The Massachusetts Supreme Judicial Court (SJC) recently ruled in favor of a 54-year-old electrical engineer on his claim of age discrimination arising out of his 2017 termination.  His employer, a multinational electrical equipment manufacturer, had selected the plaintiff for a reduction in force in which eight employees, all over the age of 50, were terminated.

A lower court granted summary judgment for the employer, a decision that was then overturned by the Massachusetts Court of Appeals.  The case reached the SJC on appeal by the employer.

The employee was hired by the company in 2007 and received steady praise for his work throughout his 10 years working there.  In 2016, the company conducted two rounds of layoffs.  All of the sixteen employees selected for the layoffs except one were over the age of 40.  A third round of layoffs in 2017 resulted in the termination of eight more employees, all over the age of 50, including the plaintiff in this case.

While the reductions in force were brought about by budget cuts, the court record shows that the management team continued to recruit recent college graduates despite a hiring freeze.  Internal communications among management indicated that the company had a corporate strategy to improve “age diversity,” and lauded a manager who had brought in “young talent.”  Finally, evidence was presented that after the 2017 layoff, management expressly sought to “create the space” for more “early career talent.”

The mid-level manager who made the selection for the 2017 layoffs was not privy to these communications.  He claimed to have selected employees for the layoff based on his department’s needs and goals and denied that age was a factor in his decision-making.

The SJC applied the “cat’s paw” theory of liability in denying summary judgment for the employer. Under this theory, an employer can be liable for unlawful retaliation or discrimination even when the decisionmaker did not act with a discriminatory or retaliatory motive if he was influenced by another employee who did have a discriminatory or retaliatory motive.  Here, the manager who made the decision may have unwittingly carried out his employer’s plan to eliminate older workers in favor of younger ones.

The employer also argued that evidence of discriminatory intent was de minimis, i.e., management’s statements and comments about preference for younger workers amounted only to “stray remarks” by “non-decision makers.” The stray remarks doctrine is used by an employer to show that discriminatory comments are not sufficient to prove discriminatory animus, that they are inconsequential and do not amount to unlawful discrimination.

The SJC found that “corporate executives, including those in HR responsible for educating the workforce on discrimination, expressed a preference for younger workers, observed that there were too many older workers, and suggested ways to change the ‘demographic mix’ through voluntary and involuntary termination of older workers while hiring new and younger college graduates.”  The court concluded that the communication among members of the management team established a “consistent theme” and was sufficient proof of discriminatory intent to support the employee’s claim.

For companies facing the prospect of layoffs, this case involves some common issues raised in the selection process.  A reduction in force cannot be used as an opportunity to replace older workers with younger, and often lower paid, employees. All decisions should be carefully reviewed by human resources, and possibly outside counsel, to ensure that the selection is free of discrimination of any kind.

AIM members with questions about layoffs or any other human-resource issue may contact the AIM HR Helpline at 800-470-6277.