On November 6, 2018, the United States Supreme Court extended the reach of the federal age-discrimination law when it ruled that state and local political subdivisions of any size must comply with the Age Discrimination in Employment Act of 1967 (ADEA) and are not subject to the 20-employee-threshold.
The Supreme Court’s holding resolved circuit court division and clarified that the ADEA covers two specific types of employers: (a) employers “engaged in an industry affecting commerce” that employs 20 or more employees, and (b) states and political subdivisions, regardless of the number of workers employed. Failure to comply with the ADEA results in more than just financial losses, because it is likely to affect culture, employee morale, public perception, and could cause increased liability rates.
What is Age Discrimination?
Age discrimination occurs when you treat employees differently because of their age. The ADEA makes it illegal to discriminate against people who are 40 or older in any aspect of employment – including hiring, termination, wage, job roles, promotion, layoffs, training, benefits, and any other term or condition of employment.
ThemostcommonADEAclaimisdiscriminatorytermination,withmorethan18,000claimsfiledin2017. Since2000,agediscriminationcomplaintsaccount for over 20 percent of the Equal Employment Opportunity Commission (EEOC) complaints.
Historically, public employers with less than 20 employees contended that they were exempt from the ADEA, and appellate courts agreed. However, in Mount Lemmon Fire District v. Guido, U.S., No. 17-587, the Supreme Court ruled in favor of the plaintiffs.
Mount Lemmon Fire District Case Details
Mount Lemmon Fire District is an Arizona political subdivision that was sued after terminating two of its oldest employees – 46 and 54, who were captains with at least 18 years of service. According to the District, it was facing budget cuts, and that is why those two employees were terminated. The employees, however, allegedagediscriminationundertheADEA. TheDistrictargueditwastoosmall(hadlessthan20employees)toqualifyasan‘employer’undertheADEA’s definition, and therefore could not be held liable under the ADEA.
The Supreme Court disagreed. It found that the ADEA’s definition of employer “also means” states and political subdivisions. The ADEA states: “The term [employer] also means (1) any agent of such a person, and (2) a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State . . .” The Supreme Court construed the use of “also means,” to “add new categories of employers” to the definition, such that states and public entities are potentially liable under the ADEA even if they have less than 20 employees.
The Cost of Age Discrimination
The cost of age discrimination extends beyond lost wages, liquidated damages, court costs, and attorneys’ fees. We can expect that liability rates will likely rise if employers do not prevail on ADEA cases.
Trying to increase market share? Want to hire the best candidate? You may not get that chance if you get sued, and it makes headlines. Bad press may be devastating for business. If claims are made against an employer, it may become local, if not national news. Additionally, a quick internet search could yield results discussing the public claims made against your business, resulting in the loss of unquantifiable opportunities.
And, as mentioned above, age discrimination, or any discrimination for that matter, can cause a decrease in employee morale and productivity. Culture is important, and having the right policies, practices, and training can make a difference.
How to Eradicate Age Discrimination
While there is legislation prohibiting age discrimination, businesses can use additional policies, procedures, and training to prevent a potential claim. Due to the legal implications of discrimination, it’s important to seek legal advice to ensure your business remains in compliance. Here are a few things to consider:
• Training: Every manager and HR professional should understand the essential features of the ADEA. Consider annual training to revisit employment laws and changes. Diversity training can also help employees understand the value of age diversity and potential repercussions of discrimination.
• Policies: Policies should stress that your business will not tolerate discriminatory treatment based on age. Of course, you must implement the policies as well. Top-level leaders, managers, and human resources must enforce them.
• Hiring: Consider revisiting the traditional hiring process to mitigate risk. Ensure that your business’ advertisements are open to potential employees of all ages. Recently, employers like Amazon, Verizon, Target, and even Facebook found themselves in hot water after targeting specific ages in recruiting ads.
• Advertising: When running ads, avoid using language that may be deemed discriminatory such as “young,” “millennial,” and “new grad.” Consider not requiring prospective job applicants to list birthdates or the year they graduated on applications.
Age discrimination happens across all industries, all sizes, and based on the latest U.S. Supreme Court ruling, cases are may increase. It is important to be aware and take steps to create to eliminate and prevent it. Policies should include what it is, how to safely report it, as well as corrective processes for those who do not comply. As always, seek legal counsel for areas of concern or clarity. Then, educate, train, and create a culture where all employees are valued.