In 1997, a California appellate court in Hersant v. Department of Social Services stated that, to prove age discrimination, an employee must show that he or she was replaced by someone significantly younger. An unpublished appellate court decision issued May 24, 2010 (Chapman v. Safeway, Inc. (pdf)) rejects that assertion.
According to the appellate court in Chapman, there is no such requirement. In fact, according to Chapman, a plaintiff could proceed with an age discrimination claim even if the replacement was someone older! Citing to an opinion from 2000, Begnal v. Canfield & Associates, Inc., the court in Chapman explained that "a jury could . . . infer that the replacement (an older person) was hired to protect against an anticipated claim of age discrimination."
So in California, you can fire a 40 year-old, hire a 50 year-old replacement, and get sued for age discrimination. Why would any employment lawyer want to practice anywhere else?