In a effort to address this important matter, we provide below, in a question and answer format, a summary of the basic information that every employee and employer need to know about age discrimination.
Q. What basic protection does the federal Age Discrimination in Employment Act (ADEA) provide to covered workers?
The ADEA prohibits employers from discriminating on the basis of age at any stage of the employment process, including application, interview, hiring, promotion, downsizing and termination.
The law applies to advertisements and selections for available positions, but allows reference to age limitations based on bona fide occupational qualifications tied to business necessity.
The ADEA prohibits employers from forcing employees to take early retirement, but does not preclude offering of legitimate incentives to induce retirement.
The law also protects employees from discrimination based on filing a complaint over, giving testimony, and/or participating in efforts to seek redress for age discrimination.
Q. Our employer has just announced plans to cut the workforce by 50% and the list of employees subject to layoff appears to single out many older workers who also have higher salaries. Is there any legal protection for the employees on this list?
Yes and No. The Age Discrimination in Employment Act (ADEA) protects workers over the age of 40 against discrimination in any employment decision because of their age. While an employer cannot force an employee to retire involuntarily, an adversely affected employee must show that age, rather than a legitimate business reason, is the basis for the employment decision. Hence, it is lawful for an employer to focus on higher-paid, potentially redundant employees so long as the decision is not a cover-up for age discrimination. Recent case law emphasizes the need for the employer to come forward with a legitimate business reason or purpose to justify any challenged employment policy or action.
The ADEA requires that a valid business reason not related to age must exist for all employment decisions. Examples of valid reasons include poor job performance by the employee or a need to achieve cost-reductions to offset economic hardships experienced by the employer.
If the employer has announced a layoff or if a layoff is rumored at work, a concerned employee should try to gather as much information as possible by talking with other coworkers, including low level supervisors and/or union officials, to find out exactly what is happening. If most of the targeted workers are 40 or older, and the majority of retained workers are younger, there may be a basis for an ADEA complaint or lawsuit. This is especially likely if the employer has hired or subsequently hires younger workers to take the places of employees over 40.
Q. Does the ADEA protect all workers from age discrimination?
No. There are limits to the scope and coverage of the ADEA. In particular, federal legislation applies only to employees 40 and older and to workplaces with 20 or more employees.
The ADEA applies to federal employees and private sector employees, but does not to state employees. However, state or local laws may apply to these employees as well as to private sector employees excluded from federal legislation.
Q. Why does the ADEA exclude state employees from its protection, but covers their counterparts in the federal government and the private sector?
When Congress passed the ADEA in 1967, it intended for the law to protect state employees as well as federal and private sector employees. For 33 years, this expression of Congressional intent prevailed, and state employees could sue their employers - namely, the states for which they worked -- for age discrimination, just like other workers.
In Kimel v. Florida Board of Regents (2000), the United States Supreme Court ruled that the ADEA does not protect state employees. The Court reasoned that Congress lacked the power to tell the states how to handle age discrimination claims relating to its own employees.
Q. If the ADEA does not provide protection, is the employer free to discriminate against an employee because of his/her age?
Not necessarily. The answer depends on the employee's place of employment and the size of the operations. Almost every state has passed it own laws barring age discrimination in employment, and many municipalities have adopted even more sweeping legislation. These laws often provide greater protection than the federal law. For example, several states provide age discrimination protection to workers before they reach the age of 40, and other states protect against the actions of employers with 20 or less employees.
Q. Can an employer lay off an employee just before he or she becomes eligible to lock into pension rights?
Historically, unscrupulous employers used this ploy to cheat workers out of promised pensions in order to save money. When Congress enacted the Older Workers Benefit Protection Act (OWBPA) as an amendment to the ADEA in 1990, this practice became illegal. The OWBPA prohibits an employer from:
- Using an employee's age as the basis for discrimination in benefits
- Targeting older workers in conjunction with reductions of staffing
- Requiring employees over the age of 40 from signing waivers or releases to obtain severance benefits if this legal document fails to provide the rights and protections explicitly set forth in this enactment.
The Employment Retirement Income Security Act of 1974 (ERISA) also places limitations on the employer's freedom to deprive employees of pensions.
Q. Does the law restrict the employer from offering retirement incentives, such as a cash bonus or an enhanced benefits package, to encourage retirement by bridging the retirement gap?
It all depends on the nature of the incentive. The Older Workers Benefit Protection Act regulates the legal waivers that employers are increasingly asking employees to sign in connection with early retirement programs. If the employer offers an employee an opportunity to participate in a staff reduction program, the Act MAY give the employee some leverage to negotiate the terms of his/her departure.
The fact that the employer has offered an incentive suggests that the company may want the employee to leave and wants to avoid potential legal problems, including age and other types of discrimination claims. Even though the company may present the severance package on a take-it or leave-it basis, an employee can still try to negotiate a better deal on his/her own or with the assistance of a skilled employment lawyer.
Q. If an employer has asks the employee to sign an agreement waiving his/her right to sue, how valid or enforceable is this agreement?
A growing number of employers ask older workers to sign severance agreements and/or releases waiving their right to sue. In return, the employer offers the employee an incentive to leave the job voluntarily, such as a significant amount of severance pay or an early retirement package. The Older Workers Benefit Protection Act places a number of restrictions on such waivers:
- The employer must make the waiver understandable to the affected workers who will have to review, understand and sign this legal document.
- The waiver may not require waiver or release of any rights or claims that may later arise, or be legitimately discovered, after signing the document as well as state that the release covers known and specifically identified rights.
- The employer must offer the employee something of value (such as severance pay) over and above what it already owes the worker in exchange for his/her signature on the waiver.
- The employer must advise the employee in writing that he/she has the right to consult an attorney before signing the waiver and, by law, is entitled to a 7-day period to revoke his/her consent to the agreement.
If the employer is offering the same everance package or benefits to a group or class of employees, it must inform the employee in writing as to the following:
- How the class of employees is defined
- The job titles and ages of all the individuals to whom the offer is being made
- The ages of all the employees in the same job classification or unit of the company to whom it has not made the same offer
- The employee must be given a fixed time in which to make a decision on whether or not to sign the waiver.
This same notification requirement applies to layoffs and other group terminations even if no incentives are offered.
Q. How does an employee enforce legal rights that protect against age discrimination?
If an employee believes that age discrimination has occurred or may have occurred, he/she can file a complaint with the U.S. Equal Employment Opportunity Commission (EEOC), just as any other claim of workplace discrimination. The employee should call 800-669-4000 to find the nearest EEOC office or check out the EEOC's website at http://www.eeoc.gov/. The EEOC Website has helpful guidance on age discrimination and a variety of other subjects that often affect older workers. The Department of Labor website (http://www.dol.gov/) also contains helpful information on the Family Medical Leave Act as well as pension protections that commonly come into play in these situations as well.
If the EEOC does not resolve the complaint to the employee's satisfaction, he/she may decide to seek relief by filing a lawsuit. The law contains an accelerated notification procedure if the employee wishes to bring suit on expedited basis without an EEOC investigation.
If the employee works in a state or city that has a law prohibiting age discrimination, he/she can choose to file a complaint under state law, federal law (ADEA), or both. In almost every instance, the employee is required to file a complaint with a federal, state or local agency and/or give formal notice of his/her claim of age discrimination before filing suit.
Lawrence J. Sherman, Esq.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Copyright 2007 by Lawrence J. Sherman.