DENVER—An Oklahoma City school district employee who was demoted to principal and then replaced by a younger worker with similar responsibilities can pursue her age discrimination suit, a federal appeals court has ruled.

According to Tuesday’s decision by a three-judge panel of the Denver-based 10th U.S. Circuit Court of Appeals in Judy F. Jones vs. Oklahoma City Public Schools, Ms. Jones was promoted in 2002 to executive director of curriculum and instruction of the school system.

Beginning in 2006, her supervisors asked questions about when she planned to retire. In 2007, when she was 60, Ms. Jones was demoted to principal, a position that paid less after her first year and affected her vacation and retirement benefits, according to the decision.

Shortly afterwards, the Oklahoma City Public Schools named a 47-year old woman to a position that had a different title but with a job description and responsibilities that “were quite similar to those of Jones’ former position” overseeing curriculum and instruction.

Ms. Jones filed suit in May 2008, alleging that the school system violated the Age Discrimination in Employment Act.

A lower court held that under the U.S. Supreme Court’s 2000 ruling in Roger Reeves vs. Sanderson Plumbing Products Inc., it was not sufficient that Ms. Jones had established a prima facie case of age discrimination. The lower court “faulted Jones for not providing any 'additional evidence’ to show that age played a role in the reassignment decision,” the appeals court panel wrote.

The lower court, though, improperly applied the Reeves decision, the appeals court said.

“Showing that (Oklahoma City Public School)’s reasons for her transfer were pretextual, Jones was under no obligation to provide additional evidence of age discrimination,” the panel ruled and remanded the case for further proceedings.