In what may be a preview of coming attractions in the executive suite as Baby Boomers age, one of the Chicago area`s major corporations and a former senior vice president are locked in an age-discrimination suit.
The case against ServiceMaster, the Downers Grove-based limited partnership that runs a diversified business dealing with everything from termite control to hospital housekeeping, is scheduled to go to trial Monday before Judge James B. Zagel in Federal District Court.
Edward F. Morgan Jr., 67, a 39-year employee who rose through the ranks from carpet-cleaning salesman to senior vice president in charge of developing maintenance contracts with hospital chains, is seeking more than $3 million from his former employer for allegedly violating the federal Age
Discrimination and Employment Act.
Attorneys for ServiceMaster claim that Morgan, who at one time in the middle 1970s was considered a contender for the presidency of the company, isn`t covered by the law because he was an executive.
In 1976, Kenneth T. Wessner, who then headed ServiceMaster, asked Morgan, who was 51 at the time, not to aspire to the presidency, and C. William Pollard, 39, a lawyer and outsider, was hired instead, according to pretrial stipulations.
Executives and policy makers at corporations are exempt from the protection, but Morgan claims he was demoted in 1988 because he refused suggestions as early as 1986 from Pollard, now ServiceMaster chairman and chief executive officer, that he retire voluntarily.
He was forcably retired in 1989 when he reached age 65, but not without unsuccessfully appealing to the limited partnership`s executive committee and board of directors, the stipulations said.
The federal law is intended to protect employees over age 40 from being fired or prematurely retired to be replaced by younger workers. The law originally had a cutoff age of 70, but it was amended a few years ago to eliminate the upper limit.
Although mandatory retirements accounted for only 446 of the more than 17,000 age-discrimination complaints filed with the Equal Employment Opportunity Commission in the U.S. last year, and a related category of demotions accounted for another 715, lawyers for the government and in private practice predict those numbers will increase as corporations try to thin out the Baby Boomers to make room for new blood.
Age-discrimination cases ”will become more common as the Baby Boomers move into the protected class,” said L. Steven Platt, an attorney who got a $500,000 verdict for a candy company executive in 1988 and now represents Morgan.
The recession that provoked white-collar layoffs as companies downsized also may be responsible for a 20 percent jump in age-discrimination cases filed with the EEOC in its 1991 fiscal year, which ended Oct. 30.
Age complaints had been declining steadily for five years, but the number jumped to 17,449 last year from 14,526 in 1990.
”Over the last few years, we have seen a lot of corporate restructuring going on, and that may have resulted in more retirements-voluntary and mandatory,” said John C. Hendrickson, regional attorney in Chicago for the EEOC.
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ServiceMaster officials said Morgan`s retirement was instigated for reasons of performance, customer service and other business judgments, not because of age, according to Vernon T. Squires, senior vice president and general counsel for the company.
Morgan`s lawyers claim ServiceMaster awarded him a life annuity in a belated effort to restore his executive exemption from age-discrimination laws. The cutoff in the law is $44,000 a year. Anyone getting a pension above that level is considered an executive and exempt from protection.
”He was awarded a one-time, one-of-a-kind, $44,000 pension,” said Arthur G. Jaros Jr., one of his lawyers.
ServiceMaster officials, who still speak favorably of the contributions Morgan made to their company during his long tenure, said that they have difficulty understanding his unwillingness to retire.
”During his employment . . . Morgan received over $12 million in stock for service. The company agreed to provide an annuity of $44,000 for life. We feel he has been treated fairly and rewarded generously,” said Squires.
Some experts in the field believe age-discrimination litigation will probably peak in the next 10 to 15 years before eventually tapering off as the Baby Boom generation retires and corporations recognize that older employees have the same protected status as minorities and women.
”You could see age discrimination becoming less socially acceptable,”
the EEOC`s Hendrickson said.