Charles Merrick v. Hilton Worldwide, Inc. , 867 F.3d 1139 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHARLES T. MERRICK, No. 14-56853
Plaintiff-Appellant,
D.C. No.
v. 3:13-cv-01568-
LAB-MDD
HILTON WORLDWIDE, INC., a
Delaware Corporation; HILTON
HOTELS CORPORATION, a Delaware OPINION
corporation; CHH TORREY PINES
TENANT CORP., a Delaware
Corporation; DOES, 1–10,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of California
Larry A. Burns, District Judge, Presiding
Argued and Submitted November 9, 2016
Pasadena, California
Filed August 16, 2017
Before: Marsha S. Berzon and Jacqueline H. Nguyen,
Circuit Judges, and Jack Zouhary,* District Judge.
Opinion by Judge Zouhary
*
The Honorable Jack Zouhary, United States District Judge for the
Northern District of Ohio, sitting by designation.
2 MERRICK V. HILTON WORLDWIDE
SUMMARY**
Age Discrimination
The panel affirmed the district court’s summary judgment
in favor of Hilton Worldwide, Inc., and CHH Torrey Pines
Tenant Corp. on a former Hilton employee’s age
discrimination claims.
The California Fair Employment and Housing Act
(“FEHA”) prohibits employers from discharging or
dismissing employees over the age of forty based on their
age. Cal. Gov’t Code §§ 12926(b), 12940(a). Plaintiff
Charles Merrick was 60 years old in July 2012, when he was
terminated from his position as Director of Property
Operations at a Hilton hotel as part of a reduction-in-
workforce (“RIF”).
The panel applied the three-part McDonnell Douglass
burden-shifting test to analyze Merrick’s age discrimination
disparate treatment claims under FEHA.
First, the panel held that Merrick satisfied the elements
for establishing a prima facie case of discrimination. The
panel noted that the district court erred in requiring Merrick
to show that he was replaced by a younger employee. The
panel held that employees terminated during a RIF, instead of
showing proof of replacement, may instead show through
evidence that discharge occurred under circumstances giving
rise to an inference of age discrimination. The panel
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
MERRICK V. HILTON WORLDWIDE 3
concluded that Hilton acknowledged Merrick’s duties were
outsourced or assumed by other employees, and, accordingly,
Merrick satisfied the elements for establishing a prima facie
case of discrimination.
Second, the panel held that the burden shifted to Hilton to
produce admissible evidence showing that it terminated
Merrick for a legitimate, nondiscriminatory reason. The
panel concluded that Hilton produced evidence that it
terminated Merrick for legitimate, nondiscriminatory reasons.
Finally, the panel held that the burden shifted back to
Merrick to produce sufficient evidence to allow a jury to
conclude that Hilton’s proffered reasons were pretexts, and
that age was a substantial motivating factor in his
termination. The panel held that considering the context of
the case – the lost profits during the economic downturn, a
series of layoffs, the overall age of the workforce, the fact
that Merrick survived previous RIFS, and the business
reasons for selecting his position for elimination - Merrick
did not present sufficient evidence to infer that Hilton’s actual
motive was discriminatory.
The panel held that Merrick’s other claims were
derivative of his FEHA age discrimination claim, and
necessarily failed along with that claim.
4 MERRICK V. HILTON WORLDWIDE
COUNSEL
James C. Mitchell (argued), The Gilleon Law Firm, San
Diego, California, for Plaintiff-Appellant.
Sherry Swieca (argued), Jackson Lewis P.C., Los Angeles,
California; Kelly D. Gemelli, Jackson Lewis P.C., San
Diego, California; for Defendants-Appellees.
OPINION
ZOUHARY, District Judge:
Charles Merrick appeals the district court’s order granting
summary judgment in favor of Hilton Worldwide and CHH
Torrey Pines Tenant Corporation (collectively, “Hilton”) on
his age discrimination claims. We affirm.
BACKGROUND
Merrick’s Tenure at the Hotel
Appellant Charles Merrick was sixty years old in July
2012, when he was terminated from his position as Director
of Property Operations at the Hilton La Jolla Torrey Pines
Hotel (“the Hotel”) as part of a reduction-in-workforce
(“RIF”). Merrick began his career in hotel operations as a
maintenance mechanic for Sheraton Hotels in Chicago. He
rose through the ranks to become Director of Engineering. In
1993, Sheraton transferred Merrick to the Sheraton Grande
Torrey Pines, La Jolla. When Hilton acquired the Hotel five
years later, it kept Merrick on, first as Director of Hotel
MERRICK V. HILTON WORLDWIDE 5
Operations and then as Director of Property Operations. By
2012, Merrick had logged nineteen years at the Hotel.
As Director of Property Operations, Merrick was
responsible for supervising maintenance, rehabilitation, and
capital improvement projects for the Hotel. In addition to
overseeing run-of-the-mill heating, ventilation, air
conditioning, plumbing, and other equipment repairs, Merrick
also oversaw fifty major building renovations during his
tenure. However, his role on these renovation projects
shifted—though the parties dispute how much—in 2009,
when Hilton Worldwide instructed Remington, a subsidiary
of the Hotel’s joint owner, to assume primary responsibility
for capital improvement projects. Merrick acknowledges that
Remington took over several aspects of project management,
but maintains that he continued to play a substantial role in
on-site management of renovation projects until his
termination. The transition apparently was not without some
tension, and Merrick reportedly complained about
Remington’s personnel and overall performance.
Merrick directly supervised seven to twelve people in his
department, including Assistant Director of Property
Operations Michael Kohl. Merrick’s performance
evaluations were consistently positive. At the time of his
termination, Merrick earned a salary of $110,325 per year,
plus an annual bonus of $20,000, making him the highest paid
Hotel employee after General Manager Patrick Duffy. At
sixty, Merrick was also the oldest management-level
employee after Duffy, who was sixty-one at the time of the
RIF.
6 MERRICK V. HILTON WORLDWIDE
The Reduction-in-Workforce
Due to declining revenues, the Hotel underwent a series
of RIFs beginning in 2008. It laid off eight employees in
2008, three employees (the entire pastry department) in 2009,
and six employees in 2011. The Hotel also left a number of
vacant positions unfilled during that time period.
In May 2012, Hilton Worldwide ordered a number of
properties, including the Hotel, to reduce payroll expenses by
seven to ten percent by August 2012. The mandate was
outlined in a document titled “Management Reduction in
Workforce (RIF) Timeline – May 2012” and provided that
“[r]eduction decisions should be heavily weighted at the
senior level.” The mandate instructed the General Manager
and Human Resources Director of each individual hotel—in
collaboration with Hilton Worldwide staff in various
disciplines, such as engineering, food and beverage, human
resources, revenue management, and sales—to recommend a
position or positions to eliminate, based on employee
performance, corrective action, and tenure.
The following month, Hilton Worldwide issued revised
guidelines for implementing the RIF. These guidelines
clarified the termination criteria, providing that in
“identifying the individual team members to be laid off . . .
[t]he primary consideration should be a team member’s
overall performance,” followed by “any disciplinary action a
team member has received.” If a decision could not be made
based on those factors, the guidelines instructed
decisionmakers to consider employees’ length of service with
the company. Both these revised guidelines and Hilton’s
general human resources guidelines for RIFs allowed
MERRICK V. HILTON WORLDWIDE 7
qualified employees to apply for transfer to open positions
within the Hilton organization following layoffs.
In response to the 2012 RIF mandate, Hotel General
Manager Patrick Duffy met with Director of Human
Resources Michelle Lucey and Director of Finance Marjorie
Maehler to discuss how to achieve the required payroll cuts.
As a starting point for their deliberations, they prepared and
reviewed a spreadsheet listing all twenty-nine Hotel
managers. The spreadsheet included each employee’s
department, job title, start date, years of service, and salary.
The spreadsheet did not include the employees’ ages, but
more than half of them were over forty. For business reasons,
the decisionmakers preferred to avoid eliminating positions
(1) with direct guest contact, (2) with significant team
member impact (e.g., supervisors of large departments), and
(3) that directly generated additional revenue for the Hotel.
In light of the other recent layoffs, they also preferred to
achieve the required payroll cut by eliminating a single
position, if possible.
Consistent with the RIF guidelines, Duffy, Lucey, and
Maehler determined that all twenty-nine managers met
performance standards, and none had been subject to
disciplinary action. Though the decisionmakers did not attest
to discussing each employee’s tenure, the spreadsheet they
reviewed included the years of service for each employee.
Without an obvious candidate for termination based on
performance and disciplinary action, the decisionmakers
proceeded to consider the business case for retaining or
eliminating each management-level position. For example,
Maehler specifically recalled considering whether to
eliminate the executive chef, sous chef, and food outlet
manager positions. However, all of these positions were
8 MERRICK V. HILTON WORLDWIDE
considered revenue generators because they had a direct
impact on increasing sales.
The decisionmakers also considered how previous RIFs,
attrition, and unfilled positions affected each department. For
example, they hesitated to terminate the executive chef—at
a salary of $90,000—because the Hotel had been forced to
operate without an executive chef for several years after an
earlier round of lay-offs, and the position had only recently
been filled. Likewise, the catering, banquet, and sales and
marketing departments were already operating with a reduced
staff. The decisionmakers also concluded that the Hotel
could not operate without a General Manager, the only
employee besides Merrick whose single salary ($192,102)
would satisfy the payroll reduction target. Selecting any
other position would require more than one layoff to achieve
the seven percent target.
The RIF Recommendation
Ultimately, Duffy, Lucey, and Maehler decided to
recommend Merrick’s position, Director of Property
Operations, for elimination. They identified several reasons
for their decision. First, unlike the food and beverage or sales
departments, Merrick’s face-to-face interaction with guests
was limited, so they perceived him as having relatively little
“guest impact,” and his work did not directly generate
additional revenue for the Hotel. Second, the managers
believed Merrick had become less “hands on” in recent years,
and few employees directly reported to him. They also
believed much of Merrick’s responsibility for capital projects
had already been outsourced to Remington. Finally,
Merrick’s projected salary and bonus of $132,049 satisfied
the target payroll reduction of $131,614, or seven percent of
MERRICK V. HILTON WORLDWIDE 9
the Hotel’s management payroll. Thus, the managers
believed eliminating Merrick’s position would allow them to
comply with the RIF by terminating a single employee.
Some higher-ups at Hilton Worldwide questioned the RIF
recommendation, particularly in light of an upcoming guest
room renovation project, which they anticipated would
require significant attention from local Hotel staff.
Ultimately, however, Hilton’s corporate executives approved
the Hotel’s recommendation that Merrick be terminated.
Duffy and Lucey then informed Merrick that his position
was being eliminated. Merrick’s termination letter advised
him that he was eligible to pursue internal job opportunities,
and the Human Resources Department provided him a list of
open positions within the company. Merrick asked to stay on
at the Hotel as Assistant Director of Property Operations, in
place of Kohl, but the Hotel refused.
Following the RIF, Kohl assumed most—if not all—of
Merrick’s duties. To compensate Kohl for his increased
responsibilities, the Hotel managers recommended that Kohl
receive a raise. The Hotel also hired an hourly mechanic, at
$15 to $16 per hour, to cover some of Kohl’s former duties.
The Lawsuit
Merrick originally raised six claims against Hilton:
wrongful termination based on age, in violation of the
California Fair Employment and Housing Act (“FEHA”); age
discrimination in violation of public policy; failure to prevent
age discrimination; wrongful termination due to physical
disability; and two counts of failure to prevent disability
discrimination. The district court granted summary judgment
10 MERRICK V. HILTON WORLDWIDE
on all six claims. Merrick appeals only the age
discrimination claims.
LEGAL STANDARD
We review de novo a district court order granting
summary judgment, including “whether the district court
correctly applied the relevant substantive law.” Earl v.
Nielsen Media Research, Inc., 658 F.3d 1108, 1112 (9th Cir.
2011). Summary judgment is appropriate if—construing the
facts in the light most favorable to the nonmoving party and
drawing all reasonable inferences in that party’s favor—there
is no genuine dispute of material fact, such that judgment is
appropriate as a matter of law. Fed. R. Civ. P. 56. A genuine
dispute of material fact exists if “a reasonable jury could
return a verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
DISCUSSION
The California FEHA prohibits employers from
discharging or dismissing employees over the age of forty
based on their age. CAL. GOV’T CODE § 12926(b); 12940(a).
Because state and federal employment discrimination laws
are similar, California courts apply the McDonnell Douglas
burden-shifting framework to analyze disparate treatment
claims under FEHA. Guz v. Bechtel Nat’l, Inc., 24 Cal. 4th
317, 354 (2000) (citing McDonnell Douglas Corp. v. Green,
411 U.S. 792 (1973)).
Under the three-part McDonnell Douglas test, the plaintiff
first bears the burden of establishing a prima facie case,
which raises a presumption of discrimination. Id. at 355. The
burden then shifts to the employer to rebut this presumption
MERRICK V. HILTON WORLDWIDE 11
by producing admissible evidence sufficient to show that “its
action was taken for a legitimate, nondiscriminatory reason.”
Id. If the employer sustains its burden, the presumption
established in the first step disappears, and the plaintiff must
raise a triable issue suggesting that the employer’s proffered
reason is mere pretext for unlawful discrimination, or offer
other evidence of discriminatory motive. Id. at 356. Despite
this intermediate shifting of the evidentiary burdens, the
ultimate burden of persuasion “remains with the plaintiff.”
Id.
The Prima Facie Case
To establish a prima facie case of age discrimination,
Merrick must show he was “(1) at least forty years old,
(2) performing his job satisfactorily, (3) discharged, and
(4) either replaced by substantially younger employees with
equal or inferior qualifications or discharged under
circumstances otherwise ‘giving rise to an inference of
discrimination.’” Schechner v. KPIX-TV, 686 F.3d 1018,
1023 (9th Cir. 2012) (quoting Diaz v. Eagle Produce Ltd.
P’ship, 521 F.3d 1201, 1207 (9th Cir. 2008)).
The first three elements are undisputed: Merrick was sixty
years old when he was permanently laid off, and his
termination was not based on his performance. Merrick
argues the fourth element is also satisfied because he was
replaced by Kohl, who was fifteen years younger. Hilton
contests this characterization and contends that while Kohl
took over some of Merrick’s duties, others were outsourced
to Remington or handled by Maehler. Hilton also notes that
Kohl was not named Director of Property Operations
following Merrick’s termination and instead maintained his
Assistant Director title. Framed this way, the district court
12 MERRICK V. HILTON WORLDWIDE
concluded Kohl did not “replace” Merrick, and held that
Merrick therefore failed to establish a prima facie case of age
discrimination.
But Merrick was not required to show that he was
“replaced” by Kohl. This Court has consistently recognized
that employees terminated during a RIF often are not
replaced. Wallis v. J.R. Simplot Co., 26 F.3d 885, 891 (9th
Cir. 1994). Instead of showing proof of replacement, a
plaintiff may establish a prima facie case of discrimination by
showing “through circumstantial, statistical, or direct
evidence that the discharge occurred under circumstances
giving rise to an inference of age discrimination.” Id.(quoting Rose v. Wells Fargo & Co., 902 F.2d 1417, 1421
(9th Cir. 1990)). Such an inference may be established by
demonstrating that an “employer had a continuing need for
[the plaintiff’s] skills and services in that [his] various duties
were still being performed.” Coleman v. Quaker Oats Co.,
232 F.3d 1271, 1281 (9th Cir. 2000) (quoting Wallis, 26 F.3d
at 891). Hilton does not contend any of Merrick’s duties
were eliminated following the RIF or that it no longer had a
need for his skills; in fact, it acknowledges Merrick’s duties
were outsourced or assumed by other employees.
Accordingly, Merrick has satisfied the elements for
establishing a prima facie case of discrimination.
The Legitimate, Nondiscriminatory Reason
The burden now shifts to Hilton to produce admissible
evidence showing that it terminated Merrick for a legitimate,
nondiscriminatory reason. “[D]ownsizing alone is not
necessarily a sufficient explanation, under the FEHA, for the
consequent dismissal of an age-protected worker.” Guz,
24 Cal. 4th at 358. When an employer discharges an
MERRICK V. HILTON WORLDWIDE 13
employee during a RIF, it must give an individualized reason
for laying off that employee. Diaz, 521 F.3d at 1211–12.
However, an employer’s “true reasons need not necessarily
have been wise or correct,” as long as they are not
discriminatory. Guz, 24 Cal. 4th at 358. “While the objective
soundness of an employer’s proffered reasons supports their
credibility . . . , the ultimate issue is simply whether the
employer acted with a motive to discriminate illegally.” Id.(emphasis in original).
Hilton provided evidence, including certain facts to which
Merrick stipulated, that it terminated Merrick for the
following individualized, nondiscriminatory reasons:
• Eliminating Merrick’s salary (the second
highest at the Hotel) would allow them to
comply with the RIF criteria by laying off
only a single employee;
• Property operations was not considered a
high guest contact or revenue generating
department;
• Other departments—some with higher
guest contact and greater revenue
generating capabilities—were already
understaffed due to previous layoffs and
unfilled positions.
Because Hilton produced evidence showing that it acted
for a legitimate, nondiscriminatory reason, the burden shifts
back to Merrick to show Hilton’s articulated reasons were
pretextual.
14 MERRICK V. HILTON WORLDWIDE
Pretext
Merrick “must now introduce evidence sufficient to raise
a genuine issue of material fact as to whether the reasons
[Hilton] articulated are pretexts for age discrimination.”
Coleman, 232 F.3d at 1282. He may rely on the same
evidence used to establish his prima facie case, or he may
introduce additional evidence. Id. However, he “must do
more than establish a prima facie case and deny the
credibility of [Hilton’s] witnesses.” Id. (quoting Schuler v.
Chronicle Broad. Co., Inc., 793 F.2d 1010, 1011 (9th Cir.
1986)). The evidence must be “sufficiently probative” to
allow a reasonable jury to conclude either (1) Hilton’s
reasons for the termination were false or (2) the true reason
for the termination was discriminatory. Nidds v. Schindler
Elevator Corp., 113 F.3d 912, 918 (9th Cir. 1996). In short,
Merrick must produce sufficient evidence to allow a jury to
conclude that age was a “substantial motivating factor” in his
termination. Harris v. City of Santa Monica, 56 Cal. 4th 203,
232 (2013) (“[P]roof that discrimination was a substantial
factor in an employment decision triggers the deterrent
purpose of the FEHA and thus exposes the employer to
liability, even if other factors would have led the employer to
make the same decision at the time.”) (emphasis in original).
In the Statement of Undisputed Material Facts, Merrick
acceded to Hilton’s account of the decisionmakers’
deliberations and motives regarding the RIF. So, as in Guz,
Merrick “has largely conceded the truth, if not the wisdom, of
[Hilton]’s proffered reasons.” Guz, 24 Cal. 4th at 357.
Nevertheless, Merrick identifies three bases, all
circumstantial, for inferring that Hilton’s proffered reasons
were mere pretext for age discrimination: (1) Hilton refused
to consider him for transfer to an alternative position within
MERRICK V. HILTON WORLDWIDE 15
the organization; (2) Hilton deliberately mischaracterized
both his responsibilities and performance and his
department’s impact on guests; and (3) Hilton failed to
comply with its own corporate guidelines in conducting the
RIF.
1. Failure to transfer. Merrick suggests Hilton’s failure
to transfer him to the Assistant Director position violated
policy and reveals Hilton’s discriminatory motive in
terminating him. But Hilton’s general guidelines for RIFs
merely provide that qualified employees may apply for
transfer to available positions. The position of Assistant
Director was not “available” because it was held by Kohl.
Further, Merrick acknowledged in his deposition that Hilton
gave him a list of open positions when he was terminated.
Thus, Merrick’s first argument is not supported by the record
and fails to create a triable question of pretext.
2. Hilton’s misrepresentations. Merrick contends Hilton
mischaracterized several issues that ultimately influenced the
RIF recommendation by Duffy, Lucey, and Maehler.
Specifically, he claims the managers: overstated Remington’s
involvement in capital projects and minimized his own
res p o n si bi l i t i es ; unfai rl y cri ticized his job
performance—describing his attitude as “negative” and his
relationship with management as “deteriorating”—while not
subjecting other employees to the same level of scrutiny; and
failed to consider customer survey data regarding the
importance of property operations to guest experience.
Merrick’s contention that Hilton misstated the role of
Remington in capital improvement projects is not supported
by the record. Merrick acknowledged that Hilton Worldwide
expected Remington to take over primary responsibility for
16 MERRICK V. HILTON WORLDWIDE
managing capital projects as early as 2009. Viewing the facts
in the light most favorable to Merrick, we assume he
continued to play a significant role in renovations between
2009 and 2012. Even so, Hilton reasonably could have
believed that Remington would assume those duties—in
keeping with its prior expectations—if it eliminated the
Director of Property Operations position during the RIF.
(Though as it turned out, Kohl did play some substantial role
in capital projects, as Merrick had before him.)
Merrick’s claim regarding the decisionmakers’ evaluation
of his performance is no more persuasive. Hilton presented
testimony that Duffy, Lucey, and Maehler did consider the
performance and disciplinary history of all twenty-nine
managers, and Merrick points to no evidence to the contrary.
Moreover, the managers noted Merrick’s performance
evaluations were positive, and neither party argues Merrick
was terminated based on performance.
Finally, the decisionmakers’ choice to rely on their own
perceptions about guest interaction and impact, rather than on
customer survey data, reflects a business judgment. The
decisionmakers chose to give priority to retaining positions
that involved face-to-face interaction with guests over those
positions that impacted guests in other ways. The wisdom of
that judgment is not subject to review by this Court, nor does
it suggest Hilton’s stated reasons for terminating Merrick
were pretextual. See Coleman, 232 F.3d at 1285 (“That
Quaker made unwise business judgments or that it used a
faulty evaluation system does not support the inference that
Quaker discriminated on the basis of age.”); Guz, 24 Cal. 4th
at 358 (“[I]f nondiscriminatory, Bechtel’s true reasons need
not necessarily have been wise or correct. While the
objective soundness of an employer’s proffered reasons
MERRICK V. HILTON WORLDWIDE 17
supports their credibility . . . the ultimate issue is simply
whether the employer acted with a motive to discriminate
illegally.”) (citations omitted).
3. Deviation from RIF guidelines. Merrick claims Duffy,
Lucey, and Maehler deviated from Hilton’s RIF guidelines by
including Maehler in the decision-making process; by failing
to consider length of service as a primary factor in their
deliberations; and by failing to achieve the targeted seven to
ten percent reduction in payroll expenses. “A plaintiff may
. . . raise a triable issue of pretext through evidence that an
employer’s deviation from established policy or practice
worked to her disadvantage.” Earl, 658 F.3d at 1117 (citing
Diaz, 521 F.3d at 1214). But such a deviation must be
considered in context and may not always be sufficient to
infer a discriminatory motive. See Guz, 24 Cal. 4th at 365(“[A]ny failure by Bechtel to conduct the reorganization with
full formality . . . [does not] strongly suggest[ ] that the
reasons Bechtel gave for releasing Guz are false.”); Diaz,
521 F.3d at 1214 (holding that while deviation from a
company policy requiring consideration of length of
employment in making termination decisions can
“undermine[ ] the credibility of the proffered explanations for
the layoffs,” the employer’s deviation in that case was
insufficient to create a genuine issue of fact concerning
pretext in light of all the evidence).
Regarding Maehler’s participation in the RIF discussions,
Hilton’s guidelines provided that the General Manager and
Director of Human Resources were responsible for making
RIF recommendations. The guidelines did not prohibit other
members of Hotel management from participating. However,
drawing all reasonable inferences in Merrick’s favor, we
assume the decision-making team was supposed to be limited
18 MERRICK V. HILTON WORLDWIDE
to the two individuals identified in the guidelines. Merrick
suggests Maehler’s participation in the RIF decision
disadvantaged him because it removed her from consideration
for termination in his place.
Merrick cites no evidence to support this conclusory
assertion, and the facts in the record suggest otherwise. Both
Maehler and Lucey’s positions were included on the
spreadsheet that formed the basis for the managers’
deliberations, and Maehler and Duffy attested every
management-level position was considered for elimination.
Moreover, Maehler’s lower salary of $99,301 would have
required eliminating more than one position to achieve the
seven percent target, and the finance department, though not
involved in direct guest contact, was already understaffed.
Maehler therefore was an unlikely candidate for termination
in light of the business considerations actually weighed by the
managers. Thus, Maehler’s inclusion in the RIF decision-
making team, even if a deviation from the RIF guidelines,
does not constitute “specific” and “substantial” evidence of
a discriminatory motive.
As for whether the decisionmakers considered length of
service, as required by both the May 2012 RIF mandate and
the revised guidelines, Maehler’s deposition testimony is the
only record evidence on this issue. She attested that each
employee’s tenure was listed on the spreadsheet the managers
consulted, but she could not recall whether they explicitly
discussed it. Viewing the evidence in the light most
favorable to Merrick, then, the managers either failed to
consider length of service or, at a minimum, failed to treat it
as a primary factor in their decision making. This policy
deviation may have worked to Merrick’s disadvantage, as he
was the second longest tenured Hotel employee at the time of
MERRICK V. HILTON WORLDWIDE 19
the RIF. See Diaz, 521 F.3d at 1214 (describing length of
employment as the fact “that weigh[s] most heavily in favor
of retaining older workers”).
Nevertheless, this discrepancy does not undermine the
credibility of Hilton’s stated (nondiscriminatory) reasons for
terminating Merrick. The length of Merrick’s tenure at
Hilton does not change the fact that the managers did not
consider property operations to be a high guest impact or
revenue generating department. Nor does it controvert their
stated goal of complying with the RIF mandate by
eliminating a single position.
Merrick’s final argument regarding pretext notes that
Hilton has repeatedly and consistently asserted that its
managers aimed to comply with the RIF mandate—reducing
payroll expenses by seven to ten percent—by eliminating a
single position. Yet, as Hilton concedes, it failed to
accomplish its payroll reduction goal. Merrick’s projected
salary and bonus totaled $132,049, just surpassing the seven
percent target. But factoring in Kohl’s proposed raise
(assuming he received it) and the cost of hiring an hourly
mechanic to take over some of Kohl’s duties, the total cost
savings amounted to only $91,350, or five percent of the
Hotel’s management payroll.
Hilton’s failure to achieve the required payroll reduction
could call into question the credibility of one of its proffered
reasons for Merrick’s termination. After all, evidence
undermining an employer’s stated reason for an adverse
employment action “may ‘considerably assist’ a
circumstantial case of discrimination, because it suggests the
employer had cause to hide its true reasons.” Guz, 24 Cal.
4th at 361 (quoting St. Mary’s Honor Ctr. v. Hicks, 509 U.S.
20 MERRICK V. HILTON WORLDWIDE
502, 517 (1993)). Yet such evidence may still be insufficient
to create a triable issue for a jury, for “there must be evidence
supporting a rational inference that intentional
discrimination, on grounds prohibited by the statute, was the
true cause of the employer’s actions.” Id. (emphasis in
original); see also Diaz, 521 F.3d at 1214 (holding
employer’s deviation from company termination policy
undermined employer’s stated nondiscriminatory reasons for
terminating employees but was insufficient to create a
genuine issue of fact concerning pretext in light of the
strength of the evidence supporting those proffered reasons).
Here, the deviations from the RIF mandate do not create such
an inference.
In short, context is key when a plaintiff alleges age
discrimination based on circumstantial evidence.
Considering the context of this case—the lost profits during
the economic downturn, a series of layoffs over several years,
the overall age of the workforce, the fact that Merrick
survived previous RIFs despite having then also been a
member of a protected class, and the business reasons for
selecting his position for elimination—“the evidence as a
whole is insufficient to permit a rational inference that the
employer’s actual motive was discriminatory.” Id.Derivative Claims
Merrick’s other claims are derivative of his FEHA age
discrimination claim, and so necessarily fail along with that
claim. A common law claim for wrongful termination in
violation of public policy requires a showing that there has
been a violation of a fundamental public policy embodied in
statute. See Turner v. Anheuser-Busch, Inc., 7 Cal. 4th 1238,
1256 (1994); Reno v. Baird, 18 Cal. 4th 640, 664 (1998).
MERRICK V. HILTON WORLDWIDE 21
Likewise, “employers are not liable for failing to take
necessary steps to prevent discrimination, ‘except where the
[discriminatory] actions took place and were not prevented.’”
Dep’t of Fair Employment & Hous. v. Lucent Techs., Inc.,
642 F.3d 728, 748 (9th Cir. 2011) (alteration in original)
(quoting Trujillo v. North Cty. Transit Dist., 63 Cal. App. 4th
280, 289 (1998).
CONCLUSION
Because Merrick fails to raise a triable question of fact as
to whether Hilton discriminated against him on the basis of
age, the district court’s order granting summary judgment in
favor of Hilton is AFFIRMED.