The director of operations for several McDonald’s franchise restaurants can proceed with her age-bias lawsuit against the franchise owners, a California appellate court ruled. Although the owners claimed that they fired the plaintiff to save money in light of declining profits, a jury could find that this explanation is a pretext for unlawful discrimination, the court said.
The plaintiff, who was 52 at the time of her discharge, was the only employee terminated, the owners undertook no other cost-cutting measures and the plaintiff’s job duties were assumed by a 28-year-old, who received a substantial raise, the court noted. The appeals court reversed the trial court’s order dismissing the lawsuit before trial.
The plaintiff was hired in 2006 to work as the director of operations for four franchise restaurants, which had approximately 150 employees. On Oct. 3, 2014, the plaintiff’s supervisor told her she was being laid off that day because it was “in the best economic interest of the organization.”
The plaintiff had no history of performance issues during her employment. Although no one assumed the plaintiff’s job title, the younger employee took over her job duties.
On Dec. 30, 2014, the plaintiff filed a lawsuit under the Fair Employment and Housing Act (FEHA) against the franchise owners, alleging age discrimination. The defendants filed a motion for summary judgment, seeking to have the lawsuit dismissed before trial. The trial court granted the motion, and the plaintiff appealed.
Asserted Reason Must Be Credible
FEHA prohibits an employer from firing workers because of their age. When a plaintiff files a FEHA discrimination claim, California courts apply the test set forth by the U.S. Supreme Court in McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792 to evaluate the claim.
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Under this test, an employer may show that a claim has no merit by providing evidence that the adverse employment action taken against the plaintiff was based on legitimate and nondiscriminatory factors and was not the result of unlawful bias.
If the employer shows it had a legitimate, nondiscriminatory reason for the action, the plaintiff may establish pretext by persuading the court that the employer was more likely motivated by a discriminatory reason or by showing that the employer’s given explanation is not credible.
In granting the defendants’ motion for summary judgment, the trial court concluded that the defendants provided evidence that they terminated the plaintiff’s employment based on declining profits and that the plaintiff failed to show that the given reason was pretext for discrimination.
The appellate court disagreed, finding that the plaintiff had presented sufficient evidence of pretext to allow the lawsuit to proceed to trial.
Although the defendants showed a decline in restaurant profits from 2012 to 2014, they failed to tell the trial court that they sold a restaurant in January 2013. The plaintiff produced evidence that it was actually the sale of that restaurant—and not declining revenue from the other locations—that resulted in the net reduction in profits.
The plaintiff also presented evidence that she was the only employee who was laid off out of approximately 450 workers. Furthermore, the owners did not take any other cost-cutting measures to address the alleged financial losses. Instead, they gave the employee who assumed the plaintiff’s job duties a $10,000 raise, which reflected a 20 percent increase in her annual salary.
According to the court, this evidence cast doubt on the defendants’ claim that their business sustained significant financial losses between 2012 and 2014 and that such losses motivated their decision to discharge the plaintiff. Plus, the plaintiff’s job duties were assumed by a 28-year-old, which could convince a reasonable jury that the defendants were motivated by age bias. Thus, the plaintiff could move forward with her claim.
Morgan v. JCAL Inc., Calif. Ct. App., No. B276474 (Nov. 20, 2018).
Professional Pointer: This case shows that an employer’s mere assertion of a legitimate business-related reason for taking an adverse action against an employee is not enough to get a discrimination lawsuit dismissed before trial. The asserted nondiscriminatory reason must be believable based on the facts presented by both parties.
Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.
[Visit SHRM’s resource page on employee termination.]