Age Discrimination

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Author: Pamela C. Jones
Editor: Robert W. Kolb
Date: 2008
Encyclopedia of Business Ethics and Society
Publisher: Sage Publications, Inc.
Document Type: Topic overview
Pages: 4
Content Level: (Level 5)

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Page 39

Age Discrimination

Acts of age discrimination are motivated by prejudice toward an individual's or group's age.

In the workplace, age discrimination occurs when an employer treats an employee or prospective employee differently than others because of the person's age.

In the United States, there have been several fundamental pieces of legislation enacted to protect individuals against age discrimination. The Age Discrimination in Employment Act of 1967 (ADEA) is the most significant. It protects individuals who are 40 years of age and older from employment discrimination based on age. The ADEA was created to extend the law stated in the Civil Rights Act of 1964, which prohibits discrimination based on race, sex, creed, color, religion, or ethnic origin, to include age.

The ADEA's protections apply to both employees and job applicants. Under the ADEA, it is unlawful to discriminate against a person because of the individual's age with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training. The ADEA further states that it is unlawful to retaliate against an individual complainant or participant in any age discrimination charge, investigation, proceeding, litigation, or testimony.

Regulations set forth by ADEA apply to employers with 20 or more employees, including federal, state, and local government organizations. Employment agencies, apprenticeship programs, and labor organizations are also subject to ADEA. Age preferences, limitations, or specifications are prohibited, but they may apply under rare exceptions. An employment agency, for example, may not make age specifications when posting job notices or making preemployment inquiries.

ADEA waivers are allowed, but only if they meet minimum standards. For example, an airline pilot is required to have a maximum level of correction relative to eye sight. A firefighter may be required to lift and carry 150 pounds. Age and other physical requirements are considered when filling these jobs. A waiver could be requested in these instances. The employer would be required to use specific language that would apply to all employment notices and advertisements for these positions. Discrimination also occurs with younger employees, but protections and liabilities are not legislated, and thus, cases and claims are rarely documented.

The ADEA is enforced by the Equal Employment Opportunity Commission (EEOC), a federal government agency. The EEOC is charged with eliminating illegal discrimination from the workplace. Individuals who think they are victims of age discrimination can report the activity to the EEOC. The EEOC provides information about how to file charges at the state and federal levels.

Age discrimination laws are also defined and imposed at the state level. These laws are based on the mandates stipulated in existing federal laws, although some state laws enforce broader protections. For example, there are states that enforce protections that apply to employers with fewer than 20 employees.

Age Discrimination and Employees

Age discrimination most commonly occurs as older workers seek new jobs, make efforts to sustain current employment, or compete for a promotion. Older workers are frequently highly compensated. These individuals tend to be employed for a lengthier period of time, achieving senior-level positions and progressively higher compensation.

Some individuals maintain that employers target these workers for replacement because they are more Page 40  |  Top of Articlecostly to keep than younger workers. Younger workers tend to be compensated at a lower rate, benefits are less costly, and there is a longer time horizon before retirement. These individuals are less expensive to hire and employ. Acompany may also consider younger workers as opposed to older workers because these individuals are perceived to be more creative, innovative, energetic, and adaptable. Benefits and pension plans are affected also. These programs are expensive to maintain for older workers. Employers may use these data to impose layoffs that are targeted at a disproportionate number of older workers. For example, due to newly revised pension arrangements, an older worker may be forced to make employment decisions, such as early retirement or a job change, which would not normally be the case or differ from younger counterparts. In this case, there are protections under the law.

The Older Workers Benefit Protection Act (OWBPA) was passed in 1990. It guarantees protection against discrimination in benefits packages. For example, OWPBA sets strict guidelines prohibiting companies from converting their pension plans in a way that would provide fewer pension dollars to older workers.

Age discrimination may eventually result in a job or career change, a significant transition for an older worker. Replacing a lost job with a comparable position is very difficult due to the high level of compensation and rank this worker has attained in the profession. There are fewer jobs available at this level, so there is more stringent competition for key positions.

Age discrimination comes in more subtle forms as well, and it is more common than estimated. These occurrences take many forms and are more noticeable in everyday activities. A younger worker may be awarded important job assignments or training opportunities over older workers, for example. A company may reorganize resulting in an older worker being reassigned to a new area, deemed a "lateral move," yet this person has fewer responsibilities and is no longer functioning in a primary role with the original work unit. Older workers may be encouraged to consider retirement by a supervisor in the instance where other employees are not. This is a dangerous form of subtle age discrimination because it is difficult to prove.

Claims between older employees and employers usually arise when compensation and promotion decisions are made unfairly, favoring equally qualified younger workers. Disputes also surface when an older worker has been fired or laid off over a younger worker of equal or lesser qualifications or when a qualified older worker has been declined employment in the hiring process, whether it is for a new position or a promotion. An older worker may have an outstanding performance record or may have been a key contributor to a company's success over a lengthy period of time, yet a younger professional with less experience, time, and expertise is chosen for important positions and promotion.

Age Discrimination and Employers

Employers may intentionally or unintentionally infringe on age discrimination laws. An intentional violation occurs when an employer makes overt statements about a job candidate that exclude this individual from the rest of the hiring pool because of age. For example, a company may review potential candidates and eliminate the older applicant because it is assumed that this individual will not be able to keep pace with the workload. Other common assumptions include the following: the older worker will not be as adaptable to the corporate culture, this individual will not be a long-term worker, or the older worker will suffer from poor health.

Another intentional, and sometimes unintentional, tactic is to create unclear employment documentation that may be legitimate for the purposes of the company, yet it provides an opportunity to exclude applicants and employees from job opportunities. In addition, a firm may develop company policies that unintentionally exclude individuals because of age.

In most cases, a company will make decisions that result in age discrimination to save costs. In so doing, a company takes certain risks that may result in adverse financial consequences. Age discrimination conflicts frequently result in a lawsuit or other form of conflict mediation. Plaintiffs may sue for past wages, future lost wages, emotional distress, and punitive damages, resulting in potentially costly verdicts.

Victims of age discrimination may sue for disparate treatment or disparate impact. Disparate treatment occurs when the employee is treated unfairly because of age, race, sex, creed, color, religion, or ethnic origin. Disparate impact takes place when the employer creates policy that negatively affects employees based on age, race, sex, creed, color, religion, or ethnic origin. Disputes are expensive, not only financially but they may also adversely affect a company's reputation. Small to medium-sized businesses are particularly vulnerable to these effects because they typically do Page 41  |  Top of Articlenot have the financial wherewithal to spend on lengthy and expensive lawsuits. Plaintiffs also bear the expense of these lawsuits. They are time intensive and expensive for all parties.

There are circumstances where age-related reorganizations are acceptable. Companies will sometimes provide financial incentives and severance packages to older workers that are favorable to the employee. This strategy enables the firm to create positions for younger workers and to reduce the number of highly paid individuals. Firms may also set mandatory retirement age under certain exceptions. For example, federal law recognizes ADEA exemptions in the case of air traffic controllers, federal police officers, airline pilots, and firefighters. In 1996, Congress passed legislation that allowed state and local governments to set retirement ages for these and similar employees as young as 55. In addition to mandatory retirement ages, many public safety jobs also have mandatory hiring ages, thus closing the door to potentially otherwise qualified people. There are some individuals who argue against mandatory retirement age exceptions because it would be fairer to all employees to rely on periodic fitness testing, since some older workers may be just as able (or perhaps more so) to carry out their duties as younger ones.

Age Discrimination and Society

Societal values and expectations both favor and discriminate against age. Many contend that older workers are more productive, stable, loyal, and wise. Older workers provide institutional knowledge that may not be recorded elsewhere. Studies show that these individuals are just as productive as younger counterparts, experience less absenteeism, and are less costly to recruit.

The counterargument is that older workers are inflexible, slow to change, and less apt to adopt new technologies.

These differing viewpoints and the conflict between them require employers to acknowledge age discrimination as a real and present issue. Baby boomers are moving through middle age and toward retirement in the United States. These individuals are healthier and are working beyond traditional retirement age. If an employer has not already embraced the value of having a mixed, age-diverse workforce, the demographics will present many issues in the future.

Employers most frequently have a financial incentive to discriminate against older workers. Firms are under tremendous pressure to meet and exceed the expectations of shareholders and other corporate constituents. Companies are in the businesses of maximizing profits and reducing costs. To accomplish these goals, employers experience difficulty balancing the obligations to worker welfare and the important role of contributing to the society at large. Employers have a responsibility to eliminate discrimination and consider employee welfare, regardless of a worker's age.

Conclusion

Age discrimination is a real and present issue in the workplace, and it will become more so for the United States as the large population of baby boomers grows older. Businesses without a firm philosophy and belief in diversity in the workplace will have to examine age-related bias and determine whether these biases are warranted. Are older workers less productive than younger workers, or is it simply a difference in work style and maturity? Relative to costs, what does an employer lose in institutional knowledge, skills, and talents if it eliminates categories of jobs that are commonly held by mature workers—what is the real financial cost?

If the business is stable or growing, a worker's job should be secure when the worker possesses a history of strong performance and ability. Businesses that must reduce workforce for economic reasons should do so with a balanced approach, being mindful of the overall implications to the business, economic development, and society.

What is the cost of age discrimination to the older worker? Whether age discrimination is overt or subtle, it frequently takes a financial and psychological toll. An unanticipated job search for an older worker usually takes longer than it would for a younger worker. Finding equivalent work at the same salary can be difficult, even in favorable market conditions.

A business makes decisions on its overall values and the values of its stakeholders. Workers of diverse ages can promote a balanced workplace while serving society and the public good. It behooves a business to closely examine whether age-related bias exists and, if so, why, and whether it is founded in a realistic framework. This examination should reveal the true costs of making decisions that discriminate against older workers, proving the impracticality of maintaining age-related bias.

                                  —Pamela C. Jones

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Further Readings

CNN Washington Bureau. (2005). Supreme Court eases way for age discrimination suits [Electronic version]. Retrieved May 5, 2006, from www.cnn.com

Encyclopedia of everyday law. (n.d.). Retrieved May 10, 2006, from http://law.enotes.com/everyday-law-encyclopedia/age-discrimination

Greenberg, D. H., & Pasternack, J. (1998, Spring). Age discrimination in the workplace [Electronic version]. Successful California Accountant, XLX(4), 38-41.

Kurland, N. B. (2001). The impact of legal age discrimination on women in professional occupations. Business Ethics Quarterly, 11, 331-348.

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Source Citation   

Gale Document Number: GALE|CX2660400028