The Elements Make All the Difference—Sixth Circuit Affirms Summary Judgment in Favor of Coal Brokerage Company in Age and Disability CaseWhen evaluating a discrimination case, one can never forget to go back to the basics and start with the elements of the cause of action. For example, if you are facing an age discrimination claim, is the employee in the protected class, i.e., over 40 years old? Were they replaced by someone outside of that class? A lawsuit cannot move forward if a plaintiff fails to provide evidence to support each element required by law. For that reason, the first line of defense for an employer accused of discrimination should be to attack the foundation of an employee’s claims. In Stearman v. Ferro Coals, Inc., the Sixth Circuit reminds us that an employee’s misguided theories about an adverse employment decision are insufficient to survive summary judgment in an age and disability case.

Background

Joseph Stearman was the vice president of sales at Ferro Coals, Inc. for five years. Because Stearman’s job required travel, he used a company credit card to cover costs. However, Ferro required all of its employees to seek approval for business travel, and in 2012, suspended all business travel “due to declining market conditions in the coal industry.” Although employees still traveled, they only did so when they received specific permission.

In 2013, Stearman followed the policy when he requested and received approval to attend a seminar in Myrtle Beach. When Stearman asked to attend the conference again in 2014, he did not receive a response, but went anyway, using the corporate credit card to cover his expenses. When Ferro discovered what Stearman had done, it terminated him for improper use of a company credit card in the broader context of the declining coal industry and a need to downsize. Stearman was 67 years old. After Stearman’s termination, Ferro did not hire a new vice president of sales, instead allowing another employee to absorb his duties in addition to the employee’s existing duties.

Stearman filed a complaint alleging age and disability discrimination under the Kentucky Civil Rights Act, among other claims. Because the Kentucky statute mirrors its federal counterparts, the ADEA and ADA, the district court analyzed Stearman’s claims in the same manner as it would federal claims. Ultimately, the district court granted summary judgment to Ferro on all claims, and he appealed.

Sixth Circuit Affirms Summary Judgment Ruling

On appeal, the Sixth Circuit explained that to prove age discrimination, Stearman had to show that he was replaced by someone outside of the protected class. Given that Ferro had a current employee absorb Stearman’s duties, Stearman had no such evidence. The Sixth Circuit held that Stearman had not been replaced because a replacement only occurred when a company hired a new person or reassigned an employee to take over the plaintiff’s job: “Spreading the former duties of a terminated employee among the remaining employees [did] not constitute a replacement.”

In an attempt to save his age claim, Stearman contended that the replacement test only applied in reduction-in-force cases. While the Sixth Circuit dismissed that argument, it concluded that Ferro was engaged in a reduction in force because it had cut its workforce from 18 to 12 by the time Stearman left. The Court added: “Workforce reduction is a prerequisite to wrapping up business, and it can occur even when some of the employees let go engage in unwise conduct—like taking business trips without authorization.”

Because Stearman could not show that he was replaced, his claim of age discrimination failed. With regard to his disability claim, the court held that because Stearman failed to demonstrate that he was disabled or suffered any restriction in his ability to perform his job, his disability discrimination claim also failed.

Stick to the Basics

This decision highlights what employers should initially consider when terminating an employee, particularly one in a protected class, and/or preparing to litigate a discrimination claim.

  1. When providing a reason for an employee’s termination, make sure that it is the actual reason for termination. It is especially helpful to be able to refer to a policy that has been violated. Also, tell the whole truth—if it is part of a reduction in force, document that reason even if the decision is also disciplinary.
  2. If an employee that is being considered for termination is in a protected class, discuss the circumstances with human resources. If there are red flags and you need to discuss potential risks and the elements of a potential discrimination claim, make sure counsel is involved and your conversation is privileged.
  3. Think about next steps after the employee is terminated. Will the employee be replaced? If so, by who? If not, will other employees assume their duties? Will the person assuming duties get a raise or a change in job title? Is the position being eliminated?

 

By keeping these fundamental concerns in mind, you will hopefully avoid battling an aggrieved former employee or at least be in a better position to defend the decision in court.