Human Resources News & Insights

Company’s mandatory retirement policy cost it $47K

Firing an employee for violating company policy isn’t unusual. And typically, policies help companies defend their actions. 

But when the policy is discriminatory, following it can be costly. 

Professional Endodontics, an oral surgery practice in Michigan, had a policy requiring all employees to retire at age 65. When one employee refused to follow it, the company ended up in court.

EEOC files lawsuit

Karen Ruerat worked for Professional Endodontics for 37 years, and had no plans to retire at 65. When the company learned that she wouldn’t be leaving, she was fired — four days after her 65th birthday.

The EEOC filed a lawsuit, claiming this policy –and Ruerat’s firing– is a violation of the Age Discrimination in Employment Act (ADEA). The company settled, paying $47,000 to Ruerat. Professional Endodontics also agreed to a consent decree, which prohibits it from similar acts of discrimination. The company will also have to provide anti-discrimination training to all of its employees, with an emphasis on ADEA education.

What this means

A lot of employers are still finding themselves in hot water over age discrimination, and employment attorney Jon Hyman of Ohio Employer Law Blog explains why.

Hyman says that many employers don’t realize that a mandatory retirement age is illegal. “Forcing out” an older employee by giving them fewer responsibilities or demoting them is also a violation of the ADEA.

And if an employee takes a company to court over a forced retirement, the employee is practically guaranteed the win.

There are a few exceptions, Hyman notes. Mandatory retirement is permitted (but not required) at:

  • age 65 for employees in high, policy-making positions, and
  • age 55 for publicly employed firefighters or police.

 

 

 

 

Print Friendly

Subscribe Today

Get the latest and greatest Human Resources news and insights delivered to your inbox.