Earlier this year, the Tenth Circuit affirmed a ruling out of the United States District Court for the District of Colorado related to claims of age discrimination and employer retaliation.  Appellant Dale Diamond (“Diamond”), worked for Verus Underwriting Managers, an operating unit of Berkley Insurance Company and W.R. Berkley Corporation (hereinafter, “Berkley”), as Vice President of Underwriting and a product-line leader for professional liability insurance.[i]

Diamond began working for Berkley in August 2011.[ii]  In June 2019, Diamond got a new immediate supervisor, Marlo Edwards (“Edwards”), and four months later, Edwards gave Diamond a list of tasks to complete.[iii]  Edwards was displeased with Diamond’s lack of progress on the list, a list which Diamond deemed impossible to complete.[iv]  Diamond confided in the vice president of human resources and expressed his concern that Edwards was trying to replace him with someone “younger and less expensive.”[v]  With Diamond’s permission, human resources spoke with Edwards about Diamond’s concerns.

Approximately two weeks after Diamond spoke to human resources, Edwards asked Diamond to travel from Denver to her office in Virginia to meet with Edwards and human resources in person “to discuss his role and performance.”[vi]  Later that day, Diamond received two e-mails criticizing his performance, prompting him to make a second complaint, “stating that he believed he was being retaliated against for making his first complaint.”[vii]  He felt the sudden, frequent criticism of his work was pretext to create a record to justify terminating his employment, stating he would “consider any adverse action taken against [him] to be in retaliation for [his age discrimination complaint].”[viii]  Diamond’s complaints were escalated to the senior vice president of human resources.  Diamond made a third complaint pertaining to the list of tasks Edwards assigned him, asserting this was another example of pretext for terminating him.[ix]  Diamond made another error at work in issuing a retroactive policy to a law firm in violation of Berkley’s underwriting guidelines, a mistake Diamond conceded.[x]

Based on Diamond’s mistake, which prompted Edwards to express serious concern about Diamond’s judgment, Edwards decided to terminate Diamond’s employment in December 2019 with the support of human resources and executive vice president, Rob Stone.[xi]  This decision was made shortly after Diamond’s third complaint. Berkley formally terminated Diamond’s employment on January 3, 2020, citing Diamond’s mistake with the law firm policy.[xii]  At the time of his termination, Diamond was 60-years-old, and he was replaced by a 52-year-old.[xiii]

The District Court’s Decision

Diamond filed an action in the United States District Court for the District of Colorado pursuant to the Age Discrimination in Employment Act (“ADEA”), alleging claims of age discrimination and retaliation.[xiv]  The district court granted summary judgment for Berkley on both claims.[xv]

Under the ADEA, it is “unlawful for an employer . . . to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age.”[xvi]  Intentional discrimination can be shown through direct or indirect evidence.  Here, the parties agreed the “case involves only indirect evidence, placing it within the ‘three-part burden-shifting framework articulated in McDonnell Douglas [Corp v. Green, 411 U.S. 792 (1973)].’”[xvii]

The three-part burden-shifting framework requires the plaintiff to first establish a prima facie case of wrongful termination.  If plaintiff does so, next, the employer “must articulate a legitimate, nondiscriminatory reason for the adverse employment action.”[xviii]  Finally, the plaintiff must show by a preponderance of the evidence that the employer’s purported justification is pretextual, and not the true reason for the termination.[xix]

While the district court noted Diamond did, in fact, establish a prima facie case of wrongful termination, it concluded Berkley’s proffered justification (Diamond’s mishandling of the law firm policy) was legitimate and non-discriminatory, noting the undisputed fact “that Diamond apologized for . . . issuing the policy . . ., admitted his mistake . . ., [and] failed to comply with Berkley’s guidelines . . . when he issued the policy amendment to correct the issuing mistake.”[xx]  Finally, the district court determined Diamond did not prove by a preponderance of the evidence that “Berkley’s proffered justification of Diamond’s mishandling of the law-firm policy was mere pretext for age discrimination.”[xxi]  Diamond challenged only the district court’s pretext analysis on appeal.[xxii]

The Tenth Circuit’s Analysis of Appellant’s Age Discrimination Claim

To show pretext, a plaintiff must demonstrate that either the “‘proffered reason is factually false,’ or ‘discrimination was a primary factor in the employer’s decision.’”[xxiii]  A plaintiff can meet this burden “by revealing weaknesses, implausibilities, inconsistencies, incoherences, or contradictions in the employer’s proffered reason, such that a reasonable fact finder could deem the employer’s reason unworthy of credence.”[xxiv]  The facts are examined as they would appear to the person making the decision, and not from plaintiff’s subjective view of the situation or with the court’s twenty-twenty hindsight.[xxv]  Further, the fact of a plaintiff’s age and a replacement’s age is part of plaintiff’s prima facie case, and is not appropriate to show pretext.[xxvi]

Diamond attempted to show pretext by minimizing his mistake related to the law-firm policy, a mistake he conceded in his opening brief to the court and in his internal e-mail, “[b]ut Diamond’s subjective position on the relative importance of the mistake [did] not establish a genuine issue of material fact as to whether he mishandled the law-firm policy.”[xxvii]  Diamond admitted he knew about Berkley’s guidelines, did not show evidence that he adhered to the guidelines, and his subjective belief that he took the right course of action to correct his error was not sufficient to constitute a genuine dispute of material fact.[xxviii]

Similarly, the court was not persuaded by Diamond’s argument that Berkley’s failure to adhere to its own investigation policy showed pretext, explaining because of “the timing of the unrelated intervening issue with the law-firm policy,” the evidence did not establish a violation of Berkley’s policy of promptly investigating all reported complaints, specifically because Diamond’s complaints were acted on by human resources.[xxix]

The court found no disparate treatment between Diamond and his replacement to show pretext, deeming Diamond’s prior work performance irrelevant to the question of whether or not he mishandled the law-firm policy in question.[xxx]  Diamond further asserted Edwards performance notes about him, which Edwards began compiling the day after Diamond’s first complaint, showed pretext.  The Court disagreed because Diamond’s termination was based on his violation of Berkley’s policies and “not on the issues included in her performance notes or on Diamond’s failure to adequately complete the task list” she gave him.[xxxi]  Diamond’s final argument to show pretext was that “Berkley’s reasons for terminating his employment . . . shifted over time and were based on subjective criteria.”[xxxii]  The court disputed this argument, as Berkley’s proffered reason for his termination remained consistent from the time of Diamond’s termination call through the litigation and appeal, and the criteria was an objective, internal policy of the company.[xxxiii]

Overall, the court found Diamond’s evidence of pretext, considered in its totality, “would not allow a reasonable jury to deem Berkley’s reason for terminating his employment ‘unworthy of credence.’”[xxxiv]  The court held because Diamond “failed to establish a genuine issue of material fact on pretext, . . . the district court did not err in awarding summary judgment to Berkley on Diamond’s age-discrimination claim.”[xxxv]

The Tenth Circuit’s Analysis of Appellant’s Retaliation Claim

Under the ADEA, it is “unlawful for an employer to discriminate against any of [its] employees . . . because such [employee] has opposed any practice made unlawful by this section.”  Diamond alleged Berkley retaliated against him for complaining about age discrimination.  Where there is no direct evidence, the court uses the same three-part burden-shifting framework discussed above.

To establish a prima facie case of retaliation, Diamond was required to show he engaged in protected opposition to discrimination, a reasonable employee would have considered the challenged employment action materially adverse, and a causal connection existed between the protected activity and the materially adverse action.[xxxvi]  Diamond’s claim for retaliation failed based on the third factor.

To establish the causal connection, Diamond needed to show Berkley was motivated to terminate his employment “by a desire to retaliate for [the] protected activity.”[xxxvii]  The Court noted that while evidence of close temporal proximity between the termination and the protected conduct could be evidence of retaliation, it has minimal probative value “where intervening events between the employee’s protected conduct and the challenged employment action provide a legitimate basis for the employer’s action.”[xxxviii]  Thus, Diamond was unable to establish the causal connection because of the intervening event of his mishandling the law-firm policy.[xxxix]

Takeaway

Prior to terminating an employee, a company should ensure it has kept a documented record of concerns and has discussed its concerns with the employee directly.  Here, Diamond’s acknowledgement of his mistake and violation of company policy was an important part of the court’s analysis.  This case reinforced the Tenth Circuit’s existing precedent that an intervening event typically breaks the causal connection between an employee’s protected complaint of discrimination and the challenged employment action that is required to succeed on a claim for retaliation.  If the intervening event gives credence to an employer’s decision to terminate an employee, the employee will likely fail to show the reasons offered for the termination were pretextual, particularly where the employer has properly documented the events preceding the termination.

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Sources

[i] See Diamond v. W.R. Berkley Corp., No. 21-1331, 2023 WL 1956221, at *1 (10th Cir. Feb. 13, 2023).

[ii] Id.

[iii] Id.

[iv] Id.

[v] Id.

[vi] Id.

[vii] Id. at *2.

[viii] Id.

[ix] Id.

[x] Id. at *2-3.

[xi] Id. at *3.

[xii] Id.

[xiii] Id.

[xiv] Id.  (ADEA is codified at 29 U.S.C. §§ 621-634).

[xv] Id.

[xvi] Id. at *4 (quoting 29 U.S.C. § 623(a)(1)).

[xvii] Id. (quoting DePaula v. Easter Seals El Mirador, 859 F.3d 957, 969 (10th Cir. 2017)).

[xviii] DePaula, 859 F.3d at 969.

[xix] See Diamond v. W.R. Berkley Corp., No. 21-1331, 2023 WL 1956221, at *4 (10th Cir. Feb. 13, 2023).

[xx] Id.

[xxi] Id.

[xxii] Id.

[xxiii] Id. (quoting Tabor v. Hilti, Inc., 703 F.3d 1206, 1218 (10th Cir. 2013)).

[xxiv] Id. (quoting Tabor, 703 F.3d at 1218).

[xxv] Id.

[xxvi] Id. at n. 4.

[xxvii] Id. at *5.

[xxviii] Id.

[xxix] Id. at *6.

[xxx] Id.

[xxxi] Id. at *7.

[xxxii] Id.

[xxxiii] Id.

[xxxiv] Id. at *8 (quoting Tabor, 703 F.3d at 1218).

[xxxv] Id.

[xxxvi] Id.

[xxxvii] Id.

[xxxviii] Id. at *9; see also Twigg v. Hawker Beechcraft Corp., 659 F.3d 987, 1001-02 (10th Cir. 2011).

[xxxix] See Diamond v. W.R. Berkley Corp., No. 21-1331, 2023 WL 1956221, at *9 (10th Cir. Feb. 13, 2023).