Was an employee’s creative sales strategy the reason he was terminated — or was that simply a pretext? In Ng-A-Mann v. Sears, Roebuck Co., the U.S. Court of Appeals for the Fifth Circuit considered whether the plaintiff established that his former employer’s action violated the Age Discrimination in Employment Act (ADEA).

Cutting the coupon holder

The plaintiff, a 72-year-old commissioned salesman, with held coupons that were printed for customers at the time of sale and later used them to induce new customers to make purchases. This violated his employer’s coupon policy. A routine audit uncovered the plaintiff’s actions and, when interviewed, he admitted to them. The plaintiff was terminated and he subsequently brought an instant action alleging his termination violated the ADEA.

The plaintiff claimed that his employer wanted to downsize and that it targeted him because of his age. He alleged that other employees also violated the coupon policy and none of them were terminated. The trial court granted summary judgment in the employer’s favor, finding that the plaintiff had failed to produce material evidence that the company had used his coupon violation as a pretext for age discrimination. The plaintiff appealed.

Shifting the burden

Because the plaintiff relied on circumstantial evidence, the appeals court applied the burden-shifting test set forth in McDonnell Douglas Corp. v. Green, under which a plaintiff must first establish a prima facie case of discrimination. The burden then shifts to the employer to proffer a legitimate, nondiscriminatory reason for its action. Next, the plaintiff is given the opportunity to establish by a preponderance of the evidence that the proffered reason wasn’t the true reason, but a pretext for discrimination. Generally, pretext is found through evidence of disparate treatment, or by showing that the employer’s proffered reason is false or shouldn’t be believed.

The trial court had assumed that the plaintiff had established a prima facie case and that the employer offered a nondiscriminatory reason for the termination — violation of its coupon policy. Thus, the burden shifted back to the plaintiff to prove that the employer’s proffered reason was a pretext. As evidence of pretext, the plaintiff argued that other employees used old coupons but weren’t terminated. The employer responded that, as a result of the same routine audit, it had terminated eight other employees between the ages of 17 and 24 — one of whom had violated the same coupon policy.

Assessing similarity

The plaintiff also alleged disparate treatment because younger employees who used old coupons to induce sales weren’t fired. But the court held that the fact that other employees had engaged in similar misconduct and weren’t fired wasn’t necessarily evidence of disparate treatment. The difference in treatment may be accounted for by a distinction between the plaintiff’s actions and the actions of those alleged to be “similarly situated” — that is, employees who have the same position and have committed the same violation, both in terms of seriousness and frequency.

In this case, the plaintiff needed to show that his employer chose not to terminate another similarly situated employee who had violated the coupon policy as frequently as he had. As the plaintiff couldn’t do so, he didn’t establish pretext.

The plaintiff further alleged that comments made by company management about retirement established pretext. On their own, comments regarding eventual retirement don’t evidence discriminatory intent. But persistent supervisor comments about retirement, along with other evidence, can lead to a finding of pretext. The plaintiff stated that his managers brought up retirement on multiple occasions. However, the court found that he’d failed to establish that they were anything more than reasonable inquiries into his future plans.

Staying out of court

Ultimately, the appeals court in this case affirmed the trial court’s decision of summary judgment in the employer’s favor. Yet, like most employers, you’d no doubt prefer to avoid court altogether. When terminating employees, ensure that you’re taking or have taken similar adverse actions against similarly situated workers.