By: Michelle M. De Oliveira, Esq. and Andrew M. Winston, Esq.
The Massachusetts Appeals Court held in Adams v. Schneider Elec. USA that a plaintiff could bring a discrimination claim against his former employer based on evidence that corporate efforts to reduce the workforce were motivated by discriminatory bias, even where the person who selected the plaintiff for termination did so based on nondiscriminatory criteria.
The plaintiff, age 54, was an electrical engineer at Schneider Electric USA. From April 2016 through January 2017, the company conducted three reductions in force (“RIF”). Fifteen months before the plaintiff’s termination, the company’s VP of Information Technology stated in an email to the HR leader as follows: “[t]he embedded system team leader [ ] has been stocking his team with young talent. I’d like to encourage this more.” Thereafter, the company did just that. In the RIFs, 23 out of the 24 employees who were terminated were over the age of 40; and 22 of the 24 employees who were terminated were over the age of 50.
In December 2016, the Senior Vice President directed the plaintiff’s supervisor, Kenneth Colby (“Colby”) to reduce his team’s budget by 22%. Because the majority of his budget was spent on personnel, Colby understood that he would have to terminate several employees on his team.
In choosing employees for the RIF, Colby focused on: (a) those who spent most of their time outside of research and development, (b) those who spent time supporting other teams, and (c) those employees whose termination would have the least impact on the research and development team.
Colby ultimately selected eight employees for termination, including the plaintiff. Those employees’ ages ranged from 54 to 62. Colby did not assist in transferring the plaintiff to a different department—and later dissuaded another department from trying to retain the plaintiff in a different capacity.
Although Colby’s decision appeared neutral on its face, the Court found that the decision was tainted by the company’s “corporate state of mind against older workers and in favor of early career hires [was] relevant to and probative of discriminatory animus.”
Indeed, the record contained an email trail documenting that the company “instituted a series of reductions in force (RIF) designed to shed older workers to make room for ‘young talent.’” In one email, HR personnel summed up the program as a “desire to make some budget/headcount room to hire some junior level talent.” The company also discussed early retirement packages to make room for early career talent—and the evidence suggested that Colby was aware of the company’s preference for young talent. Age was not treated neutrally in the RIF, and neither was the plaintiff’s selection for the RIF.
The Court noted that the RIF was tainted, and it was “beside the point that many older workers survived the RIF”—because the plaintiff was not required to prove that the company eliminated every older worker. The plaintiff’s position was that the company used the RIF to terminate him and other older employees “to make room to hire younger ones[ ]”—and he only needed to prove that progress was made towards the stated goal.
Moreover, the Court emphasized that the “evidence of corporate strategy against older workers cannot be dismissed as ‘stray remarks’ . . . [because] [s]tatements made by those who have power to make employment decisions [ ] are not stray remarks.” The corporate strategy to make room for young talent, and related remarks, “are a window into the souls of the decision makers.”
For these, among other, reasons, the plaintiff could rightfully bring a discrimination claim against his employer under a “cat’s paw” theory of liability, which is a situation in which a biased supervisor influences an otherwise neutral decision-maker to undertake discriminatory action against an employee. Importantly, the Court found that the employer could not insulate itself from liability from its discriminatory motivation in terminating older employees by “interposing an intermediate level of persons in the hierarchy of decision.”
This case serves as a reminder to employers that discrimination at any level of a company, whether acted upon by a decision-maker or not, may create risk of legal exposure to discrimination claims. Employers cannot insulate against liability by using purportedly neutral decision-making criteria where the overarching corporate aim is to terminate employees for discriminatory reasons. Termination decisions should be closely scrutinized, especially when such decisions may impact employees in protected classes.
Employers and individuals with questions are encouraged to consult with a Kenney & Sams employment attorney.
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