As aging Boomers bear the brunt of employer cost-cutting and “right-sizing,” they are not uncommonly asked to waive their rights under the ADEA
By Paul Igasaki, IMDiversity.com Featured EEO Columnist
Those born in the couple decades after World War II are the Baby Boom, a significant bulge in America’s demographic that has altered educational, employment, commercial and health policy as they have aged. I myself am a Boomer, recently contacted by the American Association of Retired People as they recruit my generation to membership. Certainly this has already affected marketing and commercial targeting. The eldest Boomers are entering senior status, with their generational successors close behind. With the impact that Boomers have had on our society and the protections of the Age Discrimination in Employment Act (ADEA), one might suspect that discrimination against them would decrease as seniors become a growing proportion of the society.
Unfortunately, the reverse has been true. Coupled with changes in employment practices and economic shrinkage there has been an increase in workplace challenges facing older workers. This is due to several factors. First, older workers tend to be more expensive. Although on the average more experienced, they also generally have more health care costs and are nearing the point in many companies where they will be obtaining retirement and pension plan benefits. In addition, with the increase in the number of jobs requiring up-to-date training in fast-changing technology, there is a preference for those whose training is fresh. Finally, there is the prejudice — the very reason for the ADEA — that assumes older workers are less flexible and less energetic.
The ADEA added discrimination protection in employment to workers over the age of 40. It is not illegal to discriminate against someone for being “too young.” Neither is there protection for someone under age 40 who is passed over for someone younger. For those over 40, however, the bottom line of the ADEA is that an employer cannot discriminate against a person due to their age with respect to any term, condition or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments or training.
Age discrimination can occur in a variety of ways. It occurs in hiring, with older job applicants finding the doors harder to crack open. Hiring discrimination is hard to prove. Most employers who consider age in hiring know better than to indicate this explicitly. Certain comments might help one establish age discrimination, such as questions about potential retirement. Some positions are more dominated by the young, such as computer programming or website development. For many positions, the experience that typically comes with age may overcome some of these factors. But consider the case that the EEOC recently brought against a law firm for letting a senior partner go. While the legal issue focuses upon whether a partner is an employee per se, the fact that firms are relieving those who have long been the elite of the profession — the most senior partners — says a lot about our times and economic pressures.
When I traveled to Japan to teach about our laws, my trip was spurred by a major sexual harassment case. Yet, I was interested to find substantial change underway there in relation to age discrimination. They had traditionally allowed ads that would specify both the gender and the age of the worker sought. New laws banned sexual harassment and gender-specific ads, but age was still allowed — it is not uncommon to have jobs in which precise age ranges are listed. As technology is changing the balance in favor of younger workers, age discrimination laws are being discussed.
In the U.S., neither age- nor gender-specific ads are allowed except in those rare circumstances when the age is reasonably necessary for a non-discriminatory purpose. Strength or physical standards can be explicitly required without using age as a proxy. A dramatic role requiring an older actor, however, is an example of a position where use of age as a hiring criterion may be allowable. Consider, though, how many world-class actors or actresses have portrayed people much older or younger than themselves.
With disability, employers are barred from inquiring about such conditions except in circumstances where the applicant raises it. With age, employers are generally allowed to ask about age so long as it is not for discriminatory purposes. And if the information is collected, that could have a bearing later in determining whether discrimination was involved.
Apprenticeship or training programs are traditionally focused on younger workers, but the ADEA generally prohibits age discrimination in such programs. The same can be applied to training, internship or mentorship programs. Experience, current position and education are relevant, but age itself is not.
Perhaps the biggest area involving age discrimination has to do with layoffs and benefits. In 1990, the Older Workers Benefit Protection Act (OWBPA) prohibited companies from denying benefits to older employees. The law also gives some limited options to employers to provide lower benefits based on age so long as the cost of providing those benefits is at least the same as the cost for younger workers.
Today’s economy has resulted in companies adjusting their staff size and changing their workforce frequently. Since this is usually done in response to economic setbacks and the most expensive employees are generally older workers, more money can be saved by releasing staff with seniority that might be making higher wages, costing more in health benefits and, ultimately, closer to collecting pensions. In the wake of 9-11, I met with a manager who happened to be Arab American and feared that a recent layoff was due to his ethnicity. While it might have been, initial discussions in his case indicate it could also have been due to the fact that his pension in the company would vest in the coming months.
This is the fault line in age discrimination. Cutbacks for financial reasons are generally allowed. But isn’t an age defined layoff a violation on the ADEA? For a long time, courts have held that if a layoff or benefit cutback is done for financial reasons and age is not the motivation, it would be acceptable. Where a layoff affects older workers disproportionately, the company should be able to show that the motivation was economic. Evidence in cases such as these would be the criteria used for the decisions, as well as discussions by management about what their motivations were and whether there are examples indicating that the stated reasons for action were not borne out in individual cases. For example, there may be cases where an older employee would actually cost the company less than others not laid off, but was nevertheless included in the layoff.
It is not uncommon for companies now to ask employees to sign waivers of their rights under the ADEA. In other words, older workers may be asked to agree in advance not to assert their rights through the courts or administrative agencies, in exchange for an exit incentive program. The law will allow such waivers if they are “knowing and voluntary,” which is currently defined as: (1) Being in writing and understandable; (2) Specifically referring to rights under the ADEA; (3) Not waiving any rights or claims that may arise in the future; (4) Being made for valuable consideration, in other words, that the worker gets something for what they’re giving up; (5) Advising the worker to consult an attorney before signing the waiver; and (6) Providing at least 21 days to consider the agreement and seven days to revoke it even after signing.
The protections provided under the ADEA will continue to face definition from both federal and some state courts. As with the Americans with Disabilities Act, the ADEA has been more complicated than some other civil rights employment laws given the complexity of the court rulings on benefits, waivers, jurisdiction and allowable explanations for actions affecting older workers. But with the growing number of older workers and increasing, very large employment actions by companies, this will remain a very heavily litigated area.
As in other areas of diversity, we should try to remember the great resources that experienced workers can bring to bear on the jobs that they do. Some costs are indeed higher, but without that experience, the benefits of employment history will be lost and companies will be condemned to repeating past mistakes and losing potential opportunities. When I served as Vice Chair and Chair of the EEOC, my staff included both younger and older workers. As a Presidential appointee, however, I relied heavily on the experiences of past administrations of both parties to give our team a jump start that many new to the agency would not have had. Clearly, there is value to having new ideas, but without knowing what hasn’t worked in the past could be devastating. Discrimination rarely serves any institution well.
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