Employee Rights Short Takes: Age Discrimination Cases In The News

Here are two Short Takes about some interesting age discrimination cases that made the news this month:

Forced Retirement At Age 70 Is Illegal

Nini v. Mercer County Community College: Rose Nini was a Dean at Mercer Community College from 1982 until 2005 when her contract expired and was not renewed. She was 73 years old at the time.

According to Nini, the college President, Dr. Robert Rose:

  • complimented her on her performance but “made it very clear to [her] that he thought [she] had no right to be working at [her] age”
  • said that employees of her age were considering retirement and suggested she should consider taking early retirement too
  •  told her that people who have been in a job for twenty-five years "lose their effectiveness." 
  • told her that it was her last chance to get an early retirement and leave with dignity.
  • held meetings with department heads in which he made jokes about getting rid of older employees
  • held meetings where several people discussed “age and incompetence and being dead wood”

Nini also stated that she heard from another employee that College Human Relations Director Vanessa Wilson said the College had to "get rid of old-timers and bring in new blood."

The lower court granted judgment in favor of the college holding that the college did not violate the New Jersey Law Against Discrimination because the statute allows an employer to refuse to renew an employment contract of an employee over seventy years of age. The Court of Appeals reversed and the the New Jersey Supreme Court affirmed in an opinion issued on June 1st holding that refusing to renew contracts for employees over the age of 70 because of their age violates the New Jersey’s age discrimination laws.

In other words, the failure to renew a contract because of age is equivalent to a termination -- not a failure to hire --according to the New Jersey Supreme Court. This case is good news for the many employees who are employed with contracts that are renewed year to year, or at the end of a certain term, particularly in states with statutory exceptions in discrimination laws similar to New Jersey’s.

Employees Replaced By Younger Individuals Can Prove Age Discrimination In Workforce Reduction Case

Equal Employment Opportunity Commission v. Tin, Inc.:  The EEOC announced last week that Tin, Inc., a manufacturing plant in Glendale, Arizona will pay $250,000 to settle a discrimination case filed by three employees who claimed they were fired because of their age in violation of the Age Discrimination in Employment Act.(ADEA).

The settlement follows a Ninth Circuit Court of Appeals decision in October that reversed summary judgment in favor of Tin and sent the case back to the district Court for trial.

According to the opinion, one of the plaintiffs, Neal, was replaced by an individual 15 years younger as plant manager. The EEOC provided evidence that Neal never received a negative performance review and in fact was told by his supervisors that they were satisfied with his performance.

The company contended that Neal’s younger replacement was better qualified because a facility he had run was profitable.

Interestingly, the Court stated that “the fact that a facility was profitable under one manager and not another does not mean that the two managers qualifications differed.” In addition, according to the Court, there was little evidence of the replacement's success at the plants in question. Therefore, the Ninth Circuit held, the district court erred in granting summary judgment against Neal since material facts were in dispute.

The other two plaintiffs, McGraw and Vanecko, positions were terminated because their positions were eliminated according to Tin.  In order to establish an inference of discrimination in this type of case, the Court stated,  the plaintiff is entitled to show “that the employer had a continuing need for the employee’s skills and services in that his various duties were still being performed.”

The evidence showed that McGraw’s logistics manager duties were redistributed to the production manger and sales manager who were 20 and 23 years younger. It also showed that  Vanecko’ s plant controller duties were given to someone 24 years younger.

In addition, the EEOC presented evidence that the two supervisors with decision making authority over all three plaintiffs made comments from which a jury could find “that they harbored animus towards older workers.” Therefore, the Court concluded that the EEOC provided sufficient evidence from which a jury could find that age was the “but –for” cause of the terminations.

The opinion helps explain the kind of evidence that is useful in proving age discrimination in the often difficult cases of job elimination and workforce reduction.

EEOC Goes After AT&T On Class Action Age Discrimination Case

Age Discrimination Claimed For Failure to Rehire Former Employees

The Equal Employment Opportunity Commission (EEOC) had hearings last month on recent and alarming developments in age discrimination including the effect on older workers of widespread layoffs, threats to employee benefits, and controversial recent court decisions.

In keeping with its commitment to aggressively enforce the Age Discrimination in Employment Act (ADEA) the Commission announced on Thursday that it filed an age discrimination lawsuit against AT&T and a number of its subsidiaries.

A successful outcome, which is no doubt years away, would be a huge victory for older workers.

About The Case

AT&T, like many companies, offered various retirement incentive programs over the last few years, in order to reduce its workforce. In those types of programs, employees who meet the qualifications (usually a combination of age and years of service) are offered enhanced severance packages if they voluntarily leave the company.

Some of those employees later applied for openings at the company, but were not hired because they had previously participated in the program.

Since October of 2006, AT&T has maintained a policy which prohibited hiring employees who retired under these plans.

The suit maintains the AT&T’s no-hire policies have a disparate impact on employees and applicants for employment who are age 40 and over in violation of the ADEA.

The suit further maintains that AT&T has no legitimate reason or purpose for this policy.

Disparate Impact Lawsuits

Generally speaking, there are two types of employment discrimination cases involving protected classes (age, race, gender, national origin, religion, disability, veteran status) of individuals.

1. Disparate treatment cases:

  • involve proof that an individual was treated differently/discriminated against because of his/her protected characteristic
  • requires proof (with either direct or circumstantial evidence) of intentional discrimination

2. Disparate impact cases :

  • involve the company’s use of a neutral policy which adversely/more harshly affects a protected group
  • proof of intentional discrimination is not required
  • the plaintiff need only prove that the policy, while neutral on it’s face, has a disparate impact on a protected group when applied to current or prospective employees
  • employer must prove a legitimate business reason (a reasonable factor other than age) for the discriminatory policy

Disparate impact litigation was widely used in the 1970’s to combat race discrimination, particularly in the South. It has also been used to challenge various policies and practices which have adversely affected women in the workplace.

It wasn’t until fairly recently that the Supreme Court recognized the use of a disparate impact analysis as a way to prove age discrimination.

Therefore, there are very few cases on this topic, and none that I know of which has challenged a company’s policy of not hiring former  employees who accepted severance packages, voluntarily retired, and then later applied for open positions.

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Why EEOC Claims Are On The Rise

There have been a number of good articles this week which reported the Equal Employment Opportunity Commission's news that discrimination charges are on the rise. including the Workplace Prof Blog  the Connecticut Employment Law Blog,and The Wall Street Journal. There's also some debate as what these new statistics mean.

These are the statistics:

  • Overall discrimination charges are at a record high up 15%
  • Age discrimination charges are at a record high up 29%                               
  • Sex discrimination charges are up 14%                                                
  • Religious discrimination charges are up 14%
  • National Origin discrimination charges are up 13%
  • Race discrimination charges are up 11%
  • Disability discrimination charges are up 10%

I think it's pretty obvious that discrimination is going to occur in a time of economic distress.  When managers are given the opportunity to let people go, it is an opportunity to discriminate for:

  • younger managers who don't like or who are uncomfortable with the "old timers" and replace them with younger cheaper workers
  • men who think women should be at home instead of work
  • whites who don't like blacks and other minorities

I wrote about this topic last  week in an article about the hidden dangers of workforce reductions.  My opinion comes from thirty years of representing employees in discrimination claims and both proving and winning those cases.

Not surprisingly, those who represent managers have a different perspective. I just read an article on Job-Bias Claims Soaring  to Record Highs in 2008 which quoted a management lawyer with one of the top firms in the country.  His opinion was that there really is very little discrimination and that people are just looking for money:

Someone who has lost his job is in a very tough situation and may be looking for a number of avenues where he can replace revenue, said Gerald Hathaway, and employment lawyer with Littler Mendelson in New York.  But true victims of discrimination are rare.  Most commonly, someone files a claim thinking he's a victim of discrimination, but is not.

I had lunch a couple of weeks ago with a very well regarded insurance executive who handles discrimination claims nationwide and she sincerely expressed a similar view.

Obviously, there is a real difference of opinion.

Those of us who represent employees and have done so over time have seen the patterns of a spike in discrimination claims when downsizing takes place.  We have scrutinized the documentation, explanations, and business justifications for the decisions that have been made.  Often times the objective support for the termination decision simply does not exist.  In other cases we find that the particular manager has a history of racist, ageist, or sexist remarks, or that other minorities, women, or older workers were selected in disproportionate numbers by the same manager or management group.

Certainly there are some employees who believe that they were discriminated against when they were not.  Many do not understand what the term means or how discrimination is proven.   Many believe that they were treated unfairly, and perhaps they were, but an unfair decision is not necessarily a discriminatory one.  There is no doubt that some of the charges filed with the EEOC have no merit.

On the other hand, there is real discrimination that takes place in the workplace.  If these prejudices did not exist, there would be no need for civil rights laws to protect these groups.  These claims do rise in times of economic distress when people are being singled out for termination or layoff.The news from the EEOC this week is no surprise.

Certainly everyone is entitled to their opinion. But it seems to me the belief that little discrimination occurs, or that most of the claims have no merit, or that people are just looking for money  is a belief that may not fully appreciate the real prejudice which still exists and is patently manifested in  times of economic distress.  

Image: eeopreventionorpenalty.com

One More Reason Why We Need the Employee Free Choice Act

There a host of good reasons why the Employee Free Choice Act should pass. They are very well articulated in the AFL-CIO website and AFL-CIO Blog. There’s also a wealth of information on TheHuffington Post.

According to those reports:                                                                                    

  1. 60 million people say that they would join unions if they could
  2. An employee who helps to organize a union has 1 in 5 chance of being fired
  3. Three quarters of the public -- nearly 73% -- are in favor of giving employees a fair chance to organize without employer obstruction and interference

There’s also a good reason for the passage of the Act I would like to share as an individual who has been representing employees for over twenty-five years. It may be obvious, but it's not often articulated.

Time and time again I have seen cases where employees were either prevented from or strongly discouraged from organizing a union.  In some of those instances, employees were given handbooks which looked similar in many ways to union contracts as a substitute or an appeasement.

The handbooks contained provisions, employees were told, which would give them similar benefits and protections to what they would have if they formed a union. The handbooks contained provisions for progressive discipline, layoffs by seniority, bumping rights and more.  The employees believed that they were protected and secure.

But when the time for layoffs came, seniority provisions were routinely not followed. Older employees were let go with 25, 30, and 40 years of experience. Women and minorities were fired in disproportionate numbers.

When we sued and attempted to get the provisions of the handbooks enforced we were told: “That’s just a handbook. Those are just 'guidelines’. It’s not a contract so we, the employer are not bound by it and can make choices as we see fit."  Most judges went along with the corporations.  The employees had no protection.

The result in tough economic times is that many employees in their 50’s and 60’s  are let go while the younger, less experienced employees stay on. The older employees lose the only jobs they had ever had with little chance of finding any work and no chance of finding comparable work – too young for social security, not old enough for retirement benefits, no health benefits without income to pay for it – not a good situation for our country.

And it's not safe.  Sometimes the older experienced workers -- those who know what they're doing -- are let go while the young and inexperienced workers are either retained or hired in to replace them. In many plants, it's a dangerous situation both for the workers and the community in which they live. I know of a case pending right now involving a chemical plant which frighteningly presents that precise scenario.

So unions are important for many reasons. But for someone who has represented countless individuals in age discrimination cases, they are particularly important in times of workforce reductions so that rules of fairness and safety instead of subjective attitudes of discrimination serve to control the harsh decisions that must be made.

Image: www.americasolidarity.org

The Hidden Minefield of Workforce Reductons

There's sadly lots of news about workforce reductions.  There also seems to be lots discussion about  discrimination cases in the context of workforce reductions but as far as I am concerned, most of them are really missing the point.   

I have handled many discrimination cases over the years in times of recession. On most occasions, companies have downsized with the advice of many lawyers and consultants. Those companies appear to have been given the same or similar advice as  that which was given by an employment lawyer recently published in a National Law Journal article. 

It goes like this:

Successfully battling this "recessionary discrimination" requires the use of statistical analysis comparing the demographics of those laid off with those who are retained.

This is the way that advice is translated:

  1. Managers are given directives to downsize and cut costs in their departments by a certain percentage or certain number.
  2. Managers, armed with instructions on methodology, make the decisions about who should stay and who should go.
  3. Following the standard advice, overall statistics are then looked at to determine if there are a disproportionate number of women, minorities, or those over 40, who are on the targeted list.

If the statistics look good, the terminations are executed, and  the company thinks it's off the hook as far as it's exposure to discrimination lawsuits.

The problem is that while companies relying on this advice may be off the hook for large class action cases, they are not off the hook on the individual employment discrimination case.

For example, as often happens, the long term employee with a solid record of performance is selected while their much younger counterpart is not. There is no objective support for the decision and the company gets sued for age discrimination. 

In that circumstance the overall statistical data makes no difference whatsoever – not to me, not to my client, and not to the jury. What matters is: what justification did you have for terminating the 57 year old employee and keeping the 32 year old my client trained to do his job? If the explanation is not credible, more often than not, the company will lose.

It is an inescapable truth that when managers are given discretion to terminate employees, some bias may come into play – whether it’s getting rid of a woman, a minority, or an older employee for whom the manager has some prejudice.  A  workforce reduction gives that manager a chance to get rid of the disliked employee. This individual biased decision may not show up statistically, and statistical analysis is not going to get the company off the hook in those cases.

So companies beware. While it's certainly not bad advice, or the wrong advice to look at the overall statistics on a workforce reduction, it's not all that matters.