Walter Mitchell, Louis Perunko, and David Mosby were police officers with the City of Gary, Indiana. When the officers were hired, a provision of the Indiana Code required that all police officers retire no later than their 65th birthday. In 1982, the City adopted an ordinance which also required that each member of the Gary Police Department must retire on or before his or her 65th birthday.
In late 2002, the officers learned that they were eligible to participate in a deferred retirement option plan (DROP). In 2003, the officers elected to participate in the DROP, and as part of their elections, selected retirement dates beyond their 65th birthday.
At a police Civil Service Commission meeting in late 2003 or early 2004, a commissioner asked the Police Chief to research what the retirement age was for members of the Department. The Chief looked into the issue and discovered the mandatory retirement age of 65. Sometime in 2004, the Chief received a copy of a document entitled “Retirement List as of 3/9/04 for the Gary Police Department.” The Retirement List showed each officer’s date of birth, DROP election date, planned retirement date, and DROP benefit amount. The Chief noted that the officers had selected a DROP retirement beyond their 65th birthdays. The Chief then informed each of the officers that they were “technically retired” as of their 65th birthdays and that, as of the date of the letter he sent them, they were “deemed retired.” Subsequently, the Chief’s timelines were extended to December 31, 2004.
The officers challenged the Chief’s decision through the court system. A state appellate court turned away the officers’ appeals.
Since the federal Age Discrimination in Employment Act has been amended to allow police employers to have mandatory retirement ages, the primary issue before the Court was whether the Chief’s order conflicted with the City’s contractual obligations under the DROP program. The Court found that it did not. In the eyes of the Court, “the mandatory retirement age did not change; rather, the City simply failed to enforce the retirement age in a limited number of cases. The evidence suggests that the City’s failure to retire the officers on their 65th birthdays resulted from an oversight rather than from any purposeful intention to modify their employment contracts.”
The Court also found that the retirement age set forth in the City’s ordinance made the retirement ages listed in the DROP agreements unenforceable. As the Court put it, “even if the parties had mutually agreed to a contract modification, such modification would be contrary to the ordinance and thus void and unenforceable.”
City of Gary v. Mitchell, 843 N.E.2d 929 (Ind.App. 2006).