An Ohio Appellate Court affirmed a judgment in favor of an employer who terminated the highest-earning retirement-eligible employee for budgetary reasons, while keeping younger workers who earned less, even though the employer had suggested early retirement to the employee prior to the layoff. Kightlinger v. McGee, 2012-Ohio-5295, 2012 WL 5555633 (Ohio App., Nov. 13, 2012).

Background

Joann E. Kightlinger (Kightlinger) began working for the Belmont County Clerk of Court in 1973. Kightlinger worked as Supervisor of the Legal Division, which is funded with money from the county general fund as appropriated annually by the Belmont County Commissioners. On December 17, 2008, the then-Clerk of the Court, Randy Marple (Marple), received a memorandum from the County Commissioners advising him that due to a “real fiscal crisis,” he and all other elected officials and department heads would have to decrease their appropriations budget by at least 10 percent for fiscal year 2009.

The 2008 general fund budget for the Clerk of Court was approximately $360,000. Thus, based upon the Commissioners’ directive, Marple determined that he would have to cut $36,000 from his budget and that payroll was the only available source. Marple decided that because Kightlinger was the only employee earning over $36,000 a year, she should be terminated instead of terminating two younger employees in her stead who made less than she did.

On December 22, 2008, the day the Commissioners advised Marple to return his anticipated appropriations budget, Marple wrote a letter to Kightlinger advising her that she would be “laid off” effective January 9, 2009.  Instead of delivering the letter, Marple met with Kightlinger to discuss the possibility of early retirement. Marple told Kightlinger of the Commissioners’ notice regarding the budget crisis and advised her that given her 37 years of service, she could retire and not lose her health care benefits, which she would lose if she were laid off. Kightlinger stated that she did not want to retire, and she believed that the budget threat was one that would quickly blow over. On January 7, 2009, after his unsuccessful attempt to have Kightlinger voluntarily retire, Marple gave Kightlinger the letter he had drafted and told her that if she did not retire, she would be terminated and lose her health insurance benefits. On February 1, 2009, Marple officially terminated Kightlinger.

The Lawsuit

Kightlinger sued, alleging age discrimination under Ohio law. Under Ohio law, in order to establish a prima facie case of age discrimination, a plaintiff must demonstrate that he or she (1) was a member of the statutorily protected class (over 40 years old), (2) was discharged, (3) was qualified for the position, and (4) was replaced by, or the discharge permitted the retention of, a person of substantially younger age. Both parties agreed that Kightlinger satisfied the first three elements of the test. Kightlinger argued that her “forced retirement” enabled the retention of a substantially younger employee who took over her duties after she was laid off and essentially replaced Kightlinger, thus satisfying the fourth prong.

After a bench trial, the court found that Marple’s decision to terminate Kightlinger was based solely on his need to reduce the budget and desire to terminate only one employee, rather than two, in order to meet his objective. The court found that Kightlinger did not present any credible evidence that the decision was based on age or that a younger employee replaced her. Kightlinger appealed.

In considering the issues, the Court of Appeals, 7th Appellate District, explained that under Ohio law, when a plaintiff’s position is eliminated as part of a work force reduction, courts modify the fourth element of the prima facie case to require the plaintiff to “come forward with additional evidence, be it direct, circumstantial, or statistical, to establish that age was a factor in the termination.” The court explained that: “(i)n determining whether a valid work force reduction occurred, the key inquiry is whether or not the employer replaced the plaintiff. . . if an employer did not replace the plaintiff, but rather consolidated jobs in order to eliminate excess worker capacity, then a work force reduction took place.” The court further explained that “it is well settled that a budget shortfall is a legitimate, non-discriminatory reason to reduce work force, if the employer shows additional evidence why the reduction-in-force happened to the employee.”

Under the aforementioned tests, the trial court found that Kightlinger’s termination qualified as a valid reduction in force (“RIF”). The Court of Appeals affirmed, holding that the RIF finding was supported by credible and competent evidence at trial. Specifically, the court held that the details and extent of the fiscal crisis were supported by the testimony of the manager for the Belmont County Clerk of Courts. Moreover, Marple testified that after Kightlinger left the Clerk’s office, no one replaced her, but instead, her duties were spread out among others. Marple himself took over the supervisor duties in her place, and the rest of her job functions were redistributed to the three remaining staff members. Thus, based on the foregoing, there was competent credible evidence to support the trial court’s conclusion that a valid RIF occurred due to budget constraints, and that Knightlinger’s position was not replaced, but instead, eliminated.

The Court of Appeals then turned to the second prong of the test – whether the trial court properly concluded that Kightlinger had failed to bring forth evidence to establish that she was singled out for termination because of her age. Kightlinger’s argument was that because she was close to retirement, and by definition older than her colleagues not close to retirement, that the conversations with Marple were nothing but a proxy for an age-related termination.  Rejecting this argument, the Court of Appeals recalled that at trial, when asked on cross-examination whether Marple ever made comments to her about her age, Kightlinger responded, “No. The comments were made more about my retirement.” Further testimony from Marple and from other employees demonstrated that Marple’s objective had always been to reduce the budget by 10% and that because she was the highest paid employee, Kightlinger’s position had to be the first to go.

The court distinguished Kightlinger’s case from Kohmescher v. Kroger Co., 61 Ohio St. 3d 501 (1991). There, the plaintiff produced evidence of a memo clearly indicating he was selected for RIF solely because he was of retirement age, not because he made more money than younger employees. The Ohio Supreme Court held that summary judgment had been improperly granted to the employer because the court below ignored clear direct evidence of age discrimination and remanded the case to proceed to trial. In this case, however, there was no evidence that Kightlinger was selected because she was close to retirement age; instead, the court affirmed that the evidence supported the lower court’s conclusion that Kightlinger’s salary was the single motivating factor behind her termination.

In sum, because Marple propounded a legitimate, non age-related reason for Kightlinger’s discharge (i.e. her salary), he rebutted any presumption of age discrimination that may have been raised by Kightlinger’s evidence. Moreover, Kightlinger did not show that the rationale set forth by Marple was only a pretext for age-related discrimination. For these reasons, the appellate court affirmed the trial court’s judgment in favor of the employer.

Conclusion

Although other courts may have decided this case differently, particularly if there was a direct relationship between Kightlinger’s higher salary and her age, thecase provides some support for employers who base RIF decisions on the salaries of the affected employees.