Employers That Ask Older Workers to Retire to Spare Layoffs Risk Constructive Discharge Litigation

It might seem like a straightforward business decision for a company facing the prospect of layoffs. Based on seniority, younger workers, some with families to support, will be the first ones let go. Looking at the numbers, however, it seems that those jobs could be spared if older workers in their late 50s or early 60s could be convinced to take early retirement. The company assembles an attractive package and presents it to the older workers. In the meetings, the employees are told that taking retirement will save the jobs of their younger colleagues. Many take the packages, and layoffs are avoided.

The company might believe it has achieved a win-win in this situation, but it could be wrong. In fact, it may have just risked an employment lawsuit alleging constructive discharge under the federal Age Discrimination in Employment Act (ADEA).

Courts Take ADEA Claims of Constructive Discharge Seriously

Both the Equal Employment Opportunity Commission (EEOC) and courts take a dim view of employers who pressure older workers into retirement against their wishes. This was clear in a recent case in Mississippi, where a court allowed the case of an older worker alleging he was pressured to retire to proceed to trial. It involves a 23-year veteran of the county road department in Tunica County, Mississippi, who retired at 68. In his suit, the man alleged he was repeatedly told by his supervisor that the department faced a budget crisis and layoffs would happen if older workers did not take retirement.

The issue came to a head in a meeting after the plaintiff’s longtime work partner retired. His supervisor asked him if he planned to retire as well. Though the worker did say retirement was his plan, his lawsuit alleges he told the supervisor he felt forced into the decision due to pressure regarding the layoffs that would happen if he didn’t retire.

The man’s employer, the county, filed a motion for summary judgment to dismiss the lawsuit. In reviewing the motion and the worker’s allegations, the court indicated it found it “troubling” that the five oldest employees in the department retired in quick succession and now there were no employees over the age of 64. The court also said “raising the specter that a particular employee’s failure to retire might effectively make him responsible for layoffs suffered by himself or his co-worker(s) constitutes a quite significant degree of mental coercion to retire.” The ruling on the motion to dismiss also added “Inevitably, any pressure placed upon employees to retire will be felt to a much greater extent by older workers than young ones, and the evidence in this case appears to suggest…that this is true here.”

In denying the county’s motion to dismiss the retired worker’s case, the court also made the comment that it had “concerns that, if it were to simply dismiss plaintiff’s claim on summary judgment, then this might serve to create a quite effective road map for employers to ‘weed out’ older workers.” It is clear then that, while this case still has to go to trial, the court considered the issue of constructive discharge to be serious enough to warrant allowing it to proceed so that it would not set precedent for future lawsuits that could leave older workers unprotected.

Older Workers Cannot be Pressured to Retire

Asking older workers to retire in order to spare younger colleagues from layoffs risks allegations of constructive discharge and possible litigation. Companies also cannot take other actions to force employees nearing retirement to leave, such as changing their working conditions, giving poor performance reviews, and other forms of harassment or retaliation. All are illegal under the ADEA.

Employers must ensure when they deal with layoffs that older workers are not inappropriately singled out and pressured into retiring.

Posted in In The News.