Discussions

The Best Protection Insurance Company (BPIC) handles a massive volume of claims

each year in the corporate claims function, as well as in its four regional claims

centers. Corporate claims is headed by the senior vice president of corporate

claims (SVPCC); reporting to the SVPCC are two managers of corporate claims

(MCC-Life and MCC-Residential) and a highly skilled corporate claims specialist

(CCS). Each regional office is headed by a regional center manager (RCM); the

RCM is responsible for both supervisors and claims specialists within the regional

office. The RCMs report to the vice president of regional claims (VPRC). Here is

the structure of the organization:

SVPCC

VPRC

MCC-L MCC-R CCS

RCM RCM RCM RCM

BPIC decided to reorganize its claims function by eliminating the four regional

offices (and the RCM position) and establishing numerous small field offices

throughout the country. The other part of the reorganization involved creating five

new CCS positions. The CCS job itself was to be redesigned and upgraded in terms

of knowledge and skill requirements. These new CCS positions would be staffed

through internal promotions from within the claims function.

The SVPCC asked Gus Tavus, a 52‑year-old RCM, to apply for one of the new

CCS positions since his job was being eliminated. The other RCMs, all of whom

were over 40 years of age, were also asked to apply. Neither Gus nor the other

RCMs were promoted to the CCS positions. Other candidates, some of whom were

also over age 40, were also bypassed. The promotions went to five claims specialists

and supervisors from within the former regional offices, all of whom were under

age 40. Two of these newly promoted employees had worked for, and reported to,

Gus as RCM.

Upon learning of his failure to be promoted, Gus sought to find out why. What

he learned led him to believe that he had been discriminated against because of his

age. He then retained legal counsel, attorney Bruce Davis. Bruce met informally

with the SVPCC to try to determine what had happened in the promotion process

and why his client had not been promoted. He was told that there were numerous

candidates who were better qualified than Gus and that Gus lacked adequate

technical and communication skills for the new job of CCS. The SVPCC refused

to reconsider Gus for the job and said that all decisions were etched in stone. Gus

and Bruce then filed suit in federal district court, claiming a violation of the Age

Discrimination in Employment Act. They also subpoenaed numerous BPIC documents,

including the personnel files of all applicants for the CCS positions.

After reviewing the documents and discussing things with Gus, Bruce learned

more about the promotion process actually used by BPIC. The SVPCC and the

two MCCs conducted the entire process; they received no input from the VPRC

or the HR department. There was no formal, written job description for the new

CCS position, nor was there a formal internal job posting as required by company

policy. The SVPCC and the MCCs developed a list of employees they thought

might be interested in the job, including Gus, and then met to consider the list of

candidates. At that meeting, the personnel files and previous performance appraisals

of the candidates were not consulted. After deciding on the five candidates who

would be offered the promotion (all five accepted), the SVPCC and MCCs scanned

the personnel files and appraisals of these five (only) to check for any disconfirming

information. None was found. Bruce’s inspection of the files revealed no written

comments suggesting age bias in past performance appraisals for any of the

candidates, including Gus. Also, there was no indication that Gus lacked technical

and communication skills. All of Gus’s previous appraisal ratings were above average,

and there was no evidence of decline in the favorability of the ratings.

Finally,an interview with the VPRC (Gus’s boss) revealed that he had not been consulted

at all during the promotion process, that he was “shocked beyond belief” that Gus

had not been promoted, and that there was “no question” but that Gus was qualified

in all respects for the CCS job.