In 2005, MCI Communications Services hired 54-year-old Guy Martino as a “business solutions consultant” (BSC) to provide support to its sales teams. MCI’s compensation system awarded credit to consultants when sales teams performed well, and Martino’s numbers for the year were well above quota.

But in January 2006 MCI merged with Verizon. Verizon sought to sell more complex services and required its BSCs to become directly involved in the sales process.

Martino’s experience was limited to less complex services, and he had only an ancillary involvement in sales. So when Verizon decided to execute a nationwide reduction in force that summer, Martino was a prime candidate for termination. Shortly after his termination in July 2006, Martino sued for discrimination under the Age Discrimination in Employment Act (ADEA).

Verizon claimed it laid off Martino because he lacked the skills necessary for the company’s new direction, and on July 28 the 7th Circuit agreed with the company. Affirming summary judgment granted by a district court, the appeals court concluded in Martino v. MCI Communication Services Inc. that Martino’s “obsolete skill set” provided sufficient grounds for his termination, regardless of his age.

Coming six weeks after the Supreme Court’s 5-4 ruling in Gross v. FBL Financial Services Inc., which concluded that plaintiffs must prove that age discrimination was the sole cause for termination, Martino raises the bar even higher for potential plaintiffs.

“The [Martino] decision recognized that there is a very important difference between discriminating against employees because they’re older and discriminating against them because they have an obsolete skill set,” says Gregg Lemley, a shareholder at Ogletree Deakins. “If your skill sets have become obsolete, whether you’re 20 or 50, then that’s a legitimate reason for your employment to be terminated–particularly in a reduction in force.”

Terms of Endearment

In his case against MCI/Verizon, Martino claimed that his immediate supervisor–who also hired him–occasionally called him “old timer” and alleged that this indicated age discrimination. He did not allege that the termination decision makers discriminated against him; instead, he employed a “cat’s paw” theory to contend that the immediate supervisor’s alleged bias influenced their decision.

The court, however, found Martino’s argument to be weak. Being called an “old timer,” it said, “doesn’t strike us as inherently offensive–between friends it’s often a term of endearment–but Martino sees it as evidence of bias in favor of the young,” Judge Terence Evans wrote. He also said, the “cat’s paw” argument was “particularly weak” because the company used “bias-free analysis” to make its termination decisions.

The court found the company’s decision to terminate Martino was based on sound reasoning. Evans wrote that in addition to lacking the requisite skill sets, Martino’s good 2005 quota numbers were the result of being connected to a large deal that he did little to help consummate.

Gaye L. Huxoll, a shareholder at Littler Mendelson, believes MCI/Verizon’s documentation of why it chose Martino for termination played an important role in the case. “The employer was able to articulate what his deficiencies were and why Martino was selected to be included in the RIF,” she says.

High-Value Propositions

Lemley says the 7th Circuit helped employers by rejecting the “cat’s paw” argument that one supervisor’s age-based remarks can be connected to another supervisor’s adverse employment decision. “It’s a good decision, because to go in the other direction would mean that any time someone in your organization made a comment and they have contacts with other managers, then every termination decision would be infected with one person’s comment and you’d get a jury trial every time,” he says.

Sarah Kelly, a member of Cozen O’Connor, sees Martino as useful in helping employers select people for reductions in force and other employment-related decisions. “The court is saying that an employer is allowed to determine what direction it wants to take its business in and which employees have the skill sets that are going to be complementary to that business direction,” she says.

Other employment lawyers say Martino underscores the importance of bias-free systems for evaluating employees’ skills, as well as training programs about the risks of remarks that could be interpreted as discriminatory.

“The lessons are ones we already know,” Kelly says. “Age is not a permissible factor [for terminating an employee], but skills and ability to do jobs are permissible factors, regardless of age. Finding the appropriate methods to evaluate those permissible factors and to rank employees is the challenge.”

It may appear that Martino and Gross would discourage potential plaintiffs from filing age discrimination claims, but Kelly and Huxoll aren’t so sure.

“I tend to think they won’t,” Huxoll says. “A lot of claimants are convinced that their protected category, whether it’s age or fill-in-the-blank, was the cause of the challenged employment decision. They just believe they can prove it.”

Kelly agrees age discrimination cases won’t be going away anytime soon and provides a simple reason for that: The nation’s workforce is getting older–and older people, with larger salaries, are often the first to be terminated, especially during RIFs. That means age discrimination actions have relatively high value among employment claims.

“These are things that continue to make age cases attractive to plaintiffs lawyers,” she says.