Employees that reach the age of retirement often have questions about whether they are being treated differently than other employees due to their age. It is best to communicate with supervisors in email so that there is documentation of comments and communication.
The case Burton v. Teleflex Inc., which was decided by the the Third Circuit, involved Mary Burton ("Burton") who had founded and ran companies that manufactured and distributed medical device parts. By 2006, the companies employed approximately 140 people and generated annual revenue of $14 million. In 2007, Burton sold to Teleflex and entered into a two-year employment agreement with Teleflex, providing that she could terminate her employment by providing 30 days’ written notice. Teleflex could fire Burton without cause by providing 30 days’ written notice or could fire Burton for cause, upon written notice and an opportunity to cure. Burton, then age 67, became Vice President of New Business Development, supervised by Boarini. The two had a strained relationship. During an argument, Burton asked Boarini whether he wanted her to resign. There is evidence that she stated that she was resigning, stayed out of the office for two days, then left on a previously-scheduled vacation, after which SMD “accepted” her resignation in writing. The district court granted Telefex summary judgment on claims under the Age Discrimination in Employment Act, 29 U.S.C. 621; Title VII of the Civil Rights Act, 42 U.S.C. 2000e; and state law. The Third Circuit reversed, finding genuine issues of fact on whether Burton resigned.
Appellant Mary Burton (“Burton”) alleged that her employer, Teleflex Inc. (“Teleflex”), terminated her employment in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq., and Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. § 2000e et seq.
The ADEA generally prohibits employers from discriminating against employees, age forty and over, because of their age. 29 U.S. C. §§ 623(a)(1), (2); 631(a). Under the ADEA, a plaintiff may prove age discrimination on either a disparate-treatment or disparate-impact theory. The disparate treatment theory will be discussed in a later posting.According to the disparate-treatment theory, a plaintiff must prove that his employer intentionally discriminated against him because of his age. Gross v. FBL Fin. Servs., Inc., __ U.S. __, 129 S.Ct. 2343, 2350, 174 L.Ed.2d 119 (2009). According to the disparate-impact theory, however, proof of intent is not required. Meacham v. Knolls Atomic Power Lab., 554 U.S. 84, 95-96, 128 S.Ct. 2395, 171 L.Ed.2d 283 (2008). Instead, an employer is liable for age discrimination on a disparate-impact theory if one of its policies has had an adverse effect upon employees age forty and over which is " functionally equivalent to intentional discrimination," regardless of whether the employer actually had a discriminatory intent. Evers v. Alliant Techsystems, Inc., 241 F.3d 948, 953 (8th Cir.2001) (quoting Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 987, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988)). In this case, Clark seeks to use both disparate-treatment and disparate-impact theories to prove that Matthews committed age discrimination.
In Clark v. Matthews Intern. Corp., 628 F.3d 462 (8th Cir. 2010), Clark argued that Matthews's RIF disparately impacted employees age forty and over at the St. Louis Graphics Division. To establish a prima facie case of age discrimination on a disparate-impact theory, a plaintiff must:
(1) identify a specific, facially neutral employment practice and then
(2) present " statistical evidence of a kind and degree sufficient" to show
(3) that the practice caused an adverse employment action
(4) that disparately affected workers over age forty. Evers, 241 F.3d at 953.
If the plaintiff's prima facie case is met, the burden then shifts to the employer to demonstrate that the policy identified by the plaintiff was based on a " reasonable factor other than age" that was intended to achieve a legitimate goal. Smith v. City of Jackson, 544 U.S. 228, 242, 125 S.Ct. 1536, 161 L.Ed.2d 410 (2005).
The Eighth Circuit held that Clark had not established a prima facie case of disparate-impact age discrimination.
The employment practice that Clark argued caused a disparate impact on workers age forty and over was the RIF from August 18, 2006, to January 31, 2007. To determine whether the RIF had a disparate impact on older employees, the court was required to first determine the relevant pool of workers who were subject to the RIF. Stidham v. Minn. Mining & Mfg., Inc., 399 F.3d 935, 938 (8th Cir.2005); see also Smith v. Xerox Corp., 196 F.3d 358, 368 (2d Cir.1999), overruled on other grounds by Meacham v. Knolls Atomic Power Lab., 461 F.3d 134, 139-41 (2d Cir.2006),rev'd, 554 U.S. 84, 128 S.Ct. 2395, 171 L.Ed.2d 283 (2008). Although fourteen of the fifteen employees who were terminated from August 18, 2006, to January 31, 2007, were over age forty, the pool of terminated employees is not the relevant pool for determining whether a RIF has disparately impacted older employees. See Chambers v. Metro. Prop. & Cas. Ins. Co., 351 F.3d 848, 856 (8th Cir.2003). Moreover, contrary to Clark's argument, the pool cannot be limited to just those employees who worked with Clark in the Art Department. Although these employees were the ones who Peek and Beaver compared with Clark when selecting employees for termination, the Art Department is only one department within the St. Louis Graphics Division. During the RIF, Matthews terminated employees at the St. Louis Graphics Division who worked outside the Art Department. Thus, the court could not agree with Clark that only the St. Louis Graphics Division's Art Department was subject to the RIF. Instead, the Eighth Circuit agreed with the district court that the relevant pool of workers consists of all of the non-management employees at the St. Louis facility.
Whether older workers in the pool of non-management employees at the St. Louis Graphics Division were disparately impacted by the terminations requires consideration of the percentage of older employees in the group before and after the RIF. See id. ; EEOC v. McDonnell Douglas Corp., 191 F.3d 948, 952 (8th Cir.1999) (noting that the important statistic " is the difference in the percentage of older employees in the work force before and after the RIF" ); see also Xerox Corp., 196 F.3d at 368. Prior to the terminations on January 31, 2007, the St. Louis Graphics Division employed 43 non-management employees, 35 of whom were over age forty. After the nine terminations on January 31, 2007, the St. Louis facility employed 34 non-management employees, 26 of whom were over age forty. Thus, the percentage of employees over age forty in this pool dropped from 81.4% to 76.5% after January 31, 2007.
The percentage of employees over age forty drops at a similar rate even if we expand the size of the pool. For example, if we consider the 6 employees who were terminated between August 18, 2006, and January 30, 2007, to be part of the same RIF that the 43 were subject to on January 31, then 49 non-management employees were subject to the RIF, and, at most, 40 of these employees would have been over age forty. Thus, the percentage of non-management employees over age forty would have dropped, at most, from 81.6% prior to August 18, 2006, to 76.5% after January 31, 2007. Finally, even if we consider managerial employees to have been subject to the RIF (except Peek, who was making the decisions), the ratio of employees in the protected age group at the St. Louis facility would have gone from, at most, 44 of 53 prior to August 18, 2006, to 30 of 38 after January 31, 2007. This was a drop of, at most, 4%. [3]
The issue then is whether, in a pool of forty-two to fifty-three workers, a 4-5% drop in the employment rate of workers age forty and over is sufficient to establish that the RIF terminations disparately impacted employees over age forty. To establish that a RIF had a disparate impact on older employees, there must have been a " sufficiently substantial" drop in the employment rate of those over age forty to create an inference that employees were terminated because of their age. Watson, 487 U.S. at 994-95, 108 S.Ct. 2777. Although there is no " rigid mathematical formula," id., the Eighth Circuit had previously held that a 4% drop in the employment rate of over-age-forty employees is not sufficient for purposes of establishing that age was a factor in a termination decision. Stidham, 399 F.3d at 938. Nor was the Court convinced in this case that a 4-5% drop in the employment rate of workers in the protected age group is sufficiently substantial to create an inference that Clark and other employees were terminated because of their age. Thus, the Court held that Clark failed to prove a prima facie case of disparate-impact age discrimination.
If you have any questions about whether you have been subject to illegal age discrimination, contact Madathil Law Office for a free consultation.
Madathil Law Office, LLC
Nebraska Employment Attorney
1625 Farnam Street #830
Omaha, NE 68102
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