Bar News - April 19, 2017
Labor & Employment Law: Federal Age Discrimination Law Turns 50
By: Beth Rattigan
This year marks the 50th anniversary of the Age Discrimination in Employment Act (ADEA), which makes it a good time to reflect on the effect this law has had on the workplace. In December 1967, the ADEA was passed by Congress and signed into law by President Lyndon Johnson to protect workers between the ages of 40 and 70 from discrimination.
In 1986, the ADEA was amended to eliminate the upper age limit and, in 1990, the law was amended again by the Older Workers Benefit Protection Act (OWBPA) which requires mandatory provisions in release agreements to protect older workers from uninformed waivers of age discrimination claims.
The ADEA was enacted on the basis of congressional findings that older workers had been denied equal employment opportunities due to their age. According to testimony before the Senate General Subcommittee on Labor and Public Welfare, applicants over 55 years of age were barred from half of all job openings in the private sector in 1964. Workers over 45 were barred from a quarter of these jobs, and workers over 65 were barred from almost all of them.
By contrast, today, individuals are living longer and working longer. For example, the Bureau of Labor Statistics reports that in 2016, 18.3 percent of American 65 and older – nearly 9 million people – were employed full time or part time. And nearly twice as many workers aged 65 and over were employed in 2015 than teenage workers (8.4 million vs. 4.7 million). The baby-boom generation, who are now between the ages of 53 and 71, remain a large part of the United States workforce and many are opting to delay retirement to continue working long past the historically popular retirement ages.
This change in the statistics since 1967 seems to indicate that the ADEA has been successful in reversing discrimination against older workers. However, age discrimination claim data compiled by the Equal Employment Opportunity Commission (EEOC) tells a different story.
High Incidence of Age Discrimination Claims in NH
Although US Census Bureau statistics projected that in 2016 the millennial generation would surpass the baby-boom generation as the largest population group, baby boomers have enjoyed the majority status in the workforce for decades.. As a result of this majority status, and a culture that gave rise to the now overused phrase, “50 is the new 40,” one might expect a decline in age discrimination claims. Unfortunately, that is not the case. While there has been some reduction in the volume of age discrimination claims nationally, age claims continue to make up a large portion of the claims filed with the EEOC, particularly in New Hampshire.
Nationally, age claims are still the fifth-most common type of claim filed overall at the EEOC. According to the commission, in 2016, age claims constituted 22.8 percent of all EEOC claims nationally, down from 25.8 percent in 2006. In New Hampshire, age claims filed with the EEOC make up 35.7 percent of all claims filed, making it the top basis for discrimination claims filed with the EEOC in 2016, second only to retaliation.
In addition to EEOC statistics, some studies show that applicants under 50 are more likely to be called back for an interview than those over 50. In a 2013 AARP survey, Staying Ahead of the Curve, 64 percent of respondent workers age 45 to 64 said they had seen or experienced age discrimination in the workplace. Some commentators have speculated that an unintended consequence of the ADEA is that businesses are worried about being sued and, therefore, do not hire older workers. Others have noted that because of the increased expense to employers of older workers, due to higher salaries, benefits, insurance rates, etc., businesses may be reluctant to hire older workers.
On the other hand, businesses depend upon the experience, essential knowledge and resources that senior workers bring to their businesses. The departure from the workplace of many older workers within a few short years is a succession-planning challenge for many employers. More broadly, the economy would come to a halt without the large population of workers over 40 in the workplace. Therefore, both individuals and businesses stand to gain when employment decisions are based on an evaluation of an individual’s productivity and contribution in the workplace, not the worker’s age.
Establishing an ADEA Claim
The development of case law under the ADEA has also had an effect on the ability to prevail in an age discrimination claim. ADEA claims can arise under a disparate-treatment or a disparate-impact theory.
Disparate treatment occurs when an employer intentionally discriminates against an employee or enacts a policy with the intent to affect the employee differently from others because of the employee’s age. Such disparate treatment claims require proof that the employer intended to discriminate against the complaining party when it took the challenged employment action. Intent may be shown directly (e.g., by discriminatory statements or behavior of a supervisor towards a subordinate) or by circumstantial evidence. Pursuant to a 2009 Supreme Court decision, plaintiffs must prove that age was the “but-for” cause of the adverse employment action, meaning that the employee must show that age was the deciding factor, rather than just one of several motivating factors, behind the employer’s action. See Gross v. FBL Financial Services Inc. (2009). This increases plaintiff’s burden in disparate treatment cases.
In contrast, disparate-impact claims do not require proof of discriminatory intent. In other words, even if a policy is facially neutral, if the application of the policy impacts older workers disproportionally, the policy may be deemed a violation of the ADEA. An employer can defend against such a claim by arguing that the challenged practice was based on reasonable factors other than age. It is the employer’s burden to prove that its action was in fact reasonable. See Meacham v. Knolls Atomic Power Laboratory (2008).
Additionally, despite the ADEA’s protection of employees over 40, employers should be aware that favoring employees in their 40s or 50s, to the detriment of those who are in their 60s or 70s may not protect an employer from an ADEA violation. The Third Circuit recently declared a split from other circuits when it held that employees over 50 who were disparately impacted in a reduction in force had a viable ADEA claim, notwithstanding the fact that many employees over 40 were retained. See Karlo et al v. Pittsburgh Glass (3d Cir. Jan. 10, 2017).
Changing Priorities in Washington
The new acting chair of the EEOC, Victoria Lipnic, noted the 50th anniversary of the ADEA, and suggested that her agency will focus on cases involving age discrimination, among other issues.
In her first public appearance since becoming acting chair, Lipnic stated “we will be doing a number of things related to [the ADEA]. It should get a high profile this year.” Notwithstanding this comment, given the Trump administration’s promise to reduce government programs and regulation, and the Republican-controlled Congress, it is unlikely that protections under the ADEA will be expanded any time soon.
Beth Rattigan is an employment lawyer and director with Downs Rachlin Martin in its Lebanon, NH, office.