The Age Discrimination in Employment Act
The Age Discrimination in Employment Act (ADEA) of 1967 protects individuals aged 40 and older from employment discrimination based on age. For HR professionals preparing for the SHRM exam, the ADEA presents unique considerations that differ from other anti-discrimination statutes, particularly regarding the burden of proof and the treatment of early retirement incentive programs.
Coverage and Scope
The ADEA applies to employers with 20 or more employees, employment agencies, labor organizations with 25 or more members, and federal, state, and local governments. The law prohibits age discrimination in all aspects of employment, including hiring, firing, compensation, job assignments, promotions, layoffs, training, benefits, and any other term or condition of employment.
It is important to note that the ADEA protects only individuals who are 40 years of age or older. It does not prohibit favoring an older worker over a younger one, even when both are over 40, unless the employer's actions are motivated by the younger employee's age.
Proving Age Discrimination
In Gross v. FBL Financial Services (2009), the Supreme Court established that in ADEA cases, the plaintiff bears the burden of proving that age was the "but-for" cause of the adverse employment action. This is a higher standard than the "motivating factor" standard used in Title VII mixed-motive cases. This distinction is significant for HR professionals to understand when assessing legal risk.
Bona Fide Occupational Qualification (BFOQ)
The ADEA permits age-based distinctions when age is a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the business. The BFOQ defense is narrowly construed, and employers must demonstrate that the age limit is reasonably necessary to the essence of the business and that substantially all individuals above the age limit cannot safely and efficiently perform the job, or that individual assessment is impractical. Common examples include airline pilots (subject to mandatory retirement rules from the FAA) and public safety officers in certain jurisdictions.
Older Workers Benefit Protection Act (OWBPA)
The Older Workers Benefit Protection Act of 1990 amended the ADEA to specifically address benefits and waivers. Key provisions include:
- Employers cannot reduce benefits for older workers unless the cost of providing those benefits is significantly higher than for younger workers.
- The "equal cost or equal benefit" principle: employers must either provide equal benefits or incur equal costs for older and younger workers.
- Specific requirements for valid waivers of ADEA rights in severance agreements.
Requirements for Valid ADEA Waivers
When employers offer severance packages that include a waiver of age discrimination claims, the OWBPA requires that the waiver be knowing and voluntary. For individual waivers, the following conditions must be met:
- The waiver must be written in plain language understandable to the employee.
- The waiver must specifically refer to rights under the ADEA.
- The employee must be advised in writing to consult an attorney before signing.
- The employee must be given at least 21 days to consider the waiver.
- The employee must have 7 days after signing to revoke the waiver.
- The waiver must be supported by consideration beyond what the employee is already entitled to receive.
For group terminations or exit incentive programs, additional requirements apply: the consideration period extends to 45 days, and the employer must provide information about the job titles and ages of individuals selected and not selected for the program.
Common ADEA Violations
HR professionals should be vigilant about practices that may constitute age discrimination, including job postings that specify age preferences or use terms like "recent graduate" or "digital native," layoff decisions that disproportionately affect older workers, steering older workers toward early retirement, denying training opportunities to older employees, and using age-based stereotypes in performance evaluations.
SHRM Exam Tips
For the SHRM exam, remember the ADEA's coverage threshold (20 employees), the protected age group (40 and older), the "but-for" causation standard from Gross v. FBL, and the specific waiver requirements under the OWBPA (21 days for individual, 45 days for group, plus 7-day revocation period). These details are commonly tested.