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FCA US LLC can’t avoid a claim that its job review process has a discriminatory effect on employees 55 and older, a federal judge ruled.
The Aug. 6 decision by the U.S. District Court for the Eastern District of Michigan addressed a novel legal question: Does federal age discrimination law let subsets of 40-and-over workers sue as a class when they believe they’ve been harmed by unintended bias arising from an employer’s facially neutral policy or practice? The law does allow it, the court said.
FCA contended that the Age Discrimination in Employment Act only protects workers who are 40 or older from disparate impact or unintended discrimination that favors workers under the age of 40. But the court disagreed. Judge Laurie J. Michelson cited a January 2017 ruling by the Philadelphia-based U.S. Court of Appeals for the Third Circuit recognizing ADEA “subclasses” in support of her holding.
At issue in the case is whether the “forced ranking” and other elements of the calibration process FCA US uses to evaluate and grade employees tends to result in workers 55 and older receiving lower bonuses and fewer promotion opportunities and facing a greater risk for discipline, including termination.
Lead plaintiff Dan Cerjanec and three other workers allege that FCA’s process does just that, with workers 55 and older receiving a disproportionate share of the scores of 5 or below assigned by managers. During the second step of the review process, managers have access to information—including photos—indicating employees’ ages, which contributes to the bias, Cerjanec and the others charge.
“Stack” or forced ranking performance-evaluation systems are frequently challenged by workers as having a discriminatory impact based on the common age, sex, or other protected trait of a group of workers. Similar to the “bell curves” teachers sometimes use, such ranking systems require that only a fixed percentage of workers may be assigned higher rankings. Other employers that have been sued over their use or alleged use of forced ranking include Sandia Corp., Uber Technologies, and Microsoft Corp. Uber settled the case against it for $10 million.
Several companies also recently have been accused of systemic age discrimination against older workers, including IBM, Hewlett Packard Inc., PricewaterhouseCoopers LLP, Google Inc., and Marriott International Inc. The Equal Employment Opportunity Commission recently reported that workplace age discrimination is common despite passage of the ADEA more than 50 years ago.
Michelson in her Aug. 6 ruling did dismiss the individual disparate treatment or intentional bias claim of one of the named plaintiffs, finding he didn’t allege that the age discrimination he faced was so severe it left him no reasonable choice but to quit. In December, she rejected FCA US’ bid to force the entire case into arbitration.
Pitt McGehee Palmer & Rivers P.C. and Akeel & Valentine PLC represented the workers. Littler Mendelson P.C. and Miller Canfield Paddock & Stone PLC represented FCA.
The case is Cerjanec v. FCA US, LLC, 2018 BL 279379, E.D. Mich., No. 17-10619, motion to dismiss partly denied 8/6/18.
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