Court Says Town Board Is ADEA ‘Employer,' Advances Ex-General Manager's Bias Claim

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May 16 --A local water and sewer board in Alabama must face trial on a claim by its 66-year-old former general manager that he was fired because of his age, in violation of the Age Discrimination in Employment Act, a federal district court ruled May 15.

Finding that the Water Works and Sewer Board of the Town of Vernon is an “employer” for purposes of the ADEA, the U.S. District Court for the Northern District of Alabama denied the board's motion for summary judgment on Roger Holloway's ADEA claim.

In reaching that conclusion, Judge L. Scott Coogler held that a town or city is a political subdivision of a state under the ADEA--an issue that hasn't been directly addressed by the U.S. Court of Appeals for the Eleventh Circuit--and that under Alabama law the water board is an agency or instrumentality of the Town of Vernon.

In addition, addressing another open question in the Eleventh Circuit, Coogler found that the 20-employee threshold in the ADEA's definition of employer doesn't apply to public agencies or instrumentalities, so it didn't matter from a coverage standpoint that the water board employed fewer than 20 workers.

Fired at Age 66

Holloway, who as general manager supervised the water board's day-to-day operations, was terminated by the board without the town's input or approval in July 2012.

In his June 2013 complaint, Holloway alleged that he was asked at the first meeting of the water board following his 66th birthday when he intended to retire. He replied that he planned to work for a few more years.

A few weeks later, the board voted to fire him, and he was replaced by someone substantially younger.

He was fired despite having received various promotions during his approximately 30 years working for the board, and despite having received consistent positive feedback and not being subject to any discipline, Holloway alleged.

Ruling Bucks Three Other Circuits

The water board's sole argument for summary judgment on Holloway's ADEA claim was that it wasn't an employer under the statute, because it lacked the 20 or more employees during the year preceding Holloway's discharge needed to qualify for ADEA coverage.

Coogler rejected the argument, despite the board's payroll records showing that it had no more than 12 employees in the year prior to Holloway's termination.

The part of the ADEA definition of employer regarding a “political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State” establishes a basis for ADEA coverage separate from the 20-employee threshold, the judge said.

The language addressing political subdivisions and their instrumentalities was added to the ADEA in 1974, Coogler said. Although the Eleventh Circuit hasn't directly decided whether the 20-employee rule applies to public agencies such as the water board, he said the U.S. Supreme Court has “described these amendments as an extension of the law” and the Eleventh Circuit has noted that state and local governments originally were excluded from the ADEA's definition of employer.


 

Addressing an open question in the Eleventh Circuit, Judge Coogler found that the 20-employee threshold in the ADEA's definition of employer doesn't apply to public agencies or instrumentalities.  

 


Citing the plain language of the statute, Coogler rejected the view of the Sixth, Seventh and Eighth circuits, who have all held that the 20-employee threshold applies to public agencies.

Another Open Issue

The judge said the Eleventh Circuit likewise hasn't definitively addressed whether a town or city is a political subdivision of a state under the ADEA.

However, he said in Van Voorhis v. Hillsborough County Board of County Commissioners, 512 F.3d 1296, 102 FEP Cases 513 (11th Cir. 2008) , the appeals court allowed an ADEA claim against a county to survive summary judgment, and it addressed the merits of ADEA claims against cities in three recent unpublished opinions without questioning whether the ADEA definition of employer was met.

Finally, the water board may appoint its own employees, set their salaries, work schedules and assignments, and pay them from its own separate funds, but the town played a key role in the creation of the board, and the Alabama Supreme Court has held that a public corporation such as the board is an agency of the municipality that created it, Coogler said.

Accordingly, “the Board is an agency or instrumentality of Vernon” covered by the ADEA, the court ruled.

Laird & Robertson PC represented Holloway. Donahue & Associates LLC represented the water board.


Text of the opinion is available at http://www.bloomberglaw.com/public/document/ROGER_HOLLOWAY_Plaintiff_vs_WATER_WORKS_AND_SEWER_BOARD_OF_THE_TO.