G. Age Discrimination

Federal and state discrimination laws are designed to promote employment of older persons based on their abilities, irrespective of age. The most important federal law, the Age Discrimination in Employment Act (ADEA), protects workers over 40 from being arbitrarily fired, refused a job, forced to retire, or treated unfairly with respect to pay, promotions, benefits, health care coverage, retirement plans, and other employment opportunities because of age. The ADEA governs all private employers with 15 or more workers. It also protects employees of labor organizations, unions, and local, state, and federal government employees. Many states have enacted even tougher laws protecting workers by reducing the number of employees an employer must have to be subject to the law or reducing the cut-off age for inclusion into a protected class (i.e., age 30 in a few states).

The following thumbnail sketch outlines what employers can generally do under the ADEA and state discrimination laws pertaining to age:

• Fire older workers for documented, inadequate job performance or good cause (e.g., excessive tardiness or absences)
• Entice older workers into early retirement by offering additional benefits, such as bigger pensions, extended health insurance, or substantial severance packages, that are voluntarily accepted
• Force employees to retire if the worker is 65 or older, has worked as an executive for the past two years and is entitled to a pension exceeding $44,000, or if the job calls for physical fitness (e.g., airline pilots or police officers) and age is recognized as a bona fide occupational qualification (BFOQ) factor in fitness and job performance
• Lay off older workers when younger employees are similarly treated
• Refuse to hire older applicants when successful job performance absolutely requires that a younger person be hired for the job (e.g., in the case of flight controllers)
• Make adverse decisions provided the acts are taken as a result of a demonstrated good-faith business decision that does not have a discriminatory impact on all older workers at the company

Tip:Some employers may legally discriminate against older workers when they hire independent contractors (which the law doesn't generally protect) or employ fewer than 15 workers and there is no state antidiscrimination law to protect the rights of older workers. Always check the law of your state to see what protection is available if you work for a small employer or are an independent contractor. Additionally, since some state agencies process discrimination cases more quickly than the EEOC and provide greater damages and remedies under applicable state law, consider pursuing your rights with a state agency or in state court after discussing your options with a labor lawyer.

The following actions are generally prohibited by federal and state law:

• Denying an older applicant a job on the basis of age
• Imposing compulsory retirement before age 70
• Forcing older employees into retirement by threatening them with termination or loss of benefits, unless the company has instituted a valid seniority system or retirement plan
• Firing older workers because of age
• Denying promotions, transfers, or assignments because of age
• Penalizing older employees with reduced privileges, employment opportunities, or compensation because of age

Significant damages are recoverable when a woman receives unfair treatment because of age. These may include job reinstatement in the event of a firing, wage adjustments, back pay and double back pay, future pay, promotions, recovery of legal fees, witness fees and filing costs, compensatory damages up to $300,000 depending on the size of the employer, and punitive damages. Recourse can also include the institution of an affirmative action program on behalf of fellow employees, counseling, and enhanced outplacement assistance.

Counsel Comments:Whenever an older employee (over 40) is fired and that individual is claiming discrimination, the issue is basically whether the company's decision was made because of age or was the result of a reasonable, nondiscriminatory rational business reason. Typically the older worker must use circumstantial evidence to prove an employer's motive was improper. This is sometimes done by demonstrating she was between 40 and 70 years of age, was doing satisfactory work, was fired, and the position was then filled by a substantially younger employee under 40. If a younger male employee replaces her, the female employee may also have a claim for sex discrimination. However, when employers support firing decisions with documentation of poor work performance or other factors, an older female worker's chances of proving age discrimination diminish.

Tip:It is easier to prove age discrimination when age-related statements are made to or about the claimant (e.g., "you are too old"; "Why don't you retire?") or by using statistics (i.e., that the company fired 10 older workers in the past six months and replaced them all with employees under 40).

However, when staff did not make liability-sensitive statements, remarks, or threats with respect to age and the employee is unable to demonstrate statistical proof that the company had a practice of firing older workers and replacing them with younger ones, the chances of success with a claim are reduced. A Supreme Court ruling that an employer's decision to lay off mostly older workers close to receiving vested retirement benefits did not, in and of itself, constitute age discrimination (even though the older workers were more severely affected by the discharge than younger workers) has not helped the cause of older workers asserting age claims. In that case, the court found that since the employer proffered a rational business justification for firing a large number of older workers (i.e., to save the company money since older workers with the most seniority had the highest salaries), no illegality occurred. (Note: The Supreme Court did say that the individuals might consider filing ERISA claims to protect forfeited retirement and severance benefits as a result of the company's actions.)

The following is a discussion of areas where age discrimination often occurs.

Preemployment screening

Employers sometimes set requirements that are too high or commit violations through illegal ads. Many make statements or ask questions during the hiring interview that are illegal. For example, discrimination against older applicants occurs when they are told by an interviewer that:

• They are "overqualified"
• They lack formal education credits even though they are highly qualified by previous work experience and a college degree is not necessary for successful job performance
• They must take a preemployment physical that is either unnecessary, not job-related, or not requested of all other applicants
• They are required to answer questions such as "How old are you?", "What is the date of your birth?", or "Why did you decide to seek employment at your age?"

With respect to preemployment questions concerning age, be aware that under federal and state guidelines, employers can only ask the applicant if she is between 18 and 65, and if not, to state her age. Any other type of question concerning age is illegal. If you refuse to answer such a question and believe you were denied a job as a result, consider contacting the EEOC, a local Human Rights Commission office, or your state's attorney general's office to pursue your rights.

Physicals

Companies sometimes require potential employees to take preemployment physicals. This is not legal as a result of the passage of the Americans With Disabilities Act (ADA). Physicals can be given only if they are directly related to successful job performance (e.g., a firefighter's job) and are required by all employees after a job has been offered, not before. Thus, employers are allowed to offer a job that is conditioned on passage of a successful physical exam.

Advertising

Pay special attention to language in advertisements used to attract job candidates. The ADEA prohibits companies from publishing advertisements indicating any preference, limitation, specification, or discrimination based on age. Thus, targeted advertisements containing language such as "Industrial management trainee, recent college degree," "Sales trainee, any recent degree," "Prefer recent college grad," or "Corporate attorney, 2-4 years out of law school" are illegal. However, help wanted notices or advertisements that include a term or phrase such as "college graduate" or other education criterion, or specify a minimum age less than 40, such as "not under 21," are not prohibited by federal statute.

Job requirements

When preparing criteria for a particular job, companies sometimes set a higher requirement than is necessary to attract higher-caliber applicants. This may discriminate between classes of applicants. If you are an older applicant and believe a potential employer has established unwarranted requirements (such as a college degree) that are not job-related, be aware that you may have a valid case of age discrimination.

Counsel Comments:Simply showing that a younger individual was hired over a qualified older applicant does not prove age discrimination if the employer can show its decision was based on an honest evaluation of the candidate's qualifications (e.g., the rejected applicant would be bored or likely to leave upon finding a better job, or both). Furthermore, an employer is under no obligation to provide a laid-off employee with a job for which that person is overqualified. And, when eliminating a position, an employer does not assume an obligation to retain or create a position for the displaced employee simply because the employee is within a protected class, such as being a female or over 40.

Progressive discipline and warnings

The practice of progressive discipline (in which notice is given to the employee of a company's dissatisfaction with her work performance) is used to reduce the risk of wrongful termination lawsuits. By documenting the incidence of employee disciplinary measures through precise records of conferences, warnings, probationary notices, remedial efforts and other steps, employers sometimes demonstrate that an eventual termination was not due to a discriminatory motive but stemmed from a good-faith business decision.

Many companies, however, apply their system of discipline and warnings in a haphazard fashion and fail to use the same punishment for similar infractions. This often invites a discrimination lawsuit if there are several employees with a chronic problem (such as absenteeism) and the older worker (or the female) is the first to be fired for that reason while workers under 40 (or males) are only given a warning.

Tip:If you are an older worker who believes that an employer is treating you more harshly than younger workers for identical infractions, or you are receiving dissimilar, unfair on-the-job treatment with respect to benefits, promotions, or other matters, speak to an employment lawyer for advice.

Seniority rights and vacation time

Nothing in the federal laws barring age discrimination prohibits employers from altering the terms of a benefit seniority system provided the new system is not a subterfuge for engaging in arbitrary age discrimination. For example, when companies change vacation pay policies by putting a cap on the amount of annual paid vacation a person can take (this penalizes older workers when all employees regardless of seniority must take the same number of days off) or reduce medical insurance and retiree benefit plans, such acts are legal where justified by significant cost considerations. However, the burden falls on the employer to justify that its actions are lawful.

Retirement plans and forced retirement

This is an area where older female executives are often exploited. It occurs when companies exert pressure on older workers to opt for early retirement or face firing, demotion, a cut in pay, or poor recommendations. Companies contemplating a large layoff or seeking to reduce payroll through early retirement incentives must do so carefully to avoid charges of age discrimination. Under the ADEA and in most states, it is illegal to impose compulsory retirement before age 70 unless the employee is a "bona fide executive" receiving an annual company-paid retirement benefit of at least $44,000 per year after reaching 65, or is in a "high policy-making position" during a two year-period prior to reaching age 65.

Some states have passed similar laws to protect older employees from being victimized by forced retirement and mandatory retirement plans. For example, New York has a law that prohibits most public employees from being forced to retire, no matter how old they get (except for firefighters, police officers and other law enforcement positions). Private sector employees (with limited exceptions for some executives and tenured college faculty members) are also protected.

Counsel Comments:If the employer can show that a retirement plan is "bona fide" (e.g., plan benefits are based on an employee's length of service), that the employee's decision to accept early retirement is voluntary, and that the reasons for the plan are nondiscriminatory (i.e., not based on age), a plan may not violate the ADEA. Also, if an employee can no longer perform her job duties, the employer may be allowed to discharge her or, alternatively, force her to retire (depending on the circumstances).

Ask yourself the following questions if you believe you were fired because of age:

• Did you request a transfer to another position before you were fired? Was it refused? If so, were similar requests granted to younger workers?
• How were you terminated? Were you given false reasons for the termination? Did you consent to the action or did you protest (such as by sending a certified letter to the company refuting the discharge)?
• Were you replaced by a younger worker under 40 (or between 40 and 45 if you are between 60 and 65)? Were younger workers merely laid off and not fired (i.e., rehired several months later)?

Positive answers to these questions may prove you were fired as a result of age discrimination. Your case will be strengthened when fellow employees are also victimized. In one case, for example, 143 persons were forced to retire prematurely from an insurance company at the age of 62. The large number of older employees all the same age made it difficult for the company to claim it was a valid reduction in force (called a RIF), and the workers collectively received more than $6 million in back wages.

Tip:Before implementing a RIF, companies must take steps to ensure they have acted properly. For example, if they have a practice of permitting bumping or transfers before a discharge, not extending such opportunities to older workers during a RIF may give rise to a claim of disparate treatment. Also, selection of individuals for layoff based on their current cost of retention may be unlawful where wage and benefit rates are found to be a function of length of service and, as such, an arguable product of age.

One federal court jury found a well-known bank guilty of age discrimination in dismissing five female customer service representatives. The employer was ordered to pay more than $700,000 to the women who were allegedly dismissed as a result of corporate restructuring. Their ages and seniority were:

Plaintiff #1: age 45, years of service 18

Plaintiff #2: age 43, years of service 25

Plaintiff #3: age 59, years of service 19

Plaintiff #4: age 62, years of service 14

Plaintiff #5: age 42, years of service 12

The lawyer representing the women said there were other positions they could have been offered (but weren't) and that shortly after the dismissals the bank advertised for replacements. The five were awarded $141,000 for back pay (doubled as a result of the jury's finding of "willful" discrimination); $408,750 for lost future wages and benefits and $25,000 for emotional distress.

Counsel Comments:The employer has appealed the decision. However, the case is instructive in several respects. It demonstrates that you don't have to be in your late 60's to win an age claim when you are fired. Also, a case may be strengthened when despite having greater seniority, you and other senior workers are terminated (instead of junior employees) for an alleged downsizing, but your job is filled by new inexperienced workers soon thereafter.

Waivers

To avoid charges that a person was not given sufficient time to reflect and weigh the options of an early retirement offer and thus was constructively discharged, employers are now required to prepare written releases that give retirees and older workers time to consider the offer, seek advice from a lawyer, and even repudiate the decision within seven days after signing the document. Historically, Congress did not recognize the ability of employers to enforce the waiver of age discrimination claims. As a result, some lucky workers who signed releases prior to 1990 were able to cash their settlement checks and still sue an employer thereafter.

The enactment of the federal Older Workers Benefit Protection Act (OWBPA) has eliminated confusion provided its provisions are properly followed. The act makes clear that in relation to a firing or resignation of a worker over 40, a company can protect itself from potential violations of ADEA claims by utilizing waivers, provided:

1.The waiver is part of an agreement that specifically states the worker is waiving her ADEA rights and is not merely a general release;

2.The agreement containing the waiver does not disclaim any rights or claims arising after the date of its execution;

3.The worker receives value (such as an extra month of severance) in exchange for signing the agreement;

4.The worker is advised in writing of the right to consult an attorney of her choosing before signing the agreement;

5.The worker is advised in writing of her right to consider the agreement for a period of 21 days before it is effective; and

6.The worker is given at least seven days following the execution of the agreement to revoke it.

When employers request the signing of releases or waivers in connection with mass termination programs and large-scale voluntary retirement programs, the act is even more strict. All individuals in the program must be given at least 45 days to consider the agreement and each employee must also be provided with numerous facts, such as the class, unit, or group of individuals covered by the program, any eligibility factors for the program, time limits applicable to the program, the job titles and ages of all individuals selected for the program, and the ages of all individuals not eligible for the program.

The release beginning on page 178 illustrates the kind of document that is often prepared by employers to comply with the OWBPA,

A benefit of the OWBPA is that all voluntary early retirement programs are now scrutinized closely to determine there is no chance of threat, intimidation, or coercion to the worker to whom the benefit is offered. Older employees must now be given sufficient time to consider the offer and receive accurate and complete information regarding benefits.

Tip:If you are an older worker being terminated after working years for an employer, always try to negotiate a better severance package. Information on how to do this successfully is included in Chapter Seven. When companies agree to pay more money in severance and/or benefits, they typically prepare releases for individuals to sign. Carefully review such a document. Question all ambiguous or confusing language. Consult an experienced employment lawyer for advice and guidance where necessary. Do not be afraid to do this, since the release, to be valid, must specifically allow the right to consult an attorney of your choosing. Take advantage of this provision. The lawyer you consult may advise that the company has violated the ADEA and you are entitled to a greater settlement before signing away your rights. Some workers hire employment lawyers to negotiate a better severance package or sue the employer in court after an evaluation has been made.