Age-Bias Claims on the Rise
Maybe the futurists got it right this time. For years, some experts predicted that as the Baby-Boomer generation reached middle age, the U.S. would see a surge in age-discrimination claims. Now, as many firms engage in job reductions, the evidence may be coming in.
In 2000, there were 16,008 age-discrimination complaints filed with the Equal Employment Opportunity Commission (EEOC), up from 14,141 in 1999. Last year's number of claims was the highest since 1995, though still considerably lower than the nearly 20,000 claims of 1992. This year, things look even worse. During the first six months of 2001, complaints are up 15% from the same period in 2000.
Of course, this uptick is partly the result of increased job cutting. "As the economy slows, older workers are feeling more than their share of the pain," reports the Chicago Tribune. "Discrimination claims often arise when companies eager to cut costs target their highest-paid workers. It's a simple function of corporate life, observers say, that those people are more likely to be older."
The rise may also be partly due to demographics. This is the first year that the oldest Boomers are turning 55. Prof. Howard Eglit of Chicago-Kent College of Law believes that, as the Boomers age, the number of age-discrimination complaints will continue to grow, even when the economy strengthens. Eglit's research shows that there were about 15.5 million 55-year-olds in 1994, a number that will grow to 22.1 million by 2005. Business writer Jerry McAdams notes that every eight seconds for the first ten years of the 21st century, a Baby Boomer will turn 50. That adds up to 11,000 people per day.
For employers, the goal is to convince older workers that they're being treated fairly even amid layoffs. This could be an uphill battle. Even many of those who know best how corporations operate, top managers, believe age bias is growing. A recent survey from ExecuNet shows that 58% of polled executives believe that age discrimination in hiring has increased over the last five years, and 80% said job cuts have put older executives at greater risk of age discrimination.
Others believe that, while discrimination complaints may be rising, discrimination itself isn't. "In my experience, terminated employees have an incorrect perception that their termination was the result of age discrimination or some other illegal reason and they won't recognize that their employment termination was for a legitimate reason such as poor performance," says attorney Marc Zaken, a labor law specialist for Cummings & Lockwood.
It can be hard to tell the difference between age bias and legitimate business decision. For now, the U.S. law is fuzzy about the degree to which employers can target workers with higher salaries before they wind up discriminating on the basis of age. "The law says you can't fire a worker because of age, but it says you can fire them because they're making more money. Sometimes, salary is a proxy for age," says business ethics professor Laura Hartman of DePaul University.
In some cases, however, the courts have rejected employers' economic arguments and have punished them for firing older, better-paid employees in order to make room for younger ones who earn less. For example, the EEOC was successful in an age-bias suit against the University of Wisconsin Press, securing an award of $430,000 for four older workers there. The workers ranged in age from 46 to 54 and were told they were being let go as part of a reduction in force and because they lacked necessary computer skills. However, each was then replaced by a younger employee, and this was seen as a violation of federal law.
The rise in age-discrimination suits should alert employers to be particularly careful when managing a reduction in force, especially if job cuts seem to affect a disproportionate number of older workers. Expertise in how to avoid such suits may pay large dividends over the next several decades, as the Boomer generation ages and a new generation of "Echo Boomers" enters the U.S. workforce.
====================================================
For data on age discrimination charges filed with the EEOC, see
http://www.eeoc.gov/stats/adea.html
To read about the ExecuNet survey, please see
http://www.greenwichtime.com/news/greenwich/2001-07-06/article68270340.1016078.shtml
In 2000, there were 16,008 age-discrimination complaints filed with the Equal Employment Opportunity Commission (EEOC), up from 14,141 in 1999. Last year's number of claims was the highest since 1995, though still considerably lower than the nearly 20,000 claims of 1992. This year, things look even worse. During the first six months of 2001, complaints are up 15% from the same period in 2000.
Of course, this uptick is partly the result of increased job cutting. "As the economy slows, older workers are feeling more than their share of the pain," reports the Chicago Tribune. "Discrimination claims often arise when companies eager to cut costs target their highest-paid workers. It's a simple function of corporate life, observers say, that those people are more likely to be older."
The rise may also be partly due to demographics. This is the first year that the oldest Boomers are turning 55. Prof. Howard Eglit of Chicago-Kent College of Law believes that, as the Boomers age, the number of age-discrimination complaints will continue to grow, even when the economy strengthens. Eglit's research shows that there were about 15.5 million 55-year-olds in 1994, a number that will grow to 22.1 million by 2005. Business writer Jerry McAdams notes that every eight seconds for the first ten years of the 21st century, a Baby Boomer will turn 50. That adds up to 11,000 people per day.
For employers, the goal is to convince older workers that they're being treated fairly even amid layoffs. This could be an uphill battle. Even many of those who know best how corporations operate, top managers, believe age bias is growing. A recent survey from ExecuNet shows that 58% of polled executives believe that age discrimination in hiring has increased over the last five years, and 80% said job cuts have put older executives at greater risk of age discrimination.
Others believe that, while discrimination complaints may be rising, discrimination itself isn't. "In my experience, terminated employees have an incorrect perception that their termination was the result of age discrimination or some other illegal reason and they won't recognize that their employment termination was for a legitimate reason such as poor performance," says attorney Marc Zaken, a labor law specialist for Cummings & Lockwood.
It can be hard to tell the difference between age bias and legitimate business decision. For now, the U.S. law is fuzzy about the degree to which employers can target workers with higher salaries before they wind up discriminating on the basis of age. "The law says you can't fire a worker because of age, but it says you can fire them because they're making more money. Sometimes, salary is a proxy for age," says business ethics professor Laura Hartman of DePaul University.
In some cases, however, the courts have rejected employers' economic arguments and have punished them for firing older, better-paid employees in order to make room for younger ones who earn less. For example, the EEOC was successful in an age-bias suit against the University of Wisconsin Press, securing an award of $430,000 for four older workers there. The workers ranged in age from 46 to 54 and were told they were being let go as part of a reduction in force and because they lacked necessary computer skills. However, each was then replaced by a younger employee, and this was seen as a violation of federal law.
The rise in age-discrimination suits should alert employers to be particularly careful when managing a reduction in force, especially if job cuts seem to affect a disproportionate number of older workers. Expertise in how to avoid such suits may pay large dividends over the next several decades, as the Boomer generation ages and a new generation of "Echo Boomers" enters the U.S. workforce.
====================================================
For data on age discrimination charges filed with the EEOC, see
http://www.eeoc.gov/stats/adea.html
To read about the ExecuNet survey, please see
http://www.greenwichtime.com/news/greenwich/2001-07-06/article68270340.1016078.shtml