THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT RENDERS AGE DISCRIMINATION DECISION THAT MAY MAKE IT MORE DIFFICULT FOR DEFENDANT EMPLOYERS TO OBTAIN SUMMARY JUDGMENT

February 26, 2013

In Barbara Kragor v. Takeda Pharmaceuticals America, Inc., 702 F.3d 1304 (11th Cir. 2012), the Eleventh Circuit, whose precedent is binding on all federal courts in Florida, Georgia and Alabama, recently reversed a district court’s summary judgment in favor of an employer in an age discrimination case brought by plaintiff under the Age Discrimination in Employment Act (“ADEA”). The plaintiff, a 49 year-old former pharmaceutical company employee, was terminated by the company president after an internal investigation because the employer determined that she had violated, or at a minimum had engaged in behavior that appeared to violate, the company’s conduct policies regarding improper gifts and benefits to client physicians. Plaintiff alleged that her employment was terminated based on her age in violation of the ADEA.

It was undisputed that plaintiff established the following four elements necessary to make out a prima facie case of age discrimination: 1) she was between the age of forty and seventy; 2) she was subjected to an adverse employment action; 3) a substantially younger person filled the position; and 4) she was qualified to do the job for which she was terminated. It was also undisputed that the employer proferred a legitimate, non-discriminatory reason for the termination. The next step in the age discrimination analysis is whether plaintiff can show that the employer’s proferred or stated reason is a pretext for discrimination. The district court initially granted summary judgment in the employer’s favor because plaintiff did not present sufficient evidence from which a jury could conclude that the employer’s proffered reason for the termination was pretextual, i.e., based on a lie or deceit.

The Eleventh Circuit reversed the district court’s summary judgment because evidence contradicting the employer’s proferred reason for the termination presented a factual issue that had to be decided by a jury. Namely, plaintiff offered evidence in the form of an affidavit from the employer’s physician client stating that he spoke to the company president and ultimate decisionmaker regarding her termination who said that plaintiff was an exceptional employee, that she had done nothing wrong, that she had done everything right, and that she should not have been terminated. The Eleventh Circuit held that when the employer’s decisionmaker, after terminating an employee for misconduct, says without qualification such contradictory statements – in combination with a prima facie case having already been established – then a jury question exists on the ultimate issue of discrimination. Such evidence casts sufficient doubt on the employer’s proffered nondiscriminatory reason for the termination to permit a reasonable factfinder to conclude that the proffered reasons were not what actually motivated the employer’s conduct. The Eleventh Circuit went on to hold that this type of case should be entrusted to the jury’s discretion, and also cited Gross v. FBI Fin. Servs., Inc., 557 U.S. 167 (2009) for the legal standard that ADEA plaintiffs must show, through direct or circumstantial evidence, “that age was the ‘but-for’ cause of the challenged employer decision.” (On a side note, it is good news from a defense perspective that the Eleventh Circuit cited Gross indicating agreement with the heightened “but for” standard that the factfinder must follow in ADEA cases).

Practical Significance for EPLI Claims Handling

The Eleventh Circuit’s decision in Kragor will likely make it more difficult for employer’s to prevail on summary judgment in cases in which plaintiffs are able to establish a prima facie case of age discrimination, and also present some form of evidence, whether via affidavit or deposition testimony of plaintiff or another witness, which contradicts the employer’s proferred legitimate, nondiscriminatory reason for the adverse action. Savvy plaintiffs’ employment attorneys will make sure they proffer this evidence and will cite the Kragor case to avoid summary judgment. This means that EPLI claims professionals and defense attorneys should be more hesitant to expend significant resources trying to build summary judgment in certain age discrimination cases, and instead more realistically focus the defense strategy and expend resources on either very early resolution or preparation for trial.

The materials contained in this Announcement are for informational purposes only and not for the purpose of providing legal advice. For advice about a particular problem or situation, please contact an attorney of your choice.

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