Hay v. Family Tree, Inc., 1:16-cv-03143

Background

Plaintiff Betsy Hay, a long‑time social worker with an MSW and Ph.D., was employed by Family Tree, Inc. from 2007 until contract reductions in 2014; she was 68–69 during the relevant events.
After two program contracts ended Aug. 30, 2014, Hay was placed in temporary part‑time assignments through Nov. 15, 2014, then was not retained or transferred into several open positions she sought.
Hay alleges Family Tree maintained a Kaleidoscope “retention” program/policy and that managers made statements promising transfer/retention of laid‑off employees; she claims younger, less experienced employees were transferred or hired instead.
Hay asserts four claims: (1) Age Discrimination under the ADEA; (2) breach of an express employment contract (Kaleidoscope); (3) breach of an implied contract; and (4) promissory estoppel.
Family Tree moved to dismiss under Rule 12(b)(6), arguing Hay failed to plead an enforceable contract (and special consideration), and failed to state a plausible ADEA claim or to allege she was qualified for positions.
The magistrate judge recommended dismissing Hay’s contract, implied‑contract, and promissory‑estoppel claims with prejudice, but recommended denial of dismissal as to the ADEA claim (finding Hay pleaded a prima facie case at the motion‑to‑dismiss stage).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Kaleidoscope or manager statements created an enforceable express contract for permanent employment	Kaleidoscope (and manager statements) promised retention/transfer of employees after layoffs; no special consideration required	Hay’s employment was at‑will; any handbook/acknowledgment does not create an enforceable modification; Hay failed to allege special consideration or a definite term	Dismissed with prejudice — allegations too vague; no special consideration or express term pleaded
Whether an implied contract arose from Kaleidoscope or oral assurances	Implied promises and practices (retaining/transferring laid‑off employees) created mutual assent	Statements were vague assurances, not definite promises; at‑will presumption controls	Dismissed with prejudice — alleged statements are indefinite/vague and insufficient to form an implied contract
Whether promissory estoppel supports claim of continued/permanent employment	Hay reasonably relied to her detriment on Kaleidoscope and manager promises	Same deficiencies as contract claims: no special consideration or definite promise to overcome at‑will rule	Dismissed with prejudice — cannot rebut at‑will presumption without special consideration or definite promise
Whether Hay stated a plausible ADEA claim	Hay (age 68–69) alleged she was qualified, suffered adverse actions (not hired/transferred), and younger employees were retained/replaced her	Hay’s allegations are conclusory and fail to show she was qualified or that adverse actions were ADEA‑motivated; some applications were not formal or were late	Denied as to ADEA — plaintiff pleaded a prima facie case at this stage (protected age, adequate qualifications alleged, adverse action, and replacement/younger hires alleged)

Key Cases Cited

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleadings)
Ashcroft v. Iqbal, 556 U.S. 662 (labels/conclusions insufficient; pleading must permit reasonable inference of liability)
DeFranco v. Storage Tech. Corp., 622 F.3d 1296 (10th Cir.) (special consideration or express term required to overcome at‑will presumption for permanent employment)
Pickell v. Arizona Components Co., 931 P.2d 1184 (Colo. 1997) (language promising employment that "endures over time" can rebut at‑will presumption if definite)
Brereton v. Bountiful City Corp., 434 F.3d 1213 (10th Cir.) (leave to amend futile -> dismissal with prejudice)
Gross v. FBL Financial Services, Inc., 557 U.S. 167 (but‑for causation required under ADEA)
Continental Air Lines v. Keenan, 731 P.2d 708 (Colo. 1987) (elements for implied employment contract)