Facially neutral decisions that are part of routine workforce reductions may not hold up in court if the only employee to be discharged in a group belongs to a protected class. In Schwartz v. Clark County, No. 14-16365 (May 27, 2016), the district court granted summary judgment for the employer in an age and disability discrimination case. However, the Ninth Circuit Court of Appeals reversed because events prior to the employee’s discharge suggested an improper motive.

Background

Mark Schwartz, who had cerebral palsy and used a motorized scooter to get around, worked as a senior management analyst in the Business License Department of Clark County, Nevada. Throughout his 18-year tenure, Schwartz received exemplary performance evaluations, yet Department Manager Jacqueline Holloway interacted less with Schwartz than any other employee in his job classification.

In 2008, Clark County’s Human Resources (HR) Department began reviewing the management analyst job classification to determine appropriate job titles. HR initially recommended title changes for only two of the six management analysts. After Holloway got involved, five of the six management analysts—who were not disabled and were younger than Schwartz—either received or were offered a title change. Schwartz was not recommended for the title change, making him the only remaining management analyst.

In February 2010, the county instructed Holloway to implement a budget reduction through reductions in force. Holloway chose to eliminate senior management analysts. Because Schwartz was the only remaining senior management analyst, he was laid off in July of 2010. Schwartz was 63 years old at the time he was laid off. Although Schwartz had significant seniority, the collective bargaining agreement between Clark County and the relevant union provided that seniority considerations were to be confined to job classifications. The union confirmed that the layoff complied with the collective bargaining agreement. 

The District Court’s Decision

Schwartz filed a lawsuit alleging (1) age discrimination in violation of the Americans with Disabilities Act (ADA); (2) disability discrimination in violation of the Age Discrimination in Employment Act (ADEA); and (3) deprivation of his constitutional rights in violation of 42 U.S.C. § 1983. 

Schwartz argued that Holloway had manipulated the results of the management analyst review to single him out for a layoff. In other words, Schwartz claimed that by removing less senior employees from the job classification, Holloway facilitated the termination of his employment under the pretext of a layoff plan. Additionally, Schwartz argued that Holloway’s inconsistent deposition testimony regarding her involvement in the management analyst study and title-change process raised an inference of pretext.

The trial court ruled in favor of the county, finding that Schwartz failed to provide direct or circumstantial evidence connecting his age or disability to his layoff. Further, the district court ruled that there was no evidence indicating a discriminatory purpose in either the title change or the reduction in force.

The Ninth Circuit’s Decision

The Ninth Circuit reversed, finding that Schwartz had raised a genuine dispute of material fact as to whether his selection for layoff was pretext for unlawful discrimination. In particular, the court held that a genuine issue of material fact existed based on the following evidence viewed in the light most favorable to Schwartz:

• Despite his exemplary performance, Holloway isolated Schwartz and ignored him.
• Holloway manipulated the results of the management analyst review to single out Schwartz for a layoff.
• Holloway repeatedly lied at deposition about her involvement in the HR study and title change process. The Ninth Circuit found that “[a] reasonable jury could infer that this false testimony evinced Holloway’s consciousness that she had unlawfully singled Schwartz out for the layoff.”

In dissent, Judge Bea stated that evidence that Holloway was “not particularly fond” of Schwartz was insufficient to allow a reasonable juror to conclude that unlawful discrimination had occurred. Holloway ultimately laid off several employees who were younger than Schwartz, dispelling any inference of age-based discriminatory animus. Further, Judge Bea found it “particularly doubtful that Holloway was motivated by a dislike of disabled persons” given that her sister also suffered from cerebral palsy and used a wheelchair to get around.

Key Takeaways

The Schwartz decision illustrates how it is possible for employees to survive summary judgment and proceed to trial even when (1) the employee has no direct evidence of discrimination, and (2) the employer offers a legitimate, nondiscriminatory reason for the adverse employment action.  Although the Ninth Circuit in Schwartz plainly took issue with the department manager’s purportedly false testimony, even decisions by honest and well-intentioned managers can be undermined by prior decisions that resulted in the discharge of an employee in a protected class.