Is your Employer’s Reorganization Is your Employer’s Reorganization a Latent Form of “Age” a Latent Form of “Age”

Discrimination?Discrimination?

Ethan BurgerEthan Burger & Joel Zuckerman& Joel Zuckerman

Maxwell & Barke LLC Maxwell & Barke LLC (Rockville, MD)(Rockville, MD)

www.maxlaw.uswww.maxlaw.us

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Unemployment at 15-Year HighUnemployment at 15-Year High

According to the U.S. Government the number of According to the U.S. Government the number of unemployed Americans increased by 524,000 in unemployed Americans increased by 524,000 in December 2008 to 10.8 million, representing 7.2% of all December 2008 to 10.8 million, representing 7.2% of all workers receiving unemployment insurance. workers receiving unemployment insurance.

The actual unemployment rate is approximately 12% The actual unemployment rate is approximately 12% when so-called “discouraged” workers and part-time when so-called “discouraged” workers and part-time workers seeking full-time jobs are added. These figures workers seeking full-time jobs are added. These figures represent the highest level of unemployment since 1983. represent the highest level of unemployment since 1983.

More than 2.2 million people have been out of work for More than 2.2 million people have been out of work for six months or longer — another level not reached in a six months or longer — another level not reached in a quarter-century. quarter-century.

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President Obama’s Economic PrioritiesPresident Obama’s Economic Priorities

The U.S. faces its most serious economic crisis since the The U.S. faces its most serious economic crisis since the great depression. great depression.

The Obama Administration has identified job creation, in The Obama Administration has identified job creation, in excess of 3 million jobs in the next 2 years, as the centerpiece excess of 3 million jobs in the next 2 years, as the centerpiece of his program.of his program.

Nonetheless, some economists predict that 4 million jobs may Nonetheless, some economists predict that 4 million jobs may be lost in 2009, pushing the unemployment rate up to 9%. be lost in 2009, pushing the unemployment rate up to 9%.

Consequently, even though many new jobs may be created, Consequently, even though many new jobs may be created, some workers will still risk of losing their jobs even if there is some workers will still risk of losing their jobs even if there is an recovery. Therefore American workers must educate an recovery. Therefore American workers must educate themselves of their legal rights in the employment area.themselves of their legal rights in the employment area.

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Workers Age 40+ Are Most VictimizedWorkers Age 40+ Are Most Victimized

In 2008, there were more than 80 million In 2008, there were more than 80 million American workers above age 40.American workers above age 40.

Such individuals enjoy certain legal protections Such individuals enjoy certain legal protections under federal (The Age Discrimination in under federal (The Age Discrimination in Employment Act) and some state legislation.Employment Act) and some state legislation.

Yet, evidence suggests that discrimination Yet, evidence suggests that discrimination against older workers continue in hiring and against older workers continue in hiring and promotion.promotion.

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The Age Discrimination in The Age Discrimination in Employment Act of 1967 (ADEA)Employment Act of 1967 (ADEA)

The ADEA prohibits discrimination on the basis of The ADEA prohibits discrimination on the basis of age. It makes it unlawful for an employer:age. It makes it unlawful for an employer:

(1) to fail or refuse to hire or to discharge persons (1) to fail or refuse to hire or to discharge persons

because of their age;because of their age;

(2) to deprive people of employment opportunities for (2) to deprive people of employment opportunities for reasons of age; orreasons of age; or

(3) to reduce the wage rate of employees due to their (3) to reduce the wage rate of employees due to their age.age.

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Examine the Work EnvironmentExamine the Work Environment

Most American workers are “employees at Most American workers are “employees at will” -- that is, they are not “entitled” to their will” -- that is, they are not “entitled” to their jobs.jobs.

Therefore, it is not surprising that Therefore, it is not surprising that individuals “riffed” during downsizing or individuals “riffed” during downsizing or reorganization may be fatalistic about their reorganization may be fatalistic about their situations.situations.

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Are Workers Aware of their Rights?Are Workers Aware of their Rights?

Workers over age Workers over age 40 40 ((forty)forty) are members of a are members of a “protected class” under U.S. federal law.“protected class” under U.S. federal law.

While “age” is not an immutable trait like race While “age” is not an immutable trait like race which enjoys federal constitutional protections, it which enjoys federal constitutional protections, it may enjoy state constitutional protections or may enjoy state constitutional protections or specific rights under relevant state “Human specific rights under relevant state “Human Rights” statutes.Rights” statutes.

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Exceptions to ADEAExceptions to ADEA

In some circumstances age MAY be the In some circumstances age MAY be the basis for employment decisions, but this is basis for employment decisions, but this is rare.rare.

Allowed where age is a “Allowed where age is a “bona fide” bona fide” occupational qualification (BFOQ).occupational qualification (BFOQ).

BFOQs must be genuine, not merely based BFOQs must be genuine, not merely based on stereotypes to be legally permissible.on stereotypes to be legally permissible.

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BFOQ TestBFOQ Test

According to the U.S. Supreme Court, for According to the U.S. Supreme Court, for employer to show a job involves BFOQs:employer to show a job involves BFOQs:

(i) there is a scientific basis showing a legitimate (i) there is a scientific basis showing a legitimate factor other than age is present; orfactor other than age is present; or

(ii) The employer is justified not to spend money (ii) The employer is justified not to spend money on training a worker since in the near future such on training a worker since in the near future such worker will not be able to do the job due to (i), worker will not be able to do the job due to (i), above.above.

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Some Legal Issues: ReorganizationsSome Legal Issues: Reorganizations

Where a job is reorganized out of existence, was Where a job is reorganized out of existence, was the individual given an opportunity to apply for the individual given an opportunity to apply for other positions with the employer?other positions with the employer?

Employers general patterns – is the evidence of Employers general patterns – is the evidence of age discrimination.age discrimination.

Was there a valid non-discriminatory reason for Was there a valid non-discriminatory reason for the employer’s action? the employer’s action?

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Some Legal Theories for Some Legal Theories for ClaimClaim

Actual evidence of discriminatory intent.Actual evidence of discriminatory intent.

Adverse impact on workers above age 40.Adverse impact on workers above age 40.

Disparate impact on workers above age Disparate impact on workers above age 40.40.

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Administrative Process or Administrative Process or Lawsuit?Lawsuit?

Federal Law – An employee may file a “charge” with the Federal Law – An employee may file a “charge” with the Equal Opportunity Employment Commission (EEOC). Equal Opportunity Employment Commission (EEOC). Under the ADEA, a suit may be filed at any time Under the ADEA, a suit may be filed at any time 60 days60 days after filing a charge with after filing a charge with EEOCEEOC

State Law – While D.C. and Maryland both have State Law – While D.C. and Maryland both have administrative agencies to deal with age discrimination, it administrative agencies to deal with age discrimination, it is often more advantageous to simply bring a law suit. For is often more advantageous to simply bring a law suit. For example, the D.C. Human Rights Act (D.C. Code 2-1401) example, the D.C. Human Rights Act (D.C. Code 2-1401) prohibits age discrimination in the employment context; prohibits age discrimination in the employment context; Maryland's anti-discrimination law (Maryland Code Article Maryland's anti-discrimination law (Maryland Code Article 49B, Section 11) allows employees to sue in state court for 49B, Section 11) allows employees to sue in state court for unlawful age discrimination against persons age 40 and unlawful age discrimination against persons age 40 and above. above.