A California appeals court recently overturned a trial court’s dismissal of an employee’s age discrimination claim, finding that his job transfer may have constituted a demotion. Although the employer claimed that the man had voluntarily accepted a new position, some evidence indicated that the man had been involuntarily demoted. The case is Ilaga v. The Permanente Medical Group, Calif. Ct. App., No. A165273 (Nov. 22, 2023).
The employee worked for a healthcare services organization for more than 26 years. In 2011, he was promoted to a director position, in which he reported to the medical group administrator, who in turn reported to the organization’s top executive, the physician-in-chief.
While the employee received an excellent performance review for 2015, his 2016 performance review, which a new medical group administrator completed, indicated that he needed to prepare for meetings and complete tasks on time. After the employee disputed his review at a meeting with his supervisor and an HR representative, his supervisor advised him that he was being moved to another position. The employee, who was now 59 years old, moved to a smaller office, lost his staff, received a $20,000 salary decrease, and was told to report to a younger, less experienced individual whom he had trained. The employee ultimately resigned, believing that the organization had discriminated against him.
As a result, the employee filed a lawsuit against his former employer, alleging age discrimination in violation of the California Fair Employment and Housing Act (FEHA) and other claims. The trial court granted the employer’s motion to dismiss the suit before trial, finding that the employee had failed to show that he had suffered an adverse employment action, a prerequisite for a discrimination lawsuit.
According to the appeals court, an adverse employment action “materially affects the terms, conditions, or privileges of employment.” The employer claimed that the employee suffered no adverse employment action because he was offered and voluntarily accepted a new position with the employer. However, the employer asserted that he did not voluntarily accept the position, but rather, his supervisor told him during a meeting that he was being transferred to a different position. During the meeting, an HR representative also advised him that the change was occurring. The court interpreted these statements as evidence that the employee’s transfer to another position may not have been voluntary. The court also noted that the employee moved out of an executive or managerial position, which could affect his future career advancement, and the employer could not produce evidence disputing the alleged decrease in the employee’s salary.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
Hall Benefits Law, LLC
Latest posts by Hall Benefits Law, LLC (see all)
- House Spending Bill Contains PBM Transparency Measures - March 26, 2026
