Cerni v. J.P. Morgan Securities LLC
208 F. Supp. 3d 533
S.D.N.Y.2016Background
- Cerni worked at J.P. Morgan from 2000–2013 as an Executive Director / Senior Trader and had historically positive performance reviews.
- In early 2013 J.P. Morgan notified Cerni his position would be terminated for changed staffing needs; he was 42 at termination.
- After Cerni (through counsel) complained of age discrimination, J.P. Morgan’s in-house counsel emailed that Cerni had received "Needs Improvement" ratings for 2011–2012 and a low peer ranking—allegedly post-hoc additions to his personnel file.
- Cerni filed EEOC charges (initial charge, amended charge, and rebuttal) and then sued under the ADEA asserting: (1) age-based disparate treatment (termination), (2) retaliation (J.P. Morgan papered his file with false negative reviews), and (3) a disparate-impact collective action challenging selection of high-salary/executive employees for termination.
- J.P. Morgan moved to dismiss Counts II (retaliation) and III (disparate impact); the court considered Rule 12(b)(6) standards and the parties’ arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether false post‑hoc negative reviews and related conduct constitute a "materially adverse action" for an ADEA retaliation claim | Cerni: post‑complaint negative reviews and change in stated reason for his termination tarnished his record and deterred complaint — thus materially adverse | J.P. Morgan: no materially adverse action because termination reason remained job elimination; negative reviews are not actionable | Held: Denied dismissal. Negative performance reviews can be materially adverse for retaliation; Count II survives |
| Whether Cerni plausibly alleged causation/retaliatory motive for the adverse action | Cerni: employer changed the stated reason after counsel complained; allegations plausibly show post‑hoc fabrication tied to the complaint | J.P. Morgan: implausible because the overarching reason (job elimination) never changed | Held: Denied dismissal. The complaint plausibly alleges the underlying reason for selecting Cerni changed after the complaint |
| Whether J.P. Morgan’s email/settlement‑related statements are inadmissible under Fed. R. Evid. 408 and fatal at the pleading stage | Cerni: email is probative of retaliation and admissibility is not resolved on a motion to dismiss | J.P. Morgan: statements are barred by Rule 408 and thus cannot support the claim | Held: Denied dismissal. Admissibility is irrelevant at pleading stage; Rule 408 exceptions may allow use for proving retaliation |
| Whether Count III disparate‑impact claim was exhausted and viable under ADEA given employer cost‑saving rationale | Cerni: practice of terminating higher‑paid/executive employees had disparate impact on older workers | J.P. Morgan: claim not exhausted at EEOC; even if exhausted, policy is a reasonable factor other than age (RFOA) | Held: Granted dismissal. Count III dismissed with prejudice for failure to exhaust and because terminating higher‑paid employees is a RFOA under the ADEA |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
- Kessler v. Westchester Cty. Dep’t of Soc. Servs., 461 F.3d 199 (2d Cir. 2006) (elements and adverse‑action standard for ADEA retaliation)
- Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53 (retaliation adverse‑action test: materially adverse inquiry)
- Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72 (2d Cir. 2015) (negative performance review can constitute adverse action for retaliation)
- Meacham v. Knolls Atomic Power Lab., 554 U.S. 84 (RFOA and disparate‑impact framework under ADEA)
- Hazen Paper Co. v. Biggins, 507 U.S. 604 (employer actions correlated with age but based on reasonable non‑age factors do not violate ADEA)
- Kimel v. Florida Bd. of Regents, 528 U.S. 62 (RFOA and limits on ADEA disparate‑impact liability)