PEOs Helps Prevent EEOC Claims From Age Discrimination

When job hunters in their sixties and seventies seek employment, it is likely their hiring manager or supervisor is younger than them. This can cause problems if applicants are denied employment or an employee is treated differently and they feel it was a result of their age. The Equal Employment Opportunity Commission (EEOC) protects individuals over the age of forty from age discrimination through the Age Discrimination Employment Act (ADEA).  This act prohibits discrimination due to age regarding:

• Hiring
• Firing
• Pay
• Job assignments
• Promotions
• Layoffs
• Training
• Fringe benefits
• Other terms of employment (1)

The ADEA is well-known among older workers and applicants or employees who feel they have been a victim of age discrimination have been citing the act as they place an increasing number of claims to the EEOC. In 1997, 15,785 claims were made to the EEOC on age discrimination alone.  The monetary benefits of those cases totaled over $44 million. Since then, the number of claims has gone up 45% to 22,875. In 2012, these claims totaled $91.6 million dollars. (2)

These statistics haven’t stopped employers from making poor judgement when hiring and firing employees over forty. In a recent case, a 68-year-old branch manager of a bank was fired after making what the bank felt was an inappropriate comment to a customer (who happened to also be a friend of the woman). The woman filed an EEOC complaint on the basis of age discrimination and here are some of the facts presented to the case.

• Five months prior to her termination, she received “exceeds expectations” in her annual evaluation under the “Core Values” and “Leadership/Management” categories–the same categories used to refer to behavioral expectations.
• The Corrective Action Policy of the company recommends a warning and/or additional training in the case of disciplinary problems unless “the employee has done something so egregious that immediate dismissal is appropriate.” This was the woman’s first disciplinary action and considering what was said and who it was said to, the comment could hardly be considered “egregious.”
• Employees testified that the Chairman of the Board had made comments about wanting to hire a younger, more attractive person for the front desk position and that he would like to put a younger face on the bank.
• Following the woman’s termination, she was replaced by a significantly younger person with similar qualifications. (3)

A lawsuit was filed and the court denied the bank’s request for summary judgement. Now the bank has the option to settle with the plaintiff or defend itself in court. Either option will be expensive for the employer. The firing of employees can be tricky at times. Preparation and execution are critical in avoiding EEOC claims. Best practice actions include:

• Creating a comprehensive employee handbook that clearly states expectations of worker conduct and performance
• Creating a Corrective Action Policy with definite escalation procedures and a paper trail of all incidents and disciplinary actions taken
• Consulting with HR or legal experts prior to the termination of any employee
• Obtaining employment practices liability insurance (EPLI) in the event a lawsuit is brought upon a company.

SOI advises business owners on effective policies and procedures and creates employee handbooks tailored to each business. SOI also offers EPLI coverage as part of its comprehensive risk management strategy. If you would like more information on our HR consultation or EPLI, contact SOI today.

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About the EEOC

The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. It is also illegal to discriminate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. For more information, visit EEOC.gov.

About SOI

SOI is a leading professional employer organization (PEO) for small and medium-sized businesses (SMBs) serving as a trusted partner in integrated human resource (HR) compliance, risk management, employee benefits, employment practices liability insurance (EPLI), and payroll processing. SOI is based in Charlotte, NC and supports tens of thousands of worksite employees throughout the U.S. For more information, visit SOI.com.