Employer Claims Insurance Carrier Will No Longer Cover 75-Year-Old Employees

Employers cannot simply fire someone because they have gotten too old, can they? Certainly not. But what if the employer claims its liability insurance carrier will not cover employees who are 75 or older? Will such a claim allow them to terminate employees without violating anti-discrimination laws? The EEOC challenged an employer on this issue, and succeeded.

Claims of discrimination against Atchison Transportation Services, Inc.

Atchison Transportation Services, Inc. is one of the largest full-service ground transportation companies in South Carolina. Operating for more than 60 years, the company provides uniformed drivers for a variety of transportation services. Apparently, the company believed that once its drivers reached the age of 75, they were no longer capable to perform their duties. The Operations Manager, William Thomas, approached two of his employees (who were over the age of 70) and informed them that they were being terminated. Admittedly, there was no problem with either employee's performance. However, Thomas claimed that the company's insurance provider would not cover drivers who had reached the age of 75. No other reason was given for their termination.

The EEOC filed a lawsuit against Atchison Transportation, claiming violation of the Age Discrimination in Employment Act (ADEA). This particular anti-discrimination statute provides that it is unlawful for "an employer to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age."

The case was settled for $85,000. A representative of the EEOC believes the company's willingness to settle quickly, strongly suggests that the insurance policy did not actually contain any sort of age restriction, as the manager represented to the employees. This case is yet another example of the mistaken assumptions of some employers. According to the EEOC's press release, EEOC Regional Attorney Lynette A. Barnes had this to say:

"Employers commonly make assumptions about how long persons should work before retirement, including assumptions about their ability to work based solely on age. Employers must be careful, as making such assumptions and then acting on them, can result in a violation of federal law."

Employer also required to adopt new policies and training

In addition to the $85,000 settlement, Atchison Transportation is also required to adopt new policies addressing age discrimination, to train managers and employees how to avoid age discrimination, to post notices about the lawsuit in its Spartanburg facility, and to report all terminations of employees over age 40 to the EEOC. This type of injunctive relief is common in employment discrimination case.

While failure-to-hire age discrimination cases are typically more common than wrongful termination cases, there are certainly many cases of employees who have been terminated because of their age, often to make room for younger employees. Yet, the actions of the transportation company in this case, attempting to justify termination by manufacturing a legitimate reason is really shameful.

If you feel you have been the victim of age discrimination, or if you have any questions regarding your employment rights, please contact Wrady & Michel, LLC, either online calling us at (205) 265-1880.

Categories: EEOC Claim
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