Age-bias claims rise as some firms try to save money by axing older workers. Are you a target?
EDITOR'S NOTE: This article was originally published in the May 2009 issue of Kiplinger's Retirement Report. To subscribe, click here.
You deliver a stellar job performance, but your employer gives a younger co-worker a promotion. Or, even worse, the boss hands you a pink slip. You may wonder if your age is a factor. And it's possible that it is.
As the recession pummels older workers, a record number are charging employers with age discrimination. About 24,600 age-bias claims were filed with the federal Equal Employment Opportunity Commission in the year ending September 30, 2008, up 29% from the 19,103 claims filed a year earlier.
"Older workers could be targeted because they have the highest salaries and the most-lucrative benefits," says David Grinberg, EEOC spokesman. "Employers may think they could get rid of older workers and bring in younger, less-experienced workers to save money, without realizing that could constitute age discrimination."
EEOC filings may be only the tip of the age-bias iceberg. A survey in October by Gray Hair Management, a career-coaching firm, found that 80% of executives believed there is moderate to severe age discrimination in the U.S. workplace.
Job losses due to age bias could not come at a worse time for older workers. As retirement nest eggs shrink, an increasing number of older employees say they want to stay in the workforce as long as possible.
The rise in age discrimination -- or at least in the belief among older workers that it's more prevalent -- is due in part to the recession, says David Opton, chief executive officer of ExecuNet, a job-search site for executives. "There are a lot more people who are competing for fewer jobs, and there are many people who feel that they were either laid off or not hired because of their age," he says.
If You Think You're a Target
The federal Age Discrimination in Employment Act of 1967 prohibits employers with 20 or more employees from discriminating against workers and job applicants who are 40 and older. The law applies to hiring, firing, promotion, layoffs, pay, benefits, job assignments and training.
Proving age discrimination is difficult. If you're denied training or if you're getting paid less than a younger person, you have to prove that the employer took the action in part because of your age.
Laurie McCann, senior attorney with AARP Foundation Litigation, recommends keeping a journal of comments or incidents. She says it would be relatively easy to establish discrimination if an employer fired older workers after making such comments as "Let's get rid of everyone over 50" or "We have too many old people around here."
However, employers typically know better than to make such blatant comments, says Christopher Mackaronis, a lawyer with Brickfield, Burchette, Ritts & Stone, in Washington, D.C. "Offensive comments are home runs, but they're hard to come by," he says.
And a gut feeling isn't enough to prove age discrimination. "It can be so subtle that you can't prove it," says Bob Skladany, a vice-president at RetirementJobs.com, a job-search site. An employer could argue that your layoff was purely a business decision, he says.
You may have a case if a company lays off everyone over a certain salary amount, and they all happen to be older workers. You could claim "disparate impact," which argues even if the employer did not intend to discriminate, the effect of the action was illegal, says Mackaronis. For instance, if 100 people are laid off and 70% are over age 50, that could reflect age bias.
Employees who receive a severance package as part of a group layoff should take a close look at information that employers are required to hand over under federal law. Employers that terminate two or more people must provide the workers with a list of all positions that were considered for the cut, plus the positions and ages of workers who were let go.
To get the severance package, you must sign a release stating that you won't sue your employer. "Don't sign the release until you review the list and speak with an attorney," says Mackaronis. "If you look at the list, and a majority of people are over 40 or 50, then you may want to take the next step" -- filing a complaint with EEOC.
If you're still employed, first consider filing a complaint with the human-resources department. That may lead to a satisfactory conclusion.
You can file a claim with the EEOC if your complaint is not resolved internally. Go to www.eeoc.gov, click "Age" and pull up "How to File a Charge of Employment Discrimination."
The EEOC will investigate your claim. But don't expect your charge to make it to court. Of the nearly 24,600 claims filed with the EEOC in 2008, the agency filed only 38 lawsuits. Many times, the agency concludes there's no bias. When the EEOC decides that discrimination has taken place, says EEOC's Grinberg, "the overwhelming majority of employers reach settlements" -- to the tune of $83 million in the year ending September 30, 2008.
If the EEOC takes up your case, it'll provide its own lawyer. But whether or not the EEOC decides to proceed, you can hire your own lawyer to pursue the case in federal court. Or you could file a suit in state court if your state has its own anti-discrimination law.
Be Careful If You're Still Employed
Half of age-bias cases involve terminations or layoffs, according to the EEOC. Mackaronis says that a non-layoff case could involve a company that gives smaller raises to senior employees and higher raises to younger ones. "The employer is assuming the older, more-senior employee has nowhere to go, so it doesn't have to try to retain them," he says.
But Mackaronis usually advises clients against filing lawsuits or EEOC claims against current employers. Generally, he says, "it runs the risk of irreparable damage to the employment relationship." However, if you're still employed and file a claim, your employer cannot fire you while the matter is pending, he says.
One EEOC lawsuit ended last October when the commission reached a settlement with Nassau County on Long Island, N.Y. The police department and county government agreed to pay four police officers $450,000, according to a pending consent decree filed in U.S. District Court.
The EEOC and the officers contended that in 2006 the police department transferred the four men, ranging in age from 53 to 60, from the prestigious Marine Bureau into less-desirable precincts. Arthur D'Alessandro, one of the four, said in an interview that Marine Bureau officers ride in boats and monitor the beaches and boaters. In standard precincts, he says, officers drive patrol cars and the job requires less experience. D'Alessandro, who was 58 at the time, also says the four would have lost overtime pay. He learned that he and the three others would be replaced with younger, less-experienced officers.
After trying unsuccessfully to go up the chain of command, D'Alessandro filed an EEOC complaint. Two employees, including D'Alessandro, were returned to their Marine Bureau jobs late last year. The other two remained in retirement. "It is a young man's job when you're on the street, but experience is valuable in my position," he says.
Barbara Van Riper, deputy Nassau County attorney, says the transfers were lateral moves and "were not related to age. They were due to staffing issues and performance."
Such lawsuits are likely to become more common as the recession continues, says Elizabeth Grossman, an EEOC lawyer who represented the four officers. "We will be seeing more and more litigations resulting from reductions in force," she says.
Last May, Grossman filed a lawsuit representing four workers who were terminated from a photo-processing facility in East Hartford, Conn., owned by Qualex Inc., a subsidiary of Eastman Kodak. According to the suit, the average age of those who lost their jobs in a reduction in force was over 50 and "far exceeded" the average age of those who remained.
In a March consent decree (in which Qualex and Kodak did not admit wrongdoing), the company agreed to pay the workers $272,000 and conduct anti-discrimination training for managers.
You can take some steps to reduce the odds that you'll be the victim of age bias on the job. Skladany recommends that older workers volunteer for additional assignments. Make sure you show proficiency with computers. Also, he says: "Maintain the highest level of health and fitness possible. Managers and employers believe that fit people are more productive."
Skladany suggests that older employees ask about helping younger workers. "Becoming a mentor is a unique way that an older worker can bring value to the company," he says. Also, conduct in-house training sessions, which allow you to share your expertise with co-workers.
Learn about the damages available if you win a lawsuit for age discrimination.
The federal Age Discrimination in Employment Act of 1967 (ADEA) prohibits employers from discriminating against employees or job applicants based on age, if they are at least 40 years old. Under the ADEA, no employer may discriminate based on age with respect to any term, condition, or privilege of employment — including, but not limited to, hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training. The ADEA applies to private employers with 20 or more employees. It also applies to employment agencies and to labor organizations. State and local governments are also covered by the ADEA, although state employees may not sue the state for discrimination under the ADEA.
Filing an ADEA Lawsuit
If you want to sue your employer for age discrimination, you must first file a charge of discrimination at the Equal Employment Opportunity Commission (EEOC), the federal agency responsible for interpreting and enforcing the laws prohibiting discrimination, or with a state fair employment practices agency. Filing an administrative charge is a prerequisite for filing a lawsuit.
Once you file your charge, the agency may choose to investigate your claims, try to settle the case with your employer, or litigate the case. It may also decide not to pursue your claims, in which case it will issue you a "right to sue" letter, explaining that you have met the charge-filing requirement and may file a lawsuit. (If you know you want to file a lawsuit and aren't interested in allowing the agency to pursue your claims, you may request a right to sue letter at any time.) Once you receive the letter, you have 90 days to file a lawsuit under the ADEA. That's just one reason why it's a good idea to have an attorney represent you when you file charges with the agency: The attorney will be ready to move quickly to protect your rights once the letter is issued.
Damages Available Under the ADEA
If a court finds that an employer has violated the ADEA, the employer may be ordered to do any or all of the following:
- Pay the employee all wages, benefits, and other forms of compensation lost as a result of the discrimination (this is called "back pay").
- Take action to remedy the effects of the discrimination by, for example, reinstating or promoting the employee. If the court finds that such an action is warranted but impractical (for example, if the working relationship is damaged beyond repair), it may require the employer to pay front pay -- compensation for future earnings lost -- instead.
- Pay a penalty (called "liquidated damages") equal to the total back pay award, if the employer know that its conduct was illegal or displayed reckless disregard as to whether its conduct violated the law.
- Pay the employee's court costs and attorney fees.
Damages for pain and suffering, emotional distress, and similar injuries are not available under the ADEA. Nor are punitive damages, except in the form of liquidated damages, discussed above.
Damages Available Under State Law
Although the damages an employee can be awarded under the ADEA are limited, not all states that prohibit age discrimination follow the same rules. You may be entitled to punitive damages and/or damages for emotional distress in your state. Because these two categories of damages often make up the largest part of a monetary award, you should certainly find out whether they might be available to you.
Consult an Attorney
If you are considering filing a charge of age discrimination, you should consult with an experienced employment lawyer. A lawyer can help you assess your claims and decide whether it makes sense to sue. A lawyer can also help you with every step of the process, from trying to settle your claims informally to filing a charge, filing a lawsuit, and trying your case in court.