Court Finds Workers Presented Only Scant Evidence Of Bias

The federal appellate court with jurisdiction over Tennessee recently dismissed a lawsuit brought by two employees who claimed that their positions were chosen for elimination because of their age. According to the Sixth Circuit Court of Appeals, the employees failed to show that the company’s reason for eliminating their positions was a pretext for discrimination. Bender v. Hecht’s Department Stores, No. 05-5662, Sixth Circuit Court of Appeals (August 1, 2006).

Factual Background

Brian Bender and James Rafferty worked as Division Sales Managers (DSMs) for Hecht’s Department Stores, a division of The May Department Stores Company, in different Nashville-area stores. In 2003, The May Stores implemented a company-wide plan for reducing its workforce due to stagnating sales. Under the plan, any Hecht store with sales under $26 million would no longer have a DSM.

Andrew Grafton, the Regional Vice President for the 13-store region in which Bender and Rafferty worked, made the recommendations regarding eliminating positions in his region. Kathy Gentilozzi, the Vice President of Corporate HR, made the final decision. A total of 1,450 employees lost their jobs, including four of the six DSMs in the Nashville-area stores. Since both Bender’s and Rafferty’s stores fell below the $26 million threshold, their jobs were eliminated. Bender was 50 years old and Rafferty was 55 at the time.

After the reduction in force, the Nashville area had two open positions, one of which was a DSM position left open by an employee who took another job. The company selected Terry Patton, a Nashville-area DSM whose job had been eliminated, for the open DSM position.

Bender and Rafferty sued alleging age discrimination under the Age Discrimination in Employment Act and state law. The trial judge dismissed the suit and Bender and Rafferty appealed.

Legal Analysis

The Sixth Circuit first considered whether the workers were laid off because of their age. Bender and Rafferty presented statistical evidence to support this claim. Namely, they noted that the average age of all the DSMs in Grafton’s region before the reduction was 41.7 years old, the average age of the eight DSMs who were eliminated was 43.4 years old, and five of the eight eliminated DSMs were over 40. The court found that the difference in ages in pre-eliminated and eliminated DSMs was slight and therefore not significant. Moreover, the court held that the most obvious explanation for the elimination of these positions was low sales and lower proficiency among DSMs.

The court then found that Hecht’s had legitimate, nondiscriminatory reasons for selecting Patton for the open DSM position. Specifically, Patton had the most experience and abilities of the eliminated DSMs. He also embraced the company’s merchandising system, unlike Rafferty and Bender. While Bender was clearly not as qualified as Patton, there was evidence that Rafferty’s qualifications were on a par with Patton’s. Nonetheless, the court reasoned that in the absence of probative evidence of discrimination, the rejected applicant’s qualifications must be so much better than the successful applicant’s that no reasonable employer would have chosen the rejected applicant over the successful one. Thus, without a showing that Rafferty’s qualifications were significantly better than Patton’s, he could not sue for age bias.

Practical Impact

According to Wendy Bartholomew, an attorney in Ogletree Deakins’ Nashville office: “This ruling provides guidance to Tennessee employers considering a reduction in force. Here, the employer had a clear plan and was able to demonstrate that it did not intend to single out older workers. Importantly, the court ruled that statistical evidence will not refute an employer’s legitimate nondiscriminatory reasons for deciding which positions to eliminate where those statistics show no more than a slight change in the average age of the employer’s workforce.”

Note: This article was published in the Dec/Jan 2007 issue of the Tennessee eAuthority.

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