Age Discrimination Claim Following RIF Advances to Jury

Takeaway: Before conducting a reduction in force, an employer should review its possible exposure to age discrimination claims.

A reduction in force (RIF) is not necessarily a sufficient explanation under the California Fair Employment and Housing Act (FEHA) for the dismissal of an older worker, the state Court of Appeals ruled as it sent an age discrimination claim to a jury.

The plaintiff, a customer service manager at Pacific World Corp., alleged age discrimination, disability discrimination, and failure to reasonably accommodate following her layoff. The California Court of Appeals affirmed summary judgment for the employer, a personal care products company, on the latter two claims but revived the age discrimination claim.

At the time of the layoff, the plaintiff, who was in her early 60s, was training a younger male co-worker to replace her after she retired, which she was planning to do in a few years. The plaintiff reported to the vice president of operations and supervised six employees.

In August 2019, the plaintiff’s doctor informed her she would need reconstructive surgery on her left foot, and the plaintiff scheduled the surgery for the third week of September 2019. The vice president of operations told the plaintiff that her surgery coincided with a complicated transition at Pacific World and asked her to postpone the surgery. The plaintiff rescheduled it for Oct. 3, 2019.

After the surgery, the plaintiff had work restrictions of no standing or walking. Her doctor instructed her to keep her left leg elevated as much as possible. The plaintiff struggled to accomplish that at work due to her small cubicle, so she extended her leg outside the cubicle into the hallway.

Due to the awkwardness of her seating arrangement, the plaintiff developed back pain and requested a keyboard tray and lumbar support pillow, which Pacific World provided. The plaintiff eventually requested to work from home, which the company allowed. Although the plaintiff never requested one, there were larger, vacant offices that would have provided her more space for elevating her leg.

From 2019 to 2021, Pacific World had fiscal challenges. As a result of its financial difficulties, it reduced its global workforce by 85%, amounting to a layoff of 431 employees. Its U.S. workforce was cut back from 108 to 62 employees. The plaintiff was laid off on May 4, 2020.

The younger counterpart who the plaintiff had been training was retained and elevated to the position the plaintiff had held. He reported to the vice president of operations and managed at least some of the same individuals the plaintiff had supervised. The younger counterpart also received a raise after the plaintiff was let go. The decision to lay off the plaintiff was made by the vice president of operations, who knew the plaintiff was nearing retirement.

The vice president of operations said the younger counterpart’s position was significantly different. For example, only two employees reported to him, and some strategic duties the plaintiff had done were taken over by the vice president of operations. In the vice president’s opinion, the plaintiff’s position no longer existed, even though her successor held the same title.

Pacific World’s explanation for why it laid the plaintiff off was that her position was eliminated as part of the downsizing, the appeals court noted. “But there was contrary evidence: the position of customer service manager continued to exist after the layoff,” the court said. “While there was deposition testimony that the customer service manager position involved different responsibilities after the layoff, a jury would not be required to credit that testimony.”

Moreover, the claimed differences were arguably insubstantial, the court added, saying there was no evidence that the younger counterpart was a better fit for the job than the plaintiff. A jury might infer that the company chose to hasten the plaintiff’s exit based on her age, the court concluded.

However, it rejected the disability discrimination and failure-to-reasonably-accommodate claims.

The difference between the court’s analysis of the plaintiff’s claims for age discrimination and disability discrimination “comes down to context and incentives,” the court said. “[A]t a time of major restructuring, Pacific World had a financial incentive to retain an employee who was younger and likely to stay with the organization longer. However, no such context and incentives existed to suggest disability discrimination.”

As for the failure-to-accommodate claim, the court determined there is no violation of FEHA when an employee critical to the operation of the company is asked to briefly postpone surgery. The surgery wasn’t urgent, and the plaintiff wasn’t harmed by the delay, the court decided. And while the plaintiff felt pressured to agree to the postponement, she never objected.

In addition, the plaintiff never objected to working from home at the time, the court said, and she never requested to work in a vacant office rather than her cubicle.

Fitzpatrick v. Pacific World Corp., Cal. Ct. App., No. G061797 (July 10, 2024).