Every workplace has managers who love to hand out nicknames to employees and co-workers. That’s all good fun until an employee in a protected class—age, sex, race, religion, disability, etc.—takes offense to his or her special nickname. As this new court ruling shows, nicknames are dangerous and can be used as part of a “mosaic” to prove discrimination …

Case in Point: Jolyn McDonald, 54, worked for 17 years at a Best Buy store in Illinois as a customer service manager. She’d been promoted to her position after an “exceptionally strong performance history” and positive performance reviews.

One day, the store manager gave her a written warning for failing to adapt to the company’s new business model. Witnesses testified that company leaders said employees who had “been around for a while” had a harder time adjusting to the new focus. The store manager recommended that McDonald step down from her job to spend more time with her grandchildren.

A few months later, a new store manager took over and started calling McDonald “Grandma” in front of other employees. He was also known to brag that he could fire any employee “with proper documentation.” He placed McDonald on a performance improvement plan before her even worked with her.

Soon after, McDonald was told she was being demoted because her staff handled situations poorly. She quit and filed an Age Discrimination in Employment Act (ADEA) lawsuit. The ADEA prohibits workplace discrimination against employees 40 years of age and older. Employees must be able to prove either direct age discrimination or “circumstantial evidence" that suggests discrimination. McDonald said the nickname was strong circumstantial evidence.

In court, Best Buy countered by claiming that “Grandma” isn’t an age-related nickname because people under 40 could also be grandparents. (McDonald v. Best Buy Co., U.S. Dist. Court, CDIL, 8/28/08)

What happened next … and what lessons can be learned?

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There’s nothing like a thorough, prompt and impartial investigation to save a company in court. So it’s time to think: Are you (and your HR staff) prepared and trained to handle investigations the correct way? As this new ruling shows, good investigations and an independent review of those investigations can be a true “get out of court free” card …

Case in Point: Cynthia Morrison worked as an emergency-room registrar for 17 years at Howard University Hospital. All was well until a new supervisor, Mark Furline, took over and hired 10 new registrars who were mostly in their 20s. Morrison claimed that Furline favored the younger employees and was hostile toward the older ones.

A rumor circulated that the younger registrars were being paid more—but that was proven to be false. Nevertheless, someone left a screen-saver message on a shared computer asking why the younger registrars were being paid more. Furline responded by leaving his own screen saver message that said, “Because they are younger, dependable and more productive—that’s why!” Furline later apologized to the staff.

Still, Morrison claimed that the hostility and retaliation toward older registrars continued on. At one point, Morrison received a written reprimand for her attendance problems. It culminated in a five-day suspension without pay. (The suspension was consistent with the company’s progressive discipline policy.)

Morrison sued the hospital and Furline personally, alleging that the reprimand was a result of age discrimination and retaliation. The hospital responded by saying that even though Furline’s actions showed discrimination, the attendance reprimand was based on a fair investigation and layers of review. (Furline v. Morrison, D.C. Cir., 7/24/08)

How did the case end … and what lessons can be learned?

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Does your company have a written progressive disciplinary policy? Do you and your supervisors follow it step by step--like a recipe? A new court ruling says that if you don’t, you could whipping up a recipe for disaster and liability under the Age Discrimination in Employment Act (ADEA).

Case in Point: Cynthia Kildo and Leann Richter worked as sales associates at a Cellular One store. Both were over 40. The company laid out very specific sales quotas for its sales associates and a written progressive disciplinary process for failing to meet such expectations. To make sure that managers used the discipline process fairly and consistently, the policy set multiple levels of review before disciplinary action could be taken.

Kildo and Richter were fired for failing to meet their sales quotas five times during a 12-month period. They thought their age was the real reason for the firing, so they filed ADEA lawsuits. (The ADEA is a federal law that protects workers age 40 and over from employment discrimination.)

Their proof: alleged inconsistency in applying the discipline policy. The women argued that the regional vice president used his discretion to enforce the disciplinary procedures when quotas weren’t met. They pointed to other sales associates under 40 who had also failed to meet their quotas but got to keep their jobs.

The company, however, thought it had an ace up its sleeve: It argued that the company’s policy “reserved the right” to impose different discipline based on particular infractions. (Whitesell v. Dobson Commc’ns t/a Cellular One, W.D. Pa., 2/20/08)

How did this case end…and what lessons can be learned?

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Does your organization have a policy requiring employees to retire (or step down to a lesser position) once they hit a certain unbecoming age? Does that sound like your strategic succession plan—push your working geezers and geezeretts out the door so younger workers can climb the ladder? If so, a groundbreaking $27.5 million EEOC settlement last week shows that you better retire those policies … not the people.

Here’s why: The federal Age Discrimination in Employment Act (ADEA) prohibits employers from using policies or rules that require employees (over 40) to retire when they reach a particular age. In the past, some organizations believed they could skirt the ADEA by implementing partnership agreements that classified certain employees as “partners” under state partnership law. As partners, they’d be one of the firm’s “employers” and, thus, excluded from the ADEA. But that old trick no longer works, as last week’s big settlement shows.

Case in Point: A few years back, Sidley Austin LLP—an international law firm with, ironically, a solid employment-law practice—initiated a restructuring plan. Partners over age 40 were required to either quit or take demotions to lesser positions like “senior counsel.” Also, the firm’s previous mandatory retirement age of 65 was scaled down to the range of 60 to 65. These new policies affected about three dozen attorneys who were in the prime of their careers. These lawyers complained to the EEOC, which sued on their behalf.

Sidley openly shared its strategic plan: target partners in their 50’s to enhance the leadership opportunities of younger partners. How else can a business really create a viable succession plan? Not that way, the EEOC said. (EEOC v. Sidley Austin LLP, N.D. Ill., No. 05 C 0208, 10/4/07)

How did this case end…and what lessons can be learned?

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The right timing is an important thing in most contact sports … including layoffs. And suspicious timing is always a red flag to employees and to the courts, as new lawsuit against Boeing shows.

If your organization suddenly changes its employee-scoring rules (to the employee’s detriment) prior to a layoff, it will undoubtedly raise eyebrows that something fishy is going on. The courts call it “pretext” for discrimination … your employees will call it something worse.

Case in Point: Eileen McKee, 52, was a Boeing employee for more than 30 years when the company initiated a RIF. About that same time, the company started to use a new employee rating system to compare employees in comparable positions. The new system placed McKee toe-to-toe against a 36-year-old female employee. McKee received a losing score of 17 to the other woman’s rating of 39. As a result, Boeing cut McKee loose as part of the RIF.

McKee shot off a state age-bias claim and lost. Undeterred, she filed a federal Age Discrimination in Employment Act (ADEA) lawsuit and the court last month sent the case on to trial.

The big reason: the court was especially skeptical of the rapid decline in McKee’s performance rating. Only months before she lost the ratings game in the RIF, McKee had scored a “glowing” performance report. In fact, the category in which McKee scored the highest on her earlier evaluation was removed, which resulted in her receiving a lower score before the RIF. (Cotter v. Boeing Co., E.D. Pa. No. 05-5053, 6/26/07).

What does this new ruling mean to you?

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When you have to perform reductions in force, the best strategy for avoiding age-discrimination lawsuits has nothing to do with a “strategy” at all—it’s all about making sound decisions based on honest, documented employee rankings, as telecom giant Sprint Nextel has just learned the hard way.

Case in Point: Sprint Nextel thought it had the strategy all figured out on how to avoid age discrimination lawsuits when making a series of reductions in force from 2001 to 2003. First, in an effort to save its younger workforce from being tossed into the deep end of the pool of potential layoffs, it transferred many younger workers to jobs that were “safe” from elimination. And it labeled some as “key talent.” Second, it left everyone else in the org chart where they were.

To make matters worse, Sprint Nextel set a new performance management system in motion that had a disparate impact on older workers.

Bad idea combined with bad timing.

Result: About 1,700 Sprint-Nextel workers filed a class-action Age Discrimination in Employment Act (ADEA) lawsuit. The company ended up settling last month for $57 million, one of the biggest age-discrimination class-action settlements in recent years. (Williams v. Sprint/United Mgmt., D. Kan., No. 03-02200, settlement 5/18/07)

What does this new ruling mean to you?

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Open mouth. Insert foot. Taste a lawsuit? The district manager at the Foot Locker did.

In a surprising court ruling, a judge decided that only “one comment” made by the district manager about the store manager’s age was enough to hand him his walking papers - into court that is (Barnes v. Foot Locker Retail, Inc. D. Kan. 3/9/07). Click here for the Age Discrimination case.

Usually, there is the tried-and-true “isolated comment” defense that employers argue and many courts will buy into. It looks like this: “It was just one time.” Or, “The manager didn’t mean it. Mea culpa, let us go!” But, in this situation the court kicked that defense out of play completely.

What does this new ruling mean to you?

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