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Company Facing Age Discrimination Claim after Offering Conflicting Reasons for Terminating Employee

On Behalf of | May 19, 2014 | Business Litigation

James Pierson worked at the Tennessee plant of a large national printing company for nearly forty years, when he was suddenly laid off at the age of 62. The company initially told Pierson that his layoff was due to a company-wide cost-cutting move, and that others were also being laid off to save the company money. But a human resource manager at Pierson’s plant prepared a document in support of the layoff that described Pierson as not being a “team player” and as lacking good interpersonal skills. At no time did anyone at the company mention Pierson’s age or longevity at the company as a reason for the layoff.

Pierson sued the company for age discrimination, but a Tennessee federal court dismissed the case prior to trial because Pierson was not able to point to any statement or document where the company took his age into account during the process of the layoff. Pierson appealed the dismissal of his case, and he won the appeal.

The federal appeals court in Tennessee ruled that because the company offered several different reasons to justify its decision to lay Pierson off, a reasonable jury could infer that these shifting reasons were intended to cover up the real reason for his lay-off: that being age discrimination. So even though there was no evidence of age discrimination presented to the court, the fact that the company did not speak with a unified and consistent voice as to why it laid Pierson off opened the company up to legal liability for age discrimination.

This case underscores just how critical it is for companies who are conducting a layoff or termination to be consistent from start to finish about why it is taking the personnel action. Even if the real reason for the termination is poor performance or misconduct by the employee, the company needs to make that reason clear at each phase of the separation process, or risk potentially exposing itself to legal liability for discrimination.

Declan Leonard is a Managing Partner of the business law firm Berenzweig Leonard, LLP. He can be reached at [email protected].

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