EEOC Sues Retailer Over Age Discrimination in Employee Stock Ownership Plan
The EEOC has filed a lawsuit against Scheels All Sports, alleging that its ESOP policy requires employees aged 40 or older to divest vested shares if they work fewer than 1,000 hours annually, while younger employees are exempt. The case raises concerns about age-based discrimination in employee benefit plans and underscores the need for legal review of such provisions.
On September 30, 2026, the U.S. Equal Employment Opportunity Commission (EEOC) filed a lawsuit against Scheels All Sports, Inc., alleging that an amendment to its Employee Stock Ownership Plan (ESOP) violated the Age Discrimination in Employment Act (ADEA). The complaint centers on a policy implemented in 2014 requiring employees aged 40 or older who worked fewer than 1,000 hours in a year to divest their vested company shares, while younger employees were exempt from this requirement. Jeri Fulgham, the charging party, turned 40 in 2021 and worked only 794 hours that year; she was informed in December 2021 that she must sell her accumulated shares—after which she could no longer work enough hours to avoid divestment. The EEOC alleges the company justified the rule through age-based stereotypes, denied her request for an exception, and contributed to her constructive discharge in February 2022. The case was filed in the U.S. District Court for the District of Nevada, with the EEOC seeking rescission of the amendment, restoration of shares or compensation for lost appreciation, back and front pay, liquidated damages, and injunctive relief.
The background reveals a shift from prior ESOP practices where employees who fell short of 1,000 hours received no new allocations but retained vested shares regardless of age. The 2014 amendment introduced an age-based distinction that disproportionately impacted older workers, raising concerns about compliance with federal anti-discriminat
This case could signal a broader scrutiny of employee benefit plans that use age-based thresholds, particularly in stock ownership programs where long-term equity participation is intended to incentivize retention. If upheld, the EEOC’s position may prompt employers to reevaluate any provisions that tie benefits or ownership rights to age, even when framed as performance or service metrics. Older workers—especially those nearing retirement—may feel more empowered to challenge seemingly neutral rules that disproportionately affect them, potentially reshaping how companies design ESOPs and other deferred compensation plans. The financial services and human resources sectors may respond with increased legal review of plan documents to avoid unintended discrimination claims. A comparable case is the 2015 EEOC v. AstraZeneca, where a pharmaceutical company’s retirement savings plan was challenged for favoring younger employees through age-based vesting rules. Though that case settled witho