Age Discrimination

Age discrimination is the practice of letting a person's age unfairly become a factor when deciding who receives a new job, a promotion, or other job benefit. It most commonly affects older workers who feel they have been discriminated against in favor of younger workers, but there have been cases involving younger workers being displaced by older workers. A 2005 survey of 2,600 human resource professionals and managers, published jointly by the Chartered Institute of Personnel and Development and the Chartered Management Institute, found that 60 percent of the respondents claimed to have experienced some form of age-related discrimination. However, the survey also showed that much progress has been made over the last decade on reducing age-related discrimination. The number of respondents in the survey who reported having been passed over for promotion based on age dropped by 50 percent since the same question was asked in the 1995 survey.

One factor that may be involved in the changing perception of age-related discrimination is the changing demographic picture of the U.S. workforce. "With 76 million baby boomers approaching retirement age, retaining older workers is not so much a choice as a necessity," explains Alicia Barker, vice president of human resources for the firm Hudson North America. She discusses, in an article entitled "Age Discrimination Visible, But U.S. Businesses Urge Older Workers to Stay on the Job," the need for companies to establish policies that encourage older workers to stay on the job. The need for such policies is not only in order to avoid costly discrimination lawsuits but also by way of preparing for the coming shift in the labor force that will occur as baby boomers retire.

THE ADEA

Age discrimination has officially been a major employment issue since 1967, when the U.S. government passed the Age Discrimination in Employment Act (ADEA). The act's stated purpose is "to promote employment of older persons based on their ability rather than age; to prohibit arbitrary age discrimination in employment; to help employers and workers find ways of meeting problems arising from the impact of age on employment." Specifically, the act prevents employees over the age of 40 from being unfairly fired, demoted, or offered reduced pay or benefits, and it makes it illegal to discriminate against a person on the basis of age in regard to any employment benefits. Older and younger workers must receive access to equal benefits, which generally include: the same payment options; the same type of benefits, such as health care and pension; and the same amount of benefits. The ADEA applies to companies with more than 20 employees that are "engaged in industry affecting commerce." Only true employees are covered; independent contractors are not.

There are exceptions to these rules, but they are few in number and closely monitored. For example, companies are allowed to offer early retirement incentives to older workers without penalty. But the early retirement benefits can only be offered if participation in the plan is voluntary and all other parts of the plan are nondiscriminatory. A company cannot force its workers to accept an early retirement offer, nor can it offer an early retirement plan that reduces benefits as a worker's age increases.

There are also some exemptions regarding the employees who are covered. Jobs that involve public safety, such as police and firefighters, are allowed to have age restriction clauses. Top-level executives who meet certain criteria are excluded from the ADEA. In addition, a company may still utilize an official seniority system, which has long been an accepted practice in the American workplace. The ADEA has strict rules about how a seniority system is to be administered, however, and requires that such systems include merit factors as well as years of employment as determining factors. Finally, if faced with an age discrimination suit, employers may argue that the job in question had a "bona fide occupation qualification (BFOQ)" that required a younger worker. If challenged in court, the company must prove that the BFOQ was legitimate and not just a ruse to skirt the law. Generally, this means proving that all people above the age limit for the position can be shown to be inappropriate for the job. This is extremely difficult to prove, so most companies do not try to challenge the ADEA in this manner.

Employers must prominently display notices about the ADEA and the protection it offers older workers. They must also maintain detailed records as required by the Equal Employment Opportunity Commission (EEOC), which can take action against an employer if it feels discrimination has occurred. Individuals may also file civil suits on their own. The plaintiff may sue to recover back pay, front pay, and liquidated damages from the employer. If an employee proves that the age discrimination was "willful," then back pay damages are doubled. State laws also permit punitive damages to be assessed, which can add millions of dollars to a judgement. To prove his or her case, the plaintiff can present direct evidence of discrimination (such as when the person was plainly told they were being fired because they are too old for the job), prove that a pattern of discrimination exists through the use of statistical analysis, or provide circumstantial evidence that discrimination occurred.

Since it was first written, the ADEA has been updated a number of times. The Older Workers Benefit Protection Act was passed in October 1990. Among its provisions were clear requirements that had to be met if a company wished to settle an ADEA lawsuit brought by an employee. The employee must sign a waiver releasing his or her claim. The waiver must:

• Be "knowing and voluntary," meaning that it must be in writing
• Refer to the specific portions of the ADEA that were applicable to this case
• Provide the employee with some form of compensation, or "consideration," over and above what he or she would have normally received if they had not signed the waiver
• Recommend, in writing, that the employee has the right to consult an attorney
• Indicate that the employee has 21 days to sign the waiver
• Be revocable for seven days after being signed by the employee

• Make certain information available to the employee if the case involves employment termination

While not a direct update of the ADEA, a 1993 court case has proven to be extremely important in the field of age discrimination. In Hazen Paper Co. v. Biggins, the U.S. Supreme Court ruled that, even though a decision by the paper company adversely affected older workers more than younger workers, the decision did not constitute age discrimination. In the case in question, the company claimed that money was the basis for its decision, not the age of the employees affected, and the court accepted its defense. In cases since that time, the "cost, not age" defense has been widely accepted by the courts.

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