An Alabama federal appeals court recently held that an employee in her mid-60’s who claimed age discrimination when she was demoted to a less desirable position (and called “Grandma” repeatedly),  stated a claim under the Age Discrimination in Employment Act of 1967 ("ADEA").   Although she did not receive lower pay or less benefits, her transfer “resembles a forced exile more than a lateral transfer” – her responsibilities were substantially reduced, she claimed that she was not supplied necessary equipment, and that she became a “departmental outcast.”  

The Court stated that under the McDonnell Douglas test, a plaintiff must first establish a prima facie case of age discrimination by showing that: (1) she was a member of the protected group of persons between the ages of 40 and 70; (2) she was subject to an adverse employment action; (3) she was qualified to do the job; and (4) she was replaced by a younger individual.  If the plaintiff can make this showing, the "employer must articulate a legitimate, nondiscriminatory reason for the challenged employment action,” after which the plaintiff must show that this alleged reason is a “pretext.”

The employer in this case contested only one of the McDonnell Douglas elements, contending that plaintiff suffered no “adverse employment action.” The employer also claimed that plaintiff was transferred because of performance reasons.   

On the record before it, the Court held that the employee indeed sufficiently made out an adverse employment action taken against her and therefore stated a prima facie age claim, which the employer adequately rebutted with an allegedly legitimate business reason.   

However, the court concluded that as to “pretext,” there were grounds to support an inference of age-related discrimination, which included plaintiff’s superior’s special treatment of the younger women in his department, “in combination with [his] allegedly derogatory use of the term "Grandma" on multiple occasions.