Age Discrimination Lawsuits can cost more then the R.I.F. saves

by on December 15, 2008 · 0 Comment POSTED IN: HR Info Center

Age Discrimination and Forced retirement

Here’s a case where nothing other than a lax communication policy landed a company with an age discrimination lawsuit for forced retirement.

An employer who “honestly believed” that a 55-year-old manager was about to retire went ahead and set her retirement date – and hired her replacement. Problem was, the manager never had any intention of retiring. She didn’t even know she was being replaced – fired, as she saw it – until she read it in a memo.

The miscommunication culminated in an age discrimination lawsuit. The manager claimed her employer had tried to force her out against her will. The employer argued that the manager had told her boss that she’d sold her home. Based on many previous conversations, the boss assumed that meant she was planning to retire.

The court said that the employer had honestly believed that the manager’s departure was imminent; it did nothing illegal. But the lawsuit might have been avoided altogether had the manager’s boss documented her intention to retire. Managers should document in writing every change in status or employment action involving a member of a protected class.

Cite: Margaret M. Leibforth v. Belvidere National Bank, U.S. Court of Appeals, 7th Circuit, No. 02-3190, 7/25/0

Forced retirement costs employer

When an employee refused to retire at age 65, he was fired and replaced with a man in his early 20s. He filed an age discrimination lawsuit.

The employer argued that the discharge had been for financial reasons. But the judge was skeptical because the firm was still in business and the man’s job hadn’t been eliminated.

The firm settled with the EEOC. In addition to paying the employee $97,000, it agreed to train all supervisors in age discrimination.

Cite: EEOC v. Burlington Cooperative Association.

No one monitored reorganization for bias

Sometimes HR is the only department that can step back and look at termination and demotion trends – and maybe spot discrimination before anyone else does.

When a technology company fired and demoted a number of sales managers and reps, and replaced some with less-experienced individuals after a merger, it seems no one was watching one important “demographic factor” – age.

Affected sales pros saw a pattern and contacted their attorneys. The lawsuit settled for $2.15 million.

Cite: EEOC v. Honeywell.

Age discrimination: it’s a numbers thing

Here’s a case where someone from HR didn’t look over the numbers during a RIF. If they had, they would have seen a pattern – and an age discrimination lawsuit coming.

A luxury jet plane maker released about 200 employees, and more than 100 of them were over age 40. Fifty-two of them sued the company for age discrimination. The case was settled for an undisclosed sum (estimated to be in the tens of millions) because of what the plaintiffs’ attorney called an “overwhelming” amount of evidence that the company was ridding itself of people based on age and pension status.

During layoffs, look for patterns that reveal even the appearance of bias against protected classes of employees.

Cite: EEOC v. Gulfstream.

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