Employer’s Failure to Follow Job Restructuring Plan Could Prove Discrimination

New Jersey’s Appellate Division recently ruled that when a company does not follow through with the plan it used to justify firing an employee, such as its plan for a reorganization or reduction in force, that failure can be enough for a jury to conclude that the decision to fire the employee was discriminatory.

In Abraham v. American International Group, Inc., Lisbi Abraham sued American International Group (AIG) claiming the company fired him because of his race and national origin, in violation of the New Jersey Law Against Discrimination (LAD). Mr. Abraham is a United States citizen of Indian descent. His was AIG’s Chief Technology Officer (CTO) for the company’s Domestic Brokerage and Information Services Groups. The LAD prohibits companies from firing employees based on their race or national origin.

In October 2005, AIG issued a report which concluded that it should eliminate 13 of its 20 CTO positions. In May 2006, AIG fired Mr. Abraham. AIG claimed it fired him because it was restructuring the Information Services Group to eliminate duplication and redundancy of job functions.

The Appellate Division explained that one way a plaintiff can prove discrimination is by offering evidence that discredits the employer’s explanation for its actions. It ruled that Mr. Abraham had evidence to discredit AIG’s claim that it fired him as part of a job restructuring. In particular, although several other people temporarily took over Mr. Abraham’s job duties after he was fired, none of his functions were permanently transferred to other employees. Since there is evidence that Mr. Abraham’s job never was merged into another job, as AIG claimed it intended to do when it justified firing Mr. Abraham, the Appellate Division ruled that a jury could conclude that AIG fired him because of his race or national origin.

The Appellate Division was careful to recognize that courts should not act as “super-personnel departments,” or second-guess employment decisions such as job restructuring. However, it also recognized that companies can violate the LAD in many “subtle and nuanced ways,” that there is rarely “smoking gun” evidence to prove discrimination, and that often there are not even any overt acts of discrimination. The court concluded that, after a trial, a jury could find that AIG discriminated against Mr. Abraham because of his race or national origin, or it could find that AIG’s decision to fire him was legitimate. It therefore sent his case back for a trial.


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