Employers – Make Sure Your Story Makes Sense! (And Is Truthful!)

By Paul Burgin - Shawe Rosenthal LLP

April 7, 2021

Every now and then I read a case where from the beginning when presented with the employer’s handling of a termination, I can see the wheels coming off – so to speak.

Such was the case when I read Matchko v. Kost Tire Distributors, Inc.  The employer laid off (or was he terminated? – more on that later) its 73-year old District Manager, who had received several promotions, had never been disciplined, and had never received negative performance evaluations. He sued, alleging age discrimination under the Age Discrimination in Employment Act and state law.

The District Manager contended that his employer told him he was laid off because of lack of work.  On the other hand, the employer claimed the District Manager was laid-off (but not terminated) because he was not performing the duties and responsibilities of his job and because business was slow. Inexplicably, however, the employer advertised for applicants to fill the District Manager’s position while he was still laid-off.  Despite the employer’s insistence that the District Manager was laid off, he was not brought back to work, and was ultimately replaced with an individual who was over 40, but twenty years younger. (And yes, age discrimination can still occur even if a replacement is part of the protected age group of over 40, as long as the replacement is younger).

Predictably, the court denied the employer’s motion for summary judgment.  The employer simply could not get its story straight at any point and its reasoning for separation from employment was inconsistent at every stage.  It was unclear whether the employee was terminated or simply placed on layoff.  Next, it was unclear whether the decision was a result of loss of business or deteriorating performance – the employer offered both as rationale for its decision.  The court articulated that the employer’s inconsistent reasons for the District Manager’s separation, as well as the lack of evidence regarding the alleged deteriorating performance, supported a finding of pretext for discrimination by the employer.

So, what was the issue here?  Was this a classic case of too many drivers behind the wheel?  Or was the employer simply spinning its wheels, failing to figure out whether the employee would be terminated or laid off, and the reasons regarding the same?

This case is a good reminder to employers that their proffered reasons for separation of employment should be both consistent AND legitimate, and their subsequent actions should be aligned with those proffered reasons. In other words, when terminating an employee, have your story straight, and make sure your previous, current, and subsequent actions back up that story!