We have a training program that involves five years of rotating assignments before employees are ready to really start the job. And it is a few years after that before they start to actually contribute significant profits. Because we have to invest so much in their training, can we have an age cutoff, such as not hiring people over age 50? If not, what can we do to ensure that new hires will work long enough to pay off our investment in them? — Parmat G., HR Manager in Sacramento
Both federal and California law prohibit age discrimination against employees who are age 40 and older. If a person can show that an employer decided not to hire or promote him or her because it preferred a younger applicant of equal or lesser capabilities for the position, he or she can prove and win an age discrimination claim. Even if the employer does not intend to discriminate based on age, an employee can still prevail on an age discrimination claim if the employer has a policy or makes a decision that adversely affects employees who are 40 or older disproportionately. Given this reality, establishing an age cutoff for a particular employment program or benefit is likely to invite an age discrimination lawsuit.
Defenses to Age Discrimination Claims
There are a few legal exceptions to the prohibition against age discrimination. In one, an employer is allowed to make decisions based on a “reasonable factor other than age.” Such factors could include seniority, experience, or prior training. An employer might defend a decision to reject an older applicant for a multiyear training program by showing that the person had planned to remain in the workforce or with the employer for only a short time. That could be hard to prove, however, and an employer that based its decision on an assumption rather than on a fact is not likely to win an age discrimination lawsuit.
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Other defenses that employers can use against an age discrimination claim include “business necessity” and “bona fide occupational qualification.” To use the business necessity defense, the employer must show that a neutral policy or practice is necessary for the safe and efficient operation of the business, that it effectively fulfills a business purpose, and that there is no less discriminatory practice that would accomplish the same purpose. The bona fide occupational qualification defense allows an employer to set an age cutoff for a particular job if the employer can establish that most individuals over that age would be unable to perform the job duties safely or that it would be impossible to test employees over the age cutoff to figure out if they were qualified. This defense is used most often for public safety positions. Neither of these defenses, however, is likely to aid an employer that sets an age cutoff to avoid training workers who may leave the workforce before contributing enough to justify the training.
Retaining Employees for the Long Haul
Setting an age cutoff for the training program would not necessarily even accomplish the goal of ensuring that employees remain long enough to pay off the company’s investment. Any employee—at any age—could choose to leave after completing the training program and put the company in the same circumstance. One way to protect against workers leaving before working long enough to recoup the cost of training them is to set up the compensation scheme to reward individuals who remain for a certain period of time. An employer could provide that employees who remain employed for a year (or some other period) after completing the training program earn a set bonus. The compensation structure could also be set up so that employees earn a fairly low salary during the training years and then get substantial increases each year after completing the training. This way, all employees have the same incentive to stay with the employer long enough to justify the years of training. Any such program should be reviewed with an employment lawyer to make sure that it does, in fact, reduce the risk of age discrimination or other claims associated with the program.
Sandra Rappaport, Esq., is a partner at the San Francisco office of the law firm Hanson Bridgett, LLP.
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