The Different World of Public Sector Employment When Plaintiff’s Retirement After His Termination Results in Dismissal of Discrimination Lawsuit

Last week, the Hamilton County Court of Appeals affirmed judgment on the pleadings for a public employer on a disability discrimination claim on the basis that the plaintiff could not prove an adverse employment action or constructive termination when he admittedly retired during the pendency of a civil service commission appeal of his termination in order to preserve his retirement benefits. Daudistel v. Village of Silverton, 2014-Ohio-5731.  In this case, the plaintiff had been employed as the Village Police Chief when he required time off from work to combat cancer and was faced with repeated efforts by the City Manager to reduce and terminate his employment upon his return. (The City Council rejected each of the City Manager’s efforts).  Nonetheless, after the plaintiff was eventually placed on administrative leave and terminated, he appealed to the Civil Service Commission.  The Commission has a local rule which will dismiss any charges of misconduct if the employee resigns his employment before the Commission rules on the propriety of the discharge.    The plaintiff retired during the pendency of his civil service appeal, which was then dismissed by the Commission and affirmed on appeal by the common pleas court. The plaintiff then brought a lawsuit alleging disability discrimination and harassment, which was dismissed without opinion after the employer sought judgment on the pleadings.  The Court of Appeals affirmed on the basis that the plaintiff’s retirement was voluntary and, therefore, could not be an adverse employment action.  The Court rejected his arguments that he was constructively terminated (i.e., forced to retire) by the City Manager’s efforts to terminate his employment and rejected the employer’s argument that the prior civil service appeal constituted either res judicata or collateral estoppel.

The Court concluded that the plaintiff had not been actually terminated because his retirement converted the City Manager’s attempt to discharge him into a resignation.  It similarly rejected his argument that the prior attempts to terminate him qualified as adverse employment actions or harassment because they had been rejected by the City Council.   As for constructive discharge, the Court found that the plaintiff’s decision to retire – while opposing the decision to discharge him before the Civil Service Commission – had been entirely voluntary because he could have chosen to continue his civil service appeal instead of retiring.

 

“The test for constructive discharge “is whether the employer’s actions made working conditions so intolerable that a reasonable person under the circumstances would have felt compelled to resign.” . . . . 

The effect of Rule 14.01, as applied to Daudistel, and as he well knew, was to convert Daudistel’s termination into a resignation and to protect his retirement benefits. Daudistel elected to resign, even though  he had the opportunity to contest his firing, and, thus, he cannot now claim that the Village wrongfully terminated him—actually or constructively.

 

This decision is surprising because a private sector employer would not be able to force an employee to choose between collecting retirement benefits (which the employee was otherwise qualified to receive) and pursuing a claim for constructive discharge or challenging an allegedly discriminatory employment termination.   A court faced with similar facts in the private sector would have considered whether the employer’s actions and the plaintiff’s termination created an intolerable working environment instead of giving precedence to a local civil service rule over a state or federal law.   There also would have been consideration of the amount of time the plaintiff lacked an income due to the employer’s actions.   It is because of this that employers enter into settlement agreements with plaintiffs to convert terminations to resignations in exchange for the dismissal of the litigation.  If private sector employers could avoid discrimination litigation simply by imposing their own rules about converting terminations to resignations when elderly employees collect retirement benefits, there would be far fewer lawsuits.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Revives Retiree Healthcare Litigation Despite Prior Final Judgment Against Unions Over Same 2001 Modifications

Earlier this month, the Sixth Circuit reversed summary judgment for an employer in a class action lawsuit brought by retirees over changes in their healthcare.   Amos v. PPG Industries, Inc., No. 10-3319 (6^th Cir. 11-1-12).   The employer had modified the insurance coverage in 2001 by requiring the retirees to contribute to a portion of the cost.   Unions which had negotiated collective bargaining agreements governing the terms of the retirees’ health coverage brought suit in federal court in Pittsburgh alleging that the employer’s modifications breached those bargaining agreements.  That lawsuit was dismissed on the grounds that the insurance benefits had not vested and was affirmed on appeal in 2007.  While that lawsuit was still pending in Pittsburgh, the plaintiffs then filed a class action suit in federal court in Columbus under ERISA and the LMRA alleging that the insurance benefits had vested and were not subject to change.  Following the dismissal of the Pittsburgh suit, the employer moved for summary judgment on the grounds of collateral estoppel: that the lawsuit had already been litigated and final judgment entered in favor of the employer in Pennsylvania.  The district court here agreed and entered judgment for the employer.  The Sixth Circuit reversed on the grounds that the Unions did not represent the plaintiff retirees and, thus, the retirees had not been given an opportunity to litigate the issue for themselves.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.