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Lordy, Lordy, the Age Discrimination in Employment Act Turns 40

by Boyd A. Byers

Forty is a mystical number in many cultures. In ancient Babylonia, the number was known as kissatuin, meaning “the excellent quantity.” The great flood described in the Bible resulted from 40 days and 40 nights of rain. Forty is the only number, when spelled out in English, whose letters are in alphabetical order. And of course, 40 is the number of top songs Casey Kasem chronicled each week.

The number 40 is significant to HR professionals because it’s the age employees become protected by the Age Discrimination in Employment Act of 1967 (ADEA). This year, the ADEA turns 40. To mark the occasion, let’s take a stroll down memory lane and look back at some significant moments in the law’s life.

HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, including discrimination

Age Discrimination in Employment Act history
In 1967, hippies flocked to San Francisco during the Summer of Love. On the other side of the country, Congress passed the Age Discrimination in Employment Act (ADEA) to protect workers ages 40 to 65. Lawmakers’ primary concern was blatant age discrimination in hiring — about half of all private job openings expressly barred applicants over age 55, and one-fourth precluded those over age 45. Employees were commonly subject to mandatory retirement.

By 1978, disco reigned, and the Age Discrimination in Employment Act protection was extended through age 70. The upper age limit was eliminated in 1987, but there are limited exceptions. For example, executives can be subject to a mandatory retirement age of 65 or higher if they’re entitled to an annual retirement benefit of at least $44,000 per year and certain other criteria are met.

In 1990, Congress passed the Older Workers Benefit Protection Act (OWBPA), an amendment to the ADEA that prohibits employers from denying or limiting benefits to older employees because of age. The OWBPA also provides strict requirements that must be met for waivers of age discrimination claims to be valid and enforceable.

The U.S. Supreme Court decided several significant Age Discrimination in Employment Act cases from the 1990s to the 2000s:

  • A fired worker isn’t required to show that he was replaced by someone under 40 (1996).
  • The U.S. Constitution protects state government agencies from being sued under the ADEA (2000).
  • The ADEA doesn’t prohibit an employer from favoring older employees over younger workers when providing retiree health benefits, even if the younger workers are over 40 (2004). But state and local age discrimination laws may prohibit such a preference. New Jersey and Oregon have allowed claims of “reverse” age discrimination. Courts haven’t yet decided whether the Kansas Age Discrimination in Employment Act, which prohibits age discrimination against anyone age 18 or older, prohibits discrimination against younger employees.
  • The ADEA allows older workers to sue for age discrimination based on a “disparate impact” theory when an employer’s age-neutral policy, practice, or other employment action unintentionally discriminates against them. But if the employer can show its action was based on a reasonable factor other than age, it doesn’t violate the ADEA (2005).

A few months ago, a federal appeals court upheld proposed Equal Employment Opportunity Commission (EEOC) regulations that allow employers to reduce or eliminate retiree health benefits when retirees become eligible for Medicare or state-sponsored retiree health benefits. The AARP had sued to block the regulation.

State-by-state comparision of 50 employment laws in 50 states, including age discrimination

40-year-old version
So why the historical review of an old law? Perhaps my interest comes from the realization that I now have reached the Age Discrimination in Employment Act’s protected age classification — although partners in a law firm the size of mine generally aren’t considered “employees” under the ADEA.

Age discrimination will continue to be a hot issue as the workforce ages. Baby boomers make up over one-third of the U.S. workforce, and 79 percent of them say they don’t plan to stop working at age 65, although many intend to cut back on their hours. While the “working retired” may help with the impending labor shortage, many companies’ policies and benefit plans aren’t geared for that type of labor Boyd Byersforce.

He said it
How old would you be if you didn’t know how old you were?
— Satchel Paige

Boyd A. Byers is a partner with Foulston Siefkin LLP. You can contact him at(316) 291-9716.