These days, employers are using a number of strategies to try to cut costs, including layoffs. Because saving money is the ultimate goal, some employers may target highly paid employees and those with the most seniority for layoffs. And, because employees with the highest pay and most tenure may also tend to be older, these actions can lead to age discrimination lawsuits.
What is the Age Discrimination in Employment Act (ADEA)?
The ADEA prohibits age discrimination against employees and applicants who are at least 40 years old. Discrimination is prohibited in every aspect of employment, including:
- hiring
- promotions, job assignments, and training
- job benefits and perks, and
- layoffs and firing.
Reasonable Factors Other Than Age
If an employer determined who to lay off or fire based solely on age, that would clearly violate the ADEA. For example, it's illegal for an employer to fire everyone who is 65 or older, or to target older workers for layoffs.
If an employer's action has a disparate impact on older employees, different standards apply. A disparate impact lawsuit is one alleging that an apparently neutral policy or practice had a disproportionately negative effect on a protected class of workers. In an age discrimination case, for example, employees might argue that the employer's policy of using seniority as a factor in determining whom to lay off has a disproportionate impact on older employees.
An employer can defend against a disparate impact case by showing that it relied on a "reasonable factor other than age" (RFOA) in making its decision. The Equal Employment Opportunity Commission (EEOC), the federal government agency responsible for interpreting and enforcing the ADEA, has issued proposed regulations that include a list of criteria to be considered in determining whether an RFOA is "reasonable." These factors include whether the RFOA is related to the employer's business goals and whether it is a common business practice. Once the employee proves that the practice had a disparate impact on older workers, the employer must prove the RFOA.
Special Waiver Rules
The ADEA also requires employers to provide certain information to older workers who are laid off and asked to sign a waiver -- a legal agreement not to sue the employer. Waivers are often part of a severance agreement with laid off workers: In exchange for agreeing not to sue, the employee gets severance pay (or enhanced pay, if the employee is already entitled to severance).
When employees lose their jobs as part of a layoff or other employment termination program, and they are asked to give up their right to sue under the ADEA, the employer must inform them, in writing, of:
- the class or group of employees covered by the program, any eligibility rules for the program (for example, which employees can participate, if the employer is offering an incentive for early retirement), and any time limits applicable to the program, and
- the job titles and ages of all employees eligible or selected for the program, and the ages of all employees in the same job classification or organizational unit who are not eligible or not selected for the program.
A waiver of the right to sue for age discrimination must meet a number of other requirements, whether or not the employee is part of a layoff program. These requirements are intended to make sure that the employee's agreement to give up the right to sue is voluntary and knowing. For example, any such waiver must be in writing, must refer specifically to the employee's rights under the ADEA, must advise the employee to consult with an attorney before signing the agreement, and must give the employee a certain amount of time to consider the agreement -- and to revoke it after signing, if the employee changes his or her mind.
Getting Legal Help
If you believe you were selected for layoff or termination because of your age, or you were subject to a layoff in which a disproportionate number of older workers lost their jobs, you should consult with an employment lawyer right away. An employment lawyer can help you assess your situation and decide whether it makes sense to sign a waiver of your rights in exchange for severance. Even if you decide to sign the waiver, a lawyer might be able to negotiate a better severance package for you. If you decide to pursue your claims, a lawyer can help you file a charge of discrimination with the EEOC (a necessary prerequisite before you can file a lawsuit) and bring your claims in court.
