500 Eagle Gate Tower
60 East South Temple
Salt Lake City, Utah 84111
In a recent decision, the Tenth Circuit Court of Appeals (which covers Utah) upheld a jury verdict in favor of a former employee alleging age discrimination. The Tenth Circuit found that a jury could reasonably infer an improper motive of age discrimination to the employer because of procedural irregularities that existed in the employer’s termination selection process.
The Facts
Milton Whittington was employed by the Nordam Group as a cell production supervisor. Nordam, which services the airline industry, experienced a severe downturn following the terrorist attacks of September 11, 2002. As a result, Nordam decided that business conditions mandated a reduction-in-force (RIF).
Nordam’s management team, led by Gregg Miner, determined specific criteria by which 15 to 20 Nordam employees would be selected for termination in the RIF. The criteria used were performance evaluations and disciplinary records. The team produced a list of 15 or 16 names. Whittington’s name was not included in the list. Seventeen employees, including Whittington, however, were ultimately selected for termination.
Whittington was the only supervisor terminated in the RIF. Moreover, Whittington, at 62 years old, was the oldest employee included in the RIF. The RIF documentation listed two reasons for Whittington’s termination: “restructuring organization due to low sales in product line” and “position eliminated.”
Of note, Whittington’s job responsibilities were to be assumed by Herb Overbey. Overbey was 57 years old at the time of Whittington’s termination. And, although Overbey had reported directly to Whittington before his termination, Overbey’s former position shared a common job description with that of a cell production supervisor. In essence, the positions were one in the same.
Unhappy with his inclusion in the RIF, Whittington subsequently filed suit in the United States District Court for the Northern District of Oklahoma, alleging violations of the Age Discrimination in Employment Act (ADEA).
District Court Proceedings
At trial, Miner testified that Whittington had no “blots” on his performance record and that Whittington was the only “outstanding” employee on the termination list. Moreover, Miner testified that Whittington’s selection was the only one of the 17 that did not go through the management chain of command for approval. Rather, the decision to terminate Whittington was made by Miner alone.
Miner further testified that he had decided to terminate either Overbey or Whittington because their division was the only division at Nordam that had, in effect, two supervisors. Miner testified that the choice between the two ultimately “came down to time on the job.” Whittington had been selected for termination because he had less time with the company than Overbey—nine years versus 14 years.
A jury found in favor of Whittington; Nordam appealed.
The Appeal
On appeal, the Tenth Circuit found that the evidence supported the jury’s verdict.
In analyzing the jury’s decision, the Tenth Circuit focused on a single question: Was there sufficient evidence that Nordam’s motive for Whittington’s termination was because of his age? The Tenth Circuit concluded: Yes. Here, the court stated that: “The [jury] is entitled to infer from any weakness, implausibilities, inconsistences, incoherencies, or contradictions in the employer’s proffered reasons for its action that the employer did not act pursuant to those reasons.”
The Tenth Circuit noted that one indication of an improper motive was the extent of the procedural irregularities with respect to Whittington’s selection for the RIF. Here, all other employees included in the RIF were selected by the management team; Whittington was selected for termination by Miner alone. Furthermore, Whittington did not meet the discipline and performance criteria used by the management team for selecting employees for termination; rather, Whittington was an “outstanding” employee.
Another indication of Nordam’s improper motive were the inconsistencies it provided for Whittington’s termination. At trial, Whittington presented evidence that challenged the asserted decline in sales of his division. Furthermore, conflicts in Miner’s own testimony regarding the reasons for Whittington’s termination were brought to the surface.
Noting that these and other inconsistences could have undermined Nordam’s credibility in the eyes of the jury, the Tenth Circuit concluded that it was not unreasonable for the jury to infer that Nordam’s explanation for Whittington’s termination (that being, less tenure than Overbey) was nothing more than an after-the-fact rationalization for what had been age discrimination.
In addition, the Tenth Circuit refused to adopt a bright-line rule precluding an employer’s liability for age discrimination where the age difference between the terminated and non-terminated employees was five years or less. Although the Tenth Circuit acknowledged that in some cases the age difference between these two types of employees could be insignificant, and, thus, could preclude an employer’s liability, the court refused to adopt a set of “rigid [age-based] guidelines” regarding this matter; opting instead to leave such a determination to the jury on a case-by-case basis. Whittington v. Nordam Group, Inc., 429 F.3d 986 (10th Cir. 2005).
Lessons Learned
The Whittington case provides a common-sense lesson for any employer considering a RIF: any reduction should be administered fairly. Procedural irregularities in the selection process, such as those found in Whittington, may subject an employer to civil liability. Employees should not, and, indeed, must not, be singled out for special or different treatment, be it good or bad. Selection criteria should be applied equally and in an evenhanded manner. Applying these simple principles when performing a RIF will help to protect an employer in the event of a subsequent discrimination charge by a former employee.