Is your Employer’s Reorganization a Latent Form of “Age” Discrimination?


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The Federal and most state governments prohibit employers from discriminating against individuals above age 40 in the hiring, promotion and retirement process. Many employers and employees do not understand the law in this area. Frequently, reductions in force and reorganizations have the effect of violating laws prohibiting age discrimination.

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Is your Employer’s Reorganization a Latent Form of “Age” Discrimination?

  1. 1. Is your Employer’s Reorganization a Latent Form of “Age” Discrimination? Ethan Burger & Joel Zuckerman Maxwell & Barke LLC (Rockville, MD)
  2. 2. Unemployment at 15-Year High <ul><li>According to the U.S. Government the number of unemployed Americans increased by 524,000 in December 2008 to 10.8 million, representing 7.2% of all workers receiving unemployment insurance. </li></ul><ul><li>The actual unemployment rate is approximately 12% when so-called “discouraged” workers and part-time workers seeking full-time jobs are added. These figures represent the highest level of unemployment since 1983. </li></ul><ul><li>More than 2.2 million people have been out of work for six months or longer — another level not reached in a quarter-century. </li></ul>
  3. 3. President Obama’s Economic Priorities <ul><li>The U.S. faces its most serious economic crisis since the great depression. </li></ul><ul><li>The Obama Administration has identified job creation, in excess of 3 million jobs in the next 2 years, as the centerpiece of his program. </li></ul><ul><li>Nonetheless, some economists predict that 4 million jobs may be lost in 2009, pushing the unemployment rate up to 9%. </li></ul><ul><li>Consequently, even though many new jobs may be created, some workers will still risk of losing their jobs even if there is an recovery. Therefore American workers must educate themselves of their legal rights in the employment area. </li></ul>
  4. 4. Workers Age 40+ Are Most Victimized <ul><li>In 2008, there were more than 80 million American workers above age 40. </li></ul><ul><li>Such individuals enjoy certain legal protections under federal (The Age Discrimination in Employment Act) and some state legislation. </li></ul><ul><li>Yet, evidence suggests that discrimination against older workers continue in hiring and promotion. </li></ul>
  5. 5. The Age Discrimination in Employment Act of 1967 (ADEA) <ul><li>The ADEA prohibits discrimination on the basis of age. It makes it unlawful for an employer: </li></ul><ul><li>(1) to fail or refuse to hire or to discharge persons because of their age; </li></ul><ul><li>(2) to deprive people of employment opportunities for reasons of age; or </li></ul><ul><li>(3) to reduce the wage rate of employees due to their age. </li></ul>
  6. 6. Examine the Work Environment <ul><li>Most American workers are “employees at will” -- that is, they are not “entitled” to their jobs. </li></ul><ul><li>Therefore, it is not surprising that individuals “riffed” during downsizing or reorganization may be fatalistic about their situations. </li></ul>
  7. 7. Are Workers Aware of their Rights? <ul><li>Workers over age 40 ( forty) are members of a “protected class” under U.S. federal law. </li></ul><ul><li>While “age” is not an immutable trait like race which enjoys federal constitutional protections, it may enjoy state constitutional protections or specific rights under relevant state “Human Rights” statutes. </li></ul>
  8. 8. Exceptions to ADEA <ul><li>In some circumstances age MAY be the basis for employment decisions, but this is rare. </li></ul><ul><li>Allowed where age is a “ bona fide” occupational qualification (BFOQ). </li></ul><ul><li>BFOQs must be genuine, not merely based on stereotypes to be legally permissible. </li></ul>
  9. 9. BFOQ Test <ul><li>According to the U.S. Supreme Court, for employer to show a job involves BFOQs: </li></ul><ul><li>(i) there is a scientific basis showing a legitimate factor other than age is present; or </li></ul><ul><li>(ii) The employer is justified not to spend money on training a worker since in the near future such worker will not be able to do the job due to (i), above. </li></ul>
  10. 10. Some Legal Issues: Reorganizations <ul><li>Where a job is reorganized out of existence, was the individual given an opportunity to apply for other positions with the employer? </li></ul><ul><li>Employers general patterns – is the evidence of age discrimination. </li></ul><ul><li>Was there a valid non-discriminatory reason for the employer’s action? </li></ul>
  11. 11. Some Legal Theories for Claim <ul><li>Actual evidence of discriminatory intent. </li></ul><ul><li>Adverse impact on workers above age 40. </li></ul><ul><li>Disparate impact on workers above age 40. </li></ul>
  12. 12. Administrative Process or Lawsuit? <ul><li>Federal Law – An employee may file a “charge” with the Equal Opportunity Employment Commission (EEOC). Under the ADEA, a suit may be filed at any time 60 days after filing a charge with EEOC </li></ul><ul><li>State Law – While D.C. and Maryland both have administrative agencies to deal with age discrimination, it is often more advantageous to simply bring a law suit. For example, the D.C. Human Rights Act (D.C. Code 2-1401) prohibits age discrimination in the employment context; Maryland's anti-discrimination law (Maryland Code Article 49B, Section 11) allows employees to sue in state court for unlawful age discrimination against persons age 40 and above. </li></ul>