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Ninth Circuit Revives Discrimination Claims Against Circle K
Opinion Says District Court Judge Erred in Granting Summary Judgment to Company Based on Plaintiffs’ Failure to Apply for Promotion That They Allege Was Never Publicized
By Kimber Cooley, associate editor
The Ninth U.S. Circuit Court of Appeals on Friday held that a District Court judge erred in granting summary judgment against three plaintiffs who asserted that Circle K Stores Inc. passed them over for a promotion due to their ages, saying that the jurist wrongly concluded that they could not establish a prima facie case of discrimination because they never applied for the post.
Friday’s opinion, authored by Circuit Judge Eric D. Miller, said the decision improperly discounted the plaintiffs’ justification for their failure to apply, namely that the retailer allegedly ignored a company policy of calling for internal applications for openings even though the then-employees were qualified candidates and had made known that they would be interested in promotion.
Circuit Judge Jennifer Sung and Senior Circuit Judge Andrew Hurwitz joined in the opinion, which also found error in the lower court’s conclusion that one plaintiff was unable to prove his case because he was only nine years older than the chosen candidate. Miller declared that a presumption of legitimacy that applies where the age gap between the complaining party and the hired person is less than 10 years may be overcome by evidence of bias.
He opined that sufficient evidence of ageism was provided by the plaintiffs in the form of declarations averring that the employee purportedly responsible for the hiring decision had allegedly disparaged older employees and encouraged them to retire.
Complaint Filed
Plaintiffs Brian Caldrone, Joseph Celusta, and Kathleen Staats filed a complaint against Circle K in Riverside Superior Court in December of 2020, asserting claims under the federal Age Discrimination in Employment Act of 1967 (“ADEA”) and the California Fair Employment and Housing Act (“FEHA”), among other causes of action.
The plaintiffs alleged that they were excluded from consideration for the Corona-based West Coast regional director position due to their ages. Caldrone was 54, Celusta was 55, and Staats was 57 when Circle K selected Mikos Angeles for the role; Angeles was 45 when he was offered the position.
In the pleading, the plaintiffs claimed that they were each employed by the company in 2020 as a dealer business manager and qualified for promotion to regional director based on strong performance reviews. They alleged that they all had expressed interest in moving up within the company.
However, they said they were not informed of the California opening in January 2020, when Circle K selected Angeles for the role without soliciting any other applications. Angeles had previously served as a regional director for the Southeast region.
Circle K removed the matter to federal court in April 2021 based on diversity jurisdiction, citing its citizenship in Texas and Arizona. None of the plaintiffs reside in either state.
Summary Judgment
Following the dismissal of the plaintiffs’ other causes of action, Senior District Court Judge George Wu of the Central District of California granted the defendant’s request for summary judgment on the remaining age discrimination claims in August 2023. He wrote:
“There is no dispute that none of the Plaintiffs submitted an application for the Corona Position. However, Plaintiffs assert that they were prevented from doing so because of Circle K’s failure to post the opening of that position as it had previously done in the past. That contention fails….”
The jurist pointed to declarations submitted by the defendant indicating that it had no such policy of posting open positions and said that the plaintiffs’ evidence to the contrary was inadmissible hearsay that, even if considered, failed to show that “the purported change…was motivated in any way by ageist animus.” He added that Caldrone had not established that “the age difference between [himself] and Angeles gives rise to an inference of discriminatory intent.”
Friday’s decision reverses the ensuing defense judgment.
Age Discrimination Claims
Miller explained that the same three-step analysis applies to both the federal and state age discrimination claims. The plaintiff bears the initial burden of establishing a prima facie case giving rise to an inference of bias, and then the defendant is required to offer a legitimate reason for the challenged decision; if the employer does so, the opposing party must then show that the proffered justification is a pretext.
The jurist said:
“[E]stablishing a prima facie case requires plaintiffs to demonstrate that (1) they were at least 40 years old at the time, (2) they were qualified for the position they sought, (3) they were denied the position, and (4) the promotion was given to a substantially younger person….There is no dispute that the plaintiffs established the first and third components.”
Saying that Wu “concluded that plaintiffs could not establish the second component because they did not apply for the West Coast regional-director position,” he acknowledged that “the language of some of our cases suggests” such a threshold requirement.
Makes Little Sense
However, he said:
“That requirement makes sense in many cases. If an employer selects a candidate for promotion from a pool of applicants, it is reasonable to infer that a plaintiff who fails to put himself in the running has that failure—and not any protected characteristic—to blame for not being promoted. But….it makes little sense to require plaintiffs to demonstrate that they submitted an application when an employer declines to solicit applications and does not announce that a position is available.”
He added:
“Contrary to the district court’s understanding, it does not matter why Circle K did not open the West Coast regional director position to applications. Plaintiffs need not show that Circle K somehow acted improperly in not soliciting applications….Because there is no dispute that Circle K did not give plaintiffs the opportunity to apply for the West Coast regional-director position, plaintiffs have established the second component of a prima facie case.”
Substantially Younger Person
As to the age difference, Miller commented that “the parties agree that Celusta and Staats established the fourth component of a prima facie case,” but he pointed out that Wu found that “Caldrone could not do so because Angeles is only 9.3 years younger than [him] and therefore is not ‘substantially younger’ than him.”
Rejecting that view, the judge wrote:
“Although 10 years is the presumptive threshold…, a plaintiff can overcome that presumption by ‘producing additional evidence to show that the employer considered his or her age to be significant.’ ”
He continued:
“Celusta declared that George Wilkins—the Circle K executive who plaintiffs assert chose Angeles—told him that he was ‘out of touch’ and ‘too old for this business’ after he told Wilkins that he was 56. Wilkins also encouraged Celusta to ‘start thinking about retiring.’ Thomas Maloney, who previously served as the Midwest regional director, declared that Gerardo Valencia—Wilkins’s boss—’press[ed] [him] to remove older employees for no business reasons.’ And Staats declared that Maloney told her that Valencia and Wilkins ‘wanted only younger people with MBAs.’ ”
Saying that the evidence “creates an issue of fact” about whether the company considered age to be a significant factor in making its promotion decisions, the court concluded that “all three plaintiffs established a prima facie case.”
Other Factors
Circle K asserted that it selected Angeles because he was the only person to express an interest in the position and had prior experience as a regional director.
However, Miller reasoned that “Plaintiffs have presented enough evidence to create a triable issue on pretext” based on the declarations averring that “Wilkins made ageist comments to older employees” and “suggesting that Circle K’s decision not to advertise the…position…was a deviation from its standard policy.”
As to Wu’s assertion that the declarations about the purported policy contained inadmissible hearsay, he said:
“Plaintiffs’ declarations were not offered to establish the truth of any out-of-court statements but merely to establish Circle K’s pattern of conduct—namely, its prior practice of announcing vacancies. Although the declarations arguably refer to out of-court statements—the job listings themselves—plaintiffs are not offering those statements for their truth because they are not attempting to show that the positions at issue in the prior announcements actually were available.”
Under those circumstances, he declared:
“Plaintiffs have thus raised a material dispute of fact as to whether Circle K’s proffered explanation for selecting Angeles was pretext for illegal discrimination, making summary judgment inappropriate.”
The case is Caldrone v. Circle K Stores Inc., 24-1432.
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