New EEOC Rule to Address Layoffs of Older Workers

In a difficult economy, older workers have reason to worry more than their younger counterparts about being fired. Although it's illegal to discriminate against those 40 and over because of their age, it's OK to lay off those who are paid more—as older workers generally are—even if this policy has a disproportionate effect on older workers.

"If an employment decision falls disproportionately on minorities or women, for instance, an employer must be able to show it did not discriminate on the basis of race or sex but was forced to take action for a pressing business reason—a 'business necessity.' But in age-discrimination cases, employers need only cite 'reasonable factors other than age.' And cost generally is one," writes Barbara Rose, a Chicago Tribune columnist.

A Trading Markets post points out that this distinction between age discrimination and other types of discrimination is based on a 2005 U.S. Supreme Court ruling in Smith v. City of Jackson, 544 U.S. 228. A proposed new Equal Employment Opportunity Commission rule incorporating this distinction is now in the process of being adopted.

However, the EEOC is doing what it can for older workers by giving the employer the burden of showing that the layoff was, as Rose puts it, "based on a reasonable factor other than age." Right now, to prove age discrimination, the worker has the burden of showing that the layoff policy applied is unreasonable, according to her column. The EEOC hasn't yet decided whether to supplement the proposed new rule by issuing additional guidance about what factors it considers "reasonable."

Additional coverage:

Employment Law Alert (Nixon Peabody): "Landmark Second Circuit Decision Dismisses Adverse Impact Age Discrimination Claims and Jury Verdict against KAPL, Inc., and Lockheed Martin"

Associated Press: "Look at Age Discrimination Cases"