HAMMOND | The son of the founder of home furnishing buying club company DirectBuy is suing the Merrillville-based company's parent group over alleged age discrimination, accusing DirectBuy's corporate parent of depriving him of $900,000 in yearly pay when he was purportedly forced to retire at age 53.
Sara Butler, spokeswoman for DirectBuy parent United Consumers Club, said her company's leaders "could not disagree more strongly with the allegations"of plaintiff Jack Gagan.
"All employees are given equal employment opportunity without regard to age, sex, race, religion, national origin, disability, genetic information or any other category protected by applicable law," she said.
"The company looks forward to defeating Mr. Gagan's claims in court," she said.
Gagan claims in a lawsuit filed last week in Hammond federal court that after Trivest Partners bought United Consumers Club in 2007, the company's president, who is slightly younger than Gagan, demanded in 2008 that Gagan retire at age 53. Gagan, who had been the parent company's vice president of merchandising, told United President Scott Powell and the company's lawyer that he did not want to retire until age 65, the suit claims.
But Powell and the lawyer persisted, according to the suit. On July 22, 2008, the men asked Gagan if he wanted to publically announce his retirement at a manager's meeting the next day, the suit claims. During the same meeting, the men said they wanted to fire one of the company's oldest employees, a 63-year-old man with a "demonstrated record of excellent job performance," and Gagan spoke against the firing, Gagan alleges.
At the end of that meeting, Gagan was told not to come to work the next day, according to the suit. Company officials told Gagan, who made a $600,000 salary and $75,000 quarterly bonuses in 2007, he should "consult" for the company from home and, if they needed his help, they would contact him, the suit claims.
United Consumers Club executives announced Gagan's retirement a few days later, Gagan claims.
The company has continued to fire employees upwards of 40, the suit claims.
Gagan's attorney could not be reached Thursday for comment.
Jack Gagan's father, James L. Gagan Sr., founded DirectBuy in Merrillville in 1971. The company's franchises offer members home furnishings at what the company calls "direct insider prices." Jack Gagan was recently hired as an executive with Khoury Furniture, according to furniture industry trade publications.