Age Discrimination in Employment Act of 1967

Abstract

The Age Discrimination in Employment Act (ADEA) of 1967 banned age-related workplace discrimination against Americans aged 45 to 65. It applies to any private or federal, state, or local government employer who has at least twenty employees, and to employment agencies and labor unions. Protections apply in the areas of hiring, compensating, firing, promoting, training, assigning tasks, and awarding of bonuses and benefits. The act also requires that when laying off two or more employees, employers must report the age of any individuals considered for layoff at the same time. ADEA also protects older employees from hostile working environments.

Overview

In the twenty-first century, older Americans have become more active physically and mentally than at any other time in history, and they are willing to work longer than workers of the past. Many workers are remaining on the job beyond the traditional retirement age of 65. Older works have become an integral part of the American workplace. In 2015, 33 million Americans over the age of 55 were actively employed, and another 1.3 million were looking for jobs. According to the National Council of Aging, 40 percent of the over-55 population will be working in 2019. This means that one in every four workers will be 55 or older.

Despite legal protections for employees in areas such as the provision of safer working environments and payment of overtime to employees who work beyond the normal 40-hour workweek, there were no federal restrictions that protected employees from being dismissed at the will of the employer. However, passage of the Civil Rights Act of 1964 brought an end to many types of discrimination in the workplace, because Title VII protected Americans from discrimination based on color, race, sex, religion, and national origin. The Supreme Court identified these as protected classes and began placing increased scrutiny on discrimination cases involving these groups. Title VII forced employees to document valid reasons for dismissing employees. However, it was not until 1967 with the passage of the ADEA that it became illegal to discriminate against older employees. Originally, the act covered only individuals between the ages of 45 and 64, but later it was extended to include those from 40 to 44, and the maximum age was eliminated. Age-based discrimination has come to be known as ageism.

Despite the lack of substantive support for their claims, employers often perceive of older workers as being stubborn, inflexible, unproductive, and resistant to change and new technologies. Thus, employers may consider older workers poor investments. With passage of ADEA, Congress acknowledged the existence of ongoing and often arbitrary age discrimination in the workplace and argued that the practice interfered with the flow of commerce while placing a burden on the individuals involved and their families. ADEA charged the Equal Employment Opportunity Commission (EEOC) with conducting further research on work-related age discrimination, making those findings public, and educating the public about age discrimination. EEOC was also required to work with states and communities to inform and educate them on age discrimination in the workplace.

In addition to federal action, many states have passed their own laws granting greater protections from discrimination and arbitrary dismissal. Some states, in fact, began addressing the issue of age discrimination long before ADEA was passed. In 1903, Colorado passed the first age discrimination law in American history. In 1937, Massachusetts followed suit. Other state legislatures began passing anti-ageism laws at mid-century: New York (1958), Connecticut and Wisconsin (1959), California, Ohio, and Washington State (1961), New Jersey (1962), and Michigan and Indiana (1963). In 1997, Alabama became the last state to pass an age-discrimination in the workplace law. Age discrimination in employment is also considered a major problem in other Western countries. In Europe, for example, older workers make up only 3–5 percent of the workforce. By contrast, in Japan, where older workers are highly respected, 37 percent of the workforce is made up of males over the age of 64.

Protection from age discrimination in the workplace also means that employers are required to guarantee a non-hostile working environment, prohibiting such behavior as age-related harassment, intimidation, and disciplinary actions.

Applications

An economic downturn in the 1990s led to major layoffs and downsizing, and many older workers were forced out of the workplace through the granting of attractive severance packages. If accepted, these employees waived the right to pursue future claims of age discrimination in employment. In 1990, Congress passed the Older Workers Benefit Protection Act that required employees to give older employees who were being laid off twenty-one days to consider whether or not they wanted to accept the package and waive their ADEA rights. The economic downturn hit older women harder than any other group. Between 1991 and 1993, 16 percent of females between the ages of 55 and 64 lost their jobs. A decade earlier, an economic downturn had resulted in 11 percent unemployment for the same group (Simon, 1996).

Due to the aging of the Baby Boom generation, the number of older Americans in the workplace remains significant. In 2013, for example, there were more than 6.9 million workers over the age of 40. The following year, a survey conducted by the American Association of Retired Persons (AARP) revealed that 64 percent of respondents had experienced some form of age discrimination in employment.

Researchers have conducted a number of studies on ageism dealing with the hiring of new workers. Although resumes do not generally indicate age, studies show that employers pay close attention to such dates as high school graduation and employment histories that indicate age. Older candidates are more likely than younger candidates to be weeded out at this stage. Other studies have indicated that older workers are one-third as likely as young workers to receive additional on-the-job training (Simon, 1996). During the Great Recession, older workers were more likely than younger workers to be laid off and to remain unemployed. In 2009, for example, almost 7 percent of American workers over the age of 55 were unemployed, and they were unemployed for an average of thirty-three weeks as compared with twenty-six weeks for all workers. Older workers who find a new position are twice as likely as those in the 25 to 34 age group to accept a salary cut.

Older workers may also be the first employees to be fired, laid off, or retired during company bankruptcies, mergers, or reorganizations. In one study (Barrington, 2015) that looked at workers employed at a Days Inn call center, evaluations of older workers noted that they spent more time than younger workers on each call. On the surface, this seemed to suggest lower productivity. However, it was demonstrated that more revenue resulted from calls handled by older workers, leading to the assumption that the older workers were taking time to address the specific needs of customers.

The fact that individuals in their forties have been protected by ADEA has proved to be controversial because an employee nearing retirement can legally be replaced with an employee in their early forties without legally discriminating against the older employee. However, during the Great Recession of 2007–2009, employers were more inclined to fire individuals over the age of forty than younger individuals. Nevertheless, the burden of long-term unemployment was disproportionately felt by employees over fifty, who found it more difficult to find new jobs.

Studies have shown that older workers facing long-term unemployment experience grief, denial, depression, and a loss of self-esteem and self-identity (Gregory, 2001). During the Great Recession, the rate of suicide among older unemployed workers doubled. A number of experts suggest that it has become a common practice to dismiss employees within five to ten years of retirement either because they are seen as less productive or because they earn higher salaries and have more benefits. The notion that younger employees are more stable than older employees is negated by the fact that a new employee of any age is more likely to leave a company voluntarily within six years than an employee who has been with the company for decades.

Issues

Exceptions to ADEA allow employers to consider age if it may be legitimately considered to pose an obstacle to job performance. For that reason, firefighters and law enforcement officers have not always been covered by the act. In 2005, in Smith v. City of Jackson, the Supreme Court upheld the concept that age may have an impact on job performance, supporting the right of the employer to grant higher raises to younger police officers and dispatchers than to those with more seniority. The Court held that ADEA stipulates a narrow interpretation of disparate-impact. However, the court acknowledged the right to challenge age discrimination and concurred that age discrimination may have occurred in Smith v. City of Jackson that violated Title VII of the Civil Rights Act of 1964, which has a broader prohibition on disparate treatment than ADEA. Some courts have also required complainants to demonstrate marked patterns of age discrimination rather allowing them to claim age discrimination from a single occurrence.

When drafting discrimination laws, Congress includes a penalty for violations of the law. In employment-related discrimination cases, the tendency has been to grant relief through the payment of liquidated damages, granting either back pay or front pay. Those damages include the recovery of both regular and overtime pay. However, there has been a lack of a consistency in legal interpretations of what Congress intended to include within the concept of liquidated damages. Litigants in successful lawsuits may be awarded either front pay or back pay. In the case of documented willful intent, successful complainants may be awarded double damages. Some district courts have proved more amenable than others in recognizing age discrimination in employment. The First, Fifth, and Seventh Federal District Courts have been more likely than other federal courts to dismiss the validity of such claims.

Since 1947, the Fair Labor Standards Act of 1937 has been considered to exempt employers from paying liquidated damages if they can prove to a court that they acted in good faith when the contested action occurred, and that interpretation has been reaffirmed in age discrimination in employment cases. In 2008, in Perez v. Potter, the Supreme Court upheld ADEA provisions that prohibited retaliation against employees who bring charges of age discrimination in employment. Critics of contemporary court interpretations of ADEA insist that it has become almost impossible to prove age discrimination. Initially, the burden of proof was on employers to prove that they had not violated ADEA, but courts have shifted the burden of proof to complainants. In 2009 in Gross v. FBL Financial, a split decision (5–4) by the Supreme Court required complainants to demonstrate that age was the determining factor that led to the contested action. In his dissent, Justice John Paul Stevens accused his colleagues of engaging in "unnecessary lawmaking."

Before the Gross decision, courts tended to apply standards established in 1989 in Price Waterhouse v. Hopkins, in which courts at various levels determined that Hopkins had been evaluated solely on the fact that she was female. The case established a legal standard that required employers to demonstrate "clear and convincing evidence" that the contested action was not based on discriminatory motives. In 1993, in Hazen Paper Co. v. Biggins, the Supreme Court rejected an argument for claiming disparate treatment. The case concerned a 62-year-old worker who insisted that his employer fired him to prevent the vesting of his pension.

With bipartisan support, Patrick Leahy (D-VT), the chair of the Senate Judiciary Committee, introduced the Protecting Older Workers against Discrimination Act, which would have reaffirmed the original intent of ADEA and negated the Gross standard, allowing victims of age discrimination in employment to show only that age was a motivating factor rather than having to prove it was the determining factor. The bill has been reintroduced in subsequent Congresses, but it has failed to pass. Gross critics suggest that Congress should pass a bill similar to the Lilly Ledbetter Fair Pay Act that restored women's employment rights after they had been limited by the Court.

In 2004, in General Dynamics Land Systems, Inc. v. Cline, the Supreme Court heard a case dealing with reverse age discrimination. The employer and the employee union had negotiated an agreement whereby full health insurance benefits would be limited to retired workers above the age of 50. Employees aged 40 to 50 claimed they had been discriminated against under ADEA and sued. The Court held that the intention of ADEA had never been to prevent employers from favoring older employees at the expense of younger workers. Four years later, the Court held in Kentucky Refinement Systems v. EEOC that prohibiting the presence of older workers in hazardous jobs did not qualify as age-related employment discrimination.

Relatively few age discrimination cases ever make it to court because such lawsuits are expensive, generally costing $25,000 or more. Judges are also prone to dismissing ADEA cases. In 2006, for example, 73 percent of all cases brought before federal district courts were dismissed at the request of employers. That number is far higher than in other categories of lawsuits. Most successful complainants have been white males employed in the professions or as middle-level managers because of the lack of economic resources among other groups. Because age discrimination cases have become more difficult to win, many attorneys refuse to take them on contingency.

In 1993, 10 percent of work-related discrimination charges were based on claims of age discrimination. By 2010, the number of age-discrimination charges had tripled. The majority of those cases were filed by workers employed in the service industry. More ADEA complaints are filed during times of economic crisis than at any other time. During the Great Recession, the EEOC received 24,581 ADEA complaints. The fact that the complaints were filed does not mean they will be successful. In 1997, only 4 percent of 15,895 ADEA complaints were decided in favor of the complainants. The number of successful complaints rose to 8.2 percent of 16,008 in 2000. Between 2007 and 2008, the number of age discrimination lawsuits rose by 30 percent. However, in 2007, only 3.9 percent of 19,103 cases filed with EEOC resulted in positive outcomes for complainants. In 2008, only 3.2 percent of 24,582 claims were successful. In 2016, 2.7 percent of 20,857 cases were decided in favor of complainants.

Terms & Concepts

Baby Boom Generation: Refers to Americans born between 1946 and 1964 during the post-World War II population explosion. By sheer numbers, Baby Boomers have affected all aspects of life in the United States. Since 2008, all Baby Boomers have been protected by ADEA.

Back Pay: Concept used to determine what individuals who win age discrimination in employment lawsuits would have earned from the time of dismissal until the time the court makes a decision, including wages, overtime pay, bonuses, vacation pay, and retirement benefits. If willful discrimination is proved, back pay is subject to doubling.

Civil Rights Act of 1964: Legislation that was designed to deal with civil rights violations such as discrimination against African Americans in the areas of education, employment, and public accommodation. Because it also included protections for other groups, the act improved the academic, work, and social environments for other groups that had historically experienced high levels of discrimination. It was decided that more research should be conducted on age discrimination before identifying age as a protected category.

Contingency Fee: Amount paid to attorneys at the completion of a successful lawsuit. When working on contingency, attorneys are confident that they will win in court, so they delay payment for services until courts award damages. The fee is generally a designated percentage of the award won by the complainant.

Fair Labor Standards Act of 1938: Depression-era act that established the concept of paying liquidated damages equal to what would have been earned, plus interest, if rights under the act had not been violated.

Front Pay: Concept used to determine what individuals who win age discrimination in employment lawsuits would have earned if they had not been unfairly dismissed from their jobs.

Liquidation Damages: Damages, or financial compensation, agreed upon in an employment contract in the event of a breech.

Gross v. FBL Financial: Age discrimination case that dealt with the reassignment of a 54-year-old employee who was demoted and his responsibilities given to a forty-something, less experienced female employee that he had trained. The decision set a new standard for determining age discrimination, requiring that complainants demonstrate a preponderance of evidence that age was the determining reason for the contested action.

Price Waterhouse v. Hopkins: Sex discrimination case in which a senior manager was denied partnership as a result of claims that she was deficient in physical appearance and interpersonal relationships. The standard for determining intentional discrimination established in Price Waterhouse was used in age discrimination cases until Gross.

Willful Intent: When dealing with ADEA, it is the recognition by the courts that employers who engaged in age discrimination in the workplace were aware that they were violating the law but recklessly disregarded it when carrying out a discriminatory action. Double damages may be awarded in such cases.

Bibliography

Alaka, A. M. (2006). Corporate reorganizations, job layoffs, and age discrimination: Has Smith v. City of Jackson substantially expanded the rights of older workers under the ADEA? Albany Law Review, 70(1), 143–180.

Barrington, L. (2015). Ageism and bias in the American workplace. Generations, 39(3), 34–38. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=112207263&site=ehost-live

Gregory, R. F. (2001). Age discrimination in the American workplace: Old at a young age. New Brunswick, NJ: Rutgers University Press.

Holliday, C. P. (2010). The Age Discrimination in Employment Act of 1967: Issues litigated at the Supreme Court level. Florida Bar Journal, 84(2), 20–25.

Lewis, C. R. (2013). A gross injustice: Proving age discrimination by federal employers under the ADEA in the wake of Gross v. FBL Financial Services, Inc. St. John's Law Review, 87(1), 271–296. Retrieved September 23, 2017, from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=93729879&site=ehost-live

Sargeant, M. (2016). Age discrimination in employment. NY: Routledge.

Simon, R. (1996). Too damn old. Money, 25(7), 118–124. Retrieved September 23, 2017, from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=9607037832&site=ehost-live

Stafford, D. (2017). Graying protections: As age discrimination law turns 50, bias becomes subtler, harder to prove. Indiana Lawyer, 28(13), 7–10. Retrieved September 23, 2017, from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=124783268&site=ehost-live

Walters, J. A. (2012). Drawing a line: The need to rethink remedies under the Age Discrimination in Employment Act. University of Illinois Law Review, 2012(1), 255. 285. Retrieved September 23, 2017, from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=73940467&site=ehost-live

Suggested Reading

Dreiband, E., & Pulliam, B. (2016). Deference to EEOC rulemaking and sub-regulatory guidance: A flip of the coin? ABA Journal of Labor & Employment Law, 32(1), 93–112. Retrieved September 23, 2017, from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=124986692&site=ehost-live

Grisham, J. G., & Sudbury, J. J. (2017). Third circuit vacates order granting summary judgment in ADEA failure to hire case finding triable issue of pretext. Venulex Legal Summaries, 29(7), 1–4. Retrieved September 23, 2017, from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=125823413&site=ehost-live

Lavin, H. S., & DiMichele, E. E. (2017). Splitting the difference: Are sub-group claims cognizable under the ADEA? Employee Relations Law Journal, 43(1), 86–92. Retrieved September 23, 2017, from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=122461567&site=ehost-live

Sargeant, M. (2016). Age discrimination in employment. New York, NY: Routledge.

Zachary, M. (2017). Avoiding a "road map" for age discrimination. Supervision, 78(7), 20–24. Retrieved September 23, 2017, from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=123750396&site=ehost-live