Supreme Court Expands Age Discrimination

         I often write about age discrimination cases in this column because they are one of the most common and expensive claims an employer faces. Older workers who lose their jobs aren’t shy about suing and they make very sympathetic plaintiffs to a jury.

Here I am writing about age discrimination again because this spring the U. S. Supreme Court released a significant age discrimination opinion that employers need to understand and beware.

            In Smith v. City of Jackson, the Court ruled that workers over age 40 can sue their employers for age discrimination by claiming that a neutral practice or policy unintentionally discriminates against these older workers. For example, a corporate training program that focuses on developing the skills of younger workers because of their potential longevity at the company could be said to be discriminatory against older workers and therefore adversely impact that protected class of people.

In the past, this kind of “disparate impact” claim has not been allowed in age discrimination cases. Before this decision, older workers could only sue for specific employment actions that treated a particular worker differently because of the worker’s age, not for the impact that a seemingly neutral policy had on many older workers.

In practical terms, this decision by the Court will open the door to more claims by workers over 40 that a policy you intended to be completely neutral is actually discriminatory. Employers must take a close look at layoffs, cuts in benefits, pay scales and other practices that may impact older workers adversely.

Even seemingly innocuous employment actions like annual evaluations need to be reassessed to ensure that older workers are not adversely impacted. For example, if your evaluation form grades workers on perfect attendance, demonstrating high energy, outputting a large volume of work, possessing extraordinary computer skills or other categories with which older workers may struggle, your evaluation system may be considered to have a disparate impact on aged employees.

Because many older employees at the company may be affected by policies or practices with a disparate impact, expect to see more class-action lawsuits by older workers in light of this recent opinion.

Plaintiffs’ lawyers love class-action opportunities because of the potential for larger attorneys’ fees awards than a single plaintiff will be awarded. Even if the case can’t succeed at trial or on appeal, many employers will settle these types of cases before trial to avoid the great legal and business expense of fighting a class-action suit.

There is a silver lining for employers, however. Even if the plaintiffs can show that older workers as a class were adversely affected by the policy or action, the employer can put on evidence that the policy or employment action was taken on the basis of a reasonable factor other than age. If the court agrees with that the employer acted reasonably, then the employer isn’t liable.

In the Smith case, for example, while the Court recognized that a disparate impact case could be brought in an age discrimination setting, the Court still ruled that these particular employees (older city police officers) lost their case because the city had good business reasons for its actions in giving proportionately larger raises to younger officers to raise salaries overall to compete regionally with other police forces for new applicants.

What all this legal jargon means to you as an employer is that you need to proceed carefully when enacting policies or taking adverse employment actions and document every step of the process and the business necessity of each action.

For example, when writing job descriptions, you may want to reassess whether the physical requirements, attendance requirements and computer skills you claim are necessary to the position are really reasonable or whether an older worker could argue that they are in there just to give you an excuse to screen out older (or disabled) workers.

Your most important weapon in fighting these claims is the one we lawyers always recommend: good documentation written at the time that the action was taken or the policy was adopted. As usual, you should spell out in writing the business reasons necessitating your employment decisions.

If your company is experiencing monetary setbacks and you are looking at laying off some workers, document carefully the economic impact that layoffs will have in improving your bottom line, and consider laying off as many people under 40 as over 40 so that the impact of the layoff does not hit mainly on older employees.

Overall, just be continually vigilant as an employer to make sure that you have good business reasons for every action you take in relation to your employees and any disparate impact your policies have on older workers should be defensible.

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