AGE AND EMPLOYMENT



Historically, the issue of age has been a factor in employment in several ways. One is the minimum age for many kinds of employment, governed by state and federal child labor laws. More commonly, however, the discussion of age and employment centers on older workers and their treatment.

For many years the positive or negative treatment of employees based on their age was not a recognized area for complaint under federal law; indeed, it was such a controversial category of protection that it was stripped from its place in the 1964 Civil Rights Act. Nonetheless, the Age Discrimination in Employment Act (ADEA) was finally adopted in 1967 and has guided U.S. policy on age discrimination ever since. Specifically, the law protects workers age 40 and above from firing, demotion, hiring denial, pay or benefit cuts, and most other acts of discrimination based on age.

Originally the administration of the enforcement of the ADEA was a function of the U.S. Department of Labor. Effective I January 1979 all functions relating to the administration and enforcement of the ADEA were transferred to the Equal Employment Opportunity Commission (EEOC) under the president's Reorganization Plan No. 1. The EEOC was created by Congress to enforce the Title VII provisions of the Civil Rights Act of 1964. The EEOC receives and investigates employment discrimination charges based not only on age, but also on race, color, religion, sex, national origin, and disability for both private and public employees.

RECENT FIGURES

DISCRIMINATION CASES.

According to the Equal Employment Opportunity Commission (EEOC), the federal agency responsible for complaints under the ADEA, there were 15,191 new age discrimination complaints lodged and 19,675 complaints resolved in fiscal 1998. Allegations of age discrimination make up around 20 percent of all employment discrimination cases brought before the EEOC. In a typical year in the 1990s, the EEOC determined half or slightly more than half of these charges to lack sufficient evidence that illegal discrimination had occurred. Another quarter to a third of the complaints were never fully explored because the complainants chose not to pursue the process after they had filed with the EEOC. This leaves 10-15 percent of the annual complaint docket to what the commission considers meritorious charges. Finally, 2-4 percent of all cases were deemed meritorious by the EEOC, but a negotiated settlement could be reached. This last group, representing some 590 complaints in 1998, is liable to litigation brought by the EEOC.

The total monetary benefits that complainants collect from employers each year through EEOC settlements (excluding litigation awards) measure in the tens of millions of dollars. In fiscal years 1991-98, the average aggregate benefits exceeded $40 million per year. Lawsuit settlements and lost litigation also result in millions of dollars paid to alleged victims of age discrimination every year. A record single settlement was recorded in 1992, when IDS Financial Services paid out $35 million to 32 employees who brought a discrimination lawsuit through the EEOC.

LABOR FORCE DEMOGRAPHICS.

As the baby boom generation has aged, the number of workers covered under the ADEA has grown. This trend was expected to continue throughout the early 2000s. As of 1999 there were more than 17 million U.S. workers age 55 or over in the civilian work force. They represented approximately 12 percent of the entire U.S. work force, and that figure doesn't include the more than 30 million 40to 54-year-olds who are also protected under the ADEA.

Anecdotal evidence suggests that certain occupations and industries tend to discriminate on age more often than others. In particular, persons in sales and technology positions appear to suffer higher rates of discrimination. Computer-related occupations are notorious for their susceptibility to age bias. Statistics suggest that the unemployment rate for older workers in computer occupations may be as much as five times that for workers under 40. This pattern persists even into executive-level positions, according to a 1998 survey conducted by Exec-U-Net, a Connecticut-based networking organization for executives. The survey found that as executives grew older, the longer it took for them to find new jobs relative to their younger counterparts.

Despite these alarming trends in some occupations, labor statistics for the broader economy suggest that the overall employment picture for older workers is much less ominous. In fact, according to data from the U.S. Bureau of Labor Statistics, workers age 55 and over tend to experience an unemployment rate 1-2 percentage points lower than the average for all workers.

OTHER LEGAL PROTECTIONS

Legal protection for workers on the basis of age is guaranteed for American workers through three pieces of federal law in addition to whatever other provisions a particular state may make. Part of the purpose of the ADEA (Public Law 90-202) was, according to the Congressional mandate included in the law," to promote employment of older persons on their ability rather than age [and] to prohibit arbitrary age discrimination in employment." The ADEA prohibits age discrimination in hiring, discharge, pay, promotions, and other areas. Retaliation by the employer against someone who brings a complaint under the ADEA or who participates in an investigation of a complaint brought under the act is also expressly designated as illegal. The law applies to private employers of 20 or more persons and to federal, state, and local governments and labor organizations with 25 or more members. As of 1988, the law also protected pension benefits for older workers under certain conditions. The ADEA, in section 12(c)(1), does not prohibit the compulsory retirement of certain bona fide executives or high policymakers, however.

The Older Workers Benefit Protection Act (OWBPA), enacted in October 1990 and effected in April 1991, clarified that employee benefits and pension plans are subject to the ADEA and codified EEOC regulations relating to age discrimination.

Since the passage of the ADEA and the OWBPA, the issue of age discrimination has continued to be studied by both employer and employee groups. The extended longevity predicted for today's worker means that older workers are likely to remain in the labor market longer, bringing issues of age and employment further into the public spotlight.

WAIVERS

A significant feature of the Older Workers Benefit Protection Act was a revision of the law that allows employees to waive their ADEA rights with a specific employer under tightly controlled conditions. OWBPA amended the original waiver procedure set forth by the ADEA. The waiver is a protection for companies against litigation when they discharge employees, but may only be used when the company's policy and handling of the waiver meet certain conditions that ensure the employee executes the agreement voluntarily and in full knowledge of her rights. According to the law, valid waivers for individuals must:

  1. be written and understandable
  2. refer to the worker's ADEA rights by name
  3. provide some form of compensation to the employee in exchange for waiving his rights
  4. allow 21 days to review the waiver agreement before signing and 7 days to rescind it after signing
  5. encourage the employee to speak with an attorney before entering the agreement

When a waiver is offered to a group of employees, such as in a mass-layoff severance package, additional restrictions apply. The most notable of the group waiver requirements is that employers must provide those who are being asked to sign waivers with complete lists of all coworkers offered the waiver and those in similar positions who aren't being offered the waiver. More importantly, the lists must contain the coworkers' ages. The theory behind this rule is that given adequate information and enough time (45 days in the case of a group waiver), concerned employees could spot a discriminatory pattern in the layoffs and refuse to waive their rights.

However, questions remained about the legal standing of signed waivers that failed to meet all of the OWBPA requirements. Some employers were able to mislead employees to believe they had signed away their rights when they had not. A major test of this legislation came in 1998, when the Supreme Court ruled in Oubre v. Entergy Operations, Inc. that waivers not meeting the stringent OWBPA standards may be considered unenforceable. In other words, even when employees have signed away their right to make an ADEA claim, if the procedures by which they entered into the waiver don't meet the above criteria, the waiver can be considered void and those employees can still file an ADEA claim. Entergy had argued, based on common law, that because its former employee Dolores Oubre accepted the severance payment and didn't offer to return it, she implicitly recognized the waiver agreement regardless of its technical flaws and had no right to sue. Two lower courts sided with the company, but in a 6-3 decision the Supreme Court came down on Oubre's side. The Court held that the common law of contracts cannot override the clearly stated requirements and purpose of federal legislation. The message to employers was unambiguous: all terms of the OWBPA must be met or companies are open to discrimination lawsuits.

SEE ALSO : Child Labor ; Equal Opportunity

FURTHER READING:

'Age Bias Takes Toll on Hiring." PC Week, 30 November 1998.

Cole-Gomolski, Barb. "Current Skills OK; Adaptability at Issue." Computerworld, 14 December 1998.

Equal Employment Opportunity Commission. "Facts About Age Discrimination." Washington, January 1997. Available from www.eeoc.gov .

Flynn, Gillian. "Aging Baby Boomers May Mean More Lawsuits." Workforce, December 1997, 105.

Kennedy, Paul J. "Take the Money and Sue." HRMagazine, April 1998, 104.

Ligos, Melinda. "Too Old to Sell?" Sales & Marketing Management, June 1998, 50.



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