AGE DISCRIMINATION

AGE DISCRIMINATION

Prejudicial treatment or denial of rights based on age.

As the baby boom generation, the largest
demographic group in U.S. history, reached
middle age and looked toward retirement, laws
governing the treatment of older U.S. citizens
took on greater importance than ever before.
Between 1970 and 1991, the number of workers
over the age of 40 in the U.S. workforce rose
from 39,689,000 to 53,940,000. It is no surprise,
then, that major developments, both legislative
and judicial, occurred in the area of age discrim-
ination in employment.

Congress outlawed discrimination by
employers against employees or applicants over
the age of 40, with the Age Discrimination in
Employment Act of 1967 (ADEA) (29 U.S.C.A.
§ 621 et seq.). Amendments to the act in 1974,
1978, and 1986 (29 U.S.C.A. § 623 et seq.) raised
and then eliminated the mandatory retirement
age for most workers and extended the act’s cov-
erage to most employers. The ADEA does per-
mit employers to set maximum age limits for
employees if the employer can show that age is a
bona fide occupational qualification (BFOQ)
and is reasonably necessary for the operation of
the business. Although the ADEA did not origi-
nally apply to government employers, Congress
extended the act to cover federal, state, and local
governments in 1974. However, it no longer
applies to state governments.

The EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION (EEOC) is charged with enforcing
the ADEA. Complainants must first file a claim
with the EEOC or their state’s employment or
HUMAN RIGHTS commission before pursuing a
lawsuit. The EEOC attempts to resolve the dis-
pute through voluntary compliance on the part
of the employer, conciliation, or other persua-
sive measures. If the EEOC decides to bring an
action against the employer, the employee’s right
to sue is extinguished. However, the employee
need not exhaust his or her administrative
remedies—that is, wait for a final determination
from the EEOC—before filing suit.

Landmark Discrimination Cases

A number of landmark cases have inter-
preted the ADEA since its passage. Western Air
Lines v. Criswell, 472 U.S. 400, 105 S. Ct. 2743, 86
L. Ed. 2d 321 (1985), set out the guidelines for
defending an age limit based on the BFOQ
exception. Western required flight engineers,
who are members of the flight crew but gener-
ally do not operate flight controls, to retire at age
60.When this policy was challenged, the airline
maintained that the age limit was a BFOQ nec-
essary to ensure safety. The Supreme Court dis-
agreed, and in a unanimous decision announced
a two-pronged test to be applied when evaluat-
ing a BFOQ based on safety: (1) whether the age
limit is reasonably necessary to the overriding interest in public safety; and (2) whether the employer is justified in applying the age limit to
all employees rather than deciding each case on
an individual basis.

In another case the same year, the Supreme
Court found TWA guilty of age discrimination
for refusing to transfer pilots to the position of
flight engineer after they reached age 60, the
Federal Aviation Administration’s (FAA’s)
mandatory retirement age for pilots (Trans
World Airlines v. Thurston, 469 U.S. 111, 105 S.
Ct. 613, 83 L. Ed. 2d 523 [1985]). TWA had
allowed younger pilots who had become dis-
abled to transfer automatically to the position of
flight engineer, but did not allow pilots and
copilots past the age of 60 to do the same. The
Court held that the airline must give the same
opportunity to retiring pilots and copilots as it
had given to younger disabled pilots. However,
the Court denied the pilots’ request for double
damages, which are allowed in cases of “willful
violation” of the ADEA, stating that a violation
is willful only if the employer knew that its con-
duct was prohibited by the ADEA or showed a
“reckless disregard” for whether the act applied.
Older workers seeking redress under the
ADEA received mixed opinions in 1989. Public
Employees Retirement System of Ohio v. Betts, 492
U.S. 158, 109 S. Ct. 2854, 106 L. Ed. 2d 134
(1989), overturned a series of courts of appeals
decisions as well as EEOC and LABOR DEPART-
MENT regulations that required employers to
justify any age-based distinctions in employee
benefit plans by showing a “substantial business
purpose.” Betts shifted the BURDEN OF PROOF to
the plaintiff to show that the disputed plan was
a “subterfuge” for discrimination.
Congressional response to Betts was a com-
promise between employee advocates and busi-
ness interests. A 1990 amendment to the ADEA,
known as the Older Workers Benefit Protection
Act (OWBPA) (29 U.S.C.A. § 626), prohibits
discrimination against older employees in the
provision of fringe benefits unless the benefit
differences are due to age-based differences in
cost.

Shortly after the Betts decision, the Supreme
Court relaxed the procedural rules governing
class actions alleging age discrimination, in
Hoffmann-LaRoche v. Sperling, 493 U.S. 165, 110
S. Ct. 482, 107 L. Ed. 2d 480 (1989). The Sperling
decision made it easier for plaintiffs to join a
CLASS ACTION suit against an employer after the
suit has been filed.

Waiver Controversy

During the late 1980s and early 1990s, busi-
nesses trying to survive in a sluggish economy
began reducing their workforces, a practice
known as downsizing. When layoffs or early
retirements affected older workers dispropor-
tionately, age discrimination claims escalated.
Many companies offered attractive early-
retirement packages in return for an employee’s
waiver of rights to any legal claims. During the
1980s, courts generally allowed such waivers as
long as the employee’s acceptance was knowing
and voluntary and the employee received valu-
able consideration in return. In Cirillo v. Arco
Chemical Co., 862 F.2d 448 (1988), for example,
the U.S. Court of Appeals for the Third Circuit
held that because the plaintiff had knowingly
and voluntarily signed a waiver of his right to
sue, and in return had received a higher-than-
average severance package, the waiver did not
violate the ADEA. Likewise, in Lancaster v.
Buerkle Buick Honda Co., 809 F.2d 539, cert.
denied, 482 U.S. 928, 107 S. Ct. 3212, 96 L. Ed. 2d
699 (1987), the U.S. Court of Appeals for the
Eighth Circuit found that the plaintiff, by virtue
of his years of business experience, was well
equipped to understand the waiver he signed.
Similar reasoning prevailed in Runyan v. National Cash Register Corp., 787 F.2d 1039 (6th Cir. 1986) (en banc), cert. denied, 479 U.S. 850,
107 S. Ct. 178, 93 L. Ed. 2d 114 (1986), where the
court upheld a waiver because the employee
who signed it was an experienced labor lawyer.

The ADEA specifically recognizes the validity
of waivers in the OWBPA, and establishes
strict guidelines for employers to follow in executing
them. The waiver must use simple,
understandable language that clearly delineates
the terms of the agreement and leaves no question
that the employee is giving up any right to
pursue a lawsuit (29 U.S.C.A. § 626[f]). Several
cases in 1993 and 1994 that invalidated waiver
agreements illustrate how important it is for an
employer to follow the guidelines to the letter.
Oberg v. Allied Van Lines, Inc., 11 F. 3d 679 (7th
Cir. 1993), held that a waiver agreement that did
not meet the requirements of the OWBPA was
void and could not be ratified even though the
employee accepted and retained the severance
package offered in exchange for the waiver. The
same reasoning applied to invalidate the waiver
agreement in Soliman v. Digital Equipment
Corp., 869 F. Supp. 65 (D. Mass. 1994).

The Supreme Court has also upheld that
employers must follow the letter of the law when
asking employees to waive their rights to file an
age discrimination complaint in return for severance
pay. In Oubre v. Entergy Operations, Inc.,
522 U.S. 422, 118 S.Ct. 838, 139 L.Ed.2d 849
(1998), the worker accepted a severance package
and signed a release that stated she would not
sue the company for any reason related to her
termination. She accepted the severance payments
but soon after filed an age discrimination
lawsuit. The company argued that the release
was valid and that she had not attempted to
return her severance payments.

The Supreme Court ruled that the company
had failed to meet the minimum notice requirements
set out in the OWBP. Specifically, the
employer had not given the worker enough time
to consider her options; it had failed to give her
seven days after she signed the release to change
her mind; and the release made no specific reference
to claims under the ADEA.

ADEA is Further Clarified

Several cases further clarified the application
of the ADEA. In Gilmer v. Interstate/Johnson
Lane Corp., 500 U.S. 20, 111 S. Ct. 1647, 114 L.
Ed. 2d 26 (1991), the Supreme Court upheld
compulsory ARBITRATION under the ADEA.
When Robert Gilmer was hired by Interstate/
Johnson Lane Corporation, he was required to
register with the New York Stock Exchange,
which compelled him to agree to arbitrate any
controversy regarding employment or termination.
He was fired at age 62 and filed a complaint
with the EEOC.He then filed an age discrimination
suit against Interstate, which moved to
compel arbitration of the dispute.
In a decision that seems to reflect the Court’s
growing encouragement of ALTERNATIVE DISPUTE
RESOLUTION, Justice BYRON R. WHITE dismissed
Gilmer’s arguments that compulsory
arbitration was inconsistent with the purposes
of the ADEA and that he was in an unequal bargaining
position with Interstate. The Court held
that an ADEA claim can be subjected to compulsory
arbitration without triggering any
“inherent conflict” with the ADEA’s underlying
purposes. The Court further pointed out that
Gilmer was a professional businessman who
signed the arbitration agreement voluntarily
and with full knowledge.

Federal and State Employees

Stevens v. Department of the Treasury, 500 U.S. 1, 111 S. Ct.
1562, 114 L. Ed. 2d 1 (1991), clarified the statutory
time limits for federal employees to file an
age discrimination claim. Charles Z. Stevens III,
an INTERNAL REVENUE SERVICE (IRS)
employee, filed an age discrimination complaint
with the IRS’s administrative unit. His complaint
was rejected because it had not been filed
within 30 days of the alleged discriminatory
conduct. His subsequent complaint filed with
the TREASURY DEPARTMENT was also dismissed,
and the EEOC affirmed that dismissal. Stevens
filed suit in U.S. district court, only to have his
suit dismissed on the ground that it was not
timely, a decision that was affirmed by the U.S.
Court of Appeals for the Fifth Circuit. The
Supreme Court disagreed with the lower courts’
interpretation of the statute and held that the
ADEA requires federal employees to give the
EEOC notice of intent to sue not less than 30
days before the suit is filed, rather than within 30
days, and within 180 days of the alleged discriminatory
conduct. These small but significant
clarifications of statutory interpretation made it
easier for federal employees to seek redress
under the ADEA.

The legal landscape for age discrimination
complaints became more challenging for plaintiffs
who work for state government after the
Supreme Court decided Kimel v. Florida Board of
Regents, 528 U.S. 62, 120 S.Ct. 631, 145 L.Ed.2d
522 (2000). In this case, a group of Florida university
professors and librarians who were over
40 alleged that the university system had failed to
adequately compensate them as compared to
younger employees. The plaintiffs sued under
the ADEA and a state CIVIL RIGHTS ACT.

The state of Florida, instead of litigating the
merits of the lawsuit, challenged the constitutionality
of the ADEA as applied to state governments.
It argued that under the ELEVENTH
AMENDMENT it was immune from federal age
discrimination lawsuits. Prior court decisions
had found that Congress had validly exercised
its power under the Constitution’s Article I
COMMERCE CLAUSE to enact the ADEA. However,
this power did not extend to lawsuits filed
by private individuals. Instead, Congress could
abrogate a state’s SOVEREIGN IMMUNITY by
invoking the FOURTEENTH AMENDMENT as its
authority.

The Supreme Court concluded that Congress
had not demonstrated that the Fourteenth
Amendment authorized the application of the
ADEA to state governments. States could lawfully
discriminate on the basis of age if the discrimination
is “rationally related to a legitimate
state interest.” In addition, the Court found no
facts in the record to show that Congress needed
to act against state governments for age discrimination.
In light of this ruling, state employees
must use state CIVIL RIGHTS laws involving age
discrimination to press their claims.

Hazen Paper v. Biggins

In 1993, the Supreme Court clarified the standards by which
a business decision will be found to be a “pretext”
for discrimination, and what conduct constitutes
“willful” violation of the ADEA. In
Hazen Paper Co. v. Biggins, 507 U.S. 604, 113 S.
Ct. 1701, 123 L. Ed. 2d 338 (1993), a 62-year-old
employee,Walter Biggins, sued his employer and
its two owners, alleging age discrimination in
the decision to fire him after almost ten years of
employment. Biggins sought relief by claiming
“disparate treatment” because of his age. In a
claim of disparate treatment, the employee must
prove that the employer intended to discriminate
against the employee based on an impermissible
criterion, his or her age. Biggins alleged
that, since the firing occurred just weeks before
his ten-year anniversary, when he would have
been fully vested in the company’s PENSION
plan, the dismissal was due to his age. The company
maintained that Biggins’s outside activities
created a risk of exposing trade secrets and that
his refusal to sign a nondisclosure, noncompetition
agreement prompted its decision to fire
him.

The Supreme Court attempted to address
several questions presented by the case. Did Biggins
prove a case of disparate treatment based
on age? Is discrimination based on pension status
necessarily equivalent to discrimination
based on age? What constitutes willfulness
under the ADEA?

On the first issue, the Court found that the
element of intent to discriminate because of age,
necessary to prove a claim of disparate treatment,
was absent. A decision to fire Biggins
because he was close to vesting in the pension
plan did not satisfy the proof requirements
because it was not motivated by the prohibited
presumptions about older workers, namely, that
they are less productive and less competent than
younger employees. Biggins failed to show that
these stereotypes “had a determinative influence”
on Hazen’s decision.

Next, the Court found that Biggins did not
prove that Hazen’s reason for terminating him
was a pretext for age discrimination. Justice SANDRA
DAY O’CONNOR, writing for a unanimous
Court, stated that “an employer does not violate
the ADEA just by interfering with an older
employee’s pension benefits that would have
vested by virtue of the employee’s years of service.”
The Court found that pension status is not
the same as age under the ADEA and that
employers may make business decisions based
on an employee’s years of service without necessarily
violating the ADEA. Biggins did prove that
his firing was a pretext for discrimination
because of his pension status. It did not follow,
however, that he was fired because of his age.
Age and pension status, according to the Court,
are “analytically distinct” factors in determining
a claim under the ADEA. The Court concluded
that proof of discrimination based on an
employee’s pension status is not, absent further
evidence, the legal equivalent of proof of discrimination
based on age.

Addressing the question of whether Hazen
acted willfully so as to incur LIQUIDATED DAMAGES
under the ADEA, the Court reaffirmed its
position that a violation is willful only if the
employer knew or showed reckless disregard for
whether its actions violated the act. Using this
test, the employer will not incur liquidated damages
if it makes an age-based decision that it
believes, in GOOD FAITH and nonrecklessly, is
permitted.

Biggins makes it more difficult for an ADEA
plaintiff to prevail. The plaintiff must now show
direct evidence of age discrimination. Indirect,
empirical correlations, such as pensions and
seniority, is not enough to prove the claim.

Reverse Age Discrimination?

Age discrimination is not limited to the
workplace, nor is it experienced only by those
over age 40. In 1994, the state of New York successfully
sued five car rental agencies for refusing
to rent vehicles to licensed drivers between the
ages of 18 and 25 (People by Koppell v. Alamo
Rent A Car, Inc., 162 Misc. 2d 636, 620 N.Y.S.2d
695 [1994]). A few months earlier, New York
City had become the first city in the United
States to prohibit discrimination against the
young in public places; a violation of the new
law could bring a fine of up to $100,000.

In January 1994, coverage of the ADEA was
extended to tenured faculty at COLLEGES AND UNIVERSITIES.
The result was that many tenured professors
continued to teach after the age of 70, the
typical mandatory retirement age before ADEA.
With enrollments shrinking and fewer faculty
positions opening up, younger people found it
more and more difficult to obtain teaching positions
in higher education, raising the specter of
a “reverse discrimination” challenge.

FURTHER READINGS
Beyer, James R. 1993. “Biggins Leaves ADEA Issues Unresolved.”
National Law Journal (July 19).

Bodensteiner, Jill R. 1994. “Post OWBPA Developments in
the Law Regarding Waivers to ADEA Claims.”Washington
University Journal of Urban and Contemporary Law
46 (summer).

Fick, Barbara. 1997. American Bar Association Guide to
Workplace Law. New York: Times Books.

Gregory, Raymond F. 2001. Age Discrimination in the American
Workplace: Old at a Young Age. Piscataway, N.J.:
Rutgers Univ. Press.

Johns, Roger J., Jr. 1994. “Proving Pretext and Willfulness in
Age Discrimination Cases after Hazen Paper Company v.
Biggins.” Labor Law Journal 45 (April).

Kulatz, Karen. 1993. “Trading Substantive Values for Procedural
Values: Compulsory Arbitration and the ADEA.”
University of Florida Journal of Law and Public Policy 5
(spring).

Lawrence, Emily J. 1992. “Clarifying the Timing Requirements
for Federal Employees’ Age Discrimination
Claims.” Boston College Law Review 33 (March).

Payton, Janet G. 2003. “Age Discrimination Checklist.” Corporate
Counsel’s Quarterly 19 (January).

CROSS-REFERENCES
Affirmative Action; Discrimination; Seniority.

Age Discrimination: Disparate Impact

In 1967 Congress passed the Age Discrimination
in Employment Act
(ADEA), which protects workers age 40
or older from employment discrimination
based on their age. Anyone who
employs 20 or more people is subject to
ADEA; it covers hiring, firing, compensation
and benefits, training, job assignments,
promotions, and layoffs.

Since ADEA’s passage, however, there
has been a difference of opinion
among legal experts about
exactly what types of action
constitute “discrimination.”

There are two different
approaches that a plaintiff may
take when filing an age discrimination
suit, “disparate
treatment” and “disparate impact.” In disparate
treatment cases, the plaintiff must
prove that there was a SPECIFIC INTENT
to discriminate based on age. An example
would be an employee whose supervisor
keeps saying in front of other staffers,
“Are you sure you’re still able to do this
work?” or “Don’t you think it’s time you
retired?” DISPARATE IMPACT cases
require the plaintiff to prove that an
employment decision disproportionately
affects members of a protected group (in
this case, those over 40). In other words,
in a disparate impact case, the discriminatory
effect is what matters, even if the
employer’s intent was not discriminatory.
Courts that recognize the disparate
impact argument in age discrimination
cases often require companies to prove
“business necessity.” For example, if a disproportionate
number of employees
affected by a layoff are over 40,
the company will have to prove
that those people were let go
because their salaries were disproportionately
high and that
the company would face financial
hardship if they were
allowed to stay on.

In other forms of employment discrimination,
the disparate impact argument
has been used successfully. For
example, employers who require
prospective employees to have a certain
educational background can be liable for
a disparate impact charge if it turns out
that those educational requirements rule
out certain racial groups. The case of
Griggs v. Duke Power, 401 U. S. 424, 88
P.U.R. 3d 90, 91 S. Ct. 849, 28 L. Ed. 2d
158 (1971) was the first RACIAL DISCRIMINATION
case to recognize disparate
impact. In age discrimination
cases, the issue is more vague. It is so
vague, in fact, that the U.S. federal circuit
courts do not agree about whether disparate
impact claims are allowable. The
First, Sixth, Seventh, Tenth, and Eleventh
Circuits do not allow disparate impact
claims; the Second, Eighth, and Ninth do.
The Third and Fifth Circuits had not
ruled on it as of 2003, and the Fourth
Circuit had not addressed it at all. In
December 2001 the U.S. Supreme Court
heard the case of Adams v. Florida Power
Corp, 535 U.S. 228, 122 S. Ct. 1290, 152 L.
Ed. 2d 345 (2002), in which the Eleventh
Circuit Court had ruled against the
plaintiffs’ disparate impact argument in
255 F. 3rd 1322 (11th Cir. 2001), citing
that it was “unavailable” for age discrimination
cases. The plaintiffs took the case
to the Supreme Court. The Eleventh Circuit
Court argued that age discrimination
is closer in scope to the Equal Pay
Act (for which the Supreme Court has
not allowed disparate impact claims)
than Title VII of the CIVIL RIGHTS ACT
(which covered Griggs and similar cases).

In April 2002 the Supreme Court dismissed
the case without discussing its
merits, stating only that the writ of certiorari
had been “improvidently granted.”
This outcome left the issue unresolved
judicially.

Proponents of disparate impact
claims for age discrimination cases argue
that employers should not be allowed to
make employment decisions that disproportionately
affect those over 40. In support
of their position they point to
employers who try to get around the
claims so that they can demote or lay off
their older workers. Often, those older
workers are among the most highly paid
and have the most expensive benefits in
the company. From the company’s point
of view, getting rid of such an expensive
workforce in favor of a younger and
cheaper staff can generate significant savings,
which is the reason the company
will give for laying off a disproportionate
number of older workers during a round
of cost-cutting measures. This, say proponents
of disparate impact claims, is
clearly age discrimination because it singles
out people over a certain age. The
fact that a company uses cost savings or
some other reason for taking the action
does not diminish the adverse impact
that action has on older workers.

Opponents of age-based disparate
impact claims use the same example to
make their case. The employer may
indeed have laid off older workers to save
money. But saving money is not the same
as practicing age discrimination. From a
business perspective, the employer has a
legitimate financial concern for the
future of the company. The fact that a
particular action affects one group more
than another is not adequate ground for
protection in such cases, say those who
oppose the disparate impact claim. If a
company’s only viable options are laying
off high-salary employees or closing, it
does not have the luxury of protecting
workers who are over 40.

It should be noted that opponents of
the disparate argument are not necessarily
opposed to protection against age discrimination.
The U.S. CHAMBER OF
COMMERCE, which has filed amicus
briefs in such cases on numerous occasions,
has stated its position clearly:
“Reliance on age stereotypes about the
abilities of older workers should not be
tolerated. Due to natural job progression,
however, age affects job terms such as
compensation, PENSION, and seniority.
In this context . . . imposing a burden on
employers to justify the business necessity
of routine and uniform job standards
that statistically impact older workers is
unjustified.” Few would argue that
employers should be forced to tolerate
poor workers simply because they are
past a certain age. The question is
whether disparate impact actually forces
them to do so.

Both sides of the debate may need to
keep in mind that each case is unique.
There is no doubt that some companies
have legitimate financial difficulties and
may be forced to lay off a disproportionate
number of older workers. A company
that does so and then makes do with
fewer staffers is not the same as a company
that turns around and hires younger
people at salaries comparable to what the
older workers were making. Likewise, an
employee who is demoted because his or
her work has measurably deteriorated in
quality is different from an employee
who is demoted for some vague reason
upon reaching age 40 or 50.

FURTHER READINGS
Falk, Ursula Adler, and Gerhard Falk. 1997.
Ageism, the Aged, and Aging in America:
On Being Old in an Alienated Society.
Springfield, Ill.: Charles C. Thomas.
Posner, Richard A. 1995. Aging and Old Age.
Chicago: Univ. of Chicago Press.

CROSS-REFERENCES
Civil Rights Acts.