Employer wins age case, despite mandatory retirement policy

Most cases are won or lost on the facts, but that chestnut minimizes the importance of zealous advocacy and persistence in legal battles.

Tokah v. Foxco Insurance Management Services, Inc., decided last month by the U.S. Court of Appeals for the Third Circuit, illustrates why first impressions based on a few “bad facts” do not mean the employer should give up. In Tokah, the plaintiff put forward three seemingly damning facts to support her age discrimination claim:

  • She was fired at age 66 after 14 years of service for the company, and despite not having any performance problems.
  • The company had a “mandatory” retirement policy in its Employee Handbook that required retirement after age 65.
  • A younger person was retained to perform the plaintiff’s job duties, and plaintiff was required to train her to do the job.

Faced with this evidence, especially the mandatory retirement policy, many companies would just say “get out the checkbook” and settle. But Foxco and its lawyers did not. They believed these facts did not tell the whole story, and they fought the case through a jury trial (which Foxco won) and an appeal (which Foxco also won, this month).

How did Foxco do it? Apparently through good old-fashioned hard work and compelling witness testimony to develop and explain the facts justifying the termination for non-discriminatory reasons. Instead of conceding the decisiveness of the plaintiff’s facts, Foxco showed that:

  • The mandatory retirement policy was not enforced and the decision-maker in the termination was not even aware of it until the plaintiff pointed it out.
  • Due to a substantial decline in revenues, the company had to terminate five employees, including plaintiff, and several were younger, showing the lack of an age-based motivation.
  • The retained employee had skills that the plaintiff lacked, justifying the company’s decision to retain her instead of plaintiff.

In the end, we also assume there were credibility judgments by the jury that favored Foxco. Again, this is a credit to the defense lawyer and the company, who obviously spent the time to properly prepare for trial and show why its stated reasons were bona fide, and that the plaintiff was not fired because of her age.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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