Firing a worker because he or she is deemed too old is always a no-no, but the Federal Age Discrimination in Employment Act says that sometimes the action is worse than at other times. If the employer acted "willfully," the penalty is higher -- double the amount of the damages, rather than just reimbursement of the wronged worker.
But in the past two years, courts have been struggling to define just what "willful" means. The definitional problem is toughest in what are called "disparate treatment" discrimination cases.
Those are not those in which a manager says he's letting someone go because he has turned 60; most companies are sophisticated enough to know they will be nailed for that. But disparate impact cases are those where the oldster alleges that, for instance, he was fired ostensibly because of absenteeism while younger workers with worse attendance records were kept on. In order for the plaintiff to win such a case, it has to show that the company intended to discriminate on the basis of age.
The argument is over what more must be shown to prove "willfulness." On one side of the spectrum, the U.S. Court of Appeals in Philadelphia in 1986 ruled that an employer's decision to fire must be "outrageous" before a judge can order double damages. At the other side of the spectrum, the U.S. Court of Appeals in Atlanta last year suggested that if the company knew of the law and intended to violate it, the tougher penalty can be imposed.
The appellate courts in Richmond and St. Louis also struggled with the question last year. Their rulings suggest that the test has to be easier on the company than the one laid down by the Atlanta court, but they don't say just what it should be.
Now the U.S. Court of Appeals in Denver has been more precise about a middle-of-the-road rule. On Jan. 15, in Cooper v. Asplundh Tree Expert Co., it told a jury to weigh all the factors that went into the firing decision. Only if age is the No. 1 reason will the firing be called "willful" and be subject to double damages.
In other cases, courts ruled that:
There's nothing wrong with the government giving a contract to a company that at the time the bids are submitted is run by a civil servant. The key is that the executive was no longer on the federal payroll when the contract was actually awarded.
The dispute was over which supplier would provide Navy handheld shower assemblies, and a losing bidder won an injunction from the trial court against the contract going to the low bidder. Its president was a federal employee who resigned his government job after the bid looked like a winner. But the U.S. Court of Appeals in Washington lifted the injunction. The judges gave a literal reading to the military purchasing regulation that bars contract awards to companies owned or controlled by federal employees, finding that it does not prohibit civil servants' involvement with a company during precontract bidding and negotiation stages.
Speakman v. Weinberger, Feb. 2
It's better to reduce an antitrust fine than put a company out of business. The U.S. District Court in Little Rock agreed to slice 10 percent of an $800,000 fine handed out to a construction company found in violation of the Sherman Act. Even though Judge Elsijane Roy decided that much of the firm's financial troubles stem from the "dissipation of company assets" and the "excessive" salary paid the chief stockholder, she accepted the argument that without a reduction in the amount owed the government, the company couldn't stay in business. It wouldn't be good antitrust enforcement to reduce the number of competitors in the market, she explained.
U.S. v. Ben M. Hogan Co., Jan. 14
It can be hazardous to a company's financial health to ignore customer complaints. The U.S. Court of Appeals in St. Louis okayed a jury award of $400,000 in punitive damages in a suit by a woman shot in the leg when her son was trying to unload his bolt-action rifle.
The punitive damages were justified, the judges said, because the rifle manufacturer had for years gotten complaints that the gun would fire when the safety was released and had deliberately decided not to recall the model. The company's internal documents showed that the decision not to recall was based on an estimate that only about 1 percent of the rifles in the hands of the public had the defect.
Lewy v. Remington Arms, Jan. 7
Members of the military are paid more than their pay. And those extras -- particularly allowances for quarters and rations -- must be figured in the income that a divorce court judge looks at in deciding how much child support a parent can afford to pay. Under federal law, the military pay allowances are immune from garnishment for a past-due debt. But the South Dakota Supreme Court decided that's no reason the value of the payments can't be considered in a family law matter.
Huatala v. Huatala, Jan. 6
Moskowitz covers legal affairs for McGraw-Hill World News.