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Age Discrimination: Legal Standards and Other Business Considerations

Jack Gross had worked for FBL Financial Group, Inc. (FBL) for 32 years when, at the age of 54, he was reassigned to a new position within the company. Contemporaneously, some of Gross’s job duties were transferred to a new position held by his previous direct report, a woman in her early forties. Gross received the same compensation in his new position, but considered the transfer a demotion. Gross filed suit alleging his transfer violated the Age Discrimination in Employment Act (“ADEA”).

At trial, the jury returned a verdict for Gross and awarded him $46,945. FBL appealed on the grounds that the jury instructions were incorrect under U.S. Supreme Court precedent in Price Waterhouse v. Hopkins. The Eighth Circuit Court of Appeals agreed and Gross sought Supreme Court review and the Court agreed to hear the case.

In Price Waterhouse, the Supreme Court held that when an employee alleged he or she suffered an adverse employment action under Title VII because of both permissible and impermissible considerations, a “mixed motive” instruction is proper. In other words, if a Title VII plaintiff shows that discrimination was a “motivating” or “substantial” factor in the employment decision, the burden of persuasion shifts to the employer to show it would have taken the same action regardless of any alleged impermissible consideration.

In Mr. Gross’s case, the Supreme Court clarified that Price Waterhouse was not binding precedent in an ADEA case. Although the Court had previously been guided by Title VII case law in interpreting the ADEA, here, the Court found significant textual differences between Title VII and the ADEA. Accordingly, the Supreme Court determined Congress had not intended the Price Waterhouse ruling to apply to ADEA cases.

The Supreme Court held that in a case like Mr. Gross’s, a mixed motive age discrimination claim, the plaintiff must show by a preponderance of the evidence that age was the “but for” cause of the employers adverse employment decision. This is a high—and difficult—standard for a plaintiff to prove. In addition, the Court held that the plaintiff retains burden of persuasion in such cases. The Supreme Court’s decision in Gross’s case made it more difficult for a plaintiff to prove an age discrimination claim going forward.

The ADEA forbids age discrimination against people who are age 40 years old and older. The ADEA applies to employers with 20 or more employees, including state and local governments. It also applies to employment agencies and labor organizations, as well as to the federal government.

There are many complex issues—aside from the legal standards—when discussing the issue of older workers vs. younger workers. On one hand, some believe that businesses have economic incentives to hire younger workers. When you consider the sizeable investment that many companies make in its workers in connection training and building connections with customers, hiring younger workers may seem advantageous because younger adults, in theory, are capable of working for a company longer than older adults. In addition, some speculate that medical insurance costs and retirement costs make younger workers attractive for many companies.

On the other hand, some report that doing business with older workers is more efficient and makes for a better overall experience because such employees tend to be mature, knowledgeable, and have a deeper understanding of their business or field. In addition, research by Barbara Strauch (author of The Secret Life of the Grown-Up Brain) shows that middle-aged brains have better inductive reasoning skills and are better at problem solving. In addition, her research indicates that brains reach their peak, socially, in middle age and make better financial judgments. Older workers tend to come up with better solutions quicker because their brains, over time, have wired themselves that way through experience.

Awareness of such issues may make it less likely that you face an age discrimination claim, but may also prove to give you an advantage over the competition.