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Notice of Termination Alone Constitutes Adverse Employment Action

The Third Circuit Court of Appeals held an employer’s notice of termination to an employee is enough to support a discrimination claim, even if the employee ultimately found another position within the company.

Kathleen Fowler worked for AT&T from 1986 until her termination in 2016. She was diagnosed with epilepsy in 2006. She shared her diagnosis and its negative impact on her memory with the company in 2011. In January 2015, she shared her breast cancer diagnosis with AT&T. That same month, the company notified Fowler that they were placing her on “surplus status,” which the company used to lay off employees in eliminated positions. AT&T gave Fowler a choice: she could terminate her employment immediately and receive a severance, or she could extend her employment by 60 days to search for a new position. Fowler chose the latter and received two job offers. She chose the position for which she admittedly was “not suited or qualified.” Her new supervisor made negative comments about her hair loss from the cancer treatments. In October 2016, the company again placed Fowler on “surplus status.” She was the only individual from her unit laid off. Fowler sued, alleging discrimination based on her age and disability.

A federal district court dismissed her entire case on summary judgment, concluding the initial layoff was not an adverse employment action, which is required to establish a discrimination claim. The court based its conclusion on the fact that Fowler found another position.

While upholding the dismissal, the Third Circuit disagreed with this part of the district court’s conclusion. “Fowler’s selection for surplus status altered the terms and conditions of her employment; as soon as she received notice of it, her employment became conditional.” Her ability to find another position meant only that she “lessen[ed] the adversity.” However, the court did not find sufficient evidence that the company’s decision was pretextual. She was part of a company-wide reduction in force and ranked lower than some other employees. As to the second layoff, she admittedly did not have the right skills for her new job.