Woodhouse v. Magnolia Hospital

In 1993, registered nurse Peggy Woodhouse (plaintiff) was 53 years old, had worked for Magnolia Hospital (Magnolia) (defendant) for 23 years, and had served as Magnolia’s director of admissions for 14 years. When Magnolia’s revenue allegedly decreased by $1.2 million, its board of trustees (board) announced that it was eliminating 61 positions based on recommendations from administrative staff. Woodhouse’s position was eliminated in January 1994. In November 1994, Woodhouse’s application for a clinical-nursing position at Magnolia was denied. Woodhouse sued Magnolia, alleging that Magnolia’s discharge of Woodhouse and its refusal to rehire her were motivated by Woodhouse’s age, violating the Age Discrimination in Employment Act (ADEA). At trial, Woodhouse presented evidence that (1) Magnolia developed a new policy for the reduction in force (RIF) rather than relying on existing policies, (2) the administrative staff was controlled by the board, (3) Magnolia subsequently rehired several younger discharged employees, and (4) Magnolia did not rehire anyone Woodhouse’s age or older. Additionally, Magnolia employee Vicky Franks testified that Dr. Tommy Alexander, a gynecologist and chairman of Magnolia’s board, had told Franks just two weeks before the RIF that “[t]hey’re gonna lay off those old people.” Franks offered a recording from a November 1994 conversation in which Alexander confirmed the parties’ earlier conversation. At trial, Alexander denied ever making such a statement. Magnolia also claimed that Woodhouse was not rehired as a clinical nurse because she had not taken a recent refresher course as required by state law. However, others testified no such requirement existed for nurses like Woodhouse who had current nursing licenses. After considering the evidence, the jury held in Woodhouse’s favor, awarding her damages. The district court also ordered Magnolia to reinstate Woodhouse. Magnolia appealed.