Nancy Lytle had worked for Howmet Corporation for 18 years in the human resources area when she was terminated. At the time of her hire, the employee manual carried a statement that no employee will be terminated without proper cause. It further contained a statement that the employee manual was not an employment contract. Later the manual was revised to make clear that employment was at the will of the employer who reserved the right to terminate, however, Lytle was led to believe that the new disclaimer was for new hires only. It was only distributed to new employees as they hired on.

Lytle received favorable reviews and internal promotions. Her performance was exemplary. She had been assured during a period of internal company adjustment that her position was secure and she was well regarded. When her original director retired, a new director, Michael Malady, took has place. An apparent personality conflict occurred. In one incident, Malady required female employees to wear dresses to a company picnic. When Lytle wore slacks, she received an unfavorable job performance evaluation.

As a result of a swing toward centralization, jobs were realigned within the company and the organizational structure was changed. Lytle, than 44 years of age, was terminated. The reason stated was reduction in work force due to a reduction of military contracts and downward trend in the airline industry. Upon Lytle's termination processing, her valuation indicated that she had been an employee in good standing and that she would be rehired should an appropriate position open. However, under the new organization, a similar position was created for the new internal structure and an employee from outside the company was hired. The new employee had very similar qualifications to Lytle. Lytle was not contacted or allowed rehire or access to the position. The new employee was 31 and offered a salary higher than Lytle's.

Lytle filed suit challenging the reduction in work force reasoning and alleging age and sex discrimination. The trial court ruled against Lytle but the appeal court ruled in her favor.

In a mixed decision of the Michigan Supreme Court with dissent, it was determined that the reduction in work force overall appeared valid. However, based upon the fact that Lytle was over 40, even though she had had very favorable reviews overall, she was replaced by a substantially younger person at a higher salary. Thus, the decision of the Court of Appeals was affirmed in favor of Lytle.

Lytle v. Malady, No. 97-102515, Nancy Lytle, Plaintiff-Appellee vs. Michael Malady and Howmet Corporation, Defendants-Appellants, Michigan Supreme Court, Lansing Michigan, July 31, 1997.