The theft of company property and an age discrimination lawsuit may seem like two separate matters. But, in Velez v. Thermo King de Puerto Rico, Inc., the U.S. Court of Appeals for the First Circuit considered whether a plaintiff could proceed to trial on his age discrimination claim after he’d been fired for profiting from the sale of company property.
TOOL TIME
The plaintiff worked for Thermo King from 1978 to 2002. In September 2002, this 56-year-old employee worked as a tool crib attendant in charge of maintaining, dispatching and safeguarding the company’s tools and maintenance materials as well as preparing purchase requisitions for new tools and materials.
One day the plaintiff reported to Thermo King that, when he’d arrived at work, he’d noticed that a padlock had been broken and equipment was missing. Thermo King launched an internal investigation, which produced evidence that the plaintiff and other employees had stolen and sold company property for their own financial gain.
A PRIMA FACIE CASE
In November, Thermo King terminated the plaintiff. In turn, he filed a complaint with the Equal Employment Opportunity Commission (EEOC), which issued a right-to-sue letter. The plaintiff then commenced a lawsuit alleging that his termination violated the Age Discrimination in Employment Act (ADEA). The court granted Thermo King’s motion for summary judgment, and the plaintiff appealed.
The plaintiff had to establish a prima facie case of discrimination under the ADEA by showing that:
- He was at least 40 years old at the time he was fired,
- He was performing his duties at a level that met his employer’s legitimate expectations,
- He was fired, and
- The employer subsequently filled the position, demonstrating a continuing need for the plaintiff’s services.
The only disputed issue was the second prong. Thermo King maintained that the plaintiff’s misconduct made him unqualified for the job. The First Circuit, however, explained that a court may not consider the employer’s alleged nondiscriminatory reason for taking an adverse employment action when analyzing the prima facie case.
The court reasoned that to do so would bypass the burden-shifting analysis and deprive the plaintiff of the opportunity to show that the nondiscriminatory reason was, in actuality, a pretext designed to mask discrimination. Thus, the court concluded that the plaintiff could establish a prima facie case.
BURDEN BACK-AND-FORTH
The burden then shifted to Thermo King to offer evidence that the adverse employment action was not motivated by discriminatory intention. Thermo King asserted that the plaintiff was fired for violating the company’s code of conduct and profiting financially from the sale of its property. The appeals court found that these were both legitimate, nondiscriminatory reasons for firing him. So the burden shifted back to the plaintiff to show that these reasons were pretextual.
First, he pointed out that initially the company hadn’t provided him with any explanation for the termination. A month later, Thermo King told the EEOC that the plaintiff had been fired for violating the company’s policy on receiving gifts from suppliers. It wasn’t until more than a year later that Thermo King, responding to this lawsuit, first claimed that the plaintiff had been fired for stealing and selling company property. The appeals court found that the employer’s shifting explanation could support a finding that the reason it ultimately settled on was fabricated.
Second, the plaintiff asserted that a number of younger employees weren’t fired — despite their alleged complicity in the theft or sale of company property. The appeals court found that, based on that evidence, a jury could conclude that Thermo King had treated the plaintiff differently from younger employees who were similarly situated. Therefore, the court vacated the summary judgment finding and permitted a trial on the age discrimination claim.
SHIFTING REASONS
This case demonstrates the importance of being consistent when giving reasons for a termination. When a reason or reasons shift, the law permits the inference that the reason(s) cited may be pretextual and the true motive unlawful.
SIDEBAR: SALARY FREEZE SPARKS LAWSUIT
In another age discrimination case, Inman v. Klockner Pentaplast of America, the U.S. Court of Appeals for the Fourth Circuit considered whether the employer had violated the Age Discrimination in Employment Act (ADEA) when it terminated a 58-year-old executive.
In September 2005, Klockner instituted a salary freeze. The executive complained about the freeze to colleagues and later lied to his supervisor about having complained. In December, Klockner terminated the executive for his opposition to the salary freeze. The executive then filed an ADEA lawsuit. The trial court granted Klockner’s motion for summary judgment, and the executive appealed.
The executive argued that Klockner’s reason for terminating him — opposing the freeze — was pretextual. The appeals court pointed out that, just months before his termination, the executive’s supervisor had met with a consulting company regarding Klockner’s future. The consultant expressed a desire for “young, energetic, future people,” according to the supervisor’s handwritten notes. Although the consultant played no role in the executive’s termination, the supervisor did. Thus, the appeals court found that it was for a jury to decide:
- What the consultant meant,
- What the supervisor understood the reference to mean when he wrote it down, and
- Whether the supervisor adopted the goal of having “young, energetic” workers as his own.
Therefore, the appeals court vacated the summary judgment finding. L