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Shoe Salesman May Advance ADEA Claims, Court Rules, Citing Pretext and Agency Issues

Monday, October 7, 2013
By Anna Kwidzinski

Oct. 4 --A Connecticut shoe salesman fired in his 60s who was told management wanted a younger sales force and was replaced by a 29-year-old woman can proceed to trial with ADEA and state law age and sex discrimination claims, the U.S. District Court for the District of Connecticut ruled Sept. 30 (Tremalio v. Demand Shoes, LLC, D. Conn., No. 3:12-CV-00357, 9/30/13).

Denying summary judgment to Demand Shoes LLC, the court held that Richard Tremalio has triable state and federal charges against the shoe wholesaler because evidentiary disputes cast doubt on the company's assertions that he was fired for poor performance, that he was an independent contractor rather than an employee, and that the company cannot be lumped together with its affiliates to qualify as an employer for ADEA purposes.

Judge Vanessa L. Bryant said the U.S. Supreme Court established a new standard for ADEA cases, where claimants must show that age was a “but-for” cause of discharge, not just a motivating factor. She found that under this higher threshold, Tremalio raised an inference of age bias within the McDonnell Douglas burden-shifting framework when he pointed to a corporate manager's alleged preference for a younger sales force, despite the company's assertion that poor attitude and low sales led to his termination.

But the court declined to apply the more stringent federal standard to Tremalio's age discrimination claims under the Connecticut Fair Employment Practices Act. Because neither the state supreme court nor the appellate courts have yet ruled on the matter and a split remains at the trial court level, Bryant decided to follow existing Connecticut law and apply the motivating factor test to Tremalio's CFEPA age bias charges.

Company Wants Younger Sales Force
Tremalio had worked as a sales representative in the shoe industry for more than 27 years when Demand Shoes hired him in June 2008 at the age of 63, the court found. It said Tremalio was interviewed by John Cicione, Diane Butrus, Joseph Butrus and another company manager.

As part of his duties, Tremalio sent Demand Shoes weekly reports of customer visits and sales in the New York territory, the court said. Sometime in 2009, the court found, the company began sending Tremalio e-mails indicating its disappointment with his sales record and negative attitude.

Tremalio had heart surgery in summer 2010, prompting the company to ask for a doctor's note confirming that Tremalio was healthy enough to work, the court recounted.

Tremalio alleged that Cicione told him multiple times that Joseph Butrus wanted a younger, female sales force, according to the opinion. In November 2010, Cicione fired Tremalio over the telephone. Tremalio claimed that Cicione said during this telephone call, “I told you it was coming, that they wanted … that Joe Butrus wants a young sales force.”

Tremalio filed charges with the State of Connecticut Commission on Human Rights and Opportunities and the Equal Employment Opportunity Commission in 2011, the docket showed. Tremalio sued in March 2012, arguing that he was replaced by a woman he believed to be about 29 years old.

Employee Raises Inference of Age Bias
The court found that Tremalio established a prima facie case of age discrimination, and that a reasonable jury could view the company's explanation for his discharge--low sales figures and disrespectful attitude--as pretext.

The court relied on Gross v. FBL Financial Services, 557 U.S. 167, 106 FEP Cases 833 (2009) , which it said established a “slightly modified” McDonnell Douglas burden-shifting framework that requires claimants in ADEA disparate treatment cases to show at the pretext stage of the inquiry that age was a “but-for” instead of a motivating factor in the adverse employment decision.

Although Demand Shoes agreed that Tremalio was within the protected class and experienced an adverse employment decision, the company contested that he was qualified for the job since he failed to meet its sales and behavior expectations. But the court rejected this argument, adding that Tremalio met the minimal burden of showing he was qualified with evidence of his extensive experience in the shoe industry.

Likewise, the court rejected the company's assertion that it had no knowledge of Tremalio's and his replacement's relative ages. Citing U.S. Court of Appeals for the Second Circuit precedent, the judge said employers routinely keep age information in personnel files and are often “generally aware of employees' relative ages from personal on-the-job contact.”

“Even if Defendant was not aware of the exact age of Plaintiff's replacement at the time she was hired, it is very difficult to believe that the relative age and gender differences between Plaintiff, a man in his mid-60s, and his replacement, a woman allegedly in her late 20s, were not obvious to Defendant,” Bryant wrote.

Together with Tremalio's assertions about Cicione's age-related statements, the court found that circumstantial evidence supported Tremalio's prima facie claim for limited summary judgment purposes.

Decision Maker's Involvement, Corporate Affiliation
Demand Shoes countered that it fired Tremalio because of his low sales numbers, his failure in handling customer issues, and his “negative, combative, and disrespectful attitude,” according to the decision.

But, the court said, Tremalio's response to the company's assertion must be weighed by a jury. Tremalio alleged that over the course of the year preceding his termination, Cicione informed him repeatedly that Joseph Butrus wanted a younger, female sales force, and even mentioned this during his termination telephone call. Whether these comments support Tremalio's contention that his age was a “but-for” factor in his discharge is best left to a trier of fact, the judge decided.

The court said Butrus's alleged comments, if admissible, are more than merely “innocuous,” “ambiguous” stray remarks because they were attributed to a decision maker and were made close in time to Tremalio's termination.

Additionally, the court found questions remaining about Butrus's involvement with Demand Shoes and in the decision to fire Tremalio, because the record is unclear about his position at the company and its affiliate--Diba Imports.

“[I]t is undisputed that he played at least some role in managing personnel at Demand Shoes, including interviewing Plaintiff before Plaintiff was hired, and providing at least some supervision of Plaintiff's work,” the judge concluded. “The Defendant asserts that the decision to sever Plaintiff's employment was made by Diane Butrus, Joseph Butrus, and John Cicione.”

The judge said the fact that these decision makers were in the same protected class as Tremalio does not make discrimination “impossible” but rather “less plausible.” When the company filed the motion for summary judgment, Diane Butrus was 49; Joseph Butrus, 72; Cicione, 62 years old, and the plaintiff, 68. Bryant found issues surrounding the extent of involvement of each of the decision makers, and added that if Diane Butrus was the sole decision maker, as Tremalio claims, “the not insignificant age difference” of about 19 years between them “could decrease the inference that plaintiff must overcome.”

In addition, the judge said, the fact that the same people who hired Tremalio ultimately fired him does not preclude a jury trial. The court determined that the same actor inference must take into account that Tremalio's personal circumstances changed within his 29 months at Demand Shoes, especially given his 2010 heart surgery.

Employee Status, Employer Liability
A jury also must decide whether Tremalio was an employee or independent contractor under the common law of agency, the judge wrote. She found that Demand Shoes exercised nominal control over the days and locations Tremalio worked by requiring him to attend certain trade shows throughout the year, even though the salesman usually worked from home and set his own schedule.

The company closely supervised Tremalio's work by demanding improved weekly reports and requesting a doctor's note following heart surgery, Bryant added.

Although Tremalio bore his own travel expenses, Demand Shoes reimbursed him for some costs related to trade show travel, vehicle mileage and communication technology, the court noted. It determined that Tremalio earned a set monthly amount regardless of his sales and additional commission--a compensation scheme “resembling a salary.”

The court also found a dispute as to the existence of an independent contractor agreement, saying that “the fact that the Defendant was able to produce independent contractor agreements for other of its salesmen indicates the Defendant regularly maintained agreements when it did enter into them and the absence of an agreement with the Plaintiff is evidence that the Defendant did not enter into an independent contractor agreement with the Plaintiff.”

As an additional threshold question, the court said, a jury must decide whether Demand Shoes can be held liable as an employer under the ADEA, and whether it can be grouped with Diba Imports using the single employer doctrine.

Section 630(b) of the ADEA defines an employer as an entity with “twenty or more employees for each working day in each of twenty or more calendar weeks” in the year when the discriminatory action took place or the previous year, the court explained. “The single employer doctrine allows the employees of two separate companies to be aggregated for the purposes of satisfying the ADEA's statutory threshold,” the court added.

Evaluating the interrelation of operations and common management of Diba Imports and Demand Shoes, the court concluded that Tremalio “raised a genuine issue of fact regarding whether or not Diane Butrus and Joseph Butrus hold senior roles at Diba Imports, and thus whether Diba Imports was involved in the final employment decision related to Plaintiff.”

The court looked to agency submissions describing Diba Imports as paymaster for Demand Shoes and e-mails indicating the companies were affiliated, despite the company's assertion that it had no employees because it characterized all of its workers as independent contractors.

Existing State Law Governs CFEPA Age Bias Claims
The judge said Connecticut courts have traditionally analyzed age discrimination under the same analysis as ADEA claims. But since the U.S. Supreme Court's ruling in Gross, there have been no state appellate or supreme court decisions on the issue, resulting in “a split of authority at the Connecticut trial court level” about whether claimants must show age was a “but-for” cause rather than a “motivating factor” behind the adverse employment action, Bryant wrote.

“This Court has previously held that until Connecticut courts adopt a new standard, it will follow existing Connecticut Supreme Court pronouncements on the appropriate standard to employ in applying Connecticut law and apply a contributing or motivating factor analysis to CFEPA claims,” the judge said.

“Because Plaintiff has offered evidence sufficient for a jury to find that his age was a 'but for' cause of his termination, a higher burden than that required by CFEPA, Plaintiff has also offered sufficient evidence for his CFEPA age discrimination claim,” the court held.

Similarly, the court said CFEPA sex discrimination claims are examined under the McDonnell Douglas paradigm governing Title VII of the 1964 Civil Rights Act cases. Employing the federal model, the court ruled that Tremalio already met the higher “but-for” burden and offered sufficient evidence that his gender may have been a motivating factor in the termination.

Thomas W. Bucci of Willinger, Willinger & Bucci in Bridgeport, Conn., represented Tremalio. James M. Sconzo of Jorden Burt in Simsbury, Conn., Kimberly A. Sarff of Husch Blackwell in Peoria, Ill., and Laura B. Staley of Husch Blackwell in St. Louis represented Demand Shoes.

To contact the reporter on this story: Anna Kwidzinski in Washington at akwidzinski@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com


Text of the opinion is available at http://www.bloomberglaw.com/public/document/Tremalio_v_Demand_Shoes_LLC_Docket_No_312cv00357_D_Conn_Mar_09_20.

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