Smith v. World Insurance Company

Thomas Smith (plaintiff) was the assistant vice-president for purchasing at World Insurance Company (World) (defendant). Many years into Smith’s employment at World, World hired Alan Jackson as the new vice-president and ordered Jackson to cut costs and streamline the management structure. Jackson told World employees, including Mary Schmidt, that he planned to force older employees into early retirement to save World money on salaries and pension costs. Jackson asked Schmidt to assign Smith impossible tasks to help build a termination case against Smith. Shortly after, Jackson told Smith that he could either retire early with benefits or remain employed and risk termination without benefits. Smith chose to retire early, believing it was his only choice. Smith signed an early-retirement package stating he was retiring voluntarily. Smith was 54 years old when he was forced into early retirement. Smith was replaced by a worker in her mid-30s. Smith sued World for age discrimination under the Age Discrimination in Employment Act (ADEA), alleging that he was constructively discharged by being forced into early retirement to avoid adverse consequences. Schmidt testified to corroborate Smith’s allegations. The jury found that Smith was constructively discharged because of his age and awarded damages. World appealed, arguing that (1) there was insufficient evidence to support Smith’s claim that he was constructively discharged because of his age; and (2) because Smith signed the early-retirement package stating he was retiring voluntarily, he was equitably estopped from claiming constructive discharge.