Failure To Train about Age Discrimination Results in Employer Liability
January 2002
In this article, Paul Siegel examines a recent
ruling by the Seventh Circuit holding an employer liable for $50,000 for age
discrimination and lists ways employers can avoid harassment and discrimination
claims.
by Paul
J. Siegel, Esq.
Jackson, Lewis,
Schnitzler & Krupman
On October 15, 2001, the Seventh Circuit Court of Appeals affirmed a district
court ruling that an automobile dealership which could not demonstrate that
it trained its hiring managers about age discrimination was liable for $50,000
in liquidated damages for its "willful" violation of the Age Discrimination
in Employment Act (ADEA) (in addition to $50,000.00 in compensatory damages). Mathis v Phillips Chevrolet, Inc., 2001 U.S.
App LEXIS 21879 (7th Cir October 15, 2001).
The underlying facts are as follows. In response to an employment advertisement,
Anthony Mathis, a 59-year-old African American man with over 24 years of car
sales experience, applied for a salesman position by leaving an employment application
with a cashier at Phillips. When he was not contacted within a few weeks, Mathis
returned to the car dealership and submitted a second application.
The application form asked for the year of Mathis's discharge from the military,
to which Mathis indicated "1959." This disclosure alerted Phillips to the fact
that Mathis was well over 40 years of age. Phillips never interviewed Mathis
for the sales position. However, subsequent to the submission of Mathis's applications,
Phillips hired seven other applicants, who
all were Caucasian and younger than Mathis.
Mathis sued claiming age and race discrimination in violation of the ADEA
and Title VII of the 1964 Civil Rights Act. A jury found for the dealership
on the race discrimination claim, but found for Mathis on the age discrimination
claim and awarded him liquidated damages due to the employer's "willful" violation
of the ADEA.1 Mathis established that the
general manager, who made the final hiring decisions, often noted applicants'
ages on the application in the area where he recorded pertinent hiring information.
In addition, the general manager testified he was not aware that basing employment
decisions on age was illegal. Further, a second Phillips manager admitted at
trial that he looked to hire applicants who were "bright, young, and aggressive."
In finding that the age discrimination was willful, the jury rejected Phillip's
argument that the equal employment opportunity (EEO) statements on the employment
application was a good faith attempt to comply with the law and did not believe
the dealership's managers, who testified that they did not receive Mathis's
application.
The Seventh Circuit affirmed the district court's ruling. In addressing the
issue of whether Phillips's violation of the ADEA was willful, which would justify
double-damages, the Seventh Circuit cited the Supreme Court's holding in Hazen Paper that a violation will be considered
willful, "if an employer knew or showed reckless disregard for the matter of
whether its conduct, or the conduct of its employees, was prohibited by the
ADEA."
The Seventh Circuit further stated, "leaving managers with hiring authority
in ignorance of the basic features of the discrimination laws is an "extraordinary
mistake" for a company to make, and a jury can find that such extraordinary
mistakes amount to reckless indifference." This "indifference" justifies an
award of liquidated damages.
In addressing Phillips's argument that its actions were not willful because
its employment application stated that the ADEA prohibits discrimination against
applications on the basis of age, the Seventh Circuit concluded that such evidence
is more harmful than helpful. The court stated that, "because the jury could
easily have concluded that printing this statement on the application but then
making no effort to train hiring managers about the ADEA shows that Phillips
knew what the law required but was indifferent to whether its managers followed
the law."
To avoid liability for liquidated damages, employers should follow the advice
offered by the Supreme Court in its Kolstad ruling
about punitive damages. Briefly stated, an employer has an affirmative defense
to prove that it has made ongoing and effective efforts to avoid harassment
and discrimination. Those efforts can include supervisory training; employee
education about antidiscrimination programs; adoption of preventive policies;
implementation of effective problem-resolution; posting of the employer's zero-tolerance
policy prohibiting harassment; and additional preventive programs.
1Under the ADEA, liquidated damages are
a monetary award equal to the prevailing plaintiff's economic recovery (e.g.,
lost wages and benefits).
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