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Isolated Age Comment Insufficient to Overcome Employer’s Legitimate Reason for Layoff

The technology company, which manufactured components for large-scale computer networks and data storage systems, employed a team of sales account managers. This particular account manager was successful in generating significant revenue for the company over the course of several years. The Company began to make changes to procedures and started to cut costs due to the downturn in the economy and the industry changes in terms of how data is stored, which ultimately led to the reduction in force of the sales team from five employees to two. The account manager, however, felt that this rationale was a pretext for age discrimination, and that he was selected for lay off because of his age. To back this up, he pointed to comments made by the vice president of sales about needing to “re-energize” the team, which he considered disparaging remarks regarding the ages of the sales team. He accordingly filed a charge with the Massachusetts Commission Against Discrimination, who dismissed the complaint for a lack of probable cause. He then filed suit in state court, claiming, among other things, age discrimination under Massachusetts law. The employer removed the case to the United States District Court for the District of Massachusetts based on diversity jurisdiction, and then moved for summary judgment on all counts. The district court granted this motion, and Woodward appealed.

Massachusetts has adopted the U.S. Supreme Court’s McDonnell Douglas approach to employment discrimination under which a plaintiff must first state a prima facie case of discrimination. Once the employee has stated his prima facie case, the employer must provide “some legitimate, non-discriminatory reason” for terminating the employee.

Here, the employer rationalized its decision by pointing to the fact that the market was moving away from the type of storage systems the Company sold, and was moving toward different server systems. The employee, however, felt that this was disingenuous, and claimed that the Company permitted, and even accelerated, the drop in storage system sales revenues, discontinued products that he previously sold and rejected his request for more sales personnel, all because of they wanted to terminate him because of his age.

The First Circuit Court of Appeal observed that these decisions reinforced the proffered justification and rejected the employee's argument that his employer's business decision was unsound. Citing applicable case law, the court observed “[A]n employer is free to terminate an employee for any nondiscriminatory reason, even if its business judgment seems objectively unwise.” The court also observed that a review of the personnel decisions for similarly situated employees in the same sales unit did not reveal a pattern of discrimination, and that the Company's new vice president of sales' “isolated” comment that the employee needed to “re-energize” his sales team was not a basis to conclude the termination was pretextual.

This case reaffirms the principle that in the absence of other evidentiary issues suggesting a discriminatory intent, the courts will not second guess a business judgment, reduction in force termination, corroborated by objective economic factors.

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