Does a policy that prohibits a retired former employee from being rehired into the same or similar position have a disparate impact based on age where the employer is unable to demonstrate that its actions were based upon a reasonable factor other than age?
Richard Warden is an engineer who worked for the Ohio Department of Natural Resources (ODNR) for 29.5 years as an Engineer 4 in the Mineral Resources Management Division. In 2006, Warden accepted a two-year buyout and retired with 31.5 years of service. At the time of his retirement he was making $79,000. Following his retirement, legislation was passed requiring ODNR to prepare cost estimates for reclaiming coal mining sites. ODNR asked Warden if he would do the estimates on a 1000-hour yearly contract. Warden successfully did the estimates and was granted three additional contracts. In 2009, ODNR decided to create a full-time Natural Resources 3 position to do the estimates and asked Warden to apply. He submitted his application, was interviewed, and was determined to be the most qualified.
Unbeknownst to Warden, ODNR established a policy prohibiting a retired former employee from being rehired in the same or similar position. This policy was based on the director’s belief that “double-dipping” creates “distrust with the public.” According to the director, when a public servant retires, the public expects that person to leave the position. Previously, ODNR allowed one of its recently retired employees to become a deputy chief despite his having retired from a similar position. There, ODNR explained that exceptional circumstances necessitated the hiring because newly enacted legislation required additional inspectors and a new regulatory structure in the oil and gas industry, and he had the expertise to oversee the development of the new regulatory structure and to ensure that it met public safety requirements.
Pursuant to the policy, Warden, 54, was not given the position and Jared Knerr, 39, was hired. Everyone acknowledged that Warden scored highest on the interview, and that Knerr scored third. Everyone also acknowledged that it would require six to twelve months of training for an individual to reach the same level of proficiency as Warden and that not hiring him made the division less productive. Finally, everyone agreed that Warden would only be receiving $58,000 in the Natural Resources 3 position whereas previously he was making $79,000 so in this situation Warden’s “double-dipping” saved the department money.
Warden sued ODNR for age discrimination based upon disparate treatment and disparate impact. The court found ODNR’s desire to avoid “double-dipping” was a legitimate non-discriminatory reason for not awarding him the position under his disparate treatment claim. But it held that this policy, which was obviously based on age because people under 40 cannot retire, had a disparate impact on individuals over 40. Under the disparate impact claim, an employer can overcome a claim of age discrimination by showing it had a reasonable factor other than age for its decision. In this case, the “double-dipping” would have allowed the most qualified applicant to get the job and saved the department money. This, coupled with the fact that ODNR had already violated its own policy with no adverse effect, led the court to conclude that it failed to provide proof that the policy promotes public trust and thus failed to demonstrate that its actions were based upon a reasonable factor other than age.
The court held where a policy is obviously based on age the employer must produce concrete evidence that its actions were based upon a reasonable factor other than age.
Visit the Ohio Court of Claims
website to view the entire opinion.