Judge: CA Competition Law Fair Game in Discrimination Cases
>Second District Justice Joan Dempsey Klein ruled in a case against Nestle USA Inc. that California’s unfair competition law, the Business & Professions Code, can be used when businesses discriminate against older workers, according to a story in The Recorder. The appeals court’s ruling upheld a $5-million age discrimination jury award against the giant food conglomerate.
“An employer which practices age
discrimination has an unfair competitive advantage over
employers who comply with the [Fair Employment and
Housing Act] because older workers frequently are more
highly compensated than their younger colleagues,” Klein
wrote for the court.
In the opinion, the 78-year-old Klein
cited evidence demonstrating a “continuous pattern of age
discrimination” at Nestle, and shot down Nestle’s
arguments to throw out the trial court’s verdict.
Case History
The case involved Richard Herr, a
Nestle manager in his mid-40s who was repeatedly passed
over for promotions. While Herr was qualified for
numerous job openings and had a track record of positive
performance evaluations, Nestle repeatedly offered the
jobs to employees in their early 30s, many of who did not
meet the jobs’ minimum posted requirements. In 1995,
after being passed over for the eighth time and
frustrated by his inability to advance within the
company, Herr quit.
“There is abundant evidence that the
February 1995 failure to promote Herr was just one more
manifestation of Nestle’s discriminatory policy of
denying promotions to employees in their 40s or older,”
Klein wrote.
Thursday’s opinion affirmed a Los
Angeles jury’s 2000 verdict that leaves Nestle on the
hook for $5.16 million in compensatory and emotional
distress damages to Herr, as well as $1.7 million in
attorney fees, for constructive discharge and age
discrimination.
The published portion of the opinion
upheld a bench ruling, arising out of Herr’s unfair
competition claim, that prohibits Nestle from
discriminating against employees older than 40 for
promotions. The injunction also requires Nestle to
repudiate a 1993 memo by parent company Nestle SA’s
then-Chief Executive Officer Helmut Maucher, which laid
out a policy to “continue hiring, identifying and
developing young people to have in the long term enough
resources for future management.”