Can Non-Renewal of an Employment Contract Give Rise to an Employment Discrimination Action?

Can Non-Renewal of an Employment Contract Give Rise to an Employment Discrimination Action?

| Jul 27, 2020 | Uncategorized

Recently, former Cleveland Cavaliers Assistant Coach Jim Boylan sued the team for age discrimination. Boylan, who was 63, filed suit after the Cavaliers declined to renew Boylan’s employment contract with the team for the 2018-2019 season. According to Boylan’s complaint, available here, Boylan was informed his employment would end via a voicemail from then-Head Coach Tyronn Lue. Boylan’s lawsuit – and the public response by the Cavaliers – highlights an interesting question – when an employer declines to exercise a renewal term in a contract, can an employee still sue for employment discrimination?

Boylan’s complaint contains a particularly interesting section. It cites a voicemail from Lue, in which Lue made the following statements:

  • “Jimbo, what’s up, yo? This is T Lue. I had a talk with Koby [Altman] yesterday. He does not want to pick up your option. He said it’s way too much money. They’re not gonna pay that kind of money for three assistants on the bench. He wants to go younger in that position and, you know, find somebody who’s a grinder and younger in that position.”
  • “And he just said it’s too much money, he said, so we’ll be paying Longabardi and LD. So he just said he wanted to go younger at that position and he does not want to pick up the option.”

Boylan’s lawsuit also contained an allegation that Boylan spoke directly with Koby Altman, the Cavaliers’ General Manager, and Altman cited a desire to go younger as the reason for not renewing Boylan’s contract.

In response to Boylan’s lawsuit, the Cavaliers released a statement, the full text of which is available here. Such statement represented: “The outrageousness of Mr. Boylan’s claim of ‘age discrimination’ due to the Cavaliers not exercising an option in a contract both parties signed cannot be overstated.”

Federal law provides under Title VII of the Civil Rights Act of 1964 that it is unlawful for an employer to take an “adverse employment action” against an employee because of his or her age, sex, race, color, national origin, or religion. Rather than proceeding under Title VII, Boylan’s lawsuit was brought in Ohio state court, under Ohio state law. Ohio law contains a similar provision to Title VII prohibiting discrimination: Ohio Revised Code § 4112 which Boylan cited in his complaint. Like Title VII, under Ohio Revised Code § 4112, an adverse employment action on the basis of age is grounds for an employment discrimination action. While the Cavaliers’ statement declared that Boylan’s claim was “outrageous,” the Ohio courts had already directly addressed whether nonrenewal of an employment contract can be enough for an age discrimination claim. In Samadder v. DMF of Ohio, Inc., 154 Ohio App. 3d 770, 781 (2003), the court held that “failure to renew a contract is an actionable adverse employment action.” Therefore, the Cavaliers’ statement failed to accurately acknowledge the status of Ohio law especially in the context of their employee’s actions.

Boylan’s lawsuit highlights an important area for employers and employees alike to be aware of – citing an employee’s age, or a desire to “go younger” when discussing the termination of an employment contract, or even the nonrenewal of a contract, can lead to a lawsuit. Discrimination on the basis of age remains prohibited by federal and state laws. While the question of whether nonrenewal of a contract is an “adverse employment action” appears to be settled for now under Ohio law and in several other jurisdictions, a wide variety of state and federal laws may apply to any employer-employee relationship, depending on the facts of the individual situations.

If you have a question regarding nonrenewal of an employment contract or any question related to employment law, the attorneys at Newman, Comley & Ruth P.C. have experience discussing rights and obligations in this area with both employers and employees. Call us at (573) 634-2266 to set up a consultation.