Evidence That Similarly-Situated Younger Employees, Including Employees 40 or Older, Treated More Favorably Raised Triable Issue of Pretext in Age Discrimination Claim
The U.S. Court of Appeals for the Ninth Circuit held that, while plaintiff’s multiple violations of company policy could constitute a legitimate reason for terminating her employment, plaintiff’s evidence that younger similarly-situated employees received more lenient treatment from the company and that the employer may have not followed its own policies in terminating plaintiff without first putting her on a performance improvement plan (PIP) created a triable issue of fact as to whether Nielsen’s proffered reason was a pretext for age discrimination.
Earl Terminated for Violating Nielsen’s Policies
For 12 years, Christine Earl worked as a “recruiter” for Nielsen Media Research, Inc., a company that measures television program audiences and provides the results to advertisers and media outlets. Earl’s job was to recruit households with specified demographics and obtain their consent to install devices relaying their viewing habits back to Nielsen.
In August 2005, Earl violated a Nielsen policy by leaving a gift at an unoccupied household. After receiving a verbal warning from her supervisor, Earl violated the rule again in January 2006. The next month, Earl violated a policy requiring recruiters to keep a company map with them while recruiting targeted households. As a result of these violations, Nielsen placed Earl on a Developmental Improvement Plan (DIP), an informal, non-disciplinary tool that Nielsen used to notify an employee that her performance fell below company standards. A DIP was distinct from a PIP, which was part of Nielsen’s disciplinary process and stated that failure to meet expectations “may result in further disciplinary action up to and including termination.”
In October 2006, Earl violated a company policy requiring her to verify the home address of a household during the recruitment process and before entering it into the system. As a result of her violations, Nielsen terminated Earl’s employment in January 2007 when she was 59 years old. Younger employees who committed similar violations were not terminated or received a PIP before being terminated.
Earl filed suit against Nielsen in California Superior Court, alleging age and disability discrimination under the California Fair Employment and Housing Act (FEHA). Nielsen removed the case to federal court based on diversity, and the Eastern District of California granted summary judgment in favor of Nielsen on Earl’s age and disability discrimination claims. On appeal, Earl challenged only the dismissal of her age discrimination claim.
Central Issue on Appeal Was Pretext
The FEHA prohibits employers from discharging or dismissing any employee over 40 years old based on the employee’s age. Because state and federal employment discrimination laws are similar, California courts look to federal precedent when interpreting FEHA. The Court noted that the central issue on appeal was whether Earl presented sufficient evidence to raise a triable issue that Nielsen’s proffered reason for her termination was a pretext for age discrimination. Earl argued that Nielsen’s explanation for her termination lacked credibility because Nielsen treated younger, similarly situated employees more favorably and because, in terminating Earl without first issuing her a PIP, Nielsen deviated from its normal disciplinary procedure.
Similarly Situated Younger Employees Treated More Favorably That Earl
The Court noted that Earl could raise a triable issue of pretext through evidence that Nielsen treated younger but otherwise similarly situated employees more favorably than her. Earl contended that, during the relevant time frame, Nielsen did not terminate — and in one instance may not have even disciplined — younger “recruiters” in their 30s and 40s when those recruiters violated similar Nielsen policies. For example, Earl presented evidence that a 39 year old employee incorrectly collected child demographics from two homes that he recruited and received a “final warning” that he would face possible termination if the company discovered another similar violation. Yet when Nielsen discovered a third violation two weeks later, Nielsen issued the employee a PIP but did not terminate him.
In addition, the Court found that a 42-year-old employee received a DIP for signing a home with the wrong demographics and for entering inaccurate recruitment data into the company computer system during his first three weeks on the job. After “many” other performance problems, his manager requested that the employee be terminated, but Nielsen’s head of HR advised that terminating him without a PIP “would not be consistent with our procedure.” After receiving a PIP, the employee was subsequently terminated for additional violations.
Despite the evidence of pretext that Earl proffered, the district court granted Nielsen summary judgment on the ground that the other recruiters were not similarly situated to Earl. The Ninth Circuit found that all of the alleged comparators held the same position and had to follow the same policies and procedures. Although Nielson contended that some of the recruiters were not similarly situated because they had different supervisors, the Court noted that it had explicitly rejected this argument in Hawn v. Executive Jet Management, Inc., 615 F.3d 1151, 1157 (9th Cir. 2010). Further, the Court determined that any distinction between the violations that Earl and the other recruiters committed was immaterial because: (1) Nielsen identified the other recruiters’ violations as similar to Earl’s in response to discovery requests; (2) the relevant Nielsen policies and procedures all served the same purpose ‒ to ensure accurate data; and (3) the policy violations were of comparable seriousness. Moreover, the Court explained that whether the other recruiters are similarly situated to Earl was a question of fact for the jury to decide.
Nielsen also contended that because one comparator was 42 when he committed the policy violations and another turned 40 during the relevant time period, they were not proper comparators. The Court, however, found that, in an age discrimination case, comparison with younger employees within the protected class is not improper as a matter of law. Rather, the Court concluded the proper inquiry is whether the recruiters significantly younger than Earl. See O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308, 312 (1996). Thus, the Court held that, because Earl was significantly older than the two employees within the protected class, she could show evidence of pretext by comparing her treatment to them.
Evidence that Nielsen’s Deviated from Its Procedures in Terminating Earl without First Issuing Her a PIP
The Court noted that Earl could also raise a triable issue of pretext through evidence that Nielsen’s deviation from established policies disadvantaged her. Earl contended that in terminating her without first issuing a PIP, Nielsen deviated from its normal internal disciplinary procedure. The Court found that Earl’s contention was supported by an email from Nielsen’s HR head stating that terminating a younger employee without a PIP “would not be consistent with our procedure.” Although Nielsen contended that its written disciplinary policy expressly stated that the company could accelerate the disciplinary process “up to and including termination in any case,” the Court concluded that Earl raised a triable issue as to why consistency was not of similar importance when Nielsen terminated her.
Thus, although Nielsen contended that it fired Earl for her history of policy violations, the Court concluded that Earl’s evidence that Nielsen treated similarly situated younger employees more favorably and may have not have followed its own policies in terminating Earl without first putting her on a PIP was sufficient to raise a triable issue as to whether Nielsen’s proffered reason was a pretext for age discrimination.
Importance of Applying Employment Policies Consistently
This case illustrates the importance of applying the company’s employment policies consistently. The Court found it difficult to understand why the company’s HR director was concerned that a 42-year old employee be put on a PIP before being terminated, while the 59-year old plaintiff, whose infractions were far less serious, was terminated without receiving a PIP. Thus, even though Nielsen’s written disciplinary policy explicitly stated that employees were “at will” and could be terminated with or without prior warning, the Court found that the inconsistency between the written policy and the HR representative’s statement was sufficient to create a triable issue of fact.
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