What Employers Need to Know About the Age Discrimination in Employment Act (ADEA)

Published on July 6, 2016

The Age Discrimination in Employment Act (“ADEA”) prohibits discrimination for workers 40 or older.  The ADEA applies to companies with 20 or more employees.  Note that the Washington Law Against Discrimination, which also prohibits age discrimination, applies to companies with 8 or more employees.  In discharge cases, a prima facie case under the ADEA requires that the employee is “(1) at least forty years old, (2) performing his job satisfactorily, (3) discharged, and (4) either replaced by substantially younger employees with equal or inferior qualifications or discharged under circumstances otherwise giving rise to an inference of age discrimination.”  Diaz v. Eagle Produce Ltd. P’ship, 521 F.3d 1201, 1207-08 (9th Cir.2008).

It is unlawful to discriminate against someone because of age with respect to any condition or term of employment including hiring, firing, layoffs, compensation, benefits, training, promotions, and anything else related to employment.  Examples of age discrimination include hiring younger workers instead of older workers, terminating older workers to keep younger, lower paid workers, laying off older workers, and training only younger workers.  Even if two employees are over 40, a company still cannot use age to make an employment decision preferring the younger employee over the older employee.  Employers should always have valid reasons, not related to age, for any employment decision related to workers 40 and older.

Reduction-in-force or layoffs often lead to age-related claims, especially where the reduction-in-force will impact older workers more than younger workers.  In planning for reductions, employers should analyze their workforce to determine what the workforce looks like before making the reduction decisions.  Employers can defend against age-related claims by showing decisions were made based on reasonable factors other than age.  Employers should consider most recent performance evaluations, correlating between objective (not subjective) performance data and who is retained.  Also, employers should consider its employees’ average age both before and after the reduction – if the average age lowers significantly after the planned reduction than older employees may use that data as evidence for age-related discrimination claims (this is also true for race, gender, and other protected classes).

When terminating an employee, the company may consider offering a severance payment in exchange for a release from the employee.  Often a severance payment is a small price to pay for certainty that no claim will be filed.  To release age-related claims, the release:

• must be in writing;
• must specifically refer to ADEA claims;
• must not waive future claims;
• must advise the employee in writing to consult an attorney before signing the release;
• the employee must be allowed 21 days to consider the agreement; and
• the employee must be allowed 7 days to revoke the agreement after signing it.

A general release that does not meet these requirements is inadequate to release age-related claims.

If you find yourself in a questionable situation or needing more information, feel free to contact an attorney in the Employment Rights, Benefits and Labor Group at Ryan Swanson.

Britenae Pierce is a member in Ryan, Swanson & Cleveland, PLLC’s Employment Rights, Benefits and Labor Group and can be reached at 206.654.2289 or [email protected].