United States: Third Circuit Vacates Order Granting Summary Judgment In ADEA Failure To Hire Case Finding Triable Issue Of Pretext

Executive Summary: Recently, the United States Court of Appeals for the Third Circuit in Bulifant v. Delaware River & Bay Authority, vacated the portion of the district court's order granting summary judgment to the employer on two of the appellants' ADEA claims that alleged age discrimination based on a failure to hire. The Court of Appeals found that the two appellants raised a triable issue on pretext by: (1) showing the employer deviated from its consistently applied ranking system in favor of significantly younger applicants without a documented explanation; (2) pointing to applicant comment sheets which were "overwhelmingly positive" about all of the applicants in question; and (3) showing that the "post-hoc" diversity explanation offered was not supported by the characteristics of all of the applicants selected for hire. However, the Court of Appeals affirmed summary judgment in favor of the employer on the appellants' retaliation claims because they failed to demonstrate a causal connection between their protected activity and the employer's decision not to hire them.

Background of the Case

The Appellants Shawn Bulifant, Gary Hughes, Daniel Loper, James McClintock, and Christopher Vernon were seasonal crew members who had worked for Delaware River & Bay Authority's (DRBA) ferry services at various times for several years. All five applied for full-time positions with DRBA on three occasions. Four of the five Appellants were interviewed each time they applied, but none were selected.

DRBA used a standardized hiring process where the same panel of four employees interviewed each applicant using the same preset questions that focused on four core competencies. Each panelist assigned the applicants a numeric score in each competency, the scores of the panelists were then added, and then the candidates were ranked. These rankings and the panelists' comments on each candidate were presented to human resources and the managing director for the vacant position for consideration.

DRBA's executive director testified that the rankings are an "important guide" in the ultimate selection and are always used. He also testified that while managing directors and human resources can deviate from the rankings to achieve diversity or other goals, deviations from the rankings are documented and explained.

On two of the three occasions when applications were sought and hiring decisions made (February 2012 and January 2013), DRBA strictly applied its process and selected the applicants with the highest rankings. However, for the September 2012 positions, DRBA hired the top four ranked applicants, but skipped over Appellants Hughes (ranked fifth, age 61) and McClintock (ranked sixth, age 53) to hire the seventh, eighth and ninth-ranked candidates, ages 35, 26, and 33 respectively. DRBA was unable to produce records documenting the reason for the deviation from its normal practice.

Appellants later filed a lawsuit alleging that they were not hired for these positions due to their age in violation of the ADEA and due to retaliation based on internal complaints made to DRBA alleging age discrimination when they were not hired after the February 2012 selection process. The district court granted summary judgment to DRBA finding that Appellants had not established that reasons for DRBA's hiring decisions were a pretext for age discrimination or retaliation. Appellants then appealed the district court's ruling to the Third Circuit.

The Third Circuit's Decision

The Court of Appeals began its analysis by noting that the "Appellants must establish by a preponderance of the evidence that age was the 'but-for' cause of the DRBA's decision not to hire them." Next, the Court of Appeals set forth the prima facie elements for an age discrimination claim under the ADEA:

quoting Willis v. UPMC Children's Hosp. of Pittsburgh, 808 F.3d 638, 644 (3d Cir. 2015).

After finding that all five Appellants had established a prima facie case of age discrimination, the Court of Appeals considered DRBA's legitimate nondiscriminatory reason for its hiring decisions, namely application of its standardized hiring process. The Third Circuit concluded that DRBA's strict reliance on its standardized hiring process provided a nondiscriminatory basis for the decisions not to hire Bulifant, Loper, and Vernon for any position, and Hughes and McClintock for the positions other than the ones posted in September 2012, and that pretext had not been established. Therefore, the Court of Appeals concluded that the district court properly granted summary judgment on the failure to hire claims except for the claims of Hughes and McClintock related to their nonselection in September 2012.

Turning to the failure to hire claims of Hughes and McClintock for the September 2012 positions, the Court considered DRBA's "non­discriminatory explanations that (1) the comments accompanying the rankings justified its hiring decisions; and (2) its hiring of lower-ranked applicants was necessary to promote diversity in its workforce." While the Court found the DRBA's reasons sufficient to shift the burden of production back to Hughes and McClintock, the Court of Appeals stated that they had offered sufficient evidence for a reasonable jury to conclude the asserted reasons were pretextual.

Specifically, the Court of Appeals found "compelling" as evidence of pretext DRBA's deviation from its normal hiring process in favor of significantly younger applicants without a documented explanation. In addition, the Third Circuit found that the comment sheets relied on by DRBA were "overwhelmingly positive about all five applicants in question, and thus [did] little to explain why the three younger applicants were selected and Hughes and McClintock were not." Finally, the Court noted that while diversity had been cited as a "post-hoc explanation" for the deviation in the September 2012 selection process, only two of the three younger candidates hired promoted diversity (the third hire was a white male like Hughes and McClintock) and there was no documentation explaining the deviation. Consequently, the Court of Appeals vacated the district court's order granting summary judgment to DRBA on Hughes' and McClintock's failure to hire claims for the September 2012 hiring round.

The Court concluded its analysis by affirming the district court's order dismissing the Appellants' ADEA retaliation claims finding that no prima facie case had been established, namely that no causal connection existed between the alleged protected activity and the adverse employment decisions.

Employers' Bottom Line: The Third Circuit's decision in Bulifant underscores the importance of following established procedure during the hiring process. While deviations from normal processes may be necessary at times, it is critical that a legitimate business reason support the deviation. Moreover, the deviation should be explained, documented, and capable of being defended in the event it is later challenged by an unsuccessful applicant.

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