Monday, March 30, 2015

Court Finds Consideration of Retirement Eligibility in Promotional Criteria Evidence of Age Discrimination

Many organizations consider stability to be an important selection criteria for top positions. Public and private employers alike often want to know that their department heads will stick around at least long enough to implement their initiatives and maintain stability in the organization. But, is it appropriate for an employer to downgrade a candidate’s promotional qualifications simply because a candidate is retirement eligible. The 8th Circuit recently found that a municipality’s consideration of a lieutenant’s status as retirement eligible when considering selection of a new chief of police was evidence of discrimination.

In Hilde v. City of Eveleth, the chief of police announced his retirement. As was the policy of the municipality, their Board of Police Commission, comprised of three members, conducted candidate evaluations and recommended a candidate for selection, as determined by a point system  based on both objective and subjective criteria. 

The Plaintiff scored highest among candidates on the objective portion of the evaluations. A couple of unusual  events occurred though. Inconsistent with both practice and policy, the three commission members changed their individual evaluation scores  for Plaintiff after consulting with each other. Additionally, they discussed the fact that Plaintiff, at age 51 was eligible by age to elect retirement at any point.  The retiring chief acknowledged that the City was looking for a “long term” hire in the chief’s position. Ultimately, the commission recommended a younger candidate for selection as chief. The Plaintiff sued, claiming consideration of his retirement eligibility was tantamount to age discrimination. The trial court found in favor of the employer that the it was not unlawful to consider retirement eligibility when hiring or promoting as well as the fact that a presumption of discrimination did not arise when the successful candidate was only eight years younger than the Plaintiff.

The 8th Circuit Court of Appeals reversed the trial court and found that consideration of Plaintiff’s retirement eligibility status, because it included an age component, could be evidence of age discrimination, and ordered that the case go to trial. The court acknowledged that commitment to a job is a valid criteria in hiring or promoting but found that the City in this case concluded that the Plaintiff would be less committed solely because he was retirement eligible. Because the retirement criteria depended on both years of service as well as age, the City’s reliance on this factor could be a proxy for unlawful consideration of age only. 

The lesson for employers is pretty clear. When considering hiring or promoting, it is okay to consider job commitment and it is natural to wonder if candidates who are retirement eligible are willing to commit a certain amount of time to a position. It is just not okay to  assume that candidates who could retire at any time are not committed to the positions that they seek. The course of action is clear. For positions where stability in leadership is important, employers should ask all candidates how long they would expect to remain in the position. Three issues to remember in this regard though are the following:  1) While it is appropriate to ask candidates about their long term plans, ensure that all candidates are asked this question lest the employer look like it is singling out only older employees; 2) Avoid asking for a commitment to a certain number of years in a job unless you are prepared for the argument that an employment contract was established; and 3) never assume that retirement eligibility correlates to a diminished commitment for a job.