McCaskey v. California State Auto. Ass’n, 189 Cal.App.4th 947 (2010)

Charles Luke, Francis McCaskey and John Mellen filed this lawsuit against CSAA, alleging breach of contract and age discrimination. The contract claim was based on an alleged breach by CSAA of a promise to permit senior sales agents to continue in their employ under relaxed sales quotas (minimum production requirements or “MPR’s”). Plaintiffs also alleged that CSAA’s elimination of the policy permitting the relaxation of MPR’s for senior agents had a disparate impact on employees over age 40. The trial court granted summary judgment to CSAA, but the Court of Appeal reversed, finding a triable issue of fact regarding whether CSAA honored the policy for an agreed time (or in the absence of an agreed time, for a reasonable time). The Court rejected CSAA’s statute of limitations defense, holding the alleged breach occurred not when CSAA first adopted a compensation plan omitting the MPR reductions (2001), but when CSAA in fact applied the policy to plaintiffs (2002). The Court also held there was “no basis to conclude CSAA had honored the policy for a reasonable time when it renounced its undertaking, denied plaintiffs its benefits and ultimately discharged them for invoking it.” As for the age discrimination claim, the Court of Appeal found sufficient evidence in the record to raise a triable issue of fact concerning CSAA’s “real motivation” for terminating plaintiffs’ employment. The Court did, however, affirm summary adjudication of plaintiffs’ disparate impact and retaliation claims.