Discrimination Claims from Reductions in Force May Rise and Fall on the Appropriate Decision-Making at the Crucial Juncture

By Carissa Davis

As a result of the pandemic, countless employers have restructured or implemented reductions in force (“RIFs”). Unsurprisingly, RIFs often provoke various discharge-related lawsuits. In one such suit, Marnocha v. St. Vincent Hospital and Health Care Center, Inc. et. al., No. 18-cv-02714 (7th Cir. 2021), the Seventh Circuit gave some important reminders of what it takes to actually win such a claim. The court granted summary judgment in favor of the employer on both theories of liability the employee was able to come up with.

In Marnocha, the Hospital-employer implemented a RIF resulting in the termination of all Neonatal Intensive Care Unit (“NICU”) doctors staffed at a particular location. All terminated NICU doctors could apply to an open position at the employer’s other location. Marnocha, a 62 year old terminated NICU doctor, lost her job as part of the RIF, and she was not hired when she applied for a new position at the other location. She then filed suit alleging violations of the Age Discrimination in Employment Act (“ADEA”)—challenging both her termination and the employer’s failure to hire her for the open position.

In rejecting the employee’s first claim, the court reminds us that liability rises or falls on the employee’s ability to show that similarly situated employees who were not members of her protected class were treated more favorably. To be similarly situated, the comparators need not be identical in every conceivable way but must be directly comparable in material respects. One necessary similarity, according to the Seventh Circuit, is the need to work at the same location. Marnocha attempted to include all NICU doctors staffed at all locations as similarly situated employees, but the court determined only NICU doctors terminated as part of the RIF were similarly situated. Of these similarly situated individuals, all were terminated and eligible to apply for the open position, regardless of age. Thus, Marnocha’s ADEA termination claim failed.

The court’s rejection of Marnocha’s failure to hire claim also contains a valuable reminder—an employee’s self-assessment is not competent evidence of her aptitude. While a younger NICU doctor ultimately received the open position, the issue was not whether the position was filled by a younger applicant. Rather, the issue was whether age played a role in the hiring decision. The evidence simply did not show that Marnocha’s age was the reason she didn’t get the job. The younger employee was simply more qualified, and Marnocha’s over-confident regard of her own skills was insufficient to demonstrate otherwise.

The lesson? While we can anticipate an uptick in claims arising from the wave of RIFs triggered by the pandemic, an employer who performs (and carefully documents) the proper analysis when deciding who to let go (and perhaps who to hire back from their pool of laid-off employees) should be in a good position to defend those decisions. Employers who do not will be unlikely to fare as well as St. Vincent Hospital did.