Employment Law Daily Cancer-stricken exec, added to RIF list after EEOC charge notice, heads to trial
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Thursday, February 11, 2016

Cancer-stricken exec, added to RIF list after EEOC charge notice, heads to trial

By Brandi O. Brown, J.D. A former company VP who within four years after he was diagnosed with cancer was denied two yearly bonuses and equity awards and was laid off after filing an EEOC charge, will be allowed to take many of his claims to a jury after a ruling by a federal district court in New York. Although his discriminatory termination claim failed, a jury could infer retaliatory intent from the fact that he was placed on a RIF list within one month of the employer learning of his EEOC charge. The defendant's motion for summary judgment was granted in part (Lott v. CoreOne Technologies, LLC, February 2, 2016, McMahon, C.). Cancer diagnosis and missed promotions. In 2010, at around the same time he was named Global Head of Product, the employee was diagnosed with cancer. After he became sick, he did not receive any further promotions. In 2011, the company was reorganized, but the employee was not tapped to head up any of the new units. Instead, two of his subordinates and another younger individual were tapped for the positions. The company later hired new CTOs and a new COO. While the employee did not apply for any of these, he did make a director aware of his interest in the COO position. Bonuses denied. Nor did he receive a bonus for the 2011 or 2013 financial years. Although he allegedly was told by the CEO that none of the senior executives received a bonus for 2011, bonuses were provided to several executives. As to the 2013 bonus, the employer first indicated that the employee did not receive it because he had received a raise that year. However, the employer later took the position he was ineligible because he left his employment prior to the bonuses being paid. Wrangling over equity agreements. In 2012 and 2013, the employee received equity agreements from the employer proposing to allot him a certain number of incentive units with vesting based on the purchase price should the company be purchased. Unhappy with these terms, the employee’s attorney sent letters to the employer raising concerns about whether the award reflected his proper percentage ownership. He also referenced his cancer diagnosis and the fact that he was regularly promoted until he became ill. Subsequently, a new version of the agreement removed the company sale price requirement but added a release of claims provision. The CEO testified that this was because the employee "made a lot of comments and statements that he was going to sue the company and we felt if we were going to give him equity we didn't want him to obviously engage in destructive behavior." The employee did not sign the agreement and his attorney wrote a letter stating that she believed the employee had been discriminated against, referencing the prior letter and the addition of the claims release condition. The employee never signed the agreement and, instead, filed an EEOC charge at the end of October 2013. RIF. In January 2014, just weeks after learning of his EEOC charge, the employee was placed on a list of two dozen employees who would be let go as part of a reduction in force. According to the employer, the employee was added to the list because he did not add enough value to justify his compensation. He was fired at the end of April as part of the RIF. He then sued, alleging claims of age and disability discrimination, as well as retaliation. He also brought a cause of action for breach of contract. Retaliation. Although the employer "cherry-picked dates to supports its argument" that the employee failed to produce evidence of a causal link between his protected activity and termination, the court explained that rather than the date of actual termination, the focus should be on the date he was added to the RIF list, which was within one month of the employer receiving notification of his EEOC charge. Thus, he had shown a "sufficiently close temporal relationship" between the complaint and the adverse action. That evidence also rebutted the employer's reason for terminating his employment, particularly when taken alongside its admission that it added the claims release provision to the October 2013 equity agreement in response to the employee's suggestion that he would take legal action against it. Similarly surviving the summary judgment motion were the employee's claims of retaliation based on the denial of equity that he had earned and its attempts to require him to sign a release of claims in order to receive equity. The employee produced evidence that, if believed, would demonstrate that he discussed concerns about discrimination with a senior executive in 2013 at the time his equity award was being negotiated. Moreover, the attorney's letter to the employer referenced his illness and his treatment thereafter, thus "plainly" referring to disability discrimination. And, in fact, the employer admitted that it added the litigation release because it believed the employee intended to sue. Equity awards and unpaid bonuses. According to the employee, the employer awarded him fewer shares, and on less beneficial terms, than it offered his colleagues, which he alleged was due to his age and actual or perceived disability. The employee raised a genuine issue regarding whether the amount of equity he was allotted resulted from discrimination, the court concluded, because there was reason to doubt the employer's justification that the other executives made greater contributions to the company. Months before the employee received the equity agreement, the Board passed a resolution calling for him to receive the same equity as the other two executives in question. This made it reasonable to assume that the three executives were of equal value to the company, thus calling into question management's subsequent decision to grant him less equity. Moreover, although the employee was unable to pursue the nonpromotion claims, the evidence that he was passed over for those promotions could serve as at least minimal evidence of age or health bias with regard to the equity decision. As to the bonuses, the employer admitted that it paid bonuses in both years to executives who were both younger and healthier than the employee. The court concluded that a jury should be allowed to consider those claims because the employer's justifications shifted over time and were unsupported.

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