Issue: Failure to follow written policy supports claim of age discrimination

For the week of June 16, 2008

In what was characterized by the Court as "a close case," the 10th U.S. Circuit Court of Appeals has reversed a judgment in favor of Alaska Airlines on an issue of age discrimination, and remanded the case for trial. The case arose after an employee revealed his pending retirement plans during an interview for promotion, and then was denied the position. Maughan v. Alaska Airlines, Inc., 10th Cir., No. 07-6198, June 12, 2008.

Curtis Maughan worked as a Quality Control (QC) Supervisor/Representative, responsible for overseeing the maintenance work performed by vendors on the Airlines’ planes. In 2004, Maughan applied for a promotion, and was interviewed for the position. During that interview, Maughan was asked about his "five-year goals." He responded that he planned to retire within that time, as he would be eligible for retirement with the next 18 months. He was not selected for the position. When Maughan subsequently asked his supervisor why he was not promoted, the supervisor told him that "word on the street" was that Maughan did not get the position because he told the interview panel that he planned to retire. One day after that conversation, Maughan received a performance evaluation that was critical of his work performance. Within a month, the supervisor recommended Maughan’s termination.

Although Maughan contacted the company’s human resources manager and reported that he believed that he had been discriminated against and harassed because of his age, Alaska never conducted an investigation into that complaint. Instead, Maughan was offered a severance package in exchange for a release, an offer which he refused. Instead, Maughan filed suit under the Age Discrimination in Employment Act (ADEA). The Airlines moved for summary judgment. The district court granted that motion, finding that Maughan failed to offer evidence that Alaska’s proffered reason for the termination – Maughan’s poor performance – was simply a pretext for discrimination.

Under the now-familiar McDonnell Douglas burden-shifting analysis, once a plaintiff has shown a prima facie case of discrimination, the employer must provide evidence of a legitimate business reason for its actions. In order to carry the ultimate burden of proof, the plaintiff then must show that the proffered reason was simply a pretext for discrimination. Such pretext can be shown by inconsistencies or contradictions in the employer’s reasons, including actions contrary to a written company policy.

In this unpublished opinion, the Tenth Circuit reversed the lower court’s decision, holding that while it was a close case, Maughan put forth enough evidence to undermine the company’s proffered reason for his termination. Maughan was able to show that his March 2005 performance review criticized some of the same characteristics that were praised in a December 2004 review; he showed that an issue included in the March review had actually occurred much earlier in 2004 without prior reprimand or comment; and he presented evidence that the company acted contrary to a written policy when it failed to investigate his complaints of age discrimination.

While Maughan’s evidence of pretext was not "abundant," it was not refuted by the Airlines, and therefore was sufficient to allow the case to go to a fact finder/jury for decision. While many courts have recognized that an employer may make reasonable inquiries into the retirement plans of its employees, this inquiry seemed to have led inexorably to the employee’s termination. In this instance, the company’s failure to follow its written policies was a critical factor in the Court’s decision. Had an investigation been done pursuant to the existing policy, the Airline may have been able to more fully document the issues related to Maughan’s termination, and may then have been able to provide the "uncontroverted independent evidence" entitling it to judgment as a matter of law in this case.