Aug. 8, 2010 "Loose Lips Sink Ships" - Supreme Court Holds that Stray Remarks Count Toward Bias

Summary

In a decision invoking the imagery of the famous World War II caution, on August 5th the California Supreme Court issued its long-awaited ruling in Reid v. Google.  In a unanimous opinion, the court held that evidence of bias coming from the mouths of employees who were not themselves the decision makers in an employment decision cannot be summarily ignored, but must be evaluated and considered along with more direct evidence.  The Reid Court also let stand three other lower court rulings that effectively make it more difficult for employers to win summary dismissals in employment discrimination cases.

Details

Brian Reid worked for Google between June 2002 and February 2004.  Google's Vice-President of Engineering, Wayne Rosing (then age 55), hired Reid (then age 52) as Director of Operations.  Reid had a Ph.D. in computer science and was a former associate professor of electrical engineering at Stanford University.   He primarily reported mainly to Rosing.   

After one year of employment at Google, Reid received a "consistently meets expectations" performance review, which praised his intelligence and analytic skills, but also cautioned that he had to adapt to the younger, fast-paced Google environment.  He received a bonus and stock as well.  However, during the following year, Reid's fortunes changed.  In his lawsuit, he claimed he was demoted, given only a small bonus, and eventually terminated by Rosing because he was "not a good cultural fit." 

In support of his age discrimination claim, Reid asserted that his younger subordinate, Holzle (who eventually took his job) told Reid every few weeks that his opinions and ideas were "obsolete" and "too old to matter," that he was "slow," "fuzzy," "sluggish," and "lethargic," and that he did not "display a sense of urgency" and "lack[ed] energy."  Other coworkers called Reid an "old man," an "old guy," and an "old fuddy-duddy," told him his knowledge was ancient, and joked that Reid's CD (compact disc) jewel case office placard should be an "LP" instead of a "CD." 

However, neither Holzle nor the other coworkers were the persons who made the decision to let Reid go, enabling Google to win dismissal of the case at trial by arguing that only evidence of biased remarks actually made by the decision makers, and during the decisional process, should be considered.  Google asserted that any other statements were inadmissible "stray remarks."  Google also argued that no age discrimination was possible since Rosing had both hired and fired Reid, and was himself well into the protected age category (then age 57).  An intermediate appellate court sided with Reid, and Google appealed to the California Supreme Court.

The Supreme Court ruled that Reid's suit could go forward, and that it was error to automatically exclude from consideration the alleged "stray remarks."  The court noted that in assessing any discrimination case, remarks showing bias by persons other than the actual decision makers must be considered, and given such weight as they merit.  For example, if the remarks were made by persons who, in turn, criticized the plaintiff (albeit in non-biased language), they might show that the criticism was biased.  If the remarks were sufficiently pervasive, they might show a hostile, ageist culture.  If the remarks showed that the plaintiff could not effectively perform his job because of coworker bias, they might also be probative.  The court also rejected the "same decision-maker" defense, indicating that this evidence may still be considered, but is not dispositive.

Notably, the Reid Court also let stand portions of the appellate court's ruling that stated that a plaintiff can use statistics and expert opinions about bias in the workplace in order to defeat summary judgment.

What This Means

It will now be more difficult to obtain defense summary judgments in California bias cases.  Reid also means that in litigation, arbitration or EEOC proceedings, "me, too" and "stray remark" evidence - once excluded by the courts - will now be in play, subject to its nexus to work environment or the decision at issue.  But it also means three other things:

First, employers must be careful not to limit the scope of issues and evidence in their discrimination analyses and investigations.  Investigations should not be narrowly limited to evidence about bias in the actual decision or by the actual decision maker, but must take into account evidence of bias by other individuals that might, in some way, have affected the outcome.  Training should also focus on the increased danger that these stray remarks, especially in email or on social networking sites, pose to the employer.

Second, if there is any indication that someone with possible bias provided meaningful input into a termination decision, that input must be scrubbed or eliminated from consideration.  The fact that the ultimate decision maker is a fair, even handed and unbiased person is not enough.

Third, employers must pay closer attention to claims of institutional bias in the corporate culture.  Poor statistics can hurt.  Cumulative litigation by one particular group can also hurt.  Benefit and cultural programs, even if unintentionally skewed toward only one particular group (e.g., the young, specific racial/ethnic groups, or one gender) may potentially be used as evidence of indifference toward others.  Employers should not wait for an expert hired by a plaintiff to audit their programs and practices, but should include a periodic, privileged, cultural self-audit as a regular component of their compliance program.       

This E-Update was authored by Rich Paul.  For more information, please contact Mr. Paul or any other Paul, Plevin attorney by calling (619) 237-5200.

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