Tag Archives: Age Discrimination

Spoliation and the Dangers of Failing to Preserve Evidence

Contributed by Carlos Arévalo, September 12, 2017

In a case pending in the U.S. District Court for the Southern District of Florida, Equal Employment Opportunity Commission v. GMRI Inc., the EEOC recently argued that a restaurant chain acted in bad faith, and should be sanctioned for “spoliation” of evidence because, the EEOC claimed, it intentionally destroyed hiring data. It argued the destruction of evidence “prejudice[d] EEOC by opening the door for GMRI to attack EEOC’s statistical and anecdotal evidence, and to rely upon otherwise impermissible [defendant] favorable proxy data.”

investigate documents

Investigate and analyze magnifying glass and stack of documents

Among the allegedly destroyed evidence are emails the EEOC claimed would have established the fact that the managers for the defendant were instructed to hire “young.” In addition, the defendants are said to have intentionally shredded paper applications and interview booklets used for new restaurant openings that would have supported the EEOC’s allegations that the company had a pattern or practice of failing to hire applications over the age of 40. In response, GMRI argued that the EEOC is looking at sanctions because it has failed to find any evidence of age discrimination.

In a different case that has been pending in Colorado since 2010, the EEOC secured sanctions against an employer for its failure to produce records it claimed had been destroyed. In Equal Employment Opportunity Commission v. JBS USA LLC, the EEOC claimed that a meat-processing company failed to reasonably accommodate Muslim workers’ requests for prayer breaks. JBS asserted an undue burden affirmative defense throughout the case, arguing production line slowdowns and downtime would have been caused by allowing prayer breaks to Muslim employees. The EEOC sought discovery from JBS about its undue burden affirmative defense, specifically, all reports or data showing all dates and times the fabrication lines on any and all shifts were stopped, as well as the speed of the lines.

After years of maintaining these records were destroyed, JBS produced a number of reports it found in a warehouse; however, more records presumably stored in boxes at the warehouse could not be located. The Court sanctioned JBS for the loss or destruction of documents directly relevant to JBS’s allegations of undue hardship. The critical problem for JBS, as the Court noted, was the fact that JBS management knew “within a year” after downtime records were created that they were relevant to the EEOC investigation, yet still failed to set them aside for use in the litigation.

What is the lesson to be learned? 

EEOC v. GMRI Inc., teaches that the EEOC may claim spoliation and pursue sanctions against a defendant, even (or perhaps particularly) where the evidence does not readily support the EEOC’s allegations of discrimination. EEOC v. JBS USA, LLC provides an important lesson for businesses regarding the preservation of documents in ongoing litigation. As noted above, the critical problem for JBS was that JBS management knew downtime records were relevant yet still failed to preserve them.

Both cases illustrate the importance of immediately implementing Litigation Holds. Employers must, as a matter of course, establish appropriate procedures and work with staff, IT professionals, and legal counsel to ensure all relevant evidence is preserved.  Failure to preserve evidence may deprive defendant of an otherwise viable defense.

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.

Put the Odds In Your Favor: Understanding the EEOC’s Final Rule Under the ADEA

Contributed by Allison Chaplick

If you feel like a tribute in the arena every time the Equal Employment Opportunity Commission changes the game’s rules on you, you are not alone.  The best way to survive is to read and then add this blog to your quiver of arrows in understanding how the EEOC’s final rule amending the Age Discrimination in Employment Act applies to your decision making. 

In February, I let you know that the EEOC issued a draft final rule to amend certain ADEA regulations, including that the EEOC’s new regulations recognized the reasonable factors other than age (RFOA) affirmative defense instead of the business necessity affirmative defense. 

Well, guess what? The EEOC revised its final rule to clarify that the proposed final rule was never intended to place “significant burdens by requiring employers to meet all factors relevant to the RFOA determination.” Read the new rule here. Instead, the RFOA factors “are not required elements or duties, but considerations that are manifestly relevant to determining whether an employer demonstrates the RFOA defense.” 

The final rule also clarifies that the “reasonable factor other than age” is a non-age factor that is objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances.  If this sounds like the application of torts law to you, you get a silver parachute from your sponsors!  The final rule refers to tort law for guidance to determine what constitutes a “reasonable” factor other than age—what the employer knew about the harm and what it did to correct it.  Be aware that this “reasonable” standard test reflects a higher standard of proof, and thus the EEOC has effectively rejected the “rational-basis” test. 

But, there is good news: under the final rule, an employer does not need to perform a validity study to establish a RFOA defense to an employment test (e.g., a physical fitness test).  However, the final rule does emphasize the importance of defining a test’s employment criterion carefully and educating managers and supervisors on how to apply it fairly.

So, put the odds in your favor and good luck!

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.