Employment Law Daily Chattanooga Volkswagen employees age 50-plus granted conditional certification of age discrimination claim
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Friday, June 14, 2019

Chattanooga Volkswagen employees age 50-plus granted conditional certification of age discrimination claim

By Nicole D. Prysby, J.D.

Volkswagen’s “Pact for the Future” program could be considered a single unified policy under which Volkswagen employees over age 50 are potentially victims of age discrimination, but only as to employees in Volkswagen’s Chattanooga facility.

A federal district court in Tennessee has conditionally certified a collective action on behalf of Volkswagen employees who are 50 years of age or older, but only as to workers in Volkswagen’s Chattanooga plant. An employee claimed that Volkswagen’s “Pact for the Future” program is a single unified policy under which all Volkswagen employees are potentially victims of age discrimination, and the court credited his evidence showing that Volkswagen employees over 50 in Chattanooga are similarly situated as to facts underlying their claims and how the Pact might impact their employment setting. But he failed to make a showing that Volkswagen employees over 50 at locations outside Chattanooga are similarly situated to those in Chattanooga. The court also rejected the employee’s request that it order equitable tolling of class members’ individual claims for damages (Manlove v. Volkswagen Aktiengesellschaft, June 11, 2019, McDonough, T.).

Workforce reduction program. As previously reported, a 54-year-old manager at Volkswagen’s Chattanooga plant brought age discrimination claims after he was transferred and demoted following Volkswagen’s announcement of a new efficiency program. In November 2016, Volkswagen announced its “Pact for the Future,” which would eliminate 30,000 jobs worldwide. Volkswagen anticipated that job losses would come partly from attrition and retirements and expected that implementing its Pact would result in increased annual earnings of nearly $4 billion.

In a June 2017 press release, the CEO stated that the changes would affect Volkswagen operations worldwide, discussed retirements, and appeared to imply that the company had a new focus on younger workers. However, HR in Chattanooga, where the employee worked, quickly assured Chattanooga workers that the planned changes were limited to operations in Germany, and that the CEO’s comments “should not be misinterpreted as a preference for employees based on a particular age.”

Collective action certification. The employee moved the court to conditionally certify a collective action based on his ADEA claims. According to the employee, members of the proposed collective action, Volkswagen employees in the United States 50 years of age or older, were similarly situated. He asserted a theory that the Pact “represents a single discriminatory policy, plan, or scheme to which all class employees are potential victims.”

The court considered the four employees named in the lawsuit. The first employee (age 54) had received positive performance reviews but was not considered for three open assistant manager positions because younger employees had already been slated to fill the positions. He was eventually demoted, while younger employees advanced. The second employee (age 57) consistently received positive performance reviews but was terminated for violating a company policy and replaced with a much younger employee. The third employee (age 52) was initially told that he would be promoted to a managerial position but was then told that he was “too old” to be included in the training required to become a manager. The fourth employee (age 65) interviewed for a promotion and was told that he was a strong candidate but was passed over for a much younger candidate. In addition, he repeatedly trained much younger employees, who then were promoted into better positions than the employee.

Volkswagen argued that the named plaintiff did not show the putative class members were similarly situated because he proffered nothing more than four discrete employment circumstances of four declarants without a “common unifying nexus” or “unified policy tying individual claims together.” But the court concluded that the Pact was such a unified policy. The employee also produced evidence that Volkswagen had taken adverse actions based on age towards employees in Chattanooga. The exact methods of discrimination may vary among the putative collective-action members.

At the second stage of the certification process, Volkswagen may demonstrate that putative collective-action members’ circumstances are so dissimilar that they do not “possess the same interest,” but for the purposes of this first stage of the certification process, the employee made the required modest factual showing that Volkswagen employees in Chattanooga are similarly situated as to facts underlying their claims and how the Pact might impact their employment setting.

However, the employee did not make the required modest factual showing that Volkswagen employees over age 50 at Volkswagen locations outside Chattanooga are similarly situated to those in Chattanooga.

Oral argument. The court rejected Volkswagen’s request for oral argument on the issue of class certification. Volkswagen argued that the procedural impact of the cases needed to be addressed in oral argument, but the court noted that the procedural bifurcation is exactly what Volkswagen designed in its arbitration agreement: An arbitrator will decide claims for damages, and the court will decide claims for injunctive relief.

Equitable tolling. The employee also requested that the court order equitable tolling of class members’ individual claims for damages, which they anticipate resolving in arbitration after the resolution of the suit for injunctive relief. The court declined to do so because consideration of equitable tolling for claims brought in arbitration must be left to the arbitrator, and per the terms of the agreement only the arbitrator has the authority to interpret the agreement’s statute-of-limitations provision to determine whether equitable tolling is available for arbitrable claims.

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