Inconsistencies in Employer’s Reasons for Terminating 64-Year-Old Employee Could Lead to Liability

After 30 years of employment with Denver Merchandise Mart Inc. (“DMM”), Darrell R. Hare was terminated at the age of 64. Thereafter, he brought a claim of age discrimination under the ADEA, but a federal trial court granted summary judgment against him. He appealed to the Tenth Circuit Court of Appeals.

In order to establish a prima facie case of age discrimination, an employee must show (1) he was in a protected class; (2) was qualified for the position; (3) was discharged; and (4) the position was not eliminated after he was discharged. However, at least in the Tenth Circuit, if Hare could not establish the fourth element, he could “provide other evidence that the termination occurred under circumstances that give rise to an inference of unlawful discrimination.” Hare did just that by referencing several age-related remarks made by management involved in the decision to terminate him.

However, the court found that these statements, made in 2002, alone were not temporally close enough to Hare’s termination in 2003 to indicate a discriminatory intent. Yet, the Appeals court still found a temporal nexus linking the remarks to Hare’s termination. The court pointed to the fact that American Realty Investors, the principal owners of DMM, began searching for a replacement for Hare less than a month after the comments were made and eliminated a bonus program that made up more than half of Hare’s yearly salary. “The temporal nexus between the age-related remarks and these more immediate actions by ARI is relatively close and sufficient to support an inference of discriminatory motive that satisfies the burden of describing a prima facie case,” the court held.

To rebut Hare’s prima facie case, DMM pointed to numerous legitimate, nondiscriminatory reasons for firing Hare, including: (1) his responsibilities could be managed from Dallas at a lower cost; (2) Hare did not maximize the mart’s earning potential; (3) Hare worked short hours and was not actively involved in day-to-day operations; and (4) Hare had an insubordinate attitude towards ARI’s Dallas management and he employed an intimidating and ineffective management style. Hare successfully demonstrated these reasons were pretext by pointing to contradictions in the testimony of the decisionmakers who fired him. “Pretext can be shown by such weaknesses, implausabilities, inconsistencies, incoherences, or contradictions in the employer’s proferred legitimate reasons,” the court said. Although several of the decisionmakers said Hare was fired for performance reasons, at least one testified that his performance had nothing to do with his termination. Thus, the Court will allow the case to go to a jury to see if such inconsistencies were evidence of pretext.
The lesson here is quite simple; get your story straight. When you have multiple decisionmakers determining whether to terminate an employee, be sure they all agree on the reason that person is being let go. Moreover, document the minutes of the meeting at which the decision to terminate is made and specifically document the reason for the termination. As you can see, court’s will consider inconsistencies as evidence of pretext. Thus, such documentation is invaluable should the terminated employee sue you for discrimination and claims your stated legitimate, nondiscriminatory reasons are pretext for discrimination.

Brody and Associates regularly counsels management on all aspects of labor and employment law and ensuring compliance with all federal, state and local labor and employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.