Forced Retirement

EEOC Lawsuit Costs Employer $250K

Allen Theatres, Inc., operates a chain of movie theaters in Arizona, Colorado and New Mexico. In 2020, the company closed due to the COVID shutdown. And in March 2021, it reopened.

However, a theater manager who had been with the company for 31 years wasn’t allowed to return to work when the theaters reopened after COVID.

According to the EEOC’s lawsuit, the company president forced the theater manager to retire because he was 73 years old. The agency also alleged the employer maintained a discriminatory

compensation policy that allegedly:

Eliminated family health insurance coverage for the theater manager because he was over 65 and eligible for Medicare, and

Reduced the pay of a class of employees age 65 and older, including a director of IT who worked at a different theater.

From the EEOC’s perspective, this alleged conduct violated the Age Discrimination in Employment Act (ADEA), which protects employees aged 40 and older from discrimination in hiring, firing, compensation and benefits decisions.

The EEOC filed a federal lawsuit on the employees’ behalf.

EEOC Secures $250K Age Discrimination Settlement

The employer agreed to pay $250,000 to the affected employees to settle the EEOC lawsuit. Under a two-year consent decree, Allen Theatres must:

Offer health insurance coverage under the company’s health benefit plan to any current employee who is 65 years old or over and not currently enrolled in the company’s health plan

Revise its policies to clearly prohibit age discrimination

Implement stronger procedures for investigating complaints and training employees on age-related issues, and

Submit regular reports on training efforts, complaints and policy changes to the EEOC.

EEOC regional attorney Mary Jo O’Neill praised Allen Theatres for its cooperation in resolving the case early. She also emphasized that employers must avoid pressuring employees over 40 to retire, as this violates the ADEA.

“It violates federal anti-discrimination law for managers or any corporate officers to force workers over the age of 40 to involuntarily retire because of their age. Employers should not impose their ideas about when older employees should quit working, especially for those employees who want to work, are qualified to work and are doing a good job,” O’Neill said in a press release.

Information provided by: HR Morning

Age discrimination isn’t always obvious; it can sometimes be subtle, such as when employees face pressure to retire earlier than planned.

Even well-intentioned decisions can essentially result in forced retirement, leaving employers vulnerable to costly lawsuits and fines.

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Alternative HR is pleased to welcome Megan Hayes, HR Consultant, to their team!

Megan brings over 7 years of hands-on experience in human resources leadership and organizational development. She built her career around strengthening organizations through people-focused strategies that balance compliance, culture, and operational success. Most recently serving as HR Director for a senior living community Megan oversaw workforce planning, regulatory compliance, employee engagement, and strategic HR initiatives that improved both employee experience and organizational performance.

Megan brings a proven ability to help organizations navigate periods of change and growth by aligning people strategies with overall business objectives. Her expertise spans policy development, compensation and benefits, performance management, and leadership coaching.

Colleagues and clients alike recognize Megan for her approachable style, clear communication, and ability to turn complex challenges into practical, result-driven solutions. She thrives on

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Areas of Expertise:

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Megan has a BS in General Studies from Dakota State University and is in pursuit of her Master’s in Business Administration from the University of Sioux Falls.

She is also a member of the Sioux Empire Society for Human Resources Management (SESHRM).

Megan can be reached at mhayes@alternativehr.com.

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