Labor & Employment Law Daily Wrap Up, DISCRIMINATION—N.D. Cal.: Age, gender, disability claims of discharged transgender employee may proceed to trial, (Feb 7, 2025)

By Nadine E. Roddy, J.D.

Underlying all claims was the parties’ highly factual disagreement about the actual reason for the employee’s termination—legitimate business reasons for outsourcing or discriminatory reasons against the employee.

A discharged transgender employee raised material fact issues on her state law claims of age, gender, and disability discrimination, retaliation, and related claims, a federal district court in California has ruled. However, her breach of contract claim based solely on a “vague promise” of future security failed as a matter of law (Appin v. Mergermarket (U.S.) Ltd., No. 23-cv-03372-HSG (N.D. Cal. Feb. 4, 2025)).

A discharged 75-year-old transgender woman, who had worked for 19 years as a content editor for a financial and data analytics firm, brought suit under California law against the firm and a trading group that had acquired the firm. She asserted claims of: (1) age, gender, and disability discrimination and retaliation under the state Fair Employment and Housing Act (FEHA); (2) interference with rights and retaliation under the state Family Rights Act (FRA); (3) wrongful termination in violation of public policy; and (4) breach of contract. The firm contended that the employee was terminated as part of a years-long cost-cutting strategy that had replaced the firm’s content editors in the United States with lower-paid content editors in India.

The trading group moved to dismiss the claims against it, and both defendants moved for summary judgment.

FEHA discrimination claims. After dismissing the trading group from the suit for lack of personal jurisdiction, the court explained that to prevail on summary judgment in an FEHA discrimination suit, an employer must show either: (1) the plaintiff’s inability to establish one of the elements of the claim; or (2) a legitimate, nondiscriminatory reason for its adverse employment decision. The employer in this case adopted the latter approach, arguing that it terminated the employee, along with other similarly situated employees, for legitimate business reasons. To rebut the employer’s proffered reasons, the employee asserted that she was discharged because: (1) she was an unfavorable “legacy asset” compared to younger coworkers; (2) the firm did not want transgender employees; and (3) she had a disability that required surgery.

The court noted that very little evidence is needed to raise a material fact issue regarding an employer’s motive in a FEHA discrimination case; indeed, “any indication of discriminatory motive” may suffice. In this case, the employee had met that low bar.

Regarding her disability, a reasonable factfinder could conclude that comments by the firm’s Human Resources staff, such as “[i]t seems like you get hurt or have some health issue every year,” coupled with the timing of the employee’s termination—just two weeks before a scheduled surgery—indicated a discriminatory motive. As for her age, a factfinder would have to determine whether the firm’s references to the employee as a “legacy asset” and its decision to retain younger employees constituted age discrimination, or whether it simply reflected corporate cost-cutting. The gender discrimination claim was similarly fact-intensive. At trial, for instance, the factfinder would have to determine whether extensive misgendering can give rise to discrimination, or whether the employee’s termination, along with several cisgender content editors, was unrelated to her gender identity.

FRA, FEHA retaliation claims. The employee asserted that her termination was in retaliation for exercising her right under the FRA to take medical leave. She also claimed retaliation in violation of the FEHA in the firm’s “not treating her fairly” after the trade group acquired the firm. Once again, the court found material fact issues that precluded summary judgment. The parties disagreed as to whether the firm was even aware that the employee would undergo surgery and take leave afterward. Underlying everything was the parties’ fundamental and highly factual disagreement as to the actual reason for the employee’s termination—legitimate business reasons or retaliatory reasons.

FRA interference claim. The employee alleged unlawful interference in the firm’s preventing her from “exercising her right to take medical leave” as well as “future leave” when it terminated her just 12 days before a scheduled surgery. Because there was at least one material dispute as to whether the employee sufficiently provided notice of her need for leave, summary judgment was inappropriate on this claim as well.

Common law claims. Because the employee’s wrongful termination claim was premised on and derivative of her statutory discrimination and retaliation claims, it survived summary judgment for the same reasons. The breach of contract claim was based on a comment by the firm’s CEO that the firm would “take care of” the employee when she retired. Because such a vague promise could not constitute an enforceable contract under California precedent, this claim failed as a matter of law.

For these reasons, the court granted the trading group’s motion to dismiss and granted the firm’s motion for summary judgment on the breach of contract claim. The court denied summary judgment for the firm on the remaining claims.

The case is No. 23-cv-03372-HSG.

Judge: Gilliam, H., Jr.

Attorneys: Sarah Rebecca Nichols (Nichols Law) for Ricky L. Appin. Anna Rachella Buono (Davis Wright Tremaine) for Mergermarket [U.S.] Ltd.

Companies: Mergermarket (U.S.) Ltd.

Cases: Discrimination AgeDiscrimination DisabilityDiscrimination SexDiscrimination ContractClaims Discharge EmployeeLeave Retaliation StateLawClaims CaliforniaNews