by John Phillips
Recently, a piece I heard on NPR’s Morning Edition, “Does Business Innovation Depend on a CEO’s Age?”, while driving to work caused me to swerve from one lane to another. Fortunately, my swerve didn’t result in an accident, but it did ignite a cacophony of horns.
The NPR report dealt with new research by MIT concerning the role of age in the disruption of business (Young, Restless and Creative – Department of Economics). The research views business disruption as a good thing. It’s the key to innovation, which, in today’s business, is the shovel for hidden treasure.
Young employees drive innovation
One indicator of a company’s innovation is the number of patents it has or regularly files. According to the MIT research, almost all patents that cause disruption are prepared or filed by young innovators.
The MIT researchers assume (quite correctly, I would say) that innovative technology is increasingly necessary for the success of any business and that younger executives and managers are much more likely to embrace new technology or create it than older ones who drag around a lot of baggage. Indeed, the MIT researchers assert that their research proves it. Moreover, their scholarly inquiry allows that a meritocratic organization is much more likely than a hierarchical organization to hire a youthful computer whiz and quickly move him or her up in the organization (assuming whizness is corroborated by the employee’s work).
As an employment lawyer and an older guy, I was somewhat taken aback by such a bold report. It’s true that most honest folks would say, even if off the record, that young people are far more talented when it comes to innovative technology. Although such a claim may be correct, some would argue it sounds like spurious, stereotypical baloney that no court would accept as a defense to an age discrimination claim.
Youth as a BFOQ?
One defense to an age discrimination claim under the Age Discrimination in Employment Act (ADEA) is that it’s appropriate for an employer to take age into account if “age is a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the particular business.” I’m skeptical that most employers list the disruption of business (even as defined by the MIT research) as reasonably necessary to the normal operation of their particular business. It’s still unclear under the ADEA what is meant by “normal operation” or “particular business.” Perhaps a company that exists to find innovative disruption to share with or sell to other companies of any type could show that consideration of age is reasonably necessary for the normal operation of its particular business. But would a manufacturer of floor covering, let’s say, have the same defense—even though it has its own innovative destruction department?
But remember—MIT’s researchers say they have proof that age is a critical factor for essential innovative disruption in any business. The proof is contained in a 41-page research report filled with statistical models, quadratic equations, logarithms, and heaven knows what else—followed by 10 pages of statistical tables. In addition to reminding me why I would have never been accepted to MIT, the report perhaps presents a good foundation for the proof needed, if one of the researchers could translate the report into something understandable for normal people. What the report purports to show is that age is a necessary factor in doing the disruption any kind of business needs today to keep up with or stay ahead of competitors.
The ADEA, as enacted in 1967, made it unlawful for employers to use age as a reason for discriminating against employees or applicants who were between the ages of 40 and 65. In 1978, the upper age limit was changed from 65 to 70. In 1987, the upper limit was eliminated altogether so that anyone over the age of 40 is in the protected age group. In 1990, the Older Workers Benefit Protection Act was enacted, prohibiting employers from denying or limiting benefits to older employees because of age and providing strict requirements for waivers of age discrimination claims usually found in severance or separation agreements.
The year 1967 was a long time ago, as is true with 1978, 1987, and even 1990. Technology existed but not in the way it does today. Now, many businesses need a team of technological superstars to be innovative or disruptive or whatever the next buzzword is.
Time to update old laws
I have thought for some time that the ADEA is flawed. I understand the good intentions behind it, but to say that age can’t be taken into account except in unusual situations is unrealistic. As we age, we can’t do what we could do earlier in our lives. And most of the time, age will adversely affect the performance of most jobs. As technology continues to move quickly and take over the world, the adverse impact of age is truer with each passing year.
I’m well aware that the ADEA isn’t going to be repealed. Even making some significant modern-day changes is unlikely to get anywhere with Congress. The MIT research is a good place to begin a serious conversation about our increasing competitive disadvantage with other countries, many of which have no discrimination laws at all. I’m not advocating the abolition of our discrimination laws. I’m suggesting that some of those laws need considered, reasonable modifications.
John B. Phillips has practiced employment and business law for almost 40 years. While he has been in private practice for most of his career, he has also served as VP and Deputy General Counsel for Labor and Employment with Coca-Cola Enterprises and Senior VP and General Counsel with CraftWorks Restaurants and Breweries. He now consults with various companies and organizations concerning HR, business and leadership-related issues. He is also Of Counsel with Miller & Martin. He can be reached at firstname.lastname@example.org.