Chapter 12 Age Discrimination McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives Distinguish the perception of older workers from the reality of their impact in the workplace Describe the history of the protection of older workers in the United States. Distinguish the ADEA and state-based age discrimination laws Identify the legal options available to an employee who believes that he or she is a victim of age discrimination Page 516

Learning Objectives Explain the prima facie case of discrimination based on age Describe the bona fide occupational qualification defenses available to employers under the ADEA Distinguish circumstances where disparate impact and disparate treatment apply in connection with age discrimination Page 516

Learning Objectives Analyze factual circumstances when employer economic concerns may justify adverse action against particular groups of workers Recognize necessary elements to establish pretext under the ADEA. Define the parameters of a valid waiver of ADEA rights Page 516

Oldie…But Goldie! American culture values youth Older workers perceived as and “issue to be dealt with” and more expensive to retain Younger workers perceived as better educated and better qualified Statistics do not match general perceptions about older workers Page 517-518

Oldie…But Goldie! Workforce that was 55 years and older increased from 12 percent to 19 percent between 1999-2009 Study by Pew Research 75 percent of workers today expect to continue to work for pay after they retire Page 518

Oldie…But Goldie! American Association of Retired People report Additional cost for older workers are minimal The act of generalizing constitutes wrongful discrimination Page 519-520

Realities about Older Workers and Age Discrimination Employers should be aware of the impact of terminations based on salary since older workers may be higher paid than others on average, due to job seniority Age may not be used as a job qualification Page 519

Realities about Older Workers and Age Discrimination To file claims under the Age Discrimination in Employment Act, claimants must be 40 or older Employees are not required to retire at age 65 in the United States Page 519

Myths about Older Workers Older employees Are not hard workers Will get tired more easily than younger workers Are less able to perform than younger workers Don’t understand technology Page 519

Myths about Older Workers Older employees (contd..) Don’t want to travel too much and are generally more stubborn and uninterested in learning Make too much money since it’s often based on seniority and not performance Are just making time before they can retire Page 519

Regulation: Age Discrimination in Employment Act Prohibits discrimination in employment on the basis of age Applies to individuals who are at least 40 years old No upper age limit Page 520

Distinctions between ADEA and Title VII The ADEA is more lenient than Title VII regarding the latitude afforded employers’ reasons for adverse employment decisions An employee is not barred from pursuing a claim simply because the employer treated another older worker better The act only protects employees over 40 from discrimination Page 521

Distinctions between ADEA and Title VII Youth’s “reverse discrimination claim” The EEOC modified its regulations to remove language that prohibited discrimination against younger workers To ensure appropriate and adequate information exists as to hiring practices in connection with age, the ADEA has specific record-keeping provisions for employers Page 521-522

State Law Claims State laws on age discrimination varies widely Some have no age discrimination laws Other have laws that track the ADEA A large number of states laws that provide greater protections than those afforded by the ADEA Page 523

State Law Claims Greater protection may include for following State age discrimination laws apply to a wider range of employers State age discrimination laws sometimes allow a wider range of damages States often provide longer filing periods No state is permitted to extend the protection to someone younger than 40 Page 523-524

Employee’s Options An employee who believes that his or her employer has engaged in age discrimination must file a complaint using the employer’s internal grievance procedures Page 524

Employee’s Options Other options File a complaint with the federal Equal Employment Opportunity Commission File a complaint with the state equivalent of the EEOC (if one exists) File a lawsuit in federal court under the ADEA File a lawsuit in state court under state age discrimination laws Page 524-525

Employee’s Prima Facie Case: Disparate Treatment Member of a protected class 40 years or older Adverse employment action: Any action or omission that takes away a benefit, opportunity, or privilege of employment from an employee Decision not to hire or terminate the employee Page 525-526

Employee’s Prima Facie Case: Disparate Treatment Qualified for the position: Able to meet the employer’s legitimate job requirements Meets legitimate job requirements Dissimilar treatment Treated differently from others not in the protected class Page 526

Burden Shifting No More Court decision on Gross v. FBL Financial Servs. Inc. No burden shifting occurs in ADEA cases Mixed-motives age discrimination claims do not exist under the ADEA for disparate treatment claims Burden shifting still applies to Title VII cases Page 527-528

Employer’s Defenses Bond Fide Occupational Qualification EEOC guidelines for employers in an age discrimination case brought under the ADEA The age limit is reasonably necessary to the essence of the employer’s business All or substantially all of the individuals over that age are unable to perform the job’s requirements adequately Some of the individuals over the age possess a disqualifying trait that cannot be ascertained except by reference to age Page 528-529

Employer’s Defenses Mandatory retirement: Employee must retire upon reaching a specified age Deemed illegal by the 1986 amendments to the ADEA Limited to two circumstances Employer cannot base employment decisions on age-related stereotypes Page 529-530

Proving a Case of Age Discrimination Disparate Treatment Step 1: Employee’s prima facie case The employee is in the protected class She or he was terminated or demoted Employee met employer’s legitimate expectations Others not in the protected class were treated more favorably Step 2: Employer defenses BFOQ Step 3: Employee may evidence pretext for employer actions Page 531

Proving a Case of Age Discrimination Disparate Impact Step 1: Employee’s prima facie case A facially neutral policy or rule is imposed by an employer Which has a different effect on an older group of workers No intent to discriminate is necessary Step 1: Employer defenses Reasonable factor other than age (RFOA) Economic concerns Seniority Page 531

Employee’s Prima Facie Case: Circumstances Involving Claims of Disparate Impact Reasonable factors other than age: May include any requirement that does not have an adverse impact on older workers, as well as those factors that do adversely affect this protected class but are shown to be job-related There is no RFOA defense in Title VII Page 531-532

Employee’s Prima Facie Case: Circumstances Involving Claims of Disparate Impact Economic concerns Nothing in the ADEA prohibits elimination of a protected employee’s position for budgetary reasons Reduction in force (RIF) Employers may offer pay cut in lieu of termination (if business necessity) Correlation between compensation and age Two views from the courts Page 533-535

Defenses Based on Benefit Plans and Seniority Systems The ADEA specifically excludes bona fide retirement plans that distinguish based on age Are not a “subterfuge” Bona fide voluntary retirement plans must be truly voluntary Reasonable person must not feel compelled to retire Page 535-536

“Same Actor” Defense Same “actor” both hires and fires a worker – permissible inference that the employee’s age was not a motivating factor in the decision Page 536

Retaliation The ADEA prohibits retaliation Punitive damages: Punitive damages are designed to punish the party being sued rather than compensate the injured party Can be quite high, especially if the actions are especially offensive, the defendant is a large company, and the jury is angry Are available for retaliation claims Page 536-537

Employee’s Response: Proof of Pretext Where there is direct evidence of discrimination, proof of pretext is not required Showing pretext: Offered reasons for the adverse employment action have no basis in fact Offered reasons did not actually motivate the adverse employment action Offered reasons are insufficient to motivate the adverse action taken Page 537-538

Employee’s Prima Facie Case: Hostile Environment Based on Age The employer is 40 years or older The employee was subjected to harassment, either through words or actions, based on age Page 539

Employee’s Prima Facie Case: Hostile Environment Based on Age The harassment had the effect of unreasonably interfering with the employee’s work performance and creating an objectively intimidating, hostile, or offensive work environment There exists some basis for liability on the part of the employer Page 539

Waivers under the Older Workers’ Benefit Protection Act of 1990 Waiver: The intentional relinquishment of a known right Concerns the legality and enforceability of early retirement incentive programs and waivers of rights under the ADEA Every waiver must be knowing and voluntary Page 539-540

Waivers under the Older Workers’ Benefit Protection Act of 1990 The waiver may not bar the employee from filing a claim with the EEOC If an employee signs a defective waiver, the employee is not required to give back any benefits received under the waiver Provisions in connection with early retirement plans Page 541-542

The Use of Statistical Evidence Generally more useful in disparate impact cases Skepticism relating to statistical evidence in age discrimination cases due to attrition in the workforce Supreme court guidelines Standard deviations and percentage comparisons Surrounding facts and circumstances are important Page 542-543

Remedies Money damages Liquidated damages: Limit awards to a predetermined amount Equitable relief: Relief that is not in the form of money damages, such as injunctions, reinstatement, and promotion Reinstatement, promotions, and injunctions Page 543

Employee Retirement Income Security Act Regulates private employee benefit plans Protects employees from wrongful denial of all types if benefits Page 543-544

Employee Retirement Income Security Act Regulates Who must be covered Vesting requirements The amount that the employer must invest Distinctions among benefit plans Reduction in benefits across the board Benefits based on seniority Page 544

Management Considerations Employers should: Evaluate the true requirements of a position Test for those characteristics Pay attention to the basis for decision making and selection in connection with training and development opportunities Page 544-545

Management Considerations Problems with RIFs: Employers generally do not retain intricate written analyses of performance Managers and supervisors will likely evaluate an employee as compared to other employees The employer may make a decision based on some factor other than performance Be sure all employees periodically receive an objective, detailed performance appraisal Page 545-547

Management Tips Any job requirement on the basis of age must be subject to your highest scrutiny Review all termination decisions carefully in order to ensure fair and balanced procedures Terminating an older worker and replacing her or him with another worker who is over 40 does not protect you from a charge of age discrimination Review all recruiting literature to remove all age-based classifications Page 546

Management Tips You may not terminate an older worker on the basis of age Employers should neither permit nor encourage age-based remarks, comments, or jokes to avoid liability under the ADEA for age-related harassment Employers should be sensitive about the inclination in the past to single out workers over 40 for medical exams Page 546