Heyl Royster

Costs Remain a Proper Basis for Termination Even if the Employees Are All Over 65

october 26, 2017

By: Theresa Powell, tpowell@heylroyster.com

In Carson v. Lake County, Indiana, 865 F.3d 526 (7th Cir. 2017), the Seventh Circuit affirmed summary judgment holding that Lake County’s decision to terminate the employment of rehired retirees due to cost was not an age-related and actionable decision under the ADEA. The facts were undisputed that the plaintiffs at issue had chosen a retirement option that allowed them to be rehired and to keep a Medicare supplement through Aetna Insurance.

The County learned that this plan was not in compliance with the law and that achieving compliance would cost the County more than it could afford. The County sought legal counsel who advised that certain employees should be terminated. These employees each met the following criteria: 1) he or she had retired from County service and was later rehired part-time; 2) each was over 65; 3) each received Medicare and primary insurance and 4) each enrolled in the Aetna supplement.

Other County employees who were over 65 or older who did not meet all four criteria remained as County employees. The court found that although everyone terminated was over 65, the reason for the termination was not age, but the combination of all four criteria noted above. As the ADEA requires a “but for” causal connection between age and termination, these other factors necessitated failure for the plaintiffs.

The plaintiffs attempted claims under the Equal Protection clause as well. The court held that such claims were also properly dismissed via summary judgment. The court held that the proper standard was whether the County’s decision to terminate was rationally related to a legitimate state interest. The court held that the decision to terminate was rational as a matter of law and declined to elevate or heighten the standard under these circumstances.

In this case, the County sought the advice of counsel before making termination decisions. Navigation of complex and numerous federal laws applicable to employment decisions often requires legal guidance. Here such steps led to the successful defeat of plaintiff’s claims of age-based discrimination.

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