Important Disclaimer

June 2005

New Case Law On Age Discrimination
Prepared By: Melissa C. Marsh

The Age Discrimination in Employment Act (ADEA) was enacted in 1967 to enable older workers to compete effectively in the workforce. The ADEA serves to protect individuals who are 40 years of age or older from employment discrimination based on age. Pursuant to the ADEA, it is unlawful to discriminate against a person because of his/her age with respect to any term, condition, or privilege of employment (hiring, firing, promotion, layoff, compensation, benefits, job assignments, apprenticeships and training). The ADEA applies to employers with 20 or more employees.

In Fiscal Year 2005, the Equal Employment Opportunity Commission ("EEOC") received 16,585 age discrimination claims, of which 14,076 were resolved with payments of $77.7 million (not including monetary benefits obtained through litigation). This article explores three examples where an employer's business plans and policies subjected them to ADEA claims and presents suggestions on how to avoid such claims.

Apprenticeship Programs.

On January 7, 2005, the court extended the protections granted under the ADEA to apprenticeship programs. In EEOC v. Seafarers International Union, a suit brought on behalf of more than 40 applicants denied entry into an apprenticeship program requiring all applicants to be between the ages of 17 and 35, the Forth Circuit Court of Appeals upheld an EEOC regulation extending the protections of the ADEA to apprenticeship programs. The court reasoned that: (i) age discrimination in apprenticeship programs could hinder older workers from gaining employment; (ii) apprenticeship programs are frequently a workplace entry point; and (iii) failing to extend protections to older workers goes against the underlying purpose of the EEOC and ADEA.

Termination In Furtherance Of A Company Objective.

In Machinchick v. PB Power, Inc., an employer terminated a 63-year old employee allegedly for "poor performance" after the company implemented a new business development strategy and business plan in which the company stated its intent to "hand-pick employees whose mindset resides in the 21st Century." A company supervisor thereafter announced that he planned to "strategically hire some younger engineers and designers to support and be mentored by the current staff," questioned the plaintiff-employee about when he planned to retire, sent an email to human resources describing the plaintiff-employee as having "low motivation to adapt to a rapidly changing business environment and new company management style" (an "age stereotyping remark"): and then fired the plaintiff-employee without notice and replaced him with a younger employee. Machinchick sued his employer claiming that his termination violated the ADEA. The trial court granted the employers summary judgment motion, and on January 25, 2005, the Fifth Circuit Court of Appeals reversed and remanded the case back to trial. The Appellate Court reasoned that a reasonable jury could find that a supervisor's comments about retirement and the employee's age were motivating factors in the employer's decision to terminate Machinchick. This case is a sobering reminder that careless remarks by upper-level management can be interpreted as evidence of unlawful bias (here, age discrimination). Employers should exercise caution when commenting on business strategy and employee motivation.

Employment Policies That Have A Disparate Impact On Older Employees.

Prior to May of 2005, the Circuit Court of Appeals were divided as to whether plaintiffs bringing age discrimination claims had to prove an intent to discriminate, or merely a "disparate impact" on older workers. While the Ninth Circuit Court of Appeals (which includes California) allowed disparate impact claims under the ADEA, other circuit courts disagreed and required the plaintiff prove intent. On March 30, 2005, in Smith v. City of Jackson, Mississippi, The U.S. Supreme Court resolved the issue.

In Smith, the Supreme Court ruled that an older employee (40 years of age or older) need not prove that a defendant-employer intended to discriminate, only that as a result of the defendant's facially neutral employment policies a "disparate impact" resulted-- that the employer's policy had a disproportionately negative impact on older employees. The Supreme Court, however, did note that it is not enough for a plaintiff to allege simply a disparate impact on older workers, or to show that such an impact in fact occurred. Rather, the Supreme Court held that plaintiffs bringing an ADEA claim based on "disparate impact" must: (1) identify the specific practice that had an adverse impact on older workers and (2) show that the employer's decision that resulted in a disparate impact was not based on a "reasonable factor other than age." The Court also explained in dicta that an employer is not required to show that it had absolutely no other, less discriminatory, way to achieve its goal. According to the Supreme Court, so as long as the employer's decision is made with a valid nondiscriminatory goal in mind, and as long as the means used by the employer to achieve that nondiscriminatory goal are reasonable, a plaintiff cannot establish a valid claim for disparate impact for age discrimination under the ADEA.

Preventive Action.

While the Court's ruling in Smith extends additional benefits to future age discrimination plaintiffs, it also serves as a source of guidance for employers who seek to avoid liability for disparate impact age discrimination claims. The decision in Smith is a reminder of the need for employers to self-police their employment practices and to pay particular attention to the unintended effects of their policies on older workers. Specific things that employers can do include:

• Don't include age preferences, limitations or specifications in job postings, and make sure your job postings do not give the impression that applicants form a particular age group are preferred;

• Don't ask a job applicant's age or date of birth;

• Don't deny benefits to older employees;

• If you have a stated retirement age below 65, make sure you can objectively justify it;

• Review current employment practices and policies concerning hiring, promoting, compensation and benefits, reductions-in-force and retirement to confirm they will not disproportionately and adversely affect workers over the age of 40;

• If certain practices or policies are affecting workers over the age of 40 adversely, evaluate whether there are reasonable factors other than age to justify the discrepancy; and

• Consult with counsel if you are in doubt about the effects of any particular employment practice.

© Melissa C. Marsh 2005 All Rights Reserved.

If you have any questions, or would like further information, please e-mail us at
mmarsh@yourlegalcorner.com or call: 323-655-1002.

Disclaimer: This article has been prepared by Melissa C. Marsh for general informational purposes only and does not constitute legal advice. Readers should not rely or act upon the information contained in this article for any purpose without seeking legal advice from a local licensed attorney in your state. This article is not, and should not be used as, a substitute for legal advice as your specific factual circumstances may differ, the laws of your jurisdiction may differ, and the laws may have changed. Your use of this Internet site does not create an attorney-client relationship. Transmission of this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. All uses of the contents of this site, other than personal uses, are prohibited.