Google lost a procedural ruling to prevent an age discrimination lawsuit from going to trial yesterday when the California Supreme Court upheld an appellate court ruling that the facts of Reid vs. Google justified a trial on the merits. The outcome was reported in the Wall Street Journal and elsewhere.
As part of the case, the court yesterday struck down a relatively long standing “stray remarks” doctrine that allowed defendant-employers to block employee discrimination claims on the grounds that the organization shouldn’t be held liable for some hostile “stray remarks” of managers or employees.
While it could wind up costing Google several million dollars, the case is ultimately a much bigger deal for plaintiffs and California employment law than it is for Google in particular. It favors plaintiff-employees and puts a burden on employers to do a better job of policing the work environment and creating a culture of tolerance and so on.
Reid was laid off/terminated in 2004 not long before Google went public. Reid accordingly didn’t get the benefit of his stock options. I don’t know if there are punitive damages claims (probably). Google asserts Reid was terminated for “legitimate, nondiscriminatory reasons.”
Brian Reid worked at Google between June 2002 and February 2004. He was director of operations and engineering. Reid claims that a younger Urs Hölzle, now Sr. VP of Operations (among others), made a bunch of remarks that were reflective of broader age bias at Google:
Reid alleged that Hölzle and other employees made derogatory age-related remarks to Reid while he was employed at Google. According to Reid, Hölzle told Reid that his opinions and ideas were “obsolete” and “too old to matter,” that he was “slow,” “fuzzy,” “sluggish,” and “lethargic,” and that he did not “display a sense of urgency” and “lack[ed] energy.” Hölzle allegedly made age-related comments to Reid “every few weeks.” Other coworkers called Reid an “old man,” an “old guy,” and an “old fuddy-duddy,” told him his knowledge was ancient, and joked that Reid’s CD (compact disc) jewel case office placard should be an “LP” instead of a “CD.”
There are other facts in the case that don’t look good for Google. You can read the court’s full opinion, as well as the facts of the case, here.
I actually practiced employment law for several years, though it has been more than a decade since I was an attorney. In my experience these sorts of case most often fall into a gray area; there are usually legitimate reasons for getting rid of the employee (performance, etc.) but there are very often other elements that suggest the employee’s claim is not without some merit.
If Reid is able to show many of the things he alleges at trial it might not go so well for Google. Google is now a big, wealthy public company, not a scrappy startup with an informal culture. Defense counsel will be mindful of such factors in considering whether to settle. They will also assess Reid’s “appearance” and sympathy as a plaintiff: will a jury believe him and like him?
Whether he can prove what he claims and whether documents and witnesses will substantiate the existence of an atmosphere hostile to older employees at Google remains to be proven. But there’s enough evidence supporting Reid’s contentions that the court thought he should be able to come before a jury and prove his case.
Google will now engage in settlement talks with Reid’s attorneys. Whether the case will settle depends on whether the parties can reach an agreement about the money. Reid reportedly had 12,750 stock options. On the day Google went public those would have been worth about $1.3 million. Thereafter they could have been worth considerably more, depending on how long Reid would have remained with the company. Today they would be worth roughly $6.4 million at the current stock price.
Disagreement over the strength of the case and its value may prevent the parties from settling. In that case it would go to trial.
Google could well succeed and show that Reid’s claims were not factually supported. But the opposite could also be true and Reid could win, creating a PR black eye for Mountain View. The money in some ways is much less important than the perception that Google is unfriendly to older workers and/or that it “lost” the case.
Google must weigh all these considerations in deciding whether it wants to roll the dice at trial.
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