Firing to Prevent Pension Vesting, Without More, Does Not Violate ADEA
by
Joseph C. Maya on Mar. 01, 2024
Summary: In this economy, companies are terminating employees in an effort to increase share value or simply improve the bottom line. Often it is the older, more senior, and more costly employees that are the first to go. The question sometimes arises: “Can my employer fire me to prevent my pension from vesting (thereby saving itself money) without violating the Age Discrimination in Employment Act?” The short and surprising answer is “yes,” assuming the absence of other critical allegations necessary to sustain an ADEA claim.
A Relevant Case
In a case out of the Second Circuit Court of Appeals, a Connecticut employee alleged in his Complaint only that “he was fired by defendants because he was nearing the age of retirement.” The lower court dismissed this claim and the appellate court affirmed because this was the only fact alleged in the Complaint as evidence of age discrimination. The United States Supreme Court has held that the firing of an employee to prevent his pension benefits from vesting does not, without more, violate the ADEA.
What essential allegations were missing? In order to prevail, the plaintiff had to allege facts evincing that his employer was using pension status as a proxy for age, in order to discriminate on the basis of age. How could he do that? One way would be to plead and prove that his pension vested due to age and not years of service. While age and years of service are empirically connected, the Supreme Court has said that they are “analytically distinct.” What the Complaint lacked were additional allegations supporting a claim of age discrimination, for a successful ADEA plaintiff must prove that age actually motivated the employer’s decision.
The take-away from this case is that victims of age discrimination should consult with an experienced employment law litigator to ensure that an actionable claim is properly alleged in a Complaint. In the case referred to above, it is impossible to say whether the plaintiff would have prevailed with a more artfully crafted Complaint. What we do know is that his bare-bones Complaint was dismissed as insufficient without ever being heard on its merits.
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