Inconsistent Treatment of Older Worker May Lead to Legal Liability

On September 26, 2011, the 9th U.S. Circuit Court of Appeals overturned summary judgment allowing a 59 year old employee’s claim of age discrimination to go to a jury, based largely on evidence that younger employees – even those over 40 years old – had been disciplined differently than she was.  Christine Earl v. Nielsen Media Research, Inc., 9th Cir., No. 09-17477, Sept. 26, 2011.

For over twelve years, Christine Earl worked as a “recruiter” for Nielsen Media Research, recruiting households within specific demographics to participate in research regarding their television viewing habits.  In 2005, when Earl was 57 years old, she received a verbal warning for violating the company’s gift policy, which prohibited recruiters from leaving gifts at unoccupied households.  On early 2006, Earl again violated that policy, along with another that required recruiters to keep a company map with them while visiting targeted households.  In February 2006, Earl was placed on a Developmental Improvement Plan (“DIP”).  A DIP is an informal non-disciplinary tool used by Nielsen to inform an employee that his or her performance has fallen below company standards.  A DIP differs from a performance Improvement Plan (“PIP”), a part of Nielsen’s disciplinary process during which an employee is informed that additional performance problems may result in further disciplinary action, up to and including termination.  Earl had never received a PIP during her employment with Nielsen.

In October 2005, Earl made an error during the process of obtaining the consent of a household to participate in Nielsen research.  The error, which consisted of writing down an incorrect address for the household, was unnoticed by Earl and her customer.  However, when the Nielsen technician who was to install the company’s monitoring device realized the error (the incorrect household refused the installation), he was able to correct it.  When Nielsen learned of Earl’s mistake, it fired her.

Earl brought a lawsuit against Nielsen, including a claim of age discrimination under the relevant California law.  California courts look to federal decisions under the ADEA when interpreting that law, and use the familiar McDonnell-Douglas 3-part analysis.  Under that analysis, an employee first must set forth a prima facie case of discrimination, a fairly straight-forward burden.  The employer then must proffer a “legitimate business reason” for its actions.  The final step in the analysis – and a critical one to an employee’s successful lawsuit – is that the employee must raise a triable issue for the jury that the employer’s proffered reason is simply a pretext for unlawful discrimination.

In Earl’s case, Nielsen filed a motion for summary judgment, claiming that Earl could not prove that her termination was a pretext for discrimination.  While the lower court held that Earl could not create a question of fact for the jury on that issue, the Ninth Circuit disagreed, finding that Earl had produced evidence of pretext.  That evidence, according to the Court, was that while Nielsen did not have a formal written policy that required a PIP before firing an employee, the procedure of doing so was viewed by the company as an integral step in the disciplinary process.  In fact, less than a year prior to Earl’s termination, the company’s HR manager objected to the termination of a 42 year-old employee without first implementing a PIP because such action “would not be consistent with our procedure.”  While the company argued that its written policy included language that allowed it to accelerate the disciplinary process at its discretion, the Ninth Circuit held that the company’s general reliance on the issuance of a PIP prior to termination is essence created an internal policy that was violated in Earl’s case.  It reversed the lower court’s decision and remanded the case back for a trial on the issues.

The message of this case is an important one: consistency is the key to avoiding the perception that the basis of differing disciplinary actions is an employee’s protected characteristic.  Here, applying a more “forgiving” policy to a 42 year old than to 59 year old Earl raised a triable issue of fact, regardless of the company’s formal policy, and will allow Earl to argue that she was terminated without a PIP solely because of her age.