Tag Archives: Age Discrimination in Employment Act of 1967

Seventh Circuit’s Rejection of Applicant’s Age Claim Does Not Mean Employers Are Off The Hook

Contributed by Noah A. Frank, February 11, 2019

book with chapter age discrimination and a gavel

On January 23, 2019, an en banc panel of the 7th Circuit Court of Appeals held that the Age Discrimination in Employment Act’s (ADEA) disparate impact protections do not apply to job applicants.    

By way of background, 58-year-old Dale Kleber applied for CareFusion’s posting seeking an attorney with “3 to 7 years (no more than 7 years) of relevant legal experience.” Kleber had more experience than that, but instead of hiring Kleber, CareFusion hired a 29-year-old within the given experience range. There are a few key takeaways from this decision:

First, an en banc decision means that all of the circuit’s judges that want to participate are able to consider the merits of the case. This is a sort of intermediary stage between the appellate court’s typical review of a case and the Supreme Court, and here it signals that the Seventh Circuit determined that significant legal issues were at stake. It does not, however, mean that the judges all came to the same conclusion.  Here, 12 of 14 judges participated in the en banc panel, and decided the case 8-to-4, reversing the initial 3-judge panel’s decision (that was decided 2-1) and affirming the trial court’s dismissal of the claim. 

Second, the holding is only as to disparate impact (i.e., facially neutral policies or conduct that have a negative consequence) claims for job applicants under the federal ADEA. ADEA’s disparate impact protections remain in place for current employees, and this does not eliminate any cause of action which may exist under state and local age discrimination laws!

Third, the court clearly stated that ADEA protects both applicants and employees from disparate treatment – e.g., intentional conduct based on age where the affected individual is 40-or-over. This means that advertising specifically seeking someone under the age of 40 (unless there is a bona fide occupational qualification (“BFOQ”) – a lesson for another day) will still likely run afoul of the law.

To avoid potentially violating ADEA in the application phase of employment, employers should take a few proactive measures. First, audit job postings and descriptions to ensure they are age-neutral unless an actual BFOQ exists. Second, update application forms to eliminate requests for birthdays and graduation/degree years (which tend to give a strong indication of age). Third, train anyone involved in the interviewing process on unlawful inquiries – not solely limited to age. And of course, seek the advice of legal counsel to avoid responding to charges of discrimination and even “professional plaintiff job applicants” claims.

What is the OWBPA Again and Why Should We Care? Here Is A Quick Refresher

Contributed by Suzanne Newcomb

The Older Workers Benefits Protection Act (OWBPA) amended the Age Discrimination in Employment Act (ADEA) back in 1990 to specifically permit bona fide seniority systems and voluntary early retirement incentive plans.  Along with these allowances, the OWBPA mandated strict requirements for ADEA waivers and disclosures for group termination.  The provisions are very technical and have tripped up many unsuspecting employers.

To be effective a waiver must be “knowing and voluntary.”  That sounds straightforward, but the statute specifically spells out what “knowing and voluntary” means in this context.  If the situation involves an isolated termination – a single employee terminated for cause or let go as a result of a restructuring that impacts his position alone – an ADEA waiver is not “knowing and voluntary unless at a minimum,” the waiver:

  • is in writing and written in a manner the individual can understand;
  • specifically refers to ADEA rights or claims;
  • does not waive rights or claims arising after the waiver is executed;
  • provides consideration over and above anything to which the individual is entitled already;
  • advises the individual in writing to consult with an attorney prior to executing the agreement (advising the individual has the right to consult with an attorney may not be sufficient);
  • allows the individual at least 21 days (45 in the case of group terminations addressed below) to consider the agreement before signing; and
  • allows the individual at least 7 days to revoke following execution of the agreement.

The statute tacks on additional requirements for waivers “requested in connection with an exit incentive or other employment termination program offered to a group or class of employees.”  Legislators complicated matters by failing to define the key terms in this phrase.  Relevant regulations and considerable case law interpret them broadly to encompass any situation in which two or more employees are terminated at or near the same time under similar circumstances or are offered incentives which stem from a standardized plan.

Whenever a release is offered in conjunction with a reduction in force involving more than one employee or other group terminations, the employer must follow each of the requirements set forth above and must also disclose:

  • the “decisional unit” or class, unit, or group of individuals covered by such program – in other words, the pool of employees from which the employer chose those who would be involuntarily terminated or offered an incentive to leave;
  • the eligibility factors used to determine who was selected for termination or offered an exit incentive;
  • any applicable time limits; and
  • job titles and ages of all eligible or selected individuals and all individuals in the same job unit who are not eligible or selected.

If you are implementing a RIF or thinking about offering severance to a departing employee in hope of avoiding potential litigation, you should consult qualified legal counsel first.  It is important to make sure the ADEA waiver contained in your release is enforceable.

The 10th Circuit Refuses to Extend the Lebdbetter Act To Age Discrimination Claim

Contributed by Allison Chaplick

On November 29, 2011, the Tenth Circuit issued a decision that impacts the application of the Lilly Ledbetter Fair Pay Act to the statutory limitations period for age discrimination claims.  In Almond, et al., v. Unified School District No. 501 (No. 10-3315), the court was asked to review a district court’s dismissal of two employees’ untimely claims that their demotions and subsequent salary reductions were motivated by age discrimination.  The employees filed charges of discrimination in 2006, even though they had been told in 2003 and 2004, respectively, that they were being demoted for budgetary reasons with a salary reduction to become effective in 2006.  So, the court was faced with interpreting when parties have to file “discrimination in compensation” claims pursuant to the Ledbetter Act.

Immediately, the court distinguished this case from “unequal pay for equal work” claims, like the one brought in the seminal Ledbetter case; what the plaintiffs were claiming in this case was that the school district’s decision to demote them was the “unlawful practice” and a new cause of action arose for limitations purposes every time they received a paycheck based upon the reduced salary.  According to the plaintiffs, the Ledbetter Act expanded the terms “unlawful practice” as used in §623(d)(3) of the  Age Descrimintation in Employment Act to include situations where an employer adopts a “discriminatory compensation decision or other practice” that relates to compensation.  The court did not agree with the plaintiffs’ expansive interpretation of the Ledbetter Act, and based its rejection on its own interpretation of the Act, the Act’s legislative history, other federal circuit courts’ decisions interpreting the terms “other practice” and “discrimination in compensation,” and even Justice Ginsburg’s dissenting opinion in the Ledbetter case.  The court thus focused not on which claims accrue under the Act, but on when those claims accrue. According to the court:

  • “compensation in discrimination” claims accrue for limitation purposes “when a discrimination in compensation decision or other practice” is “adopted” or “when” someone becomes “subject to” or “affected by” its application 
  • “other practices” discrimination claims accrue not only when the pay setting decision takes place but also when the discriminatory employment practices that result in compensation discrimination are “adopted” 

Based on its exhaustive analysis, the court held that §623(d)(3) governs the accrual of discrimination in compensation (i.e., unequal pay for equal work) claims in violation of §623(a)(1), and not the accrual of other cases alleging discriminatory hiring, firing, demotions, or transfers, and affirmed the district court’s dismissal.