Can a Company Lay Off Older Workers for Taking Medical Leave?

But lawyers for AARP Foundation Litigation argued that the settlement helps protect older workers' jobs.

Here's why: The original case was filed in 2008 by three longtime WellPoint workers from Virginia — Thomas Merritt, Elizabeth Granger and Townley Sheap, who were 56, 53 and 47 when they lost their jobs during a series of 2005 layoffs. Merritt, a 31-year employee, was dismissed for what he was told were "synergy savings"; Granger, a 20-year employee, was told her position had been eliminated; and Sheap, an 18-year employee, was told she had violated health privacy procedures, which WellPoint deemed "inappropriate conduct."

While WellPoint claimed that each of the dismissals was an individual case, the complaint filed by AARP and the Richmond, Va., law firm of Butler, Williams and Skilling argued that the layoffs were part of a planned and coordinated effort that identified the workers as both older and higher-cost employees. The three argued that WellPoint, formerly known as Anthem Health Plans of Virginia, violated the Age Discrimination in Employment Act (ADEA), the Americans With Disabilities Act (ADA) and the Older Workers Benefit Protection Act (OWBPA) by terminating older workers to make room for younger ones and by failing to provide employees the required 45 days' notice to consider their severance agreements.

The plaintiffs asserted that WellPoint identified employees who had recently taken medical leave or whose family members had serious medical conditions, according to the complaint filed in the case. Under the federal Family Medical Leave Act (FMLA), employees are allowed 12 weeks of unpaid medical leave without risking layoff.

The case highlighted an increasingly common trend in managing workers: the use of so-called "metrics" and "analytics" that link individual performance with age and higher health care costs, for example.

"Recent court decisions have increased the burden of proof for plaintiffs alleging age discrimination," said AARP Foundation Litigation Senior Attorney Tom Osborne. "But this case demonstrates that it is still possible for victims of workplace age discrimination to vindicate their rights."

WellPoint is the largest health plan company in the Blue Cross and Blue Shield Association. At the time of the challenged layoffs, WellPoint employed more than 40,000 people, according to the complaint.

What it means to you: If you believe you risk layoff in violation of federal law, contact the Equal Employment Opportunity Commission.

Also of interest: Age discrimination — do you know your rights? >>

Emily Sachar is a journalist and author based in Brooklyn, N.Y.