Allen v. Highlands Hospital Corp., No. 07-6414 (6th Cir. Oct. 21, 2008)

| Oct 20, 2008 | Daily Developments in EEO Law |

An ADEA disparate impact claim comes to grief in the Sixth Circuit.

Allen v. Highlands Hospital Corp., No. 07-6414 (6th Cir. Oct. 21, 2008):  The case begins with a hospital employee, Ms. Allen, accused of violating patient privacy rules by removing copies of her granddaughter’s x-rays without authorization.  With the cooperation of a co-worker, Ms. Slone, “Allen . . . signed [her daughter Tammy] Davis’s name on a release form, backdated the document, and put it in the x-ray jacket. Throughout the course of this litigation, Allen has maintained that her actions did not constitute a “forgery” because she had Davis’s oral permission to sign the release. Davis, however, did not recall whether she had given Allen permission to sign her name, but she did give Allen permission to pick up the x-rays.”  Both co-workers were terminated by the director for a “‘Group I’ offense, the worst category of offenses that an employee can commit, and one that authorizes termination upon the first infraction.” 

The two fired employees then brought suit against the hospital for violations of the ADEA and Kentucky Civil Rights Act, alleging that the terminations were either motivated by age or, alternatively, the product of a cost-cutting policy that allegedly had a disparate impact on employees age 40 and over. The district court found that the employees’ disparate treatment claim failed because there was no evidence that the proffered legitimate, non-discriminatory reason for their discharge — violating a work rule — was a pretext for discrimination.  The disparate impact claim failed at the first stage (i.e., the absence of evidence of a statistical age impact) and because the “the Hospital’s goal of cutting costs by increasing turnover and discouraging employees from using sick and vacation time was not unlawful.”

The Sixth Circuit affirmed summary judgment on all claims. It held that (1) the plaintiffs presented no “direct” proof of age discrimination in their discharge, based on a single comment by a supervisor that “I think all older employees are going to be let go,” and; (2) the circumstantial evidence failed as well.  On the latter point, plaintiffs contended that there was a genuine issue of material fact about whether the removal of the x-rays was “authorized.”  Ye the panel held that this argument was:

“substantially undermined by evidence in the record demonstrating that Allen and Slone (1) were informed by another Hospital employee that a written release from Davis was required, and (2) recognized at the time of the incident (or shortly thereafter) that the absence of a written release was problematic. Indeed, on the evening of the x-ray incident, Slone called Allen and asked her to ‘[m]ake sure [Davis] signed a release, because if there’s not a release signed by [Davis], I could be in trouble over this.’ Allen then created a written release, signing Davis’s name and backdating it so that the release appeared to have been created before the x-rays were taken from the Hospital. This behavior strongly suggests that Allen and Slone recognized that their actions were incompatible with HHC’s privacy policy.”

The court also held that the hospital’s cost-cutting plan, said to be motivated by age, did not support an inference of discrimination.  At most, the record showed that the employer “had attempted to cut costs by increasing employee turnover and targeting employees who had job seniority; i.e., those who had higher salaries and more sick and vacation time.”  Because seniority is not synonymous with age, the court held that no inference of age bias would lie.

As for the disparate impact count, the employer first argued that the employees had not cited this claim in their EEOC charges.  The panel used the opportunity of this case to reverse prior circuit case law that held that administrative filing was a jurisdictional prerequisite to filing a civil action.  In light of the Supreme Court’s decision in Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), the court held that the filing of a charge was not jurisdictional.  Yet the Court doubted that plaintiff Allen’s charge adequately preserved the claim, stating simply that she “was discharged because of [her] age.” Slone included a slightly more detailed explanation: “I was informed that I was terminated for violation of the Health Information Privacy Act. I believe that I was discharged because of my age, 53, in violation of the Age Discrimination in Employment Act (ADEA).” 

Even if these charges were enough to support disparate impact, the panel affirmed summary judgment on the alternative ground that the claim simply failed on the merits.  The panel found that the plaintiffs at most identified a “generalized” policy of cost-cutting, which fell well short of the specificity required to challenge disparate impact under the ADEA. Moreover, “plaintiffs . . . failed to proffer statistics showing that older workers have been disproportionately harmed. As the district court observed, between July 1998 and December 2004, the percentage of total workers in the protected class actually increased from 40.6% to 50.4%. Furthermore, as we have already noted, between 1998 and 2004, HHC showed that employees under the age of 40 were terminated in a significantly higher proportion than workers protected by the ADEA.”

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