The recent matter of Marcus v. PQ Corp. has seen the latest development in the application of the Age Discrimination in Employment Act since the U.S. Supreme Court’s decision in Gross v. FBL Financial Services , 129 S.Ct. 2343 (2009).
Marcus v. PQ Corp., Nos. 11-2009, 11-2066 slip op. (3rd Cir. Jan. 19, 2012), dealt with a handful of plaintiffs who were all terminated from their employment with PQ Corp. not long after PQ purchased their previous employer back in 2005. According to court documents, all of the plaintiffs were over age 55 at the time of their termination, and, as discovery eventually revealed, no one under 55 was terminated by PQ. Consequently, because of what the plaintiffs believed to be something other than coincidence as to their commonality of all being over 55 and terminated from their employment, they brought suit against PQ for violating the ADEA. After a trial on the matter, a jury entered a verdict in favor of the plaintiffs, awarding the two appealing plaintiffs sums of approximately $2.5 million each.
After the trial, both parties appealed the decision: PQ appealed the decision on the basis of jury instructions and a matter of law, and the plaintiffs appealed the decision on the basis of taking issue with the calculation of damages awarded.
PQ’s appeal was multifaceted with regard to its issues with the jury instructions, raising four different arguments. PQ first argued that the jury instructions did not accurately reflect the “but-for” causation established by Gross . Per the Gross decision, in order for an employer to be liable under the ADEA, a plaintiff must show that “but for” the alleged age discrimination, he would not have been terminated. In its opinion, the U.S. Court of Appeals for the Third Circuit ruled that it would not reverse a decision unless the lower court’s jury instructions “as a whole fail to correctly state the burden of proof [and,] read together, [the lower court's instructions] were not deficient.”
PQ next argued that the jury instructions should not have included an instruction indicating liability can attach to an employer because of the animus of a non-decision-maker (the so-called “cat’s paw”). The court ruled that, under applicable law pursuant to the ADEA, “it is sufficient if those exhibiting discriminatory animus influenced or participated in the decision to terminate … If a supervisor performs an act motivated by…animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment actions, then the employer is liable.” The court further elaborated, saying, “The underlying principles of agency upon which subordinate bias theories are based apply equally to all types of employment discrimination.” Therefore, the instruction was appropriate.
PQ’s third argument was that the jury should have been given a specific business-judgment instruction. A business-judgment instruction is one that makes it clear that an employer can make personnel decisions based on business considerations. The court ruled that the jury instruction “the defendant had a right to hire and fire its employees whenever they [sic] wanted to, as long as they [sic] didn’t do it because of age” was sufficient to ensure the jury understood the law of business-judgment.
PQ’s fourth argument was that the lower court was not impartial in its jury instructions as a whole; however, as the court ruled that the individual instructions described above were each acceptable, there is no question as to the impartiality of the instructions taken as a whole.
PQ then argued that judgment ought to have been entered in its favor as a matter of law. When considering this argument, the Third Circuit was unconvinced. The court indicated that the plaintiffs presented “considerable evidence” in support of their claims, including how PQ changed its reasons for termination over time, how it terminated only those employees over 55, how the terminations are statistically significant as opposed to happenstance (even when controlling for alleged business decisions), and how statements from various people at PQ seemed to indicate a bias against older employees. PQ argued that the evidence described above is insufficient to warrant a verdict in the plaintiffs’ favor; however, the court ruled that it is within a jury’s discretion to weigh the evidence available and the above is sufficient to justify its verdict.
Finally, PQ argued that the award of the jury was inappropriate as it awarded damages for emotional distress in the absence of serious harm. PQ argued that the size of the award reflected the jury’s ruling on passion and prejudice as opposed to measured consideration, and, therefore, PQ should be entitled to a new trial. The court quickly dismissed this argument, citing well-established case law indicating that the size of an award is not enough to prove the verdict was rendered because of passion and prejudice.
PQ then argued that the jury must have rendered its verdict due to passion and prejudice because it only spent three hours deliberating; however, again the court was not persuaded as it, again, cited a variety of case law indicating time spent deliberating is not dispositive.
The plaintiffs also raised arguments on appeal. They argued that they should have been entitled to prejudgment interest and an adjustment for negative tax consequences. The court ruled that one of the purposes of damages is to make an injured party whole; it also noted that an abuse of discretion in awarding damages “occurs when a district court deviates from this policy without a reasoned explanation.” The court ruled that consideration of prejudgment interest and negative tax consequences were typical and the lower court’s denial of the above requested damages, contained in a single sentence, was clearly not a reasoned explanation for its deviation from the norm. Therefore, the court ruled that the prejudgment interests and accounting for negative tax consequences were appropriate to make the plaintiffs whole.
The applicability of the ADEA is in flux since the Gross decision. The case of Marcus v. PQ Corp. will serve to make the ADEA’s applicability clearer in the wake of Gross and help practitioners to more effectively and appropriately use it for the benefit of their clients. •
James W. Cushing is an associate with the Law Office of Faye Riva Cohen. He can be reached at 215-563-7776 and email@example.com.