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NEW YORKEmployers can learn some important lessons from a federal appellate court decision that overturned an age discrimination ruling in favor of an employer, employment attorneys say.
Among them is that courts likely will not consider anything said by a supervisor with the authority to fire subordinates as a "stray" remark that has no evidentiary value, attorneys said. Another is that ostensibly benign or even complimentary comments from a supervisor can form the basis of a claim, they said.
In the case, a three-judge panel of the 2nd U.S. Circuit Court of Appeals on Feb. 16 unanimously vacated a decision by a lower court that had dismissed an age discrimination case against Greenville, S.C.-based Insignia Financial Group Inc. The lower court had determined in November 2005 that an Insignia supervisor's occasional age-related remarks to a woman he eventually terminated were "stray" and inoffensive and did not show that his decision to terminate the plaintiff was discriminatory.
Employment law attorneys said the appellate panel's decision does not create new law but still is important.
"I think it's a concept that needed clarification," said Joel Bertocchi, a partner with Hinshaw & Culbertson L.L.P. in Chicago.
The decision by the influential 2nd Circuit likely will impact rulings in other jurisdictions as well, agreed Mr. Bertocchi and Eve I. Klein, a partner with Duane Morris L.L.P. in New York.
Plaintiff Patricia McCarthy Tomassi sued Insignia after she was terminated in 2003 at age 63 and replaced with a 25-year-old woman.
Since 2000, Ms. Tomassi had been Insignia's liaison with the tenants of the 11,000 apartments that Insignia managed in Manhattan, and she routinely had received favorable job performance reviews and pay raises.
But Ms. Tomassi contends that her supervisor occasionally commented to her about or asked for her thoughts on retiring or working somewhere less demanding. The supervisor at one point told her that her skills made her "well-suited" for working with senior citizens, according to court papers.
When she was terminated, Ms. Tomassi was informed that she was being replaced only because of her lack of Web site experience. But in court, her supervisor testified that she had not been addressing tenants' concerns sufficiently.
In its decision, the 2nd Circuit panel ruled that the lower court did not apply the correct evidentiary standard and inappropriately classified the supervisor's comments as "stray."
In what attorneys called an unusual admission, the appellate panel assumed some blame for the lower court's reasoning by referring to the panel's earlier rulings on the issue as possibly "somewhat confusing."
"In some instances we have found the evidence legally insufficient notwithstanding the incidence of discriminatory remarks. To explain why the evidence was nonetheless insufficient, we noted that the remarks were 'stray.' That locution represented an attemptperhaps by oversimplified generalizationto explain that the more remote and oblique the remarks are in relation to the employer's adverse action, the less they prove that the action was motivated by discrimination." For example, the court suggested that a discriminatory remark by someone without any authority to terminate an employee could be classified as "stray."
The appellate panel continued: "We did not mean to suggest that remarks should first be categorized either as stray or not stray and then disregarded if they fall into the stray category."
The appellate panel said the lower court also erred by ruling that the evidentiary value of the supervisor's remarks depended on how offensive they were.
For example, while the supervisor's comment about Ms. Tomassi's potential for working well with seniors was inoffensive, it "had a strong tendency" to show he believed that Ms. Tomassi's age did not make her "well-suited" to interact with Insignia's younger tenants, the court ruled.
Ms. Tomassi is seeking unspecified damages, including back and future pay, punitive damages and other damages allowed by the federal Age Discrimination in Employment Act, said her attorney, Christopher Kelly of Reppert Kelly L.L.C. of Basking Ridge, N.J. Total damages could exceed "seven figures," he said.
Insignia's attorney did not return calls.
The ruling underscores that "even people who think they are being nice could be acting in a discriminatory way," Mr. Bertocchi noted.
Ms. Klein said that risk managers who are aware of supervisors in their organizations who have made similar comments to subordinates might save their organizations costly court awards or settlements by arranging to remove those supervisors from the process of terminating employees.
Companies should turn over termination decisions to their human resources departments and ensure that it does not rely on the records or recommendations of the supervisors, she said.
Mr. Bertocchi recommended that risk managers also ensure that supervisor training programs specifically identify topics that supervisors should avoid discussing with subordinates.