Management's Workplace Lawyers

Vague Comments about Retirement Cannot Be Relied Upon.

October 30, 2013

An employee’s comments about possible retirement were not sufficient to support the employer’s decision to eliminate his position, according to the U.S. Court of Appeals for the Fourth Circuit. 

Facts of the Case:  In Harris v. Powhatan County School Board, a school employee wrote a letter to the school superintendent, stating that he was considering retirement in the near future, if he received monies that he believed were owed to him for accrued leave.  He reiterated this position verbally in a meeting with the superintendent.  The superintendent informed the School Board that the employee had expressed an intent to retire, but only if he received a large sum of money.  She also recommended that his position be eliminated.  The Board adopted her recommendation to eliminate his position, along with those of others. 

The employee sued the Board, alleging age discrimination in his termination.  The Board defended its decision with two arguments: (1) that it had a good faith belief that the employee wanted to retire and (2) because it needed to address budgetary shortfalls.  The federal district court found that the Board had offered legitimate non-discriminatory reasons for the termination and granted summary judgment as a matter of law for the Board, thereby dismissing the case.

The Court’s Ruling:  On appeal, the Fourth Circuit reversed the district court’s grant of summary judgment for the Board.  It found that there were fact issues about whether the employee clearly indicated an intent to retire.  The letter to the superintendent stated that he was “considering” retirement, not that he was going to retire, and he also verbally told the superintendent that he would voluntarily retire only if he received the money for the leave time.  Even if the Board had a good faith belief that the employee intended to retire, the superintendent certainly had the knowledge that retirement was not certain.  Any discriminatory bias on her part could be imputed to the Board, who adopted her recommendation.  Thus, a factfinder could conclude that the Board’s stated reliance on the employee’s intent to retire was simply a pretext for age discrimination.

In addition, the Fourth Circuit noted that there was evidence that questioned the legitimacy of the Board’s second argument – that the elimination was required because of budgetary concerns.  The Fourth Circuit noted that the employee was pressured not to return even before the budget was approved.  It also considered the fact that all of the job eliminations in the employee’s department involved employees over the age of 70.

The Fourth Circuit acknowledged that a factfinder, such as a jury, could conclude that the Board’s explanations were legitimate.  However, given the evidence, it was inappropriate for the district court to grant summary judgment.  Rather, it should have been left to a jury to consider the conflicting evidence and make a determination.

Lessons Learned:  This case emphasizes that it is important for employers to refrain from making assumptions about an employee’s retirement plans.  Jumping to conclusions about an employee’s retirement based on vague comments can lead to liability for discrimination.  In addition, if a “final decisionmaker” bases the decision upon the recommendation of a lower level employee, the final decisionmaker cannot avoid liability for the lower level employee’s discriminatory intent.