When a company determines that it is going to reduce its work force, concerns may arise by those laid off as to whether or not the reduction in the work force was done in such a way to target older workers and therefore in violation of age employment discrimination laws. An objective performance-based evaluation that is strictly adhered to by the employer in determining who will be laid off creates a strong defense for the employer in any subsequent age-discrimination lawsuits. Such was the case in the most recent July 13, 2012 decision from the United States First Circuit Court of Appeals Cameron, et al v. Idearc Media Corp. That case was an appeal from the Federal District Court in Massachusetts. The First Circuit Court of Appeals hears appeals from both the New Hampshire and Massachusetts federal courts so its ruling are equally important to New Hampshire and Massachusetts employers and employees alike.
In that case, Paul J. Cameron, Paul T. Ferris, Paul M. Gleason, and Kenneth W. Rosenthal sued their former employer, Idearc Media Corp., after their employment termination for under performance as directory-advertising sales representatives in the Premise Sales unit of Idearc. Idearc, as part of the collective bargaining agreement with the union had created a minimum standards plan which was aimed at culling those sales representatives who were weaker performers, but only if they were regularly at the bottom of the tally and also below the company’s net gain objective target. There was a particularly detailed criteria in the collective bargaining agreement and the former employees could not provide evidence that they did not fit within that criteria. They stated that because they were over 40 and were close to being qualified for pensions, this minimum standards plan and its implementation against them amounts to age discrimination and was in violation of the federal retirement plan law, ERISA.
The First Circuit Court noted: “Whatever one thinks of eliminating weaker performing sales personnel in middle age or near to their pensions, poor performance in a job is a conventional business motive and not age discrimination or purposeful interference under ERISA.” These former employees stated that their adequate performance was shown by the accolades that they received with some of those accolades being during the same period where they have failed under the minimum standards plan. The Court noted, however, that objective measures by employers are used in part to avoid claims of discrimination; and crafting a minimum standards plan that better divides superior from inferior performance is a subject for collective bargaining, and not a discrimination claim. The fact that the former employees may not have liked the minimum standards plan their union negotiated under the collective bargaining agreement does not give them a right to claim age discrimination against their employer. Likewise, if an employer without a union had a clearly written minimum standards plan and notified those employees of the consequences of not meeting that plan, that employer would have a legally defendable basis to cull their work force or replace certain employees that were not performing consistent with the standards set forth in that plan.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].