Navigating Age Discrimination Claims

Posted on April 16, 2019 in Compliance, Consulting

Age discrimination occupied my thoughts recently since turning 50 last month. I remember one of the first cases I worked on with my mentor in the practice of law. Man in his mid-40s claimed age discrimination against his Fortune 100 employer. I still recall my boss’s words: “This can’t be age discrimination, I’m older than him.” After 25 years of practicing law – odd to think now half my life – I understand why age discrimination claims are so difficult to defend and can offer my thoughts on how to avoid these challenging situations.

1. Change comes slowly

Most age discrimination claims are filed by long-term employees, and by the nature of having worked somewhere a long time, the employee typically has little (or no) documented disciplinary action. A new manager enters the picture. He wants quick results and sees himself as a change agent. He blames prior supervisors for never challenging the alleged inadequacies of the older worker. But the failure of no prior discipline means change comes slowly. Indeed, the employer and new boss must proceed with an attitude towards helping the employee succeed and not – as we too often hear – a campaign to paper the file.

2. Never encourage retirement

I often hear employers mistakenly speak of long-term employees who they want to put on a retirement plan. Or, people comment about establishing a company retirement age. However, federal and state law prohibits any form of mandatory retirement, except in the context of certain very well-defined public-sector jobs (e.g., firefighter). Employers should never talk with employees about “how long they plan to work” or “how many years do you think you still have in you.” Simply stated, an employee’s work-life longevity should not enter businesses plans unless the employee volunteers that information. A source of confusion stems from professional service firms set up as partnerships. Partners are not “employees”, and accordingly not covered by the Age Discrimination inml Employment Act (“ADEA”). Thus, a law firm can mandate that its partners (not employees) retire from partnership at a certain age. However, even this proposition has been challenged. In 2007, the EEOC entered a consent decree with the international firm of Sidley Austin that resulted in a $27.5 million payment to 32 firm partners allegedly forced to retire. See the EEOC Press Release:

3. Longevity = Severance

Most severance plans are structured with a lock-step progression and frequently capped out. These plans typical require execution of a release of claims in exchange for a payment. But a lock-step methodology might spend money unwisely. Severance plans should instead provide modest payouts for short tenured employees and weigh payouts more heavily towards long tenured (often older) employees. Older workers worry more about their next job and need more severance to be enticed to accept a release of claims.

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