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Houston Federal Court: Age Discrimination Plaintiff Presented Sufficient Evidence of Pretext

Judge Sim Lake of the Southern District of Texas considered an age discrimination claim in Paulissen v. MEI Technologies, Inc., 2013 U.S. Dist. LEXIS 59175 (S.D. Tex. April 25, 2013).

The plaintiff, who was 47 at the time of her hiring, was controller of MEI Technologies.  About a year after her 69-year-old supervisor was replaced by a 31-year-old, she received the following termination notice:

After careful review and consideration, I regret to inform you that your employment with MEI Technologies is terminated effective today. Based on our new strategic direction, we feel that it is time to make organizational changes in order to prepare ourselves for the future growth of the company.

She was replaced by a worker who was ten years younger and who had ten years less experience.  She then commenced an age discrimination lawsuit.

Judge Lake first considered whether the plaintiff had established a prima facie case of discrimination.  One of the elements of a prima facie case is that the plaintiff must be qualified for the position.  MEI argued "that plaintiff was not qualified for her position when she was discharged because in [the CEO's] opinion she lacked the leadership and management skills needed to serve as defendant's controller."  Judge Lake rejected that argument:

Since there is no evidence in the summary judgment record that some occurrence, such as suffering a physical disability or losing a necessary professional license, prevented plaintiff from working with the same experience and skill set she possessed when she was hired, there is nothing in the record to suggest that plaintiff did not possess the same qualifications on the day she was discharged as on the day she was hired.

Judge Lake next noted that MEI had articulated a legitimate, non-discriminatory reason for firing the plaintiff: that the CEO of MEI determined that she was not the right fit for the job based on "specific, concrete deficiencies in [plaintiff]'s performance, including her tardiness with cash reports, failure to complete the budget, reluctance to participate in the quality management program, resistance to changing the accounting structure to make it more flexible, lack of cooperation with her peer department managers, and failures to manage the difficult personalities in the accounting department or to resolve the conflicts between Accounting staff and MEIT's other administrative departments."

The remaining issue was whether the plaintiff could establish pretext.  Judge Lake found that the plaintiff had raised a fact issue with respect to pretext in several ways.

First, the plaintiff's performance reviews from prior years contradicted many of the grounds stated by MEI for firing the plaintiff:

For example, defendant contends that plaintiff was uncooperative, but under the heading "Teamwork/Interaction" Boyd stated in plaintiff's 2008 performance review: "You are extremely cooperative with others and work well in the normal course of staff work in carrying out your job."

Second, the grounds stated by MEI were different from the grounds stated in the termination notice (which is quoted above):

The summary judgment evidence establishes that the defendant has provided two different non-discriminatory reasons for plaintiff's discharge.  In the February 9, 2010, letter of discharge Muñiz stated that plaintiff was being discharged because defendant was embarking on a "new strategic direction" that required "organizational changes" in preparation for "future growth."   But in the motion for summary judgment now pending before the court, defendant states that the plaintiff was discharged for performance deficiencies.  The discrepancy between the reason for plaintiff's discharge stated in the February 9, 2010, letter of discharge, i.e., a "new strategic direction" that required "organizational changes," and the reasons stated in Defendant's Motion for Summary Judgment, i.e., performance deficiencies, raise genuine issues of material fact as to whether the defendant's legitimate, non-discriminatory reasons for plaintiff's discharge are false or unworthy of credence.  The court's conclusion that defendant's two different reasons for the plaintiff's discharge raise fact issues for trial is bolstered by evidence that could allow a reasonable fact-finder to conclude that each of these two reasons is not true, e.g., Muñiz's testimony that MEI did not undertake a significant change in strategy in 2010, and by plaintiff's performance reviews in which Boyd found her to be extremely cooperative with others.

Third, Judge Lake noted that there was substantial evidence of perjorative age-related remarks by the 31-year-old supervisor.  MEI sought to dismiss those comments as "stray remarks" that do not meet the rigorous standard for direct evidence of discrimination (in other words, evidence that directly proves discrimination without the need for circumstantial evidence).  Judge Lake noted, however, that the mere fact that the comments might not qualify as direct evidence did not foreclose their use as evidence of pretext.  Judge Lake followed a two-element test from the Fifth Circuit:

Under the more relaxed test used in Russell and Laxton, a plaintiff wishing to use workplace remarks as circumstantial evidence of employment discrimination need only show that the remarks (1) demonstrate discriminatory animus (2) on the part of a person who is either primarily responsible for the challenged employment action or by a person with influence or leverage over the relevant decision-maker.  But even under this relaxed standard, age-related remarks cannot be the only evidence of pretext.

Judge Lake thus denied the motion for summary judgment on the wrongful discharge claim.  The court did, however, grant summary judgment on the plaintiff's retaliation and hostile work environment claims.

Judge Lake also considered the argument by MEI that the plaintiff's damages should be cut off when she obtained a new job at NASA (presumably at a lower wage than at MEI), because she stopped looking for work at that point and thus did not mitigate her damages.  Judge Lake denied the motion for summary judgment on this ground because MEI failed to prove that better jobs were available:

Defendant argues that it is entitled to summary judgment that plaintiff has failed to mitigate her damages because once she accepted employment at NASA, she stopped seeking substantially equivalent employment either via promotion at NASA, or elsewhere. Since, however, defendant has not presented any evidence that substantially equivalent employment was or is available that plaintiff could have discovered and for which she would be qualified and, yet, has not applied, defendant has failed to establish that it is entitled to summary judgment that plaintiff has failed to mitigate her damages.

David C. Holmes is a Houston employment lawyer with The Law Offices of David C. Holmes