In Carter v. CB Richard Ellis, Inc. (— Cal.Rptr. 3d —, 2004 WL 2211222, Cal.App. 4 Dist., Oct. 4, 2004), the California Court of Appeal considered the issue of whether an employee presented evidence that a company’s reorganization caused disparate impact discrimination against women.
Employee, Helen Carter, was employed by Employer, CB Richard Ellis, Inc., as an administrative manager. All but one of Employer’s 57 administrative managers were female and more than half were over the age of 40 (including Employee). In 1998, Employer reorganized its company; it centralized its operation by creating 54 new regional positions that took over many of the duties of the administrative managers. About 15 of the former administrative managers were eventually promoted to one of the new regional positions. Employee was not promoted, however; rather, her title was changed to Office Services Administrator, her responsibilities and duties were reduced, and she lost eligibility for bonuses. She sued Employer alleging disparate impact discrimination and breach of contract.
Appellate Court Decision
Disparate impact discrimination occurs when, regardless of motive, a facially neutral employer practice or policy has a disproportionate adverse effect on members of a protected class. Here, Employer’s actions were not discriminatory because administrative managers, not women or persons over 40, were affected as a group. Even though administrative managers were almost all women and predominantly over 40, “the law does not prohibit discrimination against administrative managers.” According to the Court of Appeal, “disparate impact is not proved merely because all members of a disadvantaged subgroup [e.g., administrative managers] are also members of a protected group [e.g., women and persons over the age of 40].”
The Court also determined that Employee failed to present any evidence that she had a contract with Employer not to be demoted without cause. While Employer advised Employee in 1969, the year that she was first hired, that she would get merit increases if she did her job well, these mere “words of encouragement” did not rise to the level of an enforceable promise that she would never be demoted or that her future job would never be reclassified. Also, Employee did not present evidence of an implied in fact contract, as longevity, raises and promotions are not, in and of themselves, contractual guarantees of future employment.
Because Employee failed to present any evidence of disparate impact discrimination or breach of contract, Employer was entitled to judgment.
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