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7th Circuit Affirms Summary Judgment in Age Discrimination Case

On March 9, 2016, the 7th Circuit affirmed an order of summary judgment in a lawsuit in which the plaintiff alleged that he was fired from his job because of his age in violation of the Age Discrimination in Employment Act (“ADEA”). Bridge v. New Holland Logansport, Inc., No. 15-1935 (7th Cir., 3/9/2016). The ADEA prohibits employers from discharging employees because of their age. The statute defines an “employer” as someone who has 20 or more employees for each working day, in each of 20 or more calendar weeks, in the calendar year of (or in the year preceding) the discriminatory acts. The district court entered summary judgment after concluding that the defendant company did not have 20 or more employees. A company with fewer than 20 employees is not an “employer” under and therefore is not subject to the ADEA.

This case involved the issue of whether the plaintiff could count some of the employees of an affiliated company to meet the ADEA jurisdictional requirement of 20 employees. The two companies had common ownership, shared the same website, and had overlap in personnel. Workers at both companies were subject to the same personnel policy. The plaintiff argued that three of the affiliate’s employees also maintained employment relationships with the defendant (which had 17-19 employees in the years in question) and should be counted together with the defendant’s employees. Thus, the question on appeal was whether the defendant maintained an employment relationship with the three individuals for 20 or more weeks in the relevant years. The answer turned on the five-factor “economic realities” test: (1) the defendant’s control and supervision over the individuals; (2) type of occupation and skill required; (3) the defendant’s responsibility for the costs of the operation; (4) the method and form of payment and benefits; and (5) the length of the job commitment. The 7th Circuit ruled that the defendant did not exercise enough control over the three individuals to support a conclusion that they were employees of the defendant.

Even if the three individuals were not the defendant’s employees, all of the employees of both companies could be aggregated if: (1) they have purposely divided into smaller corporations to avoid the anti-discrimination laws; (2) a creditor of one company could pierce the corporate veil to sue the affiliate; or (3) the affiliate directed the discriminatory act or practice. The plaintiff argued that it was the affiliate, and not the defendant, that discharged the plaintiff. Employees of affiliated corporations may be counted together if the affiliate directed the discriminatory act. However, the individual who ordered the plaintiff’s discharge was an owner and director of both companies and, therefore, was acting for the defendant, not the affiliate, when he fired the plaintiff.

The third issue, and probably the most significant, is whether the “integrated enterprise” test under the National Labor Relations Act, which determines when separate entities may be treated as a single employer (by virtue of the interrelationship of their business operations) applies in an ADEA case. The 7th Circuit stated that it does not.

7th Circuit Affirms Summary Judgment in Age Discrimination Case

On November 19, 2014, the 7th Circuit affirmed the district court’s grant of summary judgment in an age discrimination case in which the plaintiff alleged that the employer had unlawfully terminated him because of his age in violation of the Age Discrimination in Employment Act. Widmar v. Sun chemical Corp., No. 13-2313 (7th Cir., 11-19-2014). In order to establish an age discrimination claim under the indirect method of proof, a plaintiff must show that: (1) he is a member of a protected class (age 40 or older); (2) he met the employer’s legitimate business expectations; (3) he suffered an adverse employment action; and (4) similarly situated employees outside of the protected class or substantially younger employees were treated more favorably. A similarly situated employee is one whose performance, qualifications, and conduct are comparable in all material respects. If the plaintiff establishes a prima facie case of age discrimination, the burden shifts to the employer to articulate a legitimate, nondiscriminatory reason for the adverse employment action. The plaintiff can avoid summary judgment with evidence that the employer’s proffered reason was pretext for discrimination.

An employee can establish that an employer’s proffered reasons for a discharge are pretext for discrimination through evidence showing that the proffered reasons had no basis in fact, were insufficient to motivate the discharge, or did not actually motivate the discharge. The employee must identify weaknesses, implausibilities, inconsistencies, or contradictions in the employer’s proffered reasons such that a reasonable person could find them unworthy of credence and infer that the employer did not act for the stated non-discriminatory reasons. In the context of a performance-based proffered reason, the question is not whether the employer’s assessment of the employee’s performance was correct, only that it was an honest belief and not pretext for age discrimination. The court is not a super-personnel department that second-guesses employer policies or decisions that are facially legitimate. A court cannot interfere because an employer’s decision is unwise or unfair. It is not the court’s concern that an employer may be wrong about its employee’s performance, or be too hard on the employee. The only question is whether the employer’s proffered reason was pretextual, meaning that it was a lie.

In Widmar, the employer claimed that it terminated the plaintiff, a plant manager, for performance, due to deficiencies in the operation of the plant. The plaintiff claimed that the deficiencies were not his fault, and that the employer had mistakenly blamed him. However, the employer’s expectation for the plant manager was that he accept responsibility over all aspects of the plant. It is not up to the court to determine whether the employer’s expectation was fair, prudent or reasonable. As long as the employer was not using its managerial decision to mask discrimination, the court will respect the decision.

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