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Leave Donation Program May Have Violated ADEA

    Client Alerts
  • January 05, 2007

A growing number of employers have adopted or have considered adopting a leave donation program.  This policy allows employees with accrued vacation, sick time, or paid time-off, to donate such time to a co-worker who has a need for leave, but has exhausted paid time away from work.  A new Eighth Circuit Court of Appeals case raises issues over a certain leave donation program’s compliance with age discrimination laws.  The suit was filed by the Equal Employment Opportunity Commission against the City of Independence, Missouri.  To be eligible to receive donated leave, Independence’s policy required that the employee in question “not be eligible for regular retirement.”  The City’s retirement age was 60, and an employee diagnosed with cancer claimed that he was forced to retire due to his ineligibility to receive donated leave.

Independence defended its policy by claiming that retirement age was not a proxy for age.  The policy does not mention age, and was intended to prevent an employee from accepting donated leave just before retiring.  The Eighth Circuit rejected these arguments, concluding that other evidence introduced by the plaintiffs made clear that eligibility for the leave donation program was expressly conditioned upon the employee’s age.  This was not a situation where there was only a correlation between age and eligibility.  Once the employee turned 60, he was automatically ineligible.  Federal courts have repeatedly found employment policies to violate ADEA where eligibility expires when an employee reaches a certain age.