According to statistics compiled by the Equal Employment Opportunity Commission, the number of age discrimination claims filed against employers in reduction of force situations is skyrocketing. Last month, in an unpublished case, the Fourth Circuit Court of Appeals (which includes North and South Carolina) illustrated how employers' errors in making such termination decisions can allow age discrimination claims to go to a jury for trial.
In Inman v. Klockner Pentaplast of Am., Inc., the plaintiff was a 58-year old manager fired after working 17 years for the defendant employer. Despite prior positive performance evaluations, the plaintiff was terminated based upon his poor work on an important development project. He alleged that in the termination conference, he was told that he was being fired to make way for a "more energetic" person. The plaintiff also introduced evidence that a consultant hired by the employer recommended that the company find younger and more energetic people.
The Fourth Circuit found this evidence to be enough indication of pretext to allow the claim to go to a jury for trial. The phrase "more energetic" is one of a number of terms that can be considered code words for younger employees. While the consultant's statements alone would not indicate that the company acted on this poor advice, the use of the same words in the termination conference led the court to conclude that the consultant possibly influenced the termination decision.
When these statements are combined with the prior positive performance appraisals, the court concluded that the plaintiff raised adequate evidence of age discrimination despite the acknowledged problems with the development project.
When making workforce reduction decisions, employers must avoid use of terms such as "lack of energy" or "resistant to change" that can be taken as evidence of age discrimination based upon stereotypes of older workers. In addition, the employee selections should be consistent with performance evaluations and other comparative measurements between employees. If these evaluations do not support the selections made, at a minimum, the employer needs to clearly demonstrate the business reasons why the decision makes sense.
Given layoff and demographic trends, the number of age discrimination claims and risk exposure to employees will continue to escalate.