August 2, 2012

How to win an age discrimination suit

Posted in Employment Law |

The best advice I can give anyone dealing with human resources issues generally is:  take good notes and create a solid record.  When litigation rears its ugly head, the side with the best (objectively reasonable) documents usually wins.  We’ve recently seen that again in the age discrimination case of Kaplan v. State of New Jersey 

The facts: Francine Kaplan was a 43-year-old Deputy Attorney General.  She was terminated as part of a reduction-in-force that resulted in the firing of 34 other DAGs.  The RIF resulted from New Jersey’s fiscal woes.  Because of the drastic need to cut expenditures, the Office of the Attorney General ordered the Division of Law to reduce its budget by $3 million through the termination of whatever number of DAGs was necessary.  In this miserable recession, many private sector businesses face similar problems, although perhaps not on the same scale.

To decide which lawyers to fire, the Division of Law wisely used an objective analysis (hey, they’re lawyers!), based upon the most recent round of performance reviews.  Acting Director Nancy Kaplen (confusing given the plaintiff’s similar name, I know) determined that any DAG who had received a rating of “2 – Needs Improvement” or lower on the state’s 5-point employee review scoring system would be the first to go.  When that round of terminations resulted in insufficient cost savings, Director Kaplen ordered that DAGs rated as “3 – Meets Expectations” would have to be separated next, except for those who had less than three years of experience.  Director Kaplen explained the retention of the junior lawyers on the ground that “newly-admitted attorneys need time to require basic lawyering skills while experienced attorneys do not.”  The other DAGs rated as 3s were ranked in numerical order from the lowest to the highest, and the 26 with the lowest ratings were terminated.  Kaplan was one of the lowest-rated lawyers, and she lost her job as a result.

This being America, Kaplan she did what many red-blooded Americans would do:  she sued, alleging that she had been unfairly discriminated against because of her age.  Kaplan argued both disparate treatment (that she was treated less favorably because of her age) and disparate impact (that she was the victim of facially neutral employment practices that discriminated against a protected class).  

In the end, this case came down to a single question: Did the employer have an objectively reasonable basis for what it did, or did it really target the plaintiff because of her age?  In answer to that question, here’s what the Appellate Division wrote:

“The Division…was directed by the Office of Management and Budget and the Attorney General’s Office to achieve a savings of $3 million in its budget through a reduction-in-force of DAGs and…it ultimately determined that thirty-five DAGs had to be terminated to achieve this savings.  The Division also established that Director Kaplen decided to select the particular DAGs who would be terminated by the objective test of their ratings on the most recent evaluations conducted by supervisory staff.  Applying this objective test, plaintiff was one of the thirty-five lowest rated DAGs of the 590 total DAGs in the Division of Law.  This constituted ‘a legitimate, nondiscriminatory reason for plaintiff’s termination.’”

What about the idea that Director Kaplen didn’t consider terminating younger attorneys (those with three years or less of experience)?  Once again, the employer had an objectively reasonable, business-related strategy for its decision:  “[Director] Kaplen explained that she decided to exclude recently admitted DAGs with a 3 rating from the reduction in force because, in her view, ‘newly admitted attorneys need time to acquire basic lawyering skills while experienced attorneys do not,’ and ‘there is a tendency in the [Division of Law] to rate newly admitted attorneys lower on performance evaluations in order to give them room to grow.’”

It’s interesting that the trial court granted summary judgment to the employer in this case.  I can imagine where some judges would have punted the matter to a jury, on the ground that “experienced” could be deemed a metaphor for “older.”  Given Kaplan’s poor performance ratings, that would have been a mistake…but all judges know that denying summary judgment can’t be reversed, while granting summary judgment can be. 

So, what does this case teach us?  It teaches us that you shouldn’t be afraid to drop poor performers, as long as you create a clear record to support your (nondiscriminatory) decisions.  In many instances, you’re actually doing the poor performer a favor by moving her out of a situation where she isn’t succeeding. 

And why don’t poor performers get fired in many instances?  Because most managers would prefer to avoid confrontation...and often create bigger problems for themselves by ducking the issue.