Age Discrimination

50 is the new 30!

AGE

Cher at 64!

Myths About Older Workers and Age Discrimination

1. Older workers are less able to perform in most positions than younger workers, even given their experience

2. In a reduction in force caused by economic reasons, employers should always terminate the older workers, since they are usually the highest paid

3. If most people in a certain age group have a common weakness, it can be generalized that all in that group have the weakness, and age can be used as a job qualification

4. If an employee is discriminated against because of youth, the employee has a claim under the Age Discrimination

5. Employees must retire at age 65 in the United States

AGE DISCRIMINATION QUESTIONS• 1. How are ADEA and Title VII

similar and how are they different?• 2. What must an employer prove to

establish age as a BFOQ?• 3. What must be true in order for a

waiver of rights to be effective under the OWBPA?

• 4. What issues does a reduction in force raise?

• 5. Is discrimination against an older worker permissible if it is due to increased costs?

• Section 4(a) of the Age Discrimination in Employment Act prohibits discrimination in employment based on age

Statutory Basis

Regulation

• Age Discrimination in Employment Act applies to people who are at least 40 years old

• Applies to public and private employers, unions, employment agencies and most foreign companies in the U.S.

• ADEA more lenient toward employers than Title VII

Smith v. City of Jackson, Mississippi125 S. Ct. 1536, 2005 U.S.LEXIS 2931 (2005)

•Civil Rights Act of 1991 amended Title VII regarding disparate-impact.•The amendments did not apply to ADEA.•Discrimination against age prohibited unless “the differentiation is based on reasonable factors other than age.”•The scope of disparate-impact liability is narrower than under Title VII.

Gross v. FBL Financial Services,129 S. Ct. 2343 (2009)

•Age must be the primary reason, rather than a “motivating factor” for the employment action.•This is a different standard from all other forms of discrimination.•There is a bill pending before the House to apply the same standard as is used with the other federal discrimination laws.

Prima Facie Case for Disparate Treatment due to Age

– The employee’s prima facie case for disparate treatment

• Member of protected class• Adverse employment action• Qualified for position• Dissimilar treatment

-Employer’s defenses

•BFOQ•Reasonable factor other than age•Economic concerns•Benefit plans and seniority systems•“Voluntariness” of plan•“Same factor” defense•The Older Workers’ Benefit Protection Act of 1990•Employee Retirement Income Security Act•Distinctions among benefit plans

– Employee’s Response: Proof of Pretext• Must show that employer’s defense is

not the true reason for the action

BFOQ• The age limit is reasonably necessary to the

essence of the employer's business; and either• all or substantially all of the individuals over that

age are unable to perform the job's requirements adequately; or

• Some of the individuals over that age possess a disqualifying trait that cannot be ascertained except by reference to age.

• Remedies– Usually front pay or back pay– Compensation for pain and suffering not available

under ADEA– Willful violations may also bring liquidated

damages in an amount equal to unpaid wage liability

Unique Problems Associated With a Reduction in Force

• Reduction in force occurs when a company downsizes operations

• Terminations should not be arbitrary• Employer protected in a bona fide RIF• Fourth aspect of prima facie case is not used

1 • The Age Discrimination in Employment Act (ADEA),

as amended by the Older Workers Benefit Protection Act (OWBPA), requires very specific provisions, if waivers of ADEA claims are to be held valid:

1) Waivers must be plainly worded, written agreements that specifically reference the ADEA and suggest consultation with a lawyer prior to acceptance;

2) Legal consideration must be provided for acceptance.

3) Employees must be given at least 21 days to consider waivers (45 days for group early

retirement offers); and 4) Waiver agreements do not become final—

and can be revoked by the employee - until 7 days after acceptance

• Only claims that arose prior to the date of the waiver can be waived.

• If these requirements are not met, the waiver is unenforceable and any severance payments or other consideration provided to support the agreement are not recoverable by the Employer.

• See General Dynamics Land Systems, Inc. v. Cline, 124 S.Ct. 1236, 157 L.Ed.2d 1094 (2004) .

Did we doBennett v. Coors Brewing Co.,189 F.3d 1221 (10th Cir. 1999)?

ManagementConsiderations

• Scrutinize any job requirement based on age• Review all termination decisions carefully• Review recruiting literature to remove age-based

classifications• Keep documentation for terminations• Be sure any waivers are in compliance with

OWBPA

What Would You Do?•Your father, in whose business you have been working since you graduated from college, has passed away. Ownership and management of the company are now yours. Your father founded the firm and built it largely based on his personal relationships with his employees. One of these employees, Mel, has just asked whether you knew about your father’s promise to him for the sacrifice he made. Ten years ago, at your father’s urging, he turned down an offer from another firm for substantially more money and a higher position in exchange for the promise of lifetime employment. It sounds just like the sort of thing your father would do. Mel has been in sales with the firm for 40 years, but his performance has slipped and he was one of the people you had planned to let go. What would you do?