3. FACTS:
Dr. Brian Reid, Ph.D. (52) was hired at Google in 2002 as Director of Operations and Vice-
President of Engineering.
Dr. Reid reported to Google’s Wayne Rosing (55) who hired Dr. Reid in 2002.
Dr. Reid occasionally reported to Urs Holzle (38), Vice-President of Engineering Operations.
Dr. Reid received performance bonuses between February 2003 to February 2004 that
included 12,750 in stock options.
Wayne Rosing conducted Dr. Reid’s first and only end of year performance review finding:
• “[Dr. Reid had] an extraordinarily broad range of knowledge concerning Operations,
Engineering in general and an aptitude and orientation towards operational and IT issues.”
• “[Dr. Reid] projected confidence when dealing with most fast changing situations, had an
excellent attitude about what ‘OPS’ and ‘Support’ mean.”
• “[Dr. Reid was] very intelligent, creative… a terrific problem solver, and the vast majority of
Ops ran great.”
• Rosing gave Dr. Reid a performance rating indicating he “consistently met expectations.”
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4. FACTS (continued):
Dr. Reid alleged that his supervisor, Urs Holzle, Vice-President of Engineering Operations made
ageist comments towards him “every few weeks,” like his opinions were “obsolete” and “too old to
matter.” Dr. Reid received similar commentary from coworkers who characterized him as “slow,”
“fuzzy,” “sluggish,” and “lethargic.” Dr. Reid did not “display a sense of urgency” and “lacked
energy.” Dr. Reid stated coworkers called him an “old fuddy-duddy.”
September 2003, Google co-founder Dr. Sergey Brin, Ph.D. emailed Google executives regarding
payroll: “We should avoid the tendency towards bloat here particularly with highly paid
individuals.”
Rosing responded to Dr. Brin’s email: “Excellent memo and very timely… Let me disclose what I am
up to organizationally… We are looking for a senior Director (note I did not capitalize Sr.) or VP level
person to run this operation…”
October 2003, Rosing removed Dr. Reid from his position as Vice-President of Engineering.
Dr. Reid now 53, was replaced by his supervisor Holzle (39), and Douglas Merrill (33).
Dr. Reid, in his new role (which CEO Eric Schmidt assured “would last at least five years,”) was to
develop Google’s Graduate Degree Program (“GDP”). The GDP would retain Google engineers by
allowing them to take classes offered by Carnegie Mellon University (Dr. Reid’s alma mater) taught
at Google. Dr. Reid would also head the Google Scholar Program (“GSP”). The GSP was a
recruiting tool to lure bright undergraduate engineering talent at Stanford University. It is
noteworthy that Google gave Dr. Reid neither staff nor budget in his new role.
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5. FACTS (cont.):
February 13, 2004, Rosing told Dr. Reid that his services were no longer needed at Google. The
GDP would continue, but under new leadership. When Dr. Rosing asked who initiated the
decision, he was informed by Rosing that the decision came from upper management (i.e.
CEO Schmidt). Rosing assured Dr. Reid his termination was not for “poor performance,” but
rather due to not being a “cultural fit” at Google.
Respecting the “cultural fit,” assessment, Rosing did mention this in his first written annual
performance review of Dr. Reid: “Adapting to Google culture is the primary task for the first
year here… Right or wrong, Google is simply different: Younger contributors, inexperienced first
line managers, and the super fast pace are just a few examples of the environment.”
February 24, 2004, Dr. Reid met with George Reyes, CFO to inquire about other career
opportunities, but was informed there were no positions for him at Google.
February 27, 2004 Dr. Reid turned in his Google campus access card, and did not return to
campus.
Dr. Reid received a severance package including stock options up to April 20, 2004.
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6. PROCEDURAL HISTORY:
July 20, 2004, Dr. Reid sued Google alleging employment discrimination under the California
Fair Employment & Housing Act, (“FEHA”), Gov. Code § 12900 et seq., and California’s Unfair
Competition Law (“UCL”), Bus. & Prof. Code, § 17200 et seq. Dr. Reid demanded injunctive
relief, disgorgement of profits, restitution of lost stock options, and attorneys fees and costs.
Google demurred, and filed motions to strike.
The trial court deemed Reid’s evidence of ageist comments “not sufficient to raise a
permissible inference that in fact, [Google] considered Plaintiff’s age as a motivating factor in
terminating his employment.” Accordingly, the trial court dismissed Dr. Reid’s suit for failure to
raise a triable issue of material fact as to whether Google’s reason for terminating employment
as “not a cultural fit,” was a pretext for unlawful age discrimination.
Dr. Reid appealed to the Sixth Appellate District.
A three justice panel found undisputed evidence from the record below that Dr. Reid had
indeed established a prima facie case of age discrimination. The trial court was reversed, and
Google appealed to the CA. Supreme Court which affirmed the Sixth Appellate District.
The lawsuit was remanded to the trial court but settled out of court.
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7. PRIMARY ISSUE: CA. Fair Employment & Housing Act
California courts employ a three prong test in cases alleging discrimination against an
employer, including age discrimination under the FEHA. McDonnell Douglass Corp. v. Green
(1973) 411 U.S. 792, 802 [36 L. Ed. 2d 668, 93 S. Ct. 1817])
The three-pronged test McDonnell Douglass Corp.:
(1) At trial, the employee must first establish a prima facie case of discrimination, showing that it is
more likely than not, the former employer acted based on prohibited discriminatory criterion.
(2) Once the employee has satisfied his burden, the onus then shifts to the employer to show that
the action was based on legitimate non-discriminatory motives.
(3) Finally, the burden shifts back to the employee to show that the employer’s asserted reasons
for termination are pretextural.
Under prong #1, both the Sixth District, and the CA. Supreme Court, found that Dr. Reid
presented material evidence of employment discrimination to satisfy prong #1 of McDonnell
Douglass Corp., Namely, the history of employment discrimination at Google, as well as the
particular ageist remarks serially lodged against Dr. Reid every few weeks by his supervisor, and
co-workers.
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8. Secondary Issue: Stray Remarks Doctrine…
A notable secondary issues in Reid v. Google was the defense strategy to exclude evidence of
the ageist remarks uttered against Dr. Reid. Here, Google lawyers resorted to a federal court
doctrine called the “Stray Remarks Doctrine.” The term “stray remarks” first appeared in a
concurring opinion by Justice O’Conner. (See Price Waterhouse v. Hopkins (1989) 490 U.S. 228,
276 [104 L. Ed. 2d 268, 109 S. Ct. 1775])
In Price Waterhouse, the plaintiff—a senior manager, sued her former employer alleging
gender discrimination for failure to re-propose her for partnership. Justice O’Conner wrote that
“stray remarks” or “statements by non-decision makers, or statements by decision makers
unrelated to the decisional process,” do not constitute direct evidence of decision makers’
reliance on illegitimate criterion in decision making. Justice O’Conner added, however that
such “stray remarks” may be probative of discrimination, and ultimately concluded that
plaintiff provided the requisite direct evidence that decision makers unlawfully based their
decision to terminate on her gender. For example, a partner remarked that she should: “walk
more femininely, talk more femininely, dress more femininely, wear make-up, have her hair
styled, and wear jewelry,” to improve her chances of partnerships, rather than being “macho.”
Since Price Waterhouse, federal courts have expanded the “stray remarks” doctrine (See Hill v.
Lockheed Martin Logistics Management, Inc.(4th Cir. 2004) 354 F. 3d 277), such that “stray
remarks” uttered by non-decision makers are immaterial in discrimination suits.
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9. Stray Remarks Doctrine (continued):
Under Hill, federal courts applied the “stray remarks doctrine” such that comments from co-
workers (and decision making supervisors outside the decision making process) like “useless old
lady” who needed to retire, or “troubled old lady,” or that “damn woman,” did not influence
the decisional process, and were thus immaterial evidence.
In another case, a direct supervisor’s statements plaintiff was an “old fart” and that a younger
person could do faster work, was a “stray remark” by the court, and insufficient to establish
evidence of age discrimination. Waggoner v. City of Garland (5th Cir. 1993) 987 F. 2d 1160,
1166
California appellate courts have analyzed certain remarks under the stray remarks doctrine,
but have not explicitly applied or addressed the stray remarks doctrine. Instead, the remarks
were considered in context with other circumstances of the discrimination suit. For example,
plaintiff’s allegation of age bias supported by non-decision maker’s comment “this is 1994,
haven’t you ever heard of a fax before?” failed to establish prima facie case of workplace
discrimination based on age. (Horn v. Cushman & Wakefield Western, Inc. (1999) 72
Cal.App.4th 798, 801-803, 809 [85 Cal. Rptr. 2d 459])
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10. Tertiary Issue in Reid v. Google, Inc.: $hakedown $uits…
Another secondary issue was “$hakedown $uits.” On appeal, Dr. Reid argued that the trial court errantly applied Proposition
64 retroactively. (See article Proposition 64: Its Impact on 17200 and why it should apply Retroactively.) Dr. Reid filed suit
before Prop. 64 was approved by voters by a margin of 59% on November 2, 2004. The Sixth Appellate District deferred to the
CA. Supreme Court on the retroactive issue.
On July 24, 2006, the Supreme Court answered that retroactivity question in the affirmative. (Californians for Disability Rights v.
Mervyn's, LLC, (2006) 39 Cal.4th 223, 46 Cal.Rptr.3d 57,138 P.3d 207.)
The text of Prop. 64 read: "Should individual or class action "unfair business" lawsuits be allowed only if actual loss suffered?
Only government officials may enforce these laws on public's behalf." Prop. 64 amended § 17200 et seq. of the Business &
Professions Code. The ballot summary of the CA. Attorney General stated: (1) Prop. 64 limits individual right to sue by allowing
private enforcement of unfair business competition laws only if that individual was actually injured by, and suffered
financial/property loss because of, an unfair business practice; (2) Requires private representative claims to comply with
procedural requirements applicable to class action lawsuits; (3) Authorizes only the California Attorney General or local
government prosecutors to sue on behalf of general public to enforce unfair business competition laws; (4) Limits use of
monetary penalties recovered by Attorney General or local government prosecutors to enforcement of consumer protection
laws.
The Sixth Appellate District curiously held that Dr. Reid suffered no “injury in fact” in hiring as required under Prop. 64 and thus
affirmed the trial court’s ruling to dismiss his UCL claim. The justices ostensibly ignored the Rosing performance review which
mentioned that part of the first year probationary requirement was fitting in with Google culture. Curiously, the justices
concluded Dr. Reid suffered no financial injury in hiring, notwithstanding the fact that he received positive performance
reviews, yet was yanked from Vice-President of Engineering (i.e. $200,000 per year position), and moved into a new role
without a staff or a budget. Add to this, the fact that CEO Eric Schmidt misrepresented his future at Google by stating the
GDP would be around for “five years.” Dr. Reid’s termination cost him his $14,000 annual bonus, his $200,000 annual salary,
and stock options.
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