by Tim Carney
On November 5, 2013, the Tenth Circuit Court of Appeals affirmed the U.S. District Court for the Northern District of Oklahoma which granted summary judgment to GableGotwals client IBM on claims of age discrimination, retaliation, and intentional infliction of emotional distress brought by a former IBM employee. The Tenth Circuit’s Opinion, which will be published, can be found here. Tim Carney orally argued the case at the Tenth Circuit for IBM and Erin Dailey was instrumental in the district court and in briefing the issues on appeal.
The facts are summarized as follows: The plaintiff was a 60 year old application developer for IBM who provided IT support for one of its customers. In June 2008 and again in October 2008, his supervisor received customer complaints about his performance. She also noticed and reported performance shortcomings. At year end, the plaintiff was given an unsatisfactory performance review and advised that unless he showed sustained long-term improvement he could be terminated. In February 2009, he was selected for a “resource action,” IBM’s term for a layoff targeting positions that are considered surplus. The resource action was called “Project Blue.” During an exchange of messages between two human resource managers concerning the layoff, it was decided that the plaintiff would be “removed” from the layoff list and would continue his employment. However, the managers agreed that if his performance continued to decline he could be offered a severance package at mid-year, per IBM’s policies. During their discussion, one of the managers used a number of terms to discuss the plaintiff’s workload, including referring to the plaintiff’s “shelf life” and whether he was going to “hit the bench.”
At mid-year 2009, the plaintiff was given another poor review, and was offered a severance package. He complained to his HR manager that he thought his poor reviews were related to his age. He also filed a charge of discrimination. When he declined the severance package he was put on a 60 day performance improvement plan. While he completed the performance improvement plan in November 2009, his performance again declined. He was given another unsatisfactory year end review in 2009 and was terminated a few months later.
In his suit, the plaintiff claimed that the terms used by the HR managers in their layoff discussion, including referencing his “shelf life” and whether he would “hit the bench,” and even the name of the layoff, “Project Blue,” constituted “direct evidence” of age animus. He also claimed that the discussion evidenced a “predetermined plan” to terminate him because of his age. He further alleged that his later termination was in retaliation for his internal complaint and subsequent charge of discrimination.
As to the plaintiff’s allegation of “direct evidence,” the Court found that the plaintiff had attempted to remove these terms from the proper context, and that when put in context, the terms “shelf life” and “hit the bench” referred not to age but rather to the amount of billable work the plaintiff had available to perform. Also, the Court found, while one of the managers had heard the word “blue” used in reference to older persons, e.g., “blue hair,” there was no evidence to suggest that the name of the layoff, “Project Blue,” had any age-related meaning, particularly when IBM refers to itself as “Big Blue.” The Court then found that because the terms used by the managers could, at the very least, have two plausible meanings, they could not constitute direct evidence of age discrimination.
The Court then found that without direct evidence, the plaintiff’s claim would be judged under the McDonnell-Douglas burden-shifting approach. Under these standards, the Court found, assuming without deciding that the plaintiff had presented a prima facie case of age discrimination, IBM articulated a legitimate, non-discriminatory reason for terminating the plaintiff, e.g., his poor performance. The Court then concluded that the plaintiff could not show that this reason was a pretext for unlawful discrimination because there was evidence a lengthy history of his performance issues, including multiple complaints by the customer he served.
In addition, the Court found that although at certain times during his employment the plaintiff was told he had shown improvement, performance is not a static, unchanging proposition, and that it did not preclude IBM from terminating him for subsequent poor performance. The Court stated: “After all, the quality of the employee’s job performance is itself capable of change and an employer isn’t prohibited from acting on honestly held beliefs about those changes. Put simply, prior good evaluations alone cannot establish that later unsatisfactory evaluations are pretextual. To hold otherwise would be to hold that things never change, a proposition clearly without basis in reality.”
The Court also rejected the plaintiff’s claim that IBM had treated similarly situated younger employees more favorably than the plaintiff After reviewing the evidence, the Court concluded that he failed to present evidence that these employees reported to the same HR manager or that their performance problems were of the same long-term character as the plaintiff’s. And, importantly, the Court found that the plaintiff had not “ruled out the possibility that the differences in treatment are due to differences in performance. . .”
Finally, the Court rejected the plaintiff’s retaliation claim, finding that his termination occurred five months after his complaint and discrimination charge, which could not raise an inference of a retaliatory motive. Nor was there any other evidence of a retaliatory motive.
The main takeaways from this case for employers include to accurately and thoroughly document employee performance problems as they occur, as that evidence, including notes of meetings with the client, was instrumental in the defense. Also, employers should take appropriate steps to correct performance problems immediately and follow established policies in so doing, as delaying or failing to address problems when they arise often is construed to mean there really wasn’t a problem. Finally, employers should treat all employees who are subject to the same HR policies in a fair and consistent manner.