Termination for Obsolete Skill Set Does Not Constitute Age Discrimination

The Age Discrimination in Employment Act (ADEA) prohibits employers from treating employees who are 40 or older adversely on the basis of their age.   Recently, however, the 7th U.S. Circuit Court of Appeals held that an employee’s “obsolete skill set” which caused him to be of “declining value” to the company was sufficient basis to support an that individual’s termination during a reduction in force (RIF), and found that the termination did not constitute age discrimination.  Martino v. MCI Communications Services, Inc., No. 08-2405, 7th Cir., July 28, 2009.

Guy Martino began his employment with MCI in 2005 at the age of 54 as a business solutions consultant (BSC).  In that position, he provided support to sales teams, but did not spearhead actual sales.  In addition to his salary, Martino received commissions on sales to which he was assigned to work.  For instance, in October 2005, Martino was part of a team working on a deal that involved British Petroleum (BO), and which resulted in substantial revenue to MCI.  Although his role in that deal was peripheral, Martino received credit that boosted his sales figures and resulted in a sizeable commission to him.  In fact, the BP deal resulted in nearly 85% of all of the commissions earned by Martino during his entire tenure with MCI. 

Following MCI’s merger with Verizon in 2006, Verizon undertook a “redundancy analysis” to identify duplicative positions, and to support a reduction in force.  As part of that analysis, a distinction was made between individuals who sold “co-location” services – which involved a client’s purchase of space, power, and cooling for its servers in the company’s data centers, but retaining management of those servers – and “managed” services, in which MCI/Verizon actually managed those servers.  Co-location services were more basic, and therefore less expensive.  When Verizon took over those sales, it removed the BSC force from sales of co-location services and assigned responsibility to them for the sale of managed services.  Martino had only limited experience with the sale of managed services, and therefore became a prime target for termination, along with five other BSCs, ranging in age from 33 to 45.

Martino filed a federal court action, claiming age discrimination.  While he conceded that the actual termination decision-makers did not discriminate against him, he invoked the “cat’s paw” theory to contend that his immediate supervisor was biased in favor of younger employees, and that the decision-makers were influenced by that bias.  The cat’s paw theory is used when an adverse action is taken by an un-biased decision-maker, but on the basis of “singular influence” by a biased supervisor or manager.  In this case, Martino argued that his direct supervisor sometimes called him an “old-timer” which, according to Martino, indicated a bias in favor of younger workers.  After stating that the term “doesn’t strike us as inherently offensive,” the court found that the two individuals who actually made the RIF decisions did an independent analysis of Martino’s qualifications, and based their decisions on business-related issues and skill-based criteria.  According to the Court, the cat’s paw theory requires a “blind reliance” on input from a biased individual.  That type of influence was not present with respect to Martino’s termination.

Martino’s skill set was limited, and Verizon’s increased focus on managed services, rather than collocation services, meant that Martino’s importance to the company was waning.   Here, the Court specifically stated that while choosing to terminate someone on the basis of old age is impermissible, choosing to let someone go because they have an “obsolete skill set” is not discriminatory.  The Court also noted that the U.S. Supreme Court’s recent decision in Gross v. FBL Financial Services, Inc. made this case especially difficult for Martino.  Under that decision, it’s not enough for a plaintiff to prove that age was one of the motivating factors of the adverse action – instead the plaintiff must prove that but for his age, the adverse action would not have occurred. 

In this case, the basis of the company’s success was its independent evaluation of employees’ skills and value to the company.  Employers should make sure that independent investigations and decisions are fully documented, and that analyses are based on the needs of the company, in order to avoid the “cat’s paw” theory attempted by Martino.  Further, training and counseling of supervisors and secondary managers should be undertaken to avoid the appearance of impropriety that is raised by remarks that could be interpreted as discriminatory.