By Christina Jaremus and Erin Dougherty Foley

Seyfarth Synopsis: In Frappied v. Affinity Gaming Black Hawk, LLC, 966 F.3d 1038 (10th Cir. 2020), the Tenth Circuit reversed dismissal and summary judgment in favor of Affinity Gaming Black Hawk, LLC (Affinity) on three of four discrimination claims brought by former Casino employees. The basis for the Court’s decision highlights several key takeaways for employers to consider in responding to discrimination claims after implementing layoffs.

The Frappied Plaintiffs were nine employees, eight women and one man, working at the Golden Mardi Gras Casino (Casino) in Blackhawk, Colorado. In 2012, Affinity purchased the Casino in 2012, and took over its operations in November. In January 2013, Affinity laid off many of the Casino’s employees, including the nine Plaintiffs. All of the Plaintiffs were over 40 years of age when Affinity terminated their employment. It was not a reduction in force. Affinity posted an advertisement listing 59 open positions and hired a large percentage of employees in their twenties. The female Plaintiffs brought “sex-plus-age” disparate impact and disparate treatment claims under Title VII of the Civil Rights Act of 1964 (Title VII), and all nine Plaintiffs brought disparate impact and disparate treatment claims under the Age Discrimination in Employment Act (ADEA) for age discrimination. The district court granted Affinity’s motion to dismiss the Title VII sex-plus-age claims and the ADEA disparate impact claim and granted summary judgment in favor of Affinity on the remaining disparate treatment ADEA claim.

The Tenth Circuit reversed all of the district court’s dismissals except the dismissal of the Title VII disparate treatment claim. Below are the key takeaways from the decision.

1. Sex-Plus-Age (or Another Factor) is a Cognizable Combination Claim Under Title VII Even if the “Plus” Factor Isn’t Protected by Title VII. It is no surprise that Title VII prohibits discrimination based on a combination of characteristics protected by Title VII, such as “sex-plus-race” discrimination, i.e., discrimination targeted only at employees of a particular race and sex. In Frappied, the “sex-plus” claim was based on sex discrimination combined with age discrimination. Age is not a protected characteristic under Title VII. Regardless, the Tenth Circuit noted that Title VII forbids “sex-plus” discrimination even when the “plus” characteristic is not protected under Title VII. The United States Supreme Court has recognized discrimination against women when the employer refused to hire women with preschool-age children, but not men with preschool-aged children. This was true even though Title VII does not prohibit discrimination against people with preschool-age children as a class.

As long as sex plays a role in the employment action, it is of no significance that a discriminatory factor other than sex might also be at work, even if that other factor plays a more important role than sex in the employer’s decision. Put in another way, as the U.S. Supreme Court explained in Bostock v. Clayton Cty., Ga., ––– U.S. ––––, 140 S. Ct. 1731, 1739, 1742 (2020), if a hypothetical employer has a policy under which it fires all Yankees fans, a termination based solely on that policy is because of status as a Yankee fan, not because of sex. But if its policy is to fire only female Yankees fans, it engages in prohibited discrimination because such terminations are based in part on sex.

In Frappied, the Tenth Circuit held that the sex-plus-age claims are cognizable under Title VII and reversed the district court’s dismissal of the Plaintiff’s Title VII disparate impact claims. It rejected Affinity’s argument that plaintiffs should not be able to bring Title VII sex-plus-age claims because of the availability of relief for age-based animus under the Age Discrimination in Employment Act, noting that each statute addresses different harms. The Court noted that recognizing “intersectional” claims best effectuates congressional intent to prohibit discrimination in its entirety.

However, it upheld the district court’s dismissal of plaintiffs’ Title VII disparate treatment claims because the lawsuit did not include any specific factual allegations that would suggest that Affinity discriminated against any individual plaintiff or the plaintiffs as a group because of sex. The lawsuit included statistical data, but it did not suffice to raise a plausible inference of sex discrimination because the Plaintiffs did not exclude younger workers in their statistical analysis. Instead, the statistics the Plaintiffs included in their lawsuit reflected at least three possibilities: discrimination based on: (1) sex alone, (2) a combination of sex and age, or (3) age alone. Because the plaintiffs did not compare older women to only older men, the statistics did not give rise to a plausible inference of discrimination because of sex necessary to allege a disparate treatment claim under Title VII.

2.  A “Sex-Plus” Plaintiff Need Not Show Discrimination Against an Entire Subclass. Citing Bostock, the Tenth Circuit also clarified that in order to prevail in a “sex-plus” claim, a female plaintiff does not need to prove that the subclass of women to which she belongs was unfavorably treated as compared to the corresponding subclass of men. Rather, if a sex-plus plaintiff shows that she (individually) would not have been terminated if she had been a man—in other words, if she would not have been terminated but for her sex—this showing is sufficient to establish liability under Title VII.

3.  Pay Attention to Lay-Off Demographics When Reorganizing Involves Rehiring. In Frappied, the district court dismissed the Plaintiffs’ disparate impact age discrimination claims because it concluded that the Plaintiffs did not offer statistics or data regarding the alleged disparate impact of age-neutral employment policies. The Tenth Circuit reversed. It found that the complaint alleged sufficient data to raise an inference of a disparate impact based on age. The Court found that the Plaintiffs provided data that showed Affinity laid off 67% of its workers forty or older and only 48-49% of its workers under 40. The statistical evidence also showed that there was less than a 5% chance that the correlation between age and termination was the product of random chance. The Court found that Plaintiffs’ claim was further buttressed by their allegations regarding the ages of the new hires who replaced Plaintiffs and the other terminated employees, 71% percent of whom were in their twenties. In short, when conducting layoffs where some employees may be rehired, pay attention to the relevant demographics of the employees who are laid off and rehired–a Plaintiff can plausibly allege an age-based disparate impact claim by alleging statistical evidence plus comparator (rehire) evidence.

4.  In the Absence of Individual Comparator Evidence, a Plaintiff in an Age Discrimination Disparate Treatment Claim Can Survive Dismissal By Showing That For Any Given Position, New Hires Were Materially Younger. The Tenth Circuit also reversed the district court’s decision to grant summary judgment to Affinity on Plaintiff’s disparate treatment age discrimination claims. Because many of the job positions were interchangeable and many of the terminated employees were fired on the same date, it was next to impossible for the Plaintiffs to ascertain who replaced whom. However, the Tenth Circuit found that because there was no clear one-to-one correlation between the terminated employees and the new hires, it would not require each plaintiff to show he or she was individually replaced by a significantly younger employee. Rather, the Plaintiffs needed only demonstrate that for any given position (even considering non-plaintiff data), the new hires were significantly younger than the terminated employees, which the Court found the Frappied Plaintiffs plausibly alleged.

5.  Be Consistent About the Basis for an Employee’s Termination. The Tenth Circuit also found that the Plaintiffs presented sufficient evidence to raise a genuine issue of material fact that Affinity’s proffered legitimate, nondiscriminatory reasons were pretextual because, in part, its reasons for terminating the Plaintiffs did not match the reasons given at the time of termination. (“The inconsistencies between Affinity’s contemporaneous stated reasons and its detailed post-hoc explanations for terminating Plaintiffs could support a jury’s finding that Affinity lacks credibility.”) In establishing a defense to any discrimination case, shifting explanations for the reasons an employee was terminated may be viewed suspiciously by a Court (and by a jury).

If you are navigating the legal implications of taking over a business previously owned by another company and making layoffs or other changes to the existing workforce, proceed with caution and (it’s strongly recommended) on the advice of counsel.

For more information on this or any related topics, please contact the authors, your Seyfarth attorney, or any member of Seyfarth Shaw’s Employment Law group.