Labor & Employment Law Daily Wrap Up, DISCRIMINATION—AGE—7th Cir.: 58-year-old Caterpillar employee placed on performance plan he already failed revives age bias claim, (Jun 20, 2025)

By Kathleen Kapusta, J.D.

Caterpillar’s “explanations for placing him on a performance action plan—especially one he began in default—are difficult to reconcile with other evidence of his satisfactory performance.”

Noting the “quite unusual” performance action plan upon which Caterpillar Inc. placed a 58-year-old employee, including that it imposed a deadline that had already passed, the Seventh Circuit found a fact issue as to whether he was constructively discharged. Further, evidence of his positive performance reviews throughout his decades-long career, as well as his most recent review just before he was placed on the plan, together with conflicting accounts about the reasons for placing him on the plan were sufficient to show pretext, the court stated, reversing the grant of summary judgment against his ADEA age discrimination claim. The court, however, affirmed summary judgment against his retaliation claim as the years-long delay between his protected activity—a prior lawsuit—and his constructive discharge undercut a reasonable inference of causation (Murphy v. Caterpillar Inc., No. 24-1517 (7th Cir. Jun. 18, 2025)).

Hired by the equipment manufacturing company in 1979 at the age of 19, the employee was promoted to senior design engineer 14 years later after having obtained an engineering degree. In August 2000, after he and several other engineers all over the age of 40 were passed over for promotion, the employee complained about age discrimination. He was later placed on a performance action plan and fired in November.

First lawsuit. He then sued and while the court granted summary judgment against his age discrimination claim, his retaliation claim went to trial. After a jury found in his favor, the court ordered his reinstatement. The parties agreed to a settlement in 2005 and Caterpillar reinstated him and promised not to retaliate against him.

Promotion. In 2008, the employee was promoted to a leadership role on a program focused on reducing engine noise. In 2013, he began reporting to a new supervisor, who learned about his prior lawsuit from his former supervisor. Nonetheless, the employee continued to receive positive performance reviews.

In 2015, the company introduced a voluntary retirement program for employees 55 years old or older. Although the employee was eligible, he chose not to retire at that time. In early 2016, he was asked to lead efforts to reduce sound in a new engine model. Completed in late 2017, the project was praised in Caterpillar’s internal communications.

Action plan. Despite that success, in mid-January 2018, the employee’s supervisor asked HR to document the time the employee spent at the office. In early March, the employee received from the supervisor a performance review indicating he met or exceeded expectations in every category. A week later, however, the supervisor and HR presented the employee with a performance action plan outlining several areas of concern.

Because the plan included a deadline for an action item that had already passed, the employee objected to it. He was told, however, that nothing in the plan would be changed. The plan also had already been signed by the employee’s supervisor, his supervisor, and HR in the portion of the document that indicated he had failed to meet its requirements. Rather than sign the plan, the employee retired.

Lower court proceedings. He then sued, asserting claims for age discrimination and retaliation and the court granted summary judgment to Caterpillar.

Evidentiary issue. On appeal, the Seventh Circuit first addressed the admissibility of the supervisor’s “desk notes” about the employee that were offered to show he failed to meet the company’s expectations and upon which the district court relied. Although Caterpillar argued that the notes were admissible based on the business records exception to the hearsay rule, the appeals court found they lacked sufficient indicia of trustworthiness so as to be considered reliable.

It appeared the supervisor took notes only on the employee and no one else and there was no evidence he, or anyone else, systematically checked the notes for accuracy. Nor was there any evidence of any internal mechanism that would ensure the accuracy of the notes. “Without a more substantial showing of regular practice and reliability, the desk notes are not admissible as business records,” the court concluded, and the district court improperly relied on them in granting summary judgment. Explaining, however, that it did not “need to separate all the wheat from all the chaff here,” the court noted that there were independent grounds for reversal on employee’s age discrimination claim.

Constructive discharge. Although the parties contested whether the employee was constructively discharged, the appeals court pointed to the deadline in his performance action plan that had already passed, noting he was “already in violation of its requirement from the outset.” And when he objected and asked that it be modified, HR and his supervisor refused. In addition, they both signed the plan in a box labeled “Did Not Meet Action Plan” before he had even accepted the plan’s terms.

Though Caterpillar argued that company policy requires signing this section on the day the plan is executed, it admitted that in an action plan issued to the employee’s coworker, the same signature block did not contain any signatures. “Caterpillar’s alleged practice,” said the court, “of preemptively having supervisors sign performance action plans as having been failed reinforces our view that constructive discharge turns on genuine issues of fact.” While “the handwriting may not have been on the wall,” the court observed, “it was certainly etched into the signature block of the action plan, and the axe was poised to fall because [the employee] was already in breach of the plan’s terms.” Accordingly, the court found a material fact issue as to whether the employee was constructively discharged.

Justifications. Attempting to justify the adverse action, Caterpillar agued that the employee was failing to meet its legitimate expectations, and he failed to show his alleged comparators were similarly situated because they were meeting legitimate performance expectations. Noting that the question whether he was meeting Caterpillar’s legitimate expectations merged with whether Caterpillar’s reasons for taking adverse employment action against him were pretextual, the court turned to pretext.

Here, the court noted that throughout his tenure with the company, the employee consistently met or exceeded performance expectations, received promotions and raises, and was entrusted with greater responsibility. Indeed, said the court, shortly before he was placed on the action plan he was publicly commended for successfully leading a high-profile project. Further, his most recent satisfactory review, which was issued just days before he was placed on the action plan, came from his supervisor, who was also responsible for initiating the plan.

While Caterpillar pointed to the employee’s alleged difficulty transitioning from a technically focused role to his position as a Job Owner Lead, which required effective delegation and team management, it repeatedly relied on that expertise, recruited him for complex projects, and praised his technical acumen. And though his focus on the technical minutiae of projects may have, at times, led to lapses in fulfilling managerial duties, his reviews reflected at least satisfactory performance. Thus, said the court, a reasonable jury could find that Caterpillar’s justification was overstated and inconsistent with the totality of the evidence.

Inappropriate comments. Further, the court observed, in its response to the EEOC, Caterpillar argued that the action plan was prompted in part by allegedly inappropriate comments the employee made in 2018 to two Asian coworkers. The supervisor later testified, however, that he decided to initiate the plan before learning of the comments.

Circumstances of plan. Finally, the court found that the circumstances of the performance action plan for the employee also supported a finding of pretext. It was written so that the employee was already in default before it began, the managers refused to correct that issue when the employee objected, and they signed the plan in the box labeled “Signatures for Did Not Meet Action Plan.”

In addition, said the court, a jury could find the performance action plan was not proposed in good faith. Here, the court pointed to the conflicting accounts from Caterpillar regarding the reasons for placing the employee on the performance plan which, it observed, cast doubt on the credibility of the company’s proffered reasons for the employee’s constructive discharge. Viewing the evidence in the light most favorable to the employee, the court found these discrepancies further supported a finding of pretext. Accordingly, the court reversed the lower court’s grant of summary judgment on the employee’s age discrimination claim.

Retaliation. Turning to the employee’s claim Caterpillar constructively discharged him in retaliation for his earlier lawsuit, the court found the 10-year lapse of time between his protected activity and the adverse action “weaken any causal connection between the two events close to the breaking point.” Further, said the court, the employee’s supervisor, who was the relevant decisionmaker, learned of the lawsuit five years before he initiated the action plan.

In addition, after the supervisor learned in 2013 about the employee’s prior lawsuit, he also learned that several other workers claimed the employee had made inappropriate comments to them at work. While HR recommended placing the employee on a performance action plan at that time, the supervisor instead directed the employee to complete anti-harassment training.

“This conduct,” the court reasoned, “does not reflect retaliatory intent, and [the employee] has provided no ‘evidence from which one may reasonably infer that [his] former employer waited in the weeds for five or ten years and then retaliated’ against him.” As a result, the court affirmed summary judgment as to this claim.

The case is No. 24-1517.

Judge: Hamilton, D.

Attorneys: Jonathan A. Backman (Law Office of Jonathan A. Backman) for Brian J. Murphy. Katherine Mendez (Seyfarth Shaw) for Caterpillar Inc.

Companies: Caterpillar Inc.

Cases: AgeDiscrimination Discrimination Discharge EvidenceDiscovery Retaliation