Age Discrimination can be a big money risk for companies who terminate workers 40 or older. The Age Discrimination in Employment Act of 1967 (ADEA) established a broad ban against age discrimination.
The law says that employment decisions of any kind— hiring, wages, conditions, terms, or privileges—cannot be based on “such individual’s age”. In a world where highly visible athletes often seem to be traded or cut with age in mind, business owners make a big mistake if they assume the rules of pro sports apply to their personnel decisions.
There is no limit on the upper age. Under the law, as amended in 1987, someone who is 100 still has the right to file a claim if they are, for example, not hired because of their age. The upper limit used to be 70.
The damages under the ADEA law provide that any wages owed because of age discrimination are doubled. A claimant also gets full attorneys’ fees and costs, and the court has the power to provide equitable relief—which often includes a sizeable “front pay” amount if reemployment is not deemed viable. Age cases are also tried in front of juries, something that over the years has likely prompted many large companies to provide generous severances to older employees.
The easiest way to get into an Age Discrimination case is for someone in the “decision tree” to not comprehend that discussion of age is never a good idea.
There may be valid reasons for a termination or a lack of promotion—such as poor sales, missed appointments, a refusal to learn, or with training, become proficient in technological advancements. Even if there are valid reasons for a termination or a lack of promotion, however, it is a high risk to a company for someone to attribute these factors to age, or worse, start discussing age as though it is a cause of those factors.
The law is clear. If there is direct evidence of “age discrimination” by any decision-maker, the case goes to a jury. The case cannot be dismissed by a judge even if there are great reasons for what was done.
This can be further complicated by the misguided notions of some in management who do not understand the law. Some believe that as long as the person departing is replaced by someone who increases the diversity of the company, there is a sort of “greater good” defense. There is none.
So, how do you make fair decisions which dramatically reduce the risk of claims? There are four things that you should do.
Establish Ground Rules.
When considering personnel, state right up front and in a serious tone that discussions about things like age, race, or gender, are not pertinent, not legal, and out of bounds.
Stick to the Merits.
Force every discussion, whether it is on candidates or current employees, to be on the merits, and make sure conclusions are backed up by data or verifiable facts and anecdotes. If you are comparing sales, for example, have the numbers up front. Do not look for numbers to back up biased conclusions.
Make Fair Comparisons of the Contributions of All Employees.
If you are having workforce reductions, or business setbacks are forcing salary reductions, consider the expense cost versus the dollar contribution for every employee, not just the higher cost ones.
Document Your Conclusions.
Write down your comparative conclusions—key evidence for dismissing cases—and see if someone else you trust can honestly understand what you have written and what you are doing. This is important and will save you money! If you cannot write well, find a lawyer who can. If you have a lawyer who does not write in simple readable style, then find one who does.
In thirty five years of practice, I have NEVER heard an executive say “My employee is working hard, and making the company lots of money, but because he or she is 65, I would like to fire them.” Business is about economics. Make sure your paperwork backs this up. And, make sure it is never about age.