Seyfarth Synopsis: Despite inopportune remarks by a decision-maker, an employer was able to prevail in an age discrimination case where underlying reason for employee's terminated was, in fact, insubordination, and not some pretext for discrimination.
In January 2021, the Sixth Circuit Court of Appeals affirmed the Southern District of Ohio Court's grant of summary judgment in favor of defendants in an unlawful termination suit. Former employee Melanie Pelcha claimed her employer, Watch Hill Bank fired her because of her age (47), in violation of the Age Discrimination in Employment Act (ADEA). Instead, Watch Hill pointed to Pelcha's noncompliance with a 2016 policy change as the reason for the termination. The policy required employees to submit time off requests in writing one month in advance.
In early July 2016, Pelcha requested time off orally and initially refused to abide by the policy. Despite initially refusing, Pelcha did eventually submit the form one day before her requested day off. Due to her insubordination among other workplace issues (including failure to timely complete tasks and generally negative attitude), then-President and CEO of Watch Hill Greg Niesen terminated Pelcha's employment.
The ADEA prohibits employers from terminating employees "because of such individual's age." 29 U.S.C. § 623(a)(1). To survive a motion for summary judgment, Pelcha needed to prove that there was a genuine issue as to whether she was fired "because of" her age. In Gross v. FBL Fin. Servs., Inc., the Supreme Court held that the language "because of" requires employees to show that their age was the but-for cause of their termination. The Court also set forth two ways a plaintiff can establish they were terminated "because of" their age: (1) by direct evidence; or (2) using the burden-shifting analysis first introduced in McDonnell-Douglas Corp. v. Green. The Sixth Circuit in Pelcha v. MW Bancorp, Inc., et al. affirmed that Pelcha failed to meet her burden under both tests.
In applying (but ultimately rejecting) the "direct evidence" framework, the District Court considered three statements by CEO Niesen including: (1) comments that another employee in her eighties had a "limited shelf life" and had reached her "expiration date;" (2) that Niesen intended to reduce that same employee's hours until she quit; and (3) Niesen's statement that he would like to "hire younger tellers." The District Court held that while these statements were properly considered as "direct evidence" of discrimination, they were not made proximate in time to the act of termination and were "merely vague, ambiguous or isolated remarks" that did not directly implicate age. Additionally, none of these statements were related to Pelcha's termination and in fact, were not made in reference to any termination and were about an entirely different employee. Accordingly, the statements alone failed to meet the required burden of proof.
The District Court then considered the familiar McDonnell-Douglas framework, under which successful plaintiffs must first establish a prima facie case of age discrimination. While Pelcha succeeded in shifting the burden to Watch Hill, the District Court and the Sixth Circuit Court were satisfied with Watch Hill's evidence that Pelcha was fired for insubordination. Ultimately, Pelcha could not establish that Watch Hill's justification for her termination was a pretext for age discrimination.
Specifically, Pelcha laid out five arguments to support her claim that her termination was pretextual: (1) she was not actually insubordinate; (2) Niesen's allegedly ageist comments show her termination was age-motivated; (3) the rationales for her firing shifted over time; (4) another employee engaged in the same conduct but was not terminated; and (5) that Watch Hill's failure to adhere to its disciplinary policy showed pretext.
The Court dismissed all five arguments. It reasoned that while Pelcha eventually turned in the written time off request form, she was nonetheless insubordinate for failing to submit it in a timely manner. It further held that Niesen's comments were insufficient as they were infrequent, directed towards another employee, and were not unambiguously ageist. Pelcha's argument that "the rationales for firing her shifted over time" likewise failed as the District Court concluded that the rationale had not shifted, but rather that Watch Hill simply had more than one reason to terminate Pelcha.
Pelcha further alleged that her termination was pretextual because another employee under the age of forty similarly failed to submit the time off form and was not terminated. The District Court was unpersuaded, and found that unlike the other employee: (1) Pelcha's insubordination was not simply her failure to complete the form but her refusal to do so once directed by management; (2) Pelcha was in a managerial position whereas the other employee was not and was therefore not subject to the same standards.
Finally, the District Court further concluded that Pelcha's reliance on Watch Hill's disciplinary policy was misplaced. While Watch Hill's policy states that while progressive discipline is "typically" implemented, it also clearly states that "[s]ome performance concerns are serious enough not to follow a progressive schedule" and that immediate termination was warranted in Pelcha's case. Based on the foregoing rationale, the Sixth Circuit affirmed Watch Hill's motion for summary judgment and dismissed Pelcha's case.
While the plaintiff here was not successful in proving age discrimination, employers should take proactive steps to avoid age discrimination claims by:
- Ensuring that policies are communicated and signed off on by all employees.
- Consistently applying those policies (or documenting why a stronger position was taken toward a specific employee or incident).
- Reminding managers to be careful in how they address employees and in what they actually say — even innocent statements could be misconstrued or used against them.
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