These days, it seems any time you terminate a worker 40 or over, you risk being hit with an age bias lawsuit. And, if you haven’t handled the termination by the book, you could get hammered with a big judgment. A recent steep arbitration award to an older employee who claimed he was illegally pressured to retire, and then fired, highlights how important it is that your employment practices are in order.
Employee’s Job Promised To Younger Worker
The case involved Herbert Needles, 64, who worked for the 1928 Jewelry Co. in Los Angeles. After Needles had been a plating manager for six years, a new employee, 30-year-old Michael Golas, was hired as his assistant. According to Needles’ attorney, the company president told Golas he would get Needles’ job in three years after he retired-but Needles had no plans to retire.
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New Manager Harasses Older Worker
About three years later, Thomas Ahearn became Needles’ supervisor. Needles’ lawyer told CEA that over the next three months Ahearn called Needles an “old man” and “old timer,” criticized him for being too rigid, humiliated him in front of co-workers for coloring his gray hair and joked about his age over the company public address system. Ahearn also allegedly told Needles that Golas was the “future of the company.”
Employee Transferred, Then Fired
Needles was then abruptly transferred to a new department where he had no experience, and Golas was promoted into Needles’ old job. A few days later, Ahearn accused Needles of making a costly mistake in his new position. Needles complained to human resources that the error wasn’t his fault and that Ahearn was harassing him. But no investigation was conducted, and Needles-after nine years with the company-was fired.
Case Sent To Arbitration
Needles sued for age discrimination. The company, however, convinced the court that the case should be arbitrated, based on a mandatory arbitration provision in an employee handbook.
During the arbitration hearing, Needles claimed that the company illegally pressured him to retire by harassing him and transferring him to a position he wasn’t qualified for, so that it could give his job to the younger employee.
He also argued that Ahearn knew he wasn’t responsible for the error that led to his termination, and that younger workers who had committed more serious infractions weren’t punished as harshly. And, the company allegedly failed to investigate his complaint about Ahearn even though several older workers complained he had mistreated them, too. Lastly, Needles contended the company destroyed important documents, including his positive performance reviews from prior years.
The employer denied Needles’ claims and said he was terminated for poor performance. According to Needles’ attorney, the company responded that it didn’t know what happened to the missing performance reviews. 1928 Jewelry declined to comment on the case.
The arbitrator ruled in Needles’ favor. He was awarded a whopping $1.64 million, including over $770,000 in punitive damages and $220,000 to cover his attorneys’ fees.
What You Should-And Shouldn’t-Do
This case is a textbook example of how not to handle an older worker. Here are some important do’s and don’ts:
- Do use caution. Be extremely careful before terminating a long-term employee with a good performance history who is in a protected class (such as workers age 40 or over, women, minorities and people with disabilities). Before acting, it’s critical to provide counseling and a reasonable opportunity for the person to improve. Plus, scrupulously document all performance problems.
- Do be consistent. In many employ- ment termination lawsuits, even if the relationship appears to be at-will, a jury (or even an arbitrator) is likely to scrutinize your actions and judge whether they were fair and consistent with how the company treated other employees. If not-as in the Needles case where younger workers may not have been disciplined as severely as older employees-be prepared to show legitimate business reasons for the different treatment.
- Don’t tolerate age-based comments. Caution all employees that insensitive remarks-such as a condescending reference to someone as “old timer,” making fun of an older worker’s appearance (like gray hair) or commenting that younger workers are the wave of the future-are illegal. These comments can spell disaster if someone files an age bias claim.