USA – agediscrimination.info

Seyfarth Shaw

www.seyfarth.com

Overview

In the U.S., federal law prohibits age discrimination in the workplace. Under the Age Discrimination in Employment Act (ADEA), it is unlawful to discriminate against an employee or job applicant on the basis of age with respect to any term, condition, or privilege of employment (e.g., hiring, firing, promotion, layoff, compensation or benefits, job assignments, training). Some courts have extended the ADEA’s protections to retired employees (challenging discrimination with respect to retiree benefits). Employers are also prohibited from including age preferences, limitations or specifications in job notices or advertisements. An employer may not retaliate against an individual for opposing employment practices that are discriminatory or for filing an age discrimination charge. The ADEA also has been construed to prohibit harassment based on one’s age.

To establish a violation under the ADEA, the employer/job applicant must be able to prove that his or her age was a determining factor in the employer’s actions. Evidence of age discrimination can take one of two forms: 1) direct evidence of intent to discriminate (e.g, specific comments), or 2) indirect (circumstantial) evidence, such as statistical data.

In addition to federal law, most states have adopted laws protecting against age discrimination. Some state law provisions are more expansive in their coverage than the ADEA.

Who’s covered?

The ADEA protects employees and job applicants who are 40 years of age or older from being discriminated against on the basis of their age, provided that the employer employs at least 20 or more workers. In some instances, the laws adopted by the States provide more protection than the ADEA, either by covering employers with fewer than 20 employees or by protecting individuals who are less than 40 years of age.

What enforcement/remedies exist?

The Equal Employment Opportunity Commission (EEOC) is the federal agency that enforces the ADEA. Before an individual can file a civil action in court, s/he must file a charge (complaint) with the EEOC. The EEOC is responsible for investigating the complaint. At the conclusion of its investigation, the EEOC issues either a notice of determination or a “right-to-sue” letter. After receiving the notice/letter, the individual has 90 days to file an action in court.

The ADEA provides the following remedies to a successful complainant: back pay (including the value of lost benefits), reinstatement or front pay, liquidated (double the back pay award) damages (if employer’s actions are found to be willful), attorneys’ fees and costs. Back pay is limited to wages for the two years preceding the date of the individual filed the EEOC charge. If the employer’s actions are willful, back pay is awarded for a period of three years. Punitive and compensatory damages are not recoverable under the ADEA.

How common are claims?

According to the EEOC, age discrimination claims represent just over one-fifth (22%) of the charges filed with the agency. In 2005, age discrimination claims ranked fourth in the total number of claims filed with the EEOC, following race (35.5%), sex (30.6%), and retaliation (29.5%). Since 2002, the actual number of age discrimination claims filed has declined. During the same time period, the number of race, sex, and retaliation claims also have declined.

What claims are most common and what are trickiest issues for employers?

Age discrimination claims frequently arise in the context of a lay off or reduction-in-force. Even though employees in the protected class are typically required to waive their rights under the ADEA in exchange for receiving a severance package, they still file suit and challenge the legality of the employer’s lay off selection process. For a variety of reasons, plaintiffs have a difficult time prevailing in such cases. Recently, plaintiffs avoided dismissal of their claims by arguing that their waiver of rights is not legally enforceable. Although the U.S. Supreme Court recently held that disparate impact claims are cognizable under the ADEA, employers need only establish that it had a reasonable basis for the selection process it used (e.g., employees on the higher end of the salary spectrum can be targeted for lay off to reduce company costs, even if that means that older employees, due to their long service with the company, are more likely to be on higher end of the pay scale).

Are there any specific exceptions in your laws?

There are certain narrow exceptions to the ADEA. The ADEA permits employers to impose mandatory age cutoffs in jobs where the individual’s age is “reasonably necessary to the normal operation of the particular business” –– commonly referred to as a bona fide occupational qualification (BFOQ). A BFOQ is usually associated with jobs involving public safety (e.g., police, fire) or aviation. The ADEA permits mandatory retirement at age 65 of a person who, in the two years prior to the action, was a bona fide executive or high policy-making employee, if such person is entitled to an “immediate non-forfeitable annual retirement benefit” equaling at least $44,000. This exception has been read narrowly.

Retirement ages

The ADEA permits mandatory retirement at age 65 of a person who, in the two years prior to the action, was a bona fide executive or high policy-making employee, if such person is entitled to an “immediate non-forfeitable annual retirement benefit” equaling at least $44,000. As noted above, this exception has been read narrowly by the courts.

Interesting cases

CH1 11096396.1

Smith v. City of Jackson, 544 U. S. 228 (2005). The U.S. Supreme Court held that employees may maintain an age discrimination claim using a “disparate impact” theory. Under a disparate impact theory, a person may sue an employer even if there is no evidence that the employer intentionally discriminated against him or her on the basis of age. All that an individual must show is that the employer had a policy that disproportionately adversely impacted those over the age of 40. An employer may defend its policy by showing that it had a reasonable basis for adopting such a policy.

General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 581 (2004). The U.S. Supreme Court held that it is lawful to favor older workers over younger workers, even if the younger workers are within the protected age group (40 years and older). Thus, age-based distinctions in employee benefits and other facets of employment are lawful under the ADEA, so long as they benefit relatively older employees within the protected age group.

Hazen Paper v. Biggins, 507 U.S. 604 (1993). The U.S. Supreme Court held that the employer did not violate the ADEA when it discharged a 62-year-old employee a few weeks before his pension benefits would have vested. The Court emphasized that the employer showed its motivation was based on factors other than age. The Court did warn that “[p]ension status may be a proxy for age . . . in the sense that the employer may suppose a correlation between the two factors and act accordingly.” However, the Court also noted that an employee’s age is analytically distinct from years of service, and thus a decision based on years of service is not necessarily age-based.

Whittington v. The Nordam Group Inc., 429 F.3d 986 (10th Cir. 2005). A federal appeals court declined to adopt a “bright-line” rule on how much of a difference in age is required between an older worker and his or her replacement to establish a case for age discrimination. In rejecting the plaintiff’s argument that a five-year age difference should be evidence of age discrimination, the court observed that all five-year age differences were not the same and that some were more suspicious than others. To date, no federal appeals court has adopted a bright-line rule regarding how many years difference is needed to support a claim of age discrimination.

Jankovitz v. Des Moines Indep. Comty. Sch. Dist., 421 F.3d 649 (8th Cir. 2005). A federal appeals court held that a school district’s early retirement incentive plan violated the ADEA because it arbitrarily cut off eligibility to participate in the plan at age 65. The court held that the plan was discriminatory on its face and rejected the school district’s argument that the plan was legal under the ADEA’s safe harbor provision. The safe harbor provision permits an employer to adopt a voluntary early retirement incentive plan that would be prohibited under the law provided that the plan is consistent with the purposes of the ADEA. The appeals court held that the plan was inconsistent with the law’s purpose of prohibiting arbitrary age discrimination because eligibility rested solely on the employee’s age. Other courts have upheld early retirement plans where eligibility is based on an age + years of service formula.