ADEA Verdict Upheld – Award Increased by $2 Million

September 17, 2001 (PLANSPONSOR.com) - In an age discrimination case, a US District Court has upheld a $3.9 million jury verdict and tacked on a further $2 million for the former president and CEO of Advanta Mortgage Co.

While the CEO, Milton Riseman, charged that he was forced out of his job because the company wanted a younger image, the jury found that the company discriminated against him by terminating him after he filed an age discrimination claim.

After the jury found Advanta’s actions violated the Age Discrimination in Employment Act (ADEA), the company motioned for a new trial, but federal judge Anita Brody found no reason to disturb the jury’s findings.

In Detail
 
Riseman, a former Citibank executive, began working for Advanta in 1992 at age 55. By age 62, the time he was forced out, he was earning $385,000 plus bonuses that sometimes doubled or even tripled his income.

Riseman claimed that when the position of president of the parent company opened up, he was passed over in favor of Olaf Olafsson, a 35-year-old with no experience in the financial industry.

Plots and Plans

His lawyers argued that Olafsson set out to oust Riseman and replace him with a man 20 years his junior as president of Advanta Mortgage, after first assuring him that the company was searching for an executive vice president who would report to Riseman.

But when Carl Forsythe was hired, he immediately took over as president of Advanta Mortgage, and Riseman was stripped of his title and ordered to vacate his office, notwithstanding former comments by the group that credited Riseman with a dramatic turnaround at Advanta Mortgage, Riseman’s lawyers claimed.

Advanta lawyers countered that Advanta had a strong record of hiring older executives and that there was no real proof of any age discrimination.

But the jury found that Advanta had retaliated against Riseman for complaining of discrimination and committed a “willful” violation of the ADEA.

Backpay

The jury then awarded Riseman about $3.9 million in damages, specifying that about $1.3 million of that amount was for Riseman’s backpay. It also found that the company had illegally withheld more than $2.5 million in wages in violation of the Pennsylvania Wage Payment and Collection Law.

The decision increased the award significantly. Since the jury found that the violation was willful and that Advanta violated Pennsylvania wage laws, the backpay portion of the verdict was increased by $640,500, and the judge added $115,032 as prejudgment interest on the backpay awarded under the ADEA.

Advanta renewed its motion for summary judgment, arguing that there was no evidence for the jury to find that it took any adverse employment action against Riseman after he filed the discrimination claim, an argument that was thrown out.

– Camilla Klein                           editors@plansponsor.com

See also: Senate Bill Seeks To Extend ADEA Protection to State Workers

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