Age Discrimination Filings Jump During Recession

Highlighting what it says is the “devastating impact” of age discrimination, the U.S. Equal Employment Opportunity Commission (EEOC) held a public hearing on July 16 addressing recent developments under the Age Discrimination in Employment Act (ADEA), including the effect of widespread layoffs on older workers, threats to employee benefits, and recent controversial U.S. Supreme Court decisions.

The testimony at the hearing sent a clear message that the EEOC is gearing up to handle more age discrimination claims. Most alarming to the agency is the nearly 30 percent increase in age discrimination charges filed last year — exceeding all other types of bias claims. The numbers led Stuart J. Ishimaru, acting chair of the EEOC, to wonder aloud whether “the public generally realizes that age discrimination is illegal.” Acting vice chair Christine M. Griffin echoed that view, stating, “It’s fair to anticipate age discrimination charges will rise as the financial crisis plays out.” The following is a summary of what was discussed at the hearing and why you should take steps now to avoid what has been termed the “coming avalanche” of age discrimination claims.

Supreme Court Decisions

The EEOC expressed concern about recent U.S. Supreme Court decisions that have arguably weakened the ADEA. The EEOC panel suggested it was strongly considering issuing new regulations clarifying how the ADEA should be enforced in the wake of those decisions.

Last month, the Supreme Court ruled 5-4 in Gross v. FBL Financial Services that workers bear the burden of proving that age was the key factor in a demotion or layoff. That changed a long-standing interpretation of the law that called for workers to show that age was just one factor in the employment decision; the burden then shifted to the employer to prove there was a permissible reason for the action. In another 5-4 ruling last year, the Supreme Court held that Kentucky’s retirement system doesn’t discriminate against older workers, even though the system deprives employees older than 55 of certain benefits.

Illegal Stereotyping

After hearing testimony from several legal experts and victims of age discrimination, the panel noted the significant impact the recession has had on older workers in 2008 and 2009. Rising unemployment has left older workers vulnerable to layoffs because they are often stereotyped by employers as costing more money and being less adaptable to change.

The consensus was that age discrimination may be more pervasive in the United States than racial or gender stereotyping. “People who would not dream of making sexually provocative statements or using a racial epithet will think nothing of calling someone ‘grandpa’ or an ‘old mutt’ or ‘old bag,'” said Anna Park, an EEOC regional director.

Reducing Risk of Claims

You can reduce the risk of age discrimination claims in the workplace by being aware of how often it occurs. For instance, downsizing can have a disparate impact on older workers, and you should be aware of that possibility when making layoff decisions.

During a reduction in force, companies tend to look at positions that represent the most expensive salaries and benefits. The problem is those positions often belong to older workers — especially if your company has a pay scale based on automatic annual increases. One solution is to be proactive. Take a close look at your company’s job descriptions, and do a compensation analysis. Look at the responsibilities associated with each job, and pay attention to industry trends and standards related to those positions. In some cases, it may make sense to set maximum pay rates for certain jobs. Doing so prevents employees from earning above a set amount, regardless of their length of service.

Also, make sure you base layoff decisions on the need to eliminate certain positions, not specific people. If you make business decisions based on the position and not the person, you’ll keep yourself out of a lot of trouble.

Finally, don’t forget training. Make sure your managers and supervisors are well-trained in appropriate selection criteria when it comes to layoff decisions — especially if they are involved in identifying employees for layoffs. It’s important that management has a working knowledge of the law and EEOC regulations. The key is to minimize the impact on protected groups. That may mean looking at alternative solutions to prevent disparate impact on older workers or other employees who are covered under antidiscrimination laws.

Bottom Line

It’s not always easy to navigate the labyrinth of antidiscrimination laws, especially during economic downturns that call for layoffs and other tough decisions. However, there are reasonable steps you can and should take to minimize the risk of age discrimination complaints. In the long term, it will benefit both you and your older workers.