Fiat Chrysler Can’t Dodge Employee Age Discrimination Lawsuit

A federal judge refused to compel plaintiffs to arbitrate a lawsuit alleging car manufacturer Fiat Chrysler engaged in employee age discrimination. However, the judge did require plaintiffs to amend their complaint to remove class action claims.

Lead plaintiffs alleged in their class action lawsuit that Fiat Chrysler violated Michigan employment laws by using an employment rating system involving a picture of the employee to systematically discriminate against non-union workers over the age of 55. These employees were afforded fewer advancement opportunities, lower pay and were also subject to higher rates of discipline and even termination, according to the lawsuit.

Chrysler argued that the class action lawsuit should be handled in mandatory arbitration; however, U.S. District Judge Laurie J. Michelson disagreed. The judge said that the mandatory arbitration policy adopted by the car manufacturer in 1995 did not apply to the workers.

“Because arbitrations agreements are fundamentally contracts, the court reviews the enforceability of  an arbitration agreement according to the applicable state law of contract formation,” noted the judge in her order.

The judge pointed out that although Chrysler indicated the policy applied to current workers at the time, the company did not tell workers how they could opt out of the agreement, for example, by leaving their employment with the company.

“In the absence of any signed agreement or any FCA-­distributed materials expressly telling plaintiffs that they would accept the terms of the [employment dispute resolution process] by continuing their employment, the court cannot find that there was an agreement to arbitrate,” stated the order.

Fiat Chrysler did convince the judge to dismiss that plaintiffs’ class action claims, however. Chrysler argued that the plaintiffs had not let enough time pass after a claim was filed with the U.S. Equal Employment Opportunity Commission before lodging the class action.

The judge noted that the claims brought by the lawsuit under the Age Discrimination in Employment Act cannot actually be filed as a class action. The plaintiffs attempted to argue that the class action claims could be brought under a different rule, the Fair Pay Act, but the judge pointed out the claims were not about Chrysler’s compensation practices, but employee evaluation.

“Each year, Plaintiffs know their respective scores (on a 1-9 scale) as well as how that score will affect them. By Plaintiffs’ own account, this score affects not just salary, but annual bonuses, promotions, retirement benefits, medical costs, as well as ‘other privileges and benefits.’ Additionally, a low score can cause an employee to go under special review, which may eventually lead to termination,” pointed out the court order. “As the allegations in this case involve discrete acts of discrimination—the yearly Evaluation Process and resulting scores—and not a challenge to a compensation system, the FPA does not apply.”

The plaintiffs need to file a collective action instead, ruled the judge, allowing the plaintiffs a chance to amend their complaint.

The lead plaintiffs are represented by Shereef H. Akeel and Hasan Kaakarli of Akeel & Valentine PLC and Michael L. Pitt, Megan A. Bonanni, Robert W. Palmer, Carey S. McGehee and Beth M. Rivers of Pitt McGehee Palmer & Rivers PC.

The Fiat Chrysler Age Discrimination Lawsuit is Dan Cerjanec v. FCA US LLC, Case No. 2:17-cv-10619, in the U.S. District Court for the Eastern District of Michigan, Southern Division.

UPDATE: On Aug. 6, 2018, a judge refused to dismiss a class action lawsuit filed by current and former Fiat Chrysler employees who claim the company commits age discrimination in their employee performance reviews.