Chapter 12

Chapter 12
Age Discrimination
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
Learning Objectives
 Explain the prima facie case of discrimination
based on age
 Describe the bona fide occupational qualification
defenses available to employers under the
 Distinguish circumstances where disparate
impact and disparate treatment apply in
connection with age discrimination
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
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
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
Oldie…But Goldie!
 American Association of Retired People report
 Additional cost for older workers are minimal
 The act of generalizing constitutes wrongful
Realities about Older Workers and Age
 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
Realities about Older Workers and Age
 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
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
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
Regulation: Age Discrimination in
Employment Act
 Prohibits discrimination in employment on the
basis of age
 Applies to individuals who are at least 40 years
 No upper age limit
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
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
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
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
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
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
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
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
Burden Shifting No More
 Court decision on Gross v. FBL Financial Servs.
 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
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
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
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
Step 3: Employee may evidence pretext for employer actions
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
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
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
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
“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
 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
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
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
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
 There exists some basis for liability on the part
of the employer
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
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
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
 Supreme court guidelines
 Standard deviations and percentage comparisons
 Surrounding facts and circumstances are important
 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
Employee Retirement Income Security
 Regulates private employee benefit plans
 Protects employees from wrongful denial of all
types if benefits
Employee Retirement Income Security
 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
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
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
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 agebased classifications
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
 Employers should be sensitive about the
inclination in the past to single out workers over
40 for medical exams
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