Docs Win $7 Million Settlement in Forced Retirement Case

In a victory for clinicians who fought to keep working regardless of age, a San Diego–based medical group has agreed to settle a federal investigation by paying nearly $7 million to physicians subject to their employer’s policy requiring them to quit at age 75.

In a statement, the US Equal Employment Opportunity Commission (EEOC) said the settlement will resolve an age and disability discrimination charge filed against Scripps Clinic Medical Group. The medical group is part of Scripps Health, a major provider of medical services in the San Diego region that operates five local hospitals.

The EECO said it found “reasonable cause” that the medical group violated the Age Discrimination in Employment Act and the Americans with Disabilities Act.

As Medscape Medical News has reported, US health systems are facing lawsuits that claim they’ve engaged in age discrimination by requiring physicians to take cognitive tests when they reach specific ages.

The Scripps medical group’s mandatory retirement policy began in 2016 and was consistent with California law, which specifically allows for mandatory retirement of physicians in medical groups at age 70, Scripps said in a statement, adding that it rescinded the policy in 2018.

“This policy was put in place to enhance patient safety,” Scripps said. “The EEOC took the position while such a policy is expressly legal under California law; it is not allowed under federal law.”

The Federal Age Discrimination in Employment Act, passed in 1967, states that employers may not “fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment because of such individual’s age.” There are exceptions, however, in cases of public safety for professions such as air traffic controllers.

California law has a similar provision banning age discrimination, but it makes an exception for “any employee who has attained 70 years of age and is a physician employed by a professional medical corporation, the articles or bylaws of which provide for compulsory retirement.”

In 2020, estimated 12% of US licensed physicians were at least 70 years old — more than 120,000 in total — up from 9% in a 2010, according to a Federation of State Medical Boards 2021 report.

Scripps Clinic Medical Group settled with the EEOC “without any admission of fault or wrongdoing to avoid the continued expense and distraction of litigation,” its statement said. It agreed to pay $6.875 million to the affected physicians.

When asked about how many physicians were affected by the policy, a Scripps human resources official said, “this was disputed but very few. The policy was only in effect for 2 years, 2016 and 2017. Additionally, by age 75, most doctors have retired. And those who have not almost always have voluntarily limited their practice.”

The Scripps official didn’t respond to questions about the number of patients served by the medical group and how many physicians it employs.

According to the EEOC, the medical group has agreed to tell employees that the policy has been scrapped and must “clarify that the company does not have any policy in which age is a factor in making employment decisions, including termination, retirement, and terms and conditions of employment.”

Scripps Clinic Medical Group also agreed to require division and department heads, executive leadership, and human resources employees to be trained regarding the Age Discrimination in Employment Act and the Americans with Disabilities Act.

Randy Dotinga is a freelance medical writer and board member of the Association of Health Care Journalists.