New Jersey Employees Bring Age Discrimination Claim Stemming from AT&T’s Reduction in Force Plan Following $51.1 Million Jury Award for Age Discrimination under the LAD

July 21, 2017

Francine Foner, Esq., Ty Hyderally Esq. and Chantal Guerriero

On June 29, 2017, five former New Jersey employees of AT&T filed an age discrimination suit in the United States District Court for the District of New Jersey after being terminated under a reduction in force (“RIF”) plan. Roy Horowitz, et al., v.  AT&T, Inc., et. al., The former employees claim that AT&T devised a discriminatory RIF plan in violation of the Age Discrimination in Employment Act (“ADEA”). The employees, all former Managers of AT&T, allege that the company created its “Vision 2020” RIF plan in order to systematically replace older employees with younger ones.

Specifically, the RIF plan placed certain employees on ‘surplus’ status, which required such employees to secure a new job title with AT&T within sixty days, or be terminated. AT&T claimed that this was as a result of the company’s elimination of certain positions. According to the pleadings filed, the criteria for attaining a new job required surplus employees to demonstrate that they would be able to perform jobs of the future, which often required extensive technological knowledge and skills. In addition, the plan allowed managers to notify employees of job openings at their discretion. If surplus employees were unable to secure a new job, AT&T offered them severance pay in exchange for signing a release of all future claims.  Plaintiffs claim that the RIF was designed to force older employees into retirement, and that the waiver and severance payment such employees received was void because it violated the ADEA and the Older Workers Benefit Protection Act.  The former employees also seek an Order to notify additional potential class members of the suit and form a collective action.

The claim arrives mere months after a jury awarded $51.1 million in damages to  James Braden (“Braden”) for his claim of age discrimination under the New Jersey Law Against Discrimination (“LAD”) against Lockheed Martin in the District of New Jersey. Braden also involved a RIF plan, resulting in Braden’s termination, who was age 66 at the time and had worked at the company for 28 years. In response to Braden’s claim, his employers claimed that Braden was terminated because his performance was below average and that he was not qualified for his position.

Before the jury made a determination, the Court ruled that in order for plaintiff to prevail on his age discrimination claim, the jury had to find that age played a role in the employer’s decision-making and had a determinative influence on the outcome. Braden v. Lockheed Martin Corp., 2017 U.S. Dist. LEXIS 10668 (D.N.J. Jan. 26, 2017). Further, the Court clarified that this “but-for” causation standard is required by both the ADEA and the New Jersey Law Against Discrimination (“NJLAD”). Thus, the jury had to disbelieve the company’s reasons, finding that they were a pretext for age discrimination, and further determine that “but for” Braden’s age he would not have been terminated.

AT&T maintains that its RIF did not discriminate against its older employees. As the case develops, if plaintiffs are able to make out a prima facie case of age discrimination, the burden will shift to AT&T to provide legitimate and non-discriminatory reasons for its RIF.  In order for plaintiffs to prevail, they will need to persuade the jury that AT&T’s termination of plaintiffs under its RIF was a pretext for age discrimination. In addition, based upon the Court’s ruling in Braden, it would appear that plaintiffs will also need to show that the age of the terminated employees was the “but-for” cause of their termination, i.e., that their age played a role in the employer’s decision-making and had a determinative influence on the outcome.

The above blog post was written over one year ago. The information in this blog post may not be current due to changes in the law or recent case decisions. We encourage you to contact our firm, at 973-509-8500, for information on this particular post and to make sure the content is still current.

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