Saving money found not to violate anti age-discrimination law

The desire to save money is not prohibited by the Age Discrimination in Employment Act (ADEA). The Tenth Circuit Court of Appeals, which does not govern Oregon school districts, was asked to decide whether a school district decided to nonrenew a teacher’s one-year contract because of her age. The ADEA makes it illegal to discriminate with respect to employment because of age.

Mrs. Reeder was hired by the district as a teacher’s aide in 1993, when she was 46 years old. She worked as a teacher’s aide until 1999. In December 1999, she was hired as a classroom teacher to finish out the school year for a first-grade teacher who resigned mid-year. Mrs Reeder continued teaching first grade for the 2000-2001 and 2001-2002 school years. On March 15, 2002, she was given a preliminary notice that her contract would not be renewed for the following school year. She was 54 years old.    

The written preliminary notice did not state a reason for nonrenewal, but the Principal told her that it was because of incompetence relating to classroom discipline. Mrs Reeder did not believe the Principal’s reason. Later, she learned that the district hired student interns to replace her and two other nonrenewed teachers.            

Mrs Reeder filed suit against the district alleging that her contract was not renewed because of her age. The district argued that she was dismissed because of incompetence relating to classroom discipline. Mrs Reeder argued that the district’s reason was pretext for age discrimination and that the real reason was because the district wanted to save money. Moreover, she argued that the cost-saving reason was related to age discrimination because the district fired older employees to prevent the employees from qualifying for a right to pension payments.            

The Tenth Circuit Court of Appeals stated that the desire to save money is not prohibited by the ADEA. However, if the teacher could have proven that the District’s desire to save money was pretext for age discrimination, then the District would be in violation of the ADEA. The court found the teacher proved no connection between saving money and the employee’s age. Even though it seems reasonable that cost-savings are related to pension payments and pension payments are related to age, she didn’t present evidence regarding factors affecting her eligibility for pension payments.  

Reeder v Wasatch County School District, No. 08-4048 (10th Cir. 2010).

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