Court Holds Stray Remarks Are Not Sufficient To Reinstate Case

A federal appellate court recently dismissed a lawsuit brought by a group of four workers over 50 who claimed that they were terminated in violation of the Age Discrimination in Employment Act (ADEA). The Third Circuit Court of Appeals held that the workers failed to rebut their employer’s legitimate, non-discriminatory reason for their termination _ sending sexually explicit emails in violation of company policy. Hodczak v. Latrobe Specialty Steel Company, No. 11-1085, Third Circuit Court of Appeals (November 17, 2011).

Factual Background

Douglas Hodczak, James Crossan, Thomas Magdic and Joseph Litvik were all hired by Latrobe Steel Company between 1969 and 1979. In 2006, Watermill Group and Hicks Holdings acquired the Pennsylvania company, and renamed it Latrobe Specialty Steel (LSS). All four men initially chose to retire but later accepted offers to work for LSS.

In October 2007, LSS discovered that Hodczak, Crossan, Magdic and Litvik, as well as two other employees, regularly exchanged emails containing sexually explicit photographs. The emails were found during the course of an investigation into a sexual harassment complaint brought against Magdic. The company’s electronic communications policy expressly prohibits employees from sending such materials.

To determine the appropriate level of discipline for each employee, LSS considered the nature and volume of the emails exchanged, whether they were sent to individuals inside or outside the company, and whether they were sent to customers or vendors. During this process, all six employees were suspended.

Approximately one week after the suspensions took effect, LSS terminated Hodczak, Crossan, Magdic and Litvik. The two other employees were not discharged. At the time they were fired, all four men were in their late fifties or early sixties.

Hodczak, Crossan, Magdic and Lit-vik sued their former employer under the ADEA, alleging that they were discriminated against because of their age. The trial judge granted summary judgment in favor of the company. The judge held that the workers failed to prove that “but for” their age, LSS would not have terminated their employment. The workers appealed this ruling to the Third Circuit Court of Appeals.

Legal Analysis

To establish a prima facie case of discrimination under the ADEA the workers must prove that: 1) they are members of a protected class; 2) they suffered an adverse employment action; 3) they were qualified to hold the positions; and 4) they were replaced by significantly younger employees.

Even assuming that the workers established a prima facie case of discrimination, the Third Circuit held, they could not rebut the employer’s legitimate, non-discriminatory reason for terminating their employment (i.e., violating the electronic communications policy). The workers alleged that there was a “corporate culture of age bias.” Specifically, they referenced discriminatory remarks by the company’s chief executive officer, such as comments that Magdic looked like he was “ready to retire” because he had “gray hair and [was] fat.” The court found, however, that the alleged comments were far removed from the decision to discharge the four workers and completely unrelated to the investigation regarding their violation of company policy.

Likewise, the Third Circuit rejected the workers’ argument that LSS treated younger, similarly situated employees more leniently for the same offense. According to the court, the three younger employees who were identified as comparators were not supervisors and there was no evidence that they had sent sexually explicit emails using work computers.

Finally, the court ruled that the mere fact that the electronic communications policy was not in effect when some of the offending emails were sent is irrelevant. The court wrote: “[The workers] cannot seriously contend that they thought it was acceptable to send sexually explicit emails simply because there was no policy expressly prohibiting it.”

Thus, the Third Circuit upheld the trial judge’s decision to dismiss the workers’ ADEA suit.

Practical Impact

According to a shareholder in Ogletree Deakins’ Pittsburgh office: “The Third Circuit’s opinion in this case serves as a reminder about two things that good employers do well. The first is to vigilantly police your workforce and facilities, particularly at the supervisor level, to minimize the use of potentially inflammatory language in written and spoken communication. Although a court may find that ageist or sexist workplace language is properly categorized as stray remarks – as was the case in this opinion – the use of such language might be the triggering event giving rise to an expensive lawsuit.”

Glunt added: “The second reminder for employers is to uniformly discipline employees for violation of computer use policies, as this company did. We see this in every imaginable workplace adversarial setting, from labor arbitrations to unemployment compensation hearings to federal court lawsuits. If shopping online, sending sexually explicit emails, or using an online chat service to make romantic overtures is unacceptable conduct, then it should be unacceptable across the board, with no exceptions. Treating any portion of your workforce more favorably than another on this issue will cause significant problems in litigation.”

Note: This article was published in the November/December 2011 issue of The Employment Law Authority.

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