Seventh Circuit Deems Failure to Train Managers .Extraordinary Mistake.

The Age Discrimination in Employment Act (“ADEA”) prohibits employers from discriminating against employees who are age forty and over. The statute provides that if a jury finds an employer willfully violated the law the court must double the amount of damages the jury awards. An employer’s violation will be considered willful if the employer knew about, or showed reckless indifference for, the illegality of the conduct. In its recent decision in Mathis v. Phillips Chevrolet, Inc., 269 F.3d 771 (7th Cir. 2001), the United States Court of Appeals for the Seventh Circuit ruled that employers who fail to properly train their managers in the basics of discrimination law are making an “extraordinary mistake.” Such a mistake, the court declared, amounts to reckless indifference and therefore justifies an award of double damages under the ADEA.

The plaintiff in Mathis, a fifty-four year old man with many years of car sales experience, applied for a sales job with Phillips Chevrolet. The dealership never interviewed Mathis but hired seven younger people. The manager with ultimate hiring authority often noted applicants’ ages on their applications and testified that he was unaware that it was illegal to consider age in hiring. Another manager testified that he sought salespeople who were “bright, young and aggressive.” The managers clearly were not trained in the basics of age discrimination law and, on this basis, the jury found that the employer was recklessly indifferent as to whether its managers followed the law.

The dealership argued that because its employment applications contained boilerplate language stating the ADEA “prohibits discrimination on the basis of age with respect to individuals who are at least 40 years of age,” it had made a good-faith attempt to comply with the law. However, the court viewed this evidence differently. The boilerplate, the court stated, showed that the dealership knew the law, while its failure to train its managers demonstrated that it was indifferent as to whether its managers adhered to the law. The employer was thus required to pay twice the damages assessed by the jury.

While many employers are seeking new ways to cut corners during this uncertain economic period, they should not make the mistake of failing to train managers in the basics of discrimination law and employee relations. As the Mathis case illustrates under the ADEA, the adoption, dissemination, and vigorous enforcement of policies against discrimination are key elements to avoiding or limiting liability under the whole panoply of employment discrimination laws. See Second Circuit Dismisses Harassment Claim Based on Plaintiff’s Failure to Invoke Employer’s Policy (June 8, 2001); Supreme Court Clarifies Standard for Obtaining Punitive Damages Under Title VII (June 28, 1999).