• Employer's Cost Cutting Defense May Be Pretextual
  • December 21, 2009 | Author: Aimee E. Dreiss
  • Law Firm: Hinshaw & Culbertson LLP - Chicago Office
  • An employee who had served for several years as chief financial officer of his employer was fired at age 62 and replaced by a 26-year-old individual. Prior to his termination, the employee had offered to take a pay cut which would have set his salary below that of his eventual replacement. The employer’s president testified that the employee was terminated in order to cut costs. There was, however, evidence that a vice-president of the employer had repeatedly told the president that the employee was “too old” to do his job. The employee sued under the Age Discrimination in Employment Act (ADEA). A district court granted summary judgement to the employer, but the United States Court of Appeals for the Second Circuit vacated the decision. The appellate court found that the employee had established a claim under the ADEA. It further found that, based on the employee’s offer to take a pay cut and the vice-president’s age-based comments, the employee had rebutted the employer’s claim that the decision to terminate was motivated by an intention to reduce costs. Employers should be mindful that adverse employment actions motivated by discrimination cannot be “covered” by an employer’s difficult financial position or by a legitimate cost-cutting strategy.

    Carras v. MGS 728 Lex Inc., No. 07-4480 (2d Cir., Dec. 19, 2008) (unpublished)