Gregg Orr Auto Collection, a group of car dealerships, has agreed to pay $325,000 to settle a U.S. Equal Employment Opportunity Commission lawsuit alleging that the Texarkana, Texas-based company fired a senior sales executive to avoid medical costs related to his cancer diagnosis, the federal agency announced today.

According to the lawsuit, Greg Orr Auto fired the 65-year-old employee in February 2020 without prior warning and informed him that his health insurance coverage would end, effective immediately. The EEOC contended this came shortly after the worker received billing statements for a costly surgery to treat a serious cancer. The suit alleged that Greg Orr Auto knew the company would be exposed to the employee’s ongoing healthcare expenses under its self-insured employee health care plan and therefore replaced him with a significantly younger worker in his mid-30s.

Such conduct violates the Americans with Disabilities Act and the Age Discrimination in Employment Act, which prohibit employers from discriminating based on disability or age (age 40 or older). The EEOC filed suit in U.S. District Court for the Eastern District of Texas after first attempting to reach a pre‑litigation resolution through its administrative conciliation process.

As part of the consent decree settling the case, Greg Orr Auto agreed to update its anti-discrimination policies and to provide its upper management with training on disability and age discrimination.