The Supreme Court’s ruling in Smith v. City of Jackson, Mississippi, has upheld the notion that persons who sue for age discrimination do not need to prove that an employer intentionally discriminated based on age. Instead, a person only needs to show that a workplace policy has a disparate impact on older workers. Due to the gray areas within this ruling, additional litigation has surfaced. Plaintiffs sue for emotional distress caused by age discrimination, and the typical age-bias cases average $150,000, while state law wrongful discharge lawsuits can run upwards of $1 million. Age discrimination lawsuits carry great financial penalties because the damages are based on the earnings of the plaintiffs and the time that they are out of work.
The Age Discrimination in Employment Act of 1967 (ADEA) protects individuals who are 40 years of age or older from employment discrimination based on 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 his/her age with respect to any term, condition, or privilege of employment — including, but not limited to, hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training.
It is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on age or for filing an age discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under the ADEA.
The ADEA applies to employers with 20 or more employees, including state and local governments. It also applies to employment agencies and to labor organizations, as well as to the federal government.
Certain state laws tend to include employers with fewer than 20 employees, so small businesses might have to comply with state law even if they are not covered by the Federal Age Discrimination in Employment Act (ADEA).
Businesses need to be proactive and extra vigilant in educating themselves to prevent age bias claims. There is no time like the present to evaluate current employment policies. Simple solutions can include keeping abreast of all record keeping requirements and reviewing business policies to ensure they are age neutral. Other solutions include, retaining payroll and benefit plan records for all terminated employees and having an organized and safeguarded system to retrieve important documentation.