Employment Discrimination Law: Age Discrimination

5/4/2023 1 EMPLOYMENT DISCRIMINATION LAW AGE DISCRIMINATION OVERVIEW  The Age Discrimination in Employment Act (ADEA) prohibits discrimination against employees or job applicants who are 40 or older because of their age.  Statistically, older workers continue to experience longer periods...

5/4/2023 1 EMPLOYMENT DISCRIMINATION LAW AGE DISCRIMINATION OVERVIEW  The Age Discrimination in Employment Act (ADEA) prohibits discrimination against employees or job applicants who are 40 or older because of their age.  Statistically, older workers continue to experience longer periods of unemployment than younger workers.  Further, age discrimination cases account for about 23% of all discrimination charges filed with the EEOC. OVERVIEW  The ADEA was enacted in 1967 and is not a part of Title VII.  The ADEA was made a part of the Fair Labor Standards Act (“FLSA”).  The ADEA applies to employers of 20 or more employees (compare to Title VII).  Under the FLSA, a successful plaintiff can recover liquidated damages (double back wages) if he/she proves it was a “willful violation” of the Act. ADEA & TITLE VII  Like the prohibitions found in Title VII, the prohibitions against age discrimination under the ADEA forbid discrimination in hiring, discharge, promotion, and other terms or conditions of employment.  The evidentiary and proof approach used in Title VII litigation is generally followed in ADEA litigation. ADEA & TITLE VII  However, there are important differences between the ADEA and Title VII.  The ADEA does not forbid employers from favoring older employees over younger ones.  Title VII, in contrast, generally recognizes “reverse discrimination” claims.  Note, however, that certain state antidiscrimination laws do recognize reverse age discrimination (not Texas). GROSS V. FBL FINANCIAL SERVICES, INC.  Factual summary?  Mixed motives case.  Did the majority hold that proving a mixed-motives case is different under Title VII than under the ADEA?  If so, what is the basis for the distinction? GROSS V. FBL FINANCIAL SERVICES, INC.  What must an ADEA plaintiff prove?  Does employer have any burden of proof?  Dissenting opinion? GROSS V. FBL FINANCIAL SERVICES, INC.  The U.S. Supreme Court held that the ultimate burden of proof under the ADEA is a stricter standard than Title VII, requiring the plaintiff to prove by a preponderance of the evidence 1 2 3 4 5 6 7 8 2 3 4 5 6 7 8 5/4/2023 2 standard than Title VII, requiring the plaintiff to prove by a preponderance of the evidence that the employer would not have acted against the employee “but for ” the employee’s age.  In other words, even if there is some evidence that age was a factor in the challenged employment decision, the plaintiff cannot win unless he or she can prove that the employer would not have taken the challenged action but for his or her age. ESTABLISHING AN ADEA CLAIM  Since the Supreme Court’s decision in Gross, most Circuit Courts of Appeals have held that the McDonnell-Douglas test, which establishes the shifts in presumption between the plaintiff and defendant in Title VII discrimination claims, remains the proper framework for evaluating summary-judgment claims in ADEA age discrimination claims. ESTABLISHING AN ADEA CLAIM  Before the Supreme Court’s decision in the subsequent Hazen Paper case, some lower courts had adopted the age-proxy theory.  Under the age-proxy theory, some lower courts had held that a presumption of intentional age discrimination could arise from evidence that an employer made an adverse employment decision based upon a factor that correlates with age.  Several prime examples of age-proxy were high salary and seniority. HAZEN PAPER CO. V. BIGGINS  Factual Summary?  Issue?  Holding?  Rationale?  Employer ’s liability under ERISA? HAZEN PAPER CO. V. BIGGINS  Remember, to establish a disparate treatment claim, a plaintiff must prove that age was the “but-for ” cause of an employer ’s adverse decision.  The Court therefore held that no disparate treatment claim “when the factor motivating the employer is some feature other than the employee’s age.” HAZEN PAPER CO. V. BIGGINS  “It is the very essence of age discrimination for an older worker to be fired because the employer believes that productivity and competence decline with old age.”  However, if the motivating factor is something correlated with age, such as pension status, then it is not because of age.  “[A]ge and years of service are analytically distinct.” HAZEN PAPER CO. V. BIGGINS  “We do not mean to suggest that an employer unlawfully could fire an employee in order to prevent his pension benefits from vesting.”  This would violate ERISA, not the ADEA.  What if an employer fired an older Black worker because the worker is Black?  ADEA claim?  Other relief? 9 10 11 12 13 14 9 10 11 12 13 14 5/4/2023 3 O’CONNOR V. CONSOLIDATED COIN CATERERS CORP.  This case addressed the fourth element of the typical prima facie showing required in an ADEA case:  Must the plaintiff prove that his replacement was younger than 40?  What if the unsuccessful applicant is 55 and the person hired in his place is 41, does this establish a prima facie case of age discrimination? O’CONNOR V. CONSOLIDATED COIN CATERERS CORP.  Read this carefully: The Supreme Court held that the ADEA “does not ban discrimination against employees because they are aged 40 or older;  it bans discrimination against employees because of their age,  but limits the protected class to those who are 40 or older.”  O’CONNOR V. CONSOLIDATED COIN CATERERS CORP.  The Supreme Court held that the fact that the replacement worker is “substantially younger ” than the plaintiff is a far more reliable indicator of age discrimination.  NOTE: O’CONNOR V. CONSOLIDATED COIN CATERERS CORP.  This is so even if the replacement is also in the class protected by the ADEA.  The Court provided little guidance what is “substantially younger.”  A majority of federal circuits have held that an age difference of less than ten years is not significant enough to establish a prima facie case of age discrimination. 2 ND CIRCUIT ADEA PRIMA FACIE CASE 1. Plaintiff is a member of the protected class; 2. Plaintiff is qualified for the position; 3. Plaintiff has suffered an adverse employment action; and 4. The circumstances surrounding that action give rise to an inference of age discrimination. AGE DISCRIMINATION: CASE ILLUSTRATIONS  Stray remarks, standing alone, may not give rise to an inference of age discrimination.  For example, stray comments by a prison warden regarding “old timer dinosaurs” was insufficient to establish age discrimination in an action brought by a corrections officer who had applied for, and was denied, two promotions at the prison. AGE DISCRIMINATION: CASE ILLUSTRATIONS  In Reeves v. Sanderson Plumbing Products , Inc., a company terminated a 57-year old man with 40 years tenure with the company after it ordered an audit of timesheets and discovered significant discrepancies in the supervisor ’s employee attendance reports.  At trial, the supervisor provided substantial evidence rebutting the company’s explanation that he was at fault.  The supervisor also introduced evidence that the director of manufacturing had made several ageist remarks towards him; one comment was that he was “so old [he] must have 15 16 17 18 19 20 21 15 16 17 18 19 20 21 5/4/2023 4 several ageist remarks towards him; one comment was that he was “so old [he] must have come over on the Mayflower.” AGE DISCRIMINATION: CASE ILLUSTRATIONS  Don’t forget your disparate treatment analysis.  In Earl v. Nielsen Media Research, Inc ., the Ninth Circuit ruled that a former media researcher may proceed with her age discrimination claim against the company because she raised a triable issue of pretext by showing that younger employees were treated more leniently for similar policy violations. DISPARATE IMPACT  The Supreme Court ruled in Smith v. City of Jackson that workers aged 40 and older may prove discrimination under the ADEA using a disparate impact theory.  Prior to this holding, an individual could obtain recovery under the ADEA only by using a disparate treatment theory.  ADEA claimants can now recover if it can be shown that an employer used a neutral business practice (not motivated by discriminatory intent) that had an adverse impact on employees age 40 and over.  The claimant need not establish that the employer intended to discriminate.  DISPARATE IMPACT  The appellate courts are in disagreement, however, as to whether disparate impact claims are cognizable when comparing “subgroups” of older employees within the protected class to other employees, also protected by the ADEA.  In a 2017 decision, the Third Circuit Court of Appeals concluded that a subgroup of plaintiffs, all over age 50, could proceed with a disparate impact claim based on their employer ’s allegedly preferential treatment of younger protected employees—between the ages 40 and 50—during a reduction in force.  In reaching this determination, the court rejected the holdings of the Second, Sixth, and Eighth Circuit Courts of Appeal. DISPARATE IMPACT  Disparate impact claims based on age are more difficult to prove than such claims under Title VII because of the differences in language between the two laws.  Specifically, unlike Title VII, where the “business necessity” test may be used to successfully establish a disparate impact claim if there are other methods or practices available that an employer could use to achieve its goals without creating a disparate impact, the ADEA allows an otherwise prohibited action if it is based on reasonable factors other than age.  This is a more lenient standard, thus making a disparate impact claim under the ADEA harder to establish. DAYTON V. OAKTON CMTY. COLL., (7TH CIR. 2018)  Community college formerly hired state university system retirees who were receiving retirement benefits  Rules changed, and hiring retirees caused the college to incur monetary penalties.  College eliminated all retiree hiring.  Clear adverse impact. 22 23 24 25 26 22 23 24 25 26 5/4/2023 5  COMPULSORY RETIREMENT?  Suppose an employer wants to promote a young employee to a managerial position but there is no opening.  Employer has an older employee who may or may not be thinking about retirement.  Or maybe he is just a “blocker ” who is only performing OK.  What would you do as the employer? EARLY RETIREMENT IS LAWFUL IF VOLUNTARY  As a general rule, an employer cannot force an employee to retire because of age.  An employer cannot give an employee an ultimatum that they either accept retirement under a special early retirement plan or be subjected to an adverse employment action.  However, an early retirement program which is purely voluntary and is offered to reduce costs is lawful. EXCEPTION TO MANDATORY RETIREMENT  An exemption exists in the ADEA to the general limitation against mandatory retirement for some high- level employees.  The ADEA permits compulsory retirement for certain executives and individuals in high policymaking positions provided three requirements are met: EXCEPTION TO MANDATORY RETIREMENT  The employee must be at least 65 years of age;  the employee must have been employed for the two-year period immediately before retirement in a bona fide executive or a high policymaking position; and  the employee must be entitled to an immediate nonforfeitable annual retirement benefit from the pension, profit sharing, savings or deferred compensation plan of at least $44,000 a year. RELEASES: AN OVERVIEW  A reoccurring scenario is as follows: o Employer makes decision to discharge employee; o Employer is concerned that employee will sue for discrimination under one or more federal or state statutes ( e.g ., Title VII, ADEA, ADA); o Employer offers to pay employee “severance” in exchange for employee’s promise not to sue employer; o The contract between the employer is called a “release” or “waiver ” of employee’s causes of action. RELEASES: AN OVERVIEW  Under the Title VII, a release will generally be deemed valid if it is knowingly and voluntarily entered into.  Whether it is knowingly and voluntary is based upon a totality-of-the-circumstances test, consisting of various criteria.  What factors would you consider? 27 28 29 30 31 32 27 28 29 30 31 32 5/4/2023 6 What factors would you consider? AN ADEA RELEASE  The Older Workers’ Benefit Protection Act (OWBPA), an amendment to the ADEA, sets forth specific elements which must be contained in a waiver or release if it is to be considered valid under the ADEA.  Waivers must include, at a minimum, seven specific elements. AN ADEA RELEASE 1. The waiver must be part of a written agreement between the employee and employer that is written in a clear, understandable manner. 2. The waiver must specifically refer to claims arising under the ADEA. AN ADEA RELEASE 3. The employee must not waive the right to claims that may arise after the date on which the waiver is signed. 4. The employee must be given consideration (something of value) in exchange for the waiver of age discrimination claims in addition to that which the employee is already entitled. AN ADEA RELEASE 5. The employee must be advised in writing to consult an attorney prior to signing the waiver. 6. The employee must be given at least 21 days in which to consider the proposed waiver. 7. The employee must be given seven days after signing the waiver to revoke it. OUBRE V. ENTERGY OPERATIONS, INC.  Factual Summary?  What was wrong with the release?  What did the employer argue?  Court’s decision?  Rationale?  What “realities” was the majority worried about? OLDER WORKERS’ BENEFIT PROTECTION ACT  In your opinion, would Ms. Oubre’s release have been valid with respect to any Title VII claims she might have had?  If Ms. Oubre succeeds in her ADEA claim, should her employer be allowed to offset the severance amount against any recovery?  As an attorney, how would you advise a client who presented for your review an invalid OWBPA waiver? REDUCTIONS IN FORCE  Most companies experience business difficulties as a result of market decline or economic downturns.  A common first response Is to cut costs, which may include a layoff of employees.  Higher compensated employees may have a greater chance in being included in a company downsizing or a reduction in force (“RIF”). 33 34 35 36 37 38 39 33 34 35 36 37 38 39 5/4/2023 7 A DIFFERENT ADEA RELEASE FOR RIF  The same as an OWBPA waiver for an individual employee except:  Instead of 21 days in which to consider the release, each affected employee is given 45 days in which to consider the agreement;  Also, each employee must be given in writing the eligibility factors of the program, including job titles and ages of people chosen for program and ages of employees not eligible or chosen for the program. REDUCTIONS IN FORCE  The reduction-in-force cases raise many difficult issues involving age discrimination.  First question: is it a “true” RIF?  Given what you learned in Hazen Paper , can an employer consider salary in making lay-off decisions?  What would you say should be the fourth element of the analytical framework to apply to RIF or downsizing cases? 4 TH ELEMENT: PLAINTIFF-FRIENDLY 4 TH ELEMENT: PLAINTIFF-FRIENDLY  Plaintiff must then show pretext:  Employee’s termination was inconsistent with employer ’s RIF criteria;  Employer ’s evaluation of plaintiff was falsified to cause termination; or  “Evidence that the RIF is more generally pretextual.”  Why would this method be considered relatively “plaintiff-friendly”? 4 TH ELEMENT: DEFENDANT-FRIENDLY EXAMPLE CASES  In Rowan v. Lockheed Martin Energy , the Sixth Circuit held that the manager ’s comments regarding a need to lower the average age in the workforce were insufficient to reasonably conclude age discrimination.  While recognizing that such statements may establish a prima facie case of discrimination, the court found the company’s explanations—that the industry was having a high percentage of its most highly skilled workers retire soon, were “a far cry from being motivated by ‘inaccurate and stigmatizing stereotypes.’ ” EXAMPLE CASES  However, where a company undertakes to transfer employees subject to a RIF to other departments, it may not favor younger employees over older ones by finding new positions only for the younger workers.  Further, an employee may bring a claim for age discrimination in a RIF even if the vast majority of the “younger ” workforce has been laid off, if evidence exists that age was a motivating factor in laying off a specific employee. TRAMP V. ASSOCIATED UNDERWRITERS, INC., 768 F.3D 793 (8TH CIR. 2014)  Plaintiff sued employer, claiming age discrimination as a result of a company RIF.  District Court granted summary judgment to employer. 40 41 42 43 44 45 46 47 40 41 42 43 44 45 46 47 5/4/2023 8 District Court granted summary judgment to employer.  Court of Appeals reversed.  Why?  Evidence showed that the employer had written its healthcare carrier and stated that it expected lower premiums since it had gotten rid of its “older, sicker employees.”