Just because an older employee is let go, you haven’t necessarily broken the federal law against age discrimination.


Ms. J, 60, was a nurse administrator at a large HMO clinic for most of her career. Her duties were mostly recruiting, scheduling, and resolving staff problems. When she was dismissed and replaced by a younger (and lower-paid) woman, she sued for age discrimination.

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The clinic had been losing money for several years. A new business director hired a consultant, who advised a “reduction in force” (RIF) program to cut costs by cutting jobs. Ms. J’s position was one of those axed, although she was offered an assignment as a charge nurse in the clinic.


In breaking the news, the HMO’s general manager told her the change was not related to her performance, which was satisfactory, but was part of the RIF program. Later, Ms. J discovered That her administrative duties had been transferred to the manager’s administrative assistant, who was much younger, less experienced, lower paid, and not even a nurse.


Ms. J had been a charge nurse early in her career and was not about to go back to it. She quit the clinic altogether and consulted a plaintiff’s lawyer who specialized in employment discrimination.


After reviewing her story, he told Ms. J he would take the case on a contingency basis. That meant that, if the suit was successful, he would take a percentage of any settlement as his fee. If he lost the case, Ms. J would owe nothing.


The plaintiff’s lawyer next called for Ms. J’s personnel records and then filed suit against the HMO for wrongful dismissal under the federal Age Discrimination in Employment Act (ADEA). With-in hours of receiving the court papers, the HMO had hired the city’s foremost law firm.


The firm was also the city’s most expensive at $500 an hour. The defense lawyers took about six months—charging about $10,000 a month—for the discovery part of the litigation, where both sides trade documents. Then it was time for the depositions, where Ms. J detailed her version of events under oath.


She outlined her early career at an acute care hospital, her hard work and dedication as she rose through the ranks, and her eventual appointment as “nurse administrator” for the HMO clinic. Then she described how she had been summarily dismissed and replaced by the young administrative assistant.


When he cross-examined, the defense lawyer seemed sympathetic, so Ms. J assumed that the HMO would make an offer to settle. Instead, two days later, she received a motion to dismiss the case for “failure to state a case.”


The judge at the subsequent hearing agreed with the HMO’s lawyers. She dismissed Ms. J’s

lawsuit for “failure to establish a prima facie case.”


Ms. J was surprised, but her lawyer assured her they’d win on appeal. He was right. The appellate court ruled that Ms. J’s deposition raised enough questions of fact for the case to proceed to trial.


Interestingly, the case never made it that far, and Ms. J and the HMO settled for $34,000. This happened a week before a jury was to be sworn.