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Employee Could Not Establish That Reduction In Force Was Discriminatory
David Foroudi worked as a senior project engineer at The Aerospace Corporation (Aerospace). Foroudi’s supervisors counseled him regarding deficiencies in his performance and warned him that failure to improve could result in corrective action. Under the collective bargaining agreement, Aerospace management assigned all bargaining unit employees, including Foroudi, to a value ranking based on their performance. “Bin 1” contained the highest-ranked employees and “bin 5” contained the lowest. In 2010 and 2011, Foroudi was ranked as bin 5.
In late 2011, Aerospace learned that its funding would be significantly impacted by the Department of Defense budget cuts. In response, Aerospace began implementing a company-wide reduction in force (RIF). The pool of eligible employees was divided into those ranked in bins 4 and 5 in 2011; new employees who were unranked; and employees on displaced status. Management then ranked RIF-eligible employees based on several criteria, including bin ranking, performance issues, and skills and expertise. Foroudi’s managers ultimately selected him for the RIF because he was in the lowest ranking bin, he did not have a strong background in algorithmic applications for GPS navigation, and he had received prior performance counseling. Aerospace notified Foroudi he would be laid off in March 2012. In Foroudi’s division, one laid-off employee was in his 80’s, two were in their 70’s, 17 were in their 60’s, 46 were in their 50’s, 24 were in their 40’s, and six were in their 30’s. Foroudi’s duties were given to an employee who was 14 years younger than Foroudi and who was considered an expert in GPS technology.
In January 2013, Foroudi filed a charge with the California Department of Fair Employment and Housing (DFEH) alleging discrimination, harassment, and retaliation because of his age, association with a member of a protected class, family care or medical leave, national origin, and religion. He also filed a charge of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC). More than one year later, Foroudi filed an amended DFEH charge alleging that he was laid off because of his protected statuses.
In August 2014, Foroudi and four other former Aerospace employees filed a civil complaint against Aerospace, alleging among other claims, age discrimination in violation of the Fair Employment and Housing Act (FEHA). The complaint also alleged that Aerospace used the RIF as a pretext to hide its motivation to terminate Foroudi because of his age and that the RIF had a disparate impact on employees over the age of 50. In January 2015, the employees filed an amended complaint to add a cause of action under the Federal Age Discrimination in Employment Act and class action allegations.
After a federal court dismissed the employees’ disparate impact and class allegations because they were not included in the DFEH charge, the matter was remanded to California’s superior court. Foroudi subsequently contacted the DFEH and EEOC to amend his charges to include class and disparate impact allegations, but the superior court did not let Foroudi file an amended civil complaint.
Aerospace then moved to dismiss Foroudi’s case. Aerospace claimed that he could not establish a prima facie case of age discrimination, nor provide substantial evidence that Aerospace’s reasons for the RIF were a pretext for age discrimination. Foroudi argued that discriminatory intent was evident because 1) he was more experienced and qualified than the younger employee who took over his work; 2) his statistics showed the RIF had a disparate impact on older workers; 3) Aerospace did not rehire him after he was laid off, and 4) his managers gave “shifting” reasons for selecting him for the RIF. The superior court found in favor of Aerospace. Foroudi appealed.
The California Court of Appeal affirmed the superior court’s ruling. First, the court upheld the decision to deny Foroudi the opportunity to amend his complaint. The court noted that the EEOC did issue Foroudi a new right-to-sue letter after the federal court remanded the case. But, the exhaustion of EEOC remedies did not satisfy the requirements for Foroudi’s state law FEHA claims. While Foroudi attempted to add the class claims to the DFEH charge, he did so more than three years after the DFEH had permanently closed his case and nearly two years after he filed his civil complaint. Foroudi could not argue his charge including the class and disparate impact claims “related back” to his prior DFEH charge because he was asserting new theories that could not be supported by his prior DFEH charge. Accordingly, Foroudi could not show he exhausted his administrative remedies as to his class and disparate impact claims.
Next, the court agreed to enter judgment in favor of Aerospace. The court reasoned that even assuming Foroudi could establish a prima facie case, Aerospace had legitimate, nondiscriminatory reasons for Foroudi’s termination that Foroudi could not show were pretextual. Aerospace’s evidence showed it instituted the company-wide RIF after learning it faced potentially severe cuts to its funding and selected Foroudi using standardized criteria.
The court found that Foroudi could only proceed by offering “substantial evidence” that Aerospace’s reasons for terminating Foroudi were untrue or pretextual and that Foroudi had not met this burden. For example, the court noted that he was not replaced by a younger employee. Rather, Aerospace eliminated Foroudi’s position and created a new position that combined Foroudi’s former duties with the duties of an existing employee. Further, the court noted that for Foroudi’s statistical evidence to create an inference of intentional discrimination, it had to “demonstrate a significant disparity” and “eliminate nondiscriminatory reasons for the apparent disparity.” The statistical evidence Foroudi offered did not account for the age-neutral factors that were considered in connection with the RIF, such as an employee’s experience, performance, and the anticipated future need for the employee’s skill.
For these reasons, the Court of Appeal affirmed the superior court’s ruling and awarded Aerospace its costs on appeal.
Foroudi v. Aerospace Corp., 57 Cal.App.5th 992 (2020).
Given the impacts of the COVID-19 pandemic, many employers have reduced their workforces. State and federal laws prohibit discrimination in the RIF process. Public agencies should ensure they are evaluating employees according to standardized criteria that are not age-related to avoid claims that they are discriminating against employees 40 and above.