The law has to define certain terms and categories of people in order to make legal concepts predictable so people and companies can adjust their actions accordingly. However, after turning 40 years old this month, the definition of “old” hits home with me. According to the law, I’m old. Moving on quickly, this Friday’s Five focuses on age related issues:
1. People 40 years old and older are in a protected category
Both Federal law, Age Discrimination Employment Act (ADEA) 29 USC section 621, et sec. and California state law, Cal. Gov. Code Section 12926(b), protect employees who are 40 years old or older.
2. Even if worker over 40 is terminated and replaced by another worker who is over 40, there could still be an age claim if the difference in age is “substantial”
The United States Supreme Court held in O’Connor v. Consolidated Coin Caterers Corp. that the ADEA prohibits discrimination because of an employee’s age, not class membership. Therefore, if one employee who is over 40 is terminated and replaced by another employee who is also over 40, the terminated employee may still assert an age claim if they can prove that the determining factor was age. However, if the person was replaced by another who is close in age, this would cut against any argument that the reason for the termination was based on age.
3. When employers can use age as a factor in an employment decision: the bona fide occupational qualification (BFOQ)
To establish a BFOQ, the employer must prove
First, the employer must demonstrate that the occupational qualification is ‘reasonably necessary to the normal operation of [the] particular business.’ Secondly, the employer must show that the categorical exclusion based on [the] protected class characteristic is justified, i.e., that ‘all or substantially all’ of the persons with the subject class characteristic fail to satisfy the occupational qualification.
Johnson Controls, Inc. v. Fair Employment & Housing Com., See 2 Cal. Code Regs section 7286.7(f). This is a narrow defense for employers, and they still also must prove that the nature of the operation of the business could not be rearranged in order to reduce the BFOQ impact.
4. Layoffs based on high salary could possibly constitute age discrimination
If salary is used as the basis for conducting terminations or layoffs, this could constitute age discrimination if older employees as a group are adversely impacted because of this factor. Cal. Gov. Code section 12941.
5. Release of age claims require additional steps – approach with caution
The Older Workers Benefit Protection Act (OWBPA) provides additional rights to workers. The OWBPA prohibits any waiver of a right under the ADEA, unless certain requirements are met. Some of these requirements include that the employee is advised to consult with an attorney, the waiver is easily understood, the individual is given at least 21 days to consider the agreement; and the individual is given at least 7 days following the execution of the agreement to revoke the agreement. The 21 day consideration period can be waived by the employee, but the seven day revocation period after the agreement is signed cannot be waived by the employee. Therefore, it is important to consider potentially not paying any money until after the seven day revocation period expires. If the employer is offering the release to a group or class of employees a longer consideration period and other requirements apply. It is highly recommended that employers receive the assistance of counsel to ensure that employees 40 years old or older effectively waive any rights under the OWBPA. For more information, the EEOCs’ website provides a good explanation and some examples.