Culture clash leads to age discrimination claim

One problem for foreign-based companies in the U. S. is that managers from the home country may not realize that comments completely acceptable abroad are evidence of discrimination here. The most recent company to learn that lesson was Mitsubishi Electronics America.

At a president’s meeting, Mr. Ihara, who was the person responsible for founding the various Mitsubishi entities in the United States and was a senior managing director at Mitsubishi Electronics, made a statement “about getting rid of managers who were over 40 and replacing them with younger, more aggressive managers.” Mr. Kawasaki, president of Mitsubishi Electronics concurred with Ihara’s statement. This information was then relayed by an American Vice President to his managers in a meeting.

When a lower level manager later was laid off, he sought to have this statement admitted as evidence of age discrimination. The California Court of Appeals held that even though the statement was hearsay it was admissable. Ihara’s and Kawasaki’s statements were admissible as admissions because Ihara was authorized to speak for Mitsubishi Electronics’ Japanese parent company (which had the right to dictate policy to its American subsidiary) and Kawasaki was the president of Mitsubishi Electronics itself.

The issue was whether the American Vice President’s relaying of Ihara’s statements were admissable. Mitsubishi Electronics argued that there was no evidence that he was authorized to report on what others said at the president’s meeting. The Court said, “The argument, however, distorts the normal presumptions in any corporate managerial hierarchy. It is certainly within the province of a company vice president to ‘carry the word’ of company direction to his or her subordinates when the vice president receives that word from the very highest levels of the firm. The normal presumption is that the managers and executives who hear an announcement of company policy are to carry that policy to their ‘troops,’ who will be expected to ‘get with the program.'”

The Court went on to say in a footnote, “That is the crux of illegal company policies in the context of the law governing authorized admissions: If you announce them to high level managers but tell the managers not to breathe a word about them, you are acknowledging that the policies are illegal, and cannot face the light of disclosure. Otherwise, you have every reason to expect that the managers who heard your announcement are going to convey it — and will have authority to convey it — down the line.”

In its holding requiring a new trial for the employee, the Court noted, “There is, of course, no doubt that if Mitsubishi Electronic’s policy really was to “get rid of managers over 40” and replace them “with younger, more aggressive managers” the policy represented a serious violation of state and federal age discrimination laws. Age discrimination laws target the generality that an individual cannot do the work just because he or she has reached a certain age. Making a layoff decision on the assumption that an individual manager is necessarily less “aggressive” just because he or she has reached a certain age is precisely the sort of thing the age discrimination laws were enacted to prohibit.”

___Cal.App.4th___, 97 C.D.O.S. 9017 (CA 4, November 25, 1997)

Information here is correct at the time it is posted. Case decisions cited here may be reversed. Please do not rely on this information without consulting an attorney first.

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