The End of the Long-Standing “Stray Remarks” Defense in Employment Lawsuits?

The Massachusetts Appeals Court issued a precedent altering decision partially centered on the long-standing defense in employment lawsuits known as the “stray remarks” doctrine. Formerly, when analyzing whether a statement could serve as direct evidence of discriminatory animus against an employer the court considered several factors. First, the court evaluated whether a decision maker was the speaker and whether the remark was related to the employment decision. Secondly, the courts looked at factors such as whether the comment was made before (having the ability to affect the decision) or after the employment decision, and the content of the remark. Previously, if those factors were in favor of the employer defendant, the courts have disregarded evidence of discriminatory remarks presented in a motion dealing with the sufficiency and admissibility of evidence, such as a motion for summary judgment.

Recently, in Adams v. Schneider Electric USA, the Appeals Court held that a motion for summary judgment awarded to Schneider Electric, in a lawsuit against a ten-year employee, released during a batch of reduction in force (RIF) layoffs should be reversed and was decided in err. In doing so, the judges held that there was sufficient evidence in the record for a reasonable jury to conclude that the RIF was proposed to carry out the larger corporate plan to target and replace its older work force. The Court determined that there was sufficient evidence of a high-level directive to replace Schneider’s older work force with younger talent “from which a jury could find that the RIF itself was tainted even if the person who selected the employees for the RIF [did so] neutrally.” As evidence of such, the Court pointed to an October 2015 e-mail in which a vice president told another employee that the company needed age diversity and younger talent. Contrary to the established Massachusetts precedent, the Court also pointed to comments made after the terminations and more importantly, not made by the Schneider employee who terminated Adams. This trampling of precedent did not go unnoticed by the Court, however. The judges reasoned that comments once considered stray and having no nexus to the employment decision, can “still be relevant to the employer’s contemporaneous thinking.” The judges continued by reasoning that any comments “made by those who have power to make employment decisions” can appropriately be considered as evidence of a larger discriminatory animus, and can no longer be dismissed as mere “stray remarks.” 

Essentially, the justices determined that even if the RIF was born from a non-discriminatory purpose, allegedly discriminatory remarks by higher-level managers can allow a jury to determine that the RIF was discriminatory from inception because of “the motives of the corporate managers,” not just the supervisor carrying out the employment decision, “should be treated as the motives for the decision.” In doing so, the majority had departed from the long-standing legal rule that “stray remarks” are insufficient to prove discriminatory bias by holding that the rule can never apply to a manager who has the power to make employment decisions. After this decision, statements from managers made after an employee is laid off could be used to persuade a jury that, although the direct actor harbored no discriminatory animus, they were “the innocent pawn of an undisclosed corporate strategy tainted by unlawful discriminatory animus.” 

This case will undoubtedly change the landscape for both plaintiff and defense employment counsel for the foreseeable future. Moving forward, it is essential that supervisory and management level decision makers are careful when discussing company-wide strategy that may impact workforce numbers. “Stray remarks,” that were once considered irrelevant and insufficient at the dispositive motion stage of litigation, are now considered to be signs of discriminatory strategy, and sufficient evidence for a jury to make a finding against an employer.  Employers, in addition to taking a second look at their own communications and language concerning RIF’s and the like, should be counseling their supervisors and managers to be mindful of their communications, even long after a RIF or other adverse employment action, because the comments made can be imputed on the employer as a whole.  Contacting your existing employment counsel at the first thoughts of laying off employees can help protect your business from legal liability and help you navigate the newly muddied water of reductions of force in Massachusetts.

For more information on this, or any other employment and labor law matter, please contact the attorneys at The Royal Law Firm LLP; (413) 586-2288. We know business matters!