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Dealing With An Aging Workplace

As members of the Baby Boomer generation head into the homestretch of their careers, employers increasingly are confronting difficult age-related issues in the workplace.

Age discrimination has long been illegal at the Federal, State and Local levels. The legal issues have become more complex and occasionally convoluted, as the workforce becomes grayer. The principal law effecting age-based discrimination is the Age Discrimination in Employment Act ("ADEA"), a Federal measure that prohibits discrimination and employment because of age. Minnesota has its own anti-discrimination measure tucked into the state Human Rights Act, a broad-based statute barring discrimination on the basis of age and many other illicit factors. Some local units of government have their own anti-age discrimination measures. For instance, the Minneapolis Civil Rights Act parallels the Federal and Sate laws, forbidding discrimination on the part of employers with sites in the city.

While these laws vary slightly, contain different procedures, and offer diverse remedies, they are similar in one major respect: they all prohibit employment-related actions that discriminate on the basis of age. But their proscription on age bias is often easier said than done. Court rulings, interpretation of the laws by administrative agencies, labor union contracts, civil service systems, and other regulatory matters have made the age discrimination laws anything but simple for employers in the Twin Cities, Greater Minnesota, and elsewhere.

Here are a few of the recurrent questions that arise concerning age discrimination in employment and how they can be addressed:

What are the major requirements to activate the age discrimination laws? An employee must be 40 years or older to invoke the Federal law. There is no explicit age requirement under the state and city laws, although they generally tend to be applied to employees 40 years of age or older, paralleling the Federal law. However, the mere fact that an employee, regardless of age, is replaced by a younger person does not in itself constitute age discrimination. There may be a number of reasons for replacing one employee with another, and a gap in age alone is not determinative of discrimination. In fact, under the State and Local laws, individuals could sue for being discriminated against because they are too young and are replaced by older employees.

Is it illegal for an older employee to be terminated and replaced by someone making a lower salary or having fewer benefits? Older employees generally are make more money and have more benefits, or are closer to obtaining greater benefits such as pension payments, compared to younger employees. This often is a product of their greater longevity in the workplace, seniority systems, and other considerations. The courts have ruled that an employer can permissibly terminate older employees and replace them with younger ones who make less money, fewer benefits, and therefore are less expensive to keep on the payroll. A decision made solely on economic terms does not constitute illegal age discrimination, even if there tends to be an unfair impact upon older employees. On the other hand, massive restructuring of the workplace that has a discernable and distinct disparate impact upon older workers may be violative of age discrimination laws, even if the action is, on its face, age neutral.

Can employees be required to retire at a particular age? Mandatory retirement is usually illegal, although there are a few exceptions. The general rule is that most employees are entitled to work as long as they want, provided they are capable of performing the job duties. With recent changes in the Social Security laws allowing people to earn more income without sacrificing Social Security benefits, it is anticipated that there will be an increase in older employees in the workforce. A few laws allow for compulsory retirement or permit employers to refuse to hire people over certain ages. Airline pilots and certain law enforcement personnel and other safety-sensitive positions fall within these categories. In Minnesota, and some other states, judges are forced to retire at age 70, a provision that has been upheld by the very judges who face forced retirement status. A company may also have a bona fide mandatory retirement program in limited circumstances. The law in Minnesota requires that the arrangement be in writing, applicable to all similarly-situated employees, and meet other rigid legal standards.

Can employers refuse to hire people who have retired and are now seeking new work? Generally, anti-retiree policies are illegal. In some cases, labor union contracts contain such clauses, which are intended to ensure more work for younger people and inject more flexibility into the workplace. Even these provisions, however, have run afoul of the law. In one recent case in Minneapolis, a newly adopted policy by the city proscribing rehiring ex-city employees who have already retired was deemed illegal by a Hennepin County Judge under the Minnesota age discrimination law.

What legal exposure do employers face if they violate the age discrimination laws? The anti-discrimination statutes contain strong remedies for employees and, conversely, impose harsh obligations upon employers who violate them. Employees can, in some circumstances, seek reinstatement to positions from which they have been removed or force the employer to hire them if they have been improperly rejected for employment. Employers also can be liable for back wages and future wage loss. The monetary damages can also be doubled or trebled under the Federal and State laws. Victims of age discrimination also can recover their attorney's fees from employers, and in extreme cases, punitive damages, too. Therefore, the stakes are quite high for employers who transgress the anti-age discrimination laws.

How can a company minimize or prevent a discrimination lawsuit? Care should be given in decision-making, especially in the case layoffs or terminations, to its age-based impact. If large-scale layoffs are anticipated, they should be spread out among the employees in a way that does not have a disproportionate affect on older employees. Severance packages can be offered to older employees, paying them money or other benefits, in consideration for release of claims. The written documentation, however, is important, and there are special rules under the federal and state laws which must be complied with regarding the terms of such releases in order for any releases to be affective in barring future litigation.

Discrimination has been around for a long time. But the legal problems it portends for employers have increased as the workforce ages, and more difficult and demanding decisions must be made by businesses in dealing with their employees. Employers should act cautiously and prudently in order to avoid becoming enmeshed in prolonged, expensive and divisive litigation that will make them feel aged and weary.

When dealing with age discrimination issues, it is better to be wary than weary.

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