Takeaway: An employee can go forward with his age bias claim in which evidence showed he was involuntarily moved into a new position that constituted a demotion, despite his employer’s claim that he voluntarily accepted the new position.
A trial court erred in dismissing an employee’s age bias claim before trial, a California appeals court recently ruled. The man’s employer claimed he voluntarily accepted a new position during a corporate reorganization, but there was evidence to support the employee’s claim that he was involuntarily demoted.
The employee, who was born in May 1958, worked for a health care services organization in northern California for more than 26 years, starting in 1991. In 2011, he was promoted to the position of director of strategic business and development. In that position, he managed space and expansion projects.
As director, the employee reported to the medical group administrator, who in turn reported to the physician-in-chief, who was the organization’s top executive.
In March 2016, the employee received a positive performance evaluation for 2015 from his supervisor, the medical group administrator at the time, with an overall rating of “excellent performance.” In or around March 2017, a new medical group administrator gave the employee his performance evaluation for 2016.
While the 2015 evaluation commended the employee for his diligence and ability to achieve results, the 2016 report stated that the employee was unprepared for meetings and did not complete tasks on time.
The employee disputed the statements in the 2016 performance evaluation. In October 2017, he attended a meeting with his supervisor, at which an HR consultant was also present. According to the employee, his supervisor told him at the meeting that his work product required extensive time for her to review and that he was being moved to a different position.
The employee was moved to a smaller office, lost the staff that reported directly to him and alleged that he had his salary cut by about $20,000. Rather than reporting to his former supervisor, the employee was to report to someone whom the employee had trained and who was significantly younger and less experienced than he was.
The employee was 59 years old at the time and believed he had been discriminated against in the job transfer. Although he had intended to remain at the organization until his retirement, he instead resigned a few months after the job change.
The employee filed suit against the organization, alleging age discrimination in violation of California’s Fair Employment and Housing Act (FEHA), among other claims.
The trial court dismissed the lawsuit before trial. The court concluded that the employee had not shown that he suffered an adverse action related to age discrimination. The employee appealed.
Age Discrimination Under FEHA
To proceed with an age bias claim under FEHA, an employee must show that an adverse action was taken against him when he was 40 years of age or older, that he was satisfactorily performing his job at the time, and that he was replaced in his position by a significantly younger person.
As to those necessary elements, the organization claimed only that the employee had not shown that he suffered an adverse employment action. The appeals court noted that the California Supreme Court has defined an adverse action as one that “materially affects the terms, conditions, or privileges of employment.”
The organization denied the presence of any adverse action, repeatedly asserting that the employee was offered and accepted a new position during a corporate reorganization. The employee, however, claimed that the move was not voluntary. At the October 2017 meeting, his supervisor told him that he was being transferred to a different position.
The HR representative who was present at the meeting stated that the employee was told “a change could be occurring.” That language, the court said, did not imply choice on the employee’s part. The employee’s view was further supported by the fact that he soon started looking for a new job outside the company, the court said.
On the substance of the adverse action question, the court noted that the change in position moved the employee out of an executive and managerial role and so certainly could affect his opportunity for advancement in his career.
He claimed he received a cut in salary. Although the organization’s executives disputed this claim, they offered no evidence to contradict the employee’s assertion about his salary.
In sum, the court said, there was evidence that the employee was demoted into a position with less prestige and potential for financial and professional advancement. This was sufficient to show the change materially affected the terms and conditions of employment, the court said.
Accordingly, the employee introduced enough evidence that he had suffered an adverse action to allow him to take his age bias claim to trial, the court concluded.
Ilaga v. The Permanente Medical Group, Calif. Ct. App., No. A165273 (Nov. 22, 2023).
Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.
