The Catholic University of America - Campus Legal Clearinghouse

Summary of Federal Laws

Employment

Equal Employment Opportunity

Age Discrimination in Employment Act of 1967 (ADEA) (part of the Fair Labor Standards Act of 1938) 29 U.S.C. § 621 et seq.; 29 C.F.R. Part 1625.1 et seq.

Prohibits employment discrimination based on age with respect to persons who are at least 40 years of age. As of January 1, 1994, mandatory retirement for faculty, whether tenured or not, is unlawful. Exemption for high level managers in bona fide executive or high policy making positions. The ADEA was amended by Pub. L. No. 104-208, § 119, 110 Stat. 3009 (1996). The amendment restores the public safety exemption, thus allowing police and fire departments to use maximum hiring and mandatory retirement ages. See 29 U.S.C. § 623(j)(1). Does not per se prohibit the asking of age or date of birth on a job application, but indicates that such action will be closely scrutinized for legitimate business purpose.

Section 941 of the Higher Education Amendments of 1998 amends the ADEA by allowing institutions of higher education to offer tenured faculty voluntary early retirement incentive plans that are in part age-based. Safe harbor provisions require that the supplemental age-based benefits must be in addition to retirement or severance benefits offered generally to tenured faculty, independent of an early retirement plan offered in the preceding 365 days. An 180-day election period is required. The effective date is October 1, 1998, and does not affect a cause of action that arose prior to that date.

Recordkeeping: See 29 C.F.R. § 1627.3.

For three years:

Payroll records containing name, address, date of birth, occupation, rate of pay, and

compensation earned each week.

For one year:

Job applications, résumés and any other form of employment inquiry submitted in connection with job openings, as well as records pertaining to the failure to hire an individual.

Promotion, demotion, transfer, training selection, layoff, recall or discharge records.

Job orders submitted to an employment agency or labor organization for recruitment of personnel.

Test papers completed by applicants which disclose the results of employment tests.

The results of physical exams considered by the employer in connection with any personnel action.

Any ads or notices to the public or employees relating to job openings, promotions, training programs, or opportunities for overtime work.

For the term of the plan, and at least one year after termination of the plan:

Any employee benefit plans such as pension and insurance plans, as well as copies of any seniority systems and merit systems which are in writing.. If the plan or system is not in writing, a memorandum fully outlining the terms of such plan or system and the manner in which it has been communicated to the affected employees, together with notations relating to changes or revisions.

Posting: See 29 C.F.R. § 1627.10. A summary of the law’s provisions must be posted in prominent and accessible places where it can be observed by employees, applicants and union members. The required notice is available from the EEOC.

Proposed Rule; Disparate Impact Under the Age Discrimination in Employment Act, 73 Fed. Reg. 16807 (March 31, 2008)

The Equal Employment Opportunity Commission is issuing this notice of proposed rulemaking
to address issues related to the United States Supreme Court's decision in Smith v. City of Jackson. The Court ruled that disparate impact claims are cognizable under the ADEA but that liability is precluded when the impact is attributable to a reasonable factor other than age. Current
EEOC regulations interpret the ADEA as prohibiting an employment practice that has a disparate impact on individuals within the protected age group unless it is justified as a business necessity. This proposed rule would states adopts the "reasonable factor other than age" language. The proposed rule also states that an individual challenging an allegedly unlawful employment practice bears the burden of isolating and identifying the specific employment practice responsible for the adverse impact.

Final Regulations, Coverage Under the Age Discrimination in Employment Act

72 Fed. Reg. 36873, July 6, 2007

The EEOC is publishing this final rule to amend the ADEA regulations to conform them to the Supreme Court's holding in General Dynamics Land Systems Inc. v. Cline 540 U.S. 581 (2004), that the ADEA only prohibits discrimination based on relatively older age, not discrimination based on age generally. Thus, the final rule deletes language in EEOC's ADEA regulations that prohibited discrimination against relatively younger individuals. The new rule explains that the ADEA only prohibits employment discrimination based on old age and, therefore, does not prohibit employers from favoring relatively older
individuals.

Proposed Regulations 68 Fed. Reg. 41542 (July 14, 2003)

In this proposed new rule, the EEOC proposes an exemption which permits employee benefit plans to lawfully provide health benefits for retired participants that are altered, reduced or eliminated when the participant is eligible for Medicare health benefits or for health benefits under a state-sponsored retiree health benefits program. No other aspects of ADEA coverage or benefits other than retiree health benefits are affected by this exemption. The rule is in response to rising health care costs, and also in response to the negative aftermath of a 3rd Circuit decisison, Erie County Retirees Ass'n v. County of Erie, 220 F.3d 193 (3rd Cir. 2000).

In an attempt to comply with the court's ruling, the county transferred younger retirees from the hybrid point-of-service plan--where each retiree had the ability to select between HMO or traditional indemnity plan coverage on an as-needed basis--to an HMO plan similar to that available to retirees over age 65 that did not provide such an option. Erie County Retirees Ass'n v. County of Erie, 192 F. Supp.2d 369, 372 (W.D. Pa. 2002). The county also required employees not yet eligible for Medicare to pay a monthly amount for such coverage equal to the monthly amount of Medicare Part B premiums that retirees over age 65 paid. (Portions of text taken from Federal Register) See the FR link for a Q and A on the proposed regulation.

Waiver of ADEA Claims: EEOC final regulations

On Dec. 11, 2000, the EEOC issued final regulations on what constitutes a valid ADEA waiver. See 65 Fed. Reg. 77437. This document contains guidance to employers drafting waiver provisions. The regulations state that a person who challenges a waiver or covenant not to sue need not tender back consideration before filing a lawsuit or EEOC charge. The waivers may not provide for employer recovery of costs, attorney fees or damages when an employee sues under the ADEA, although employers may recover same when claims are filed in bad faith. The issue of severability for an invalid provision is touched upon, but not decided. In part the final regulations state " The Commission believes, however, that contrary to the position advanced by the employer, there is a strong argument that inclusion of an invalid provision in an ADEA waiver agreement-- such as a tender back clause or a damages provision--should invalidate the entire waiver." The regulations are effective Jan. 10, 2001.

Selected Case Law Under ADEA

Resources

Compliance Manual: Portions of the EEOC compliance manual are available online at http://www.eeoc.gov/policy/compliance.html. Section 3, "Employee Benefits," added on October 3, 2000, explains how the employment discrimination laws apply to life and health insurance benefits, long-term and short-term disability benefits, severance benefits, pension or other retirement benefits, and early retirement incentives. The section covers discrimination in these benefits under the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the Civil Rights Act of 1964 (Title VII), and the Equal Pay Act (EPA). The full text of Section 10 of the Compliance Manual covering complaints of Compensation Discrimination was issued December 5, 2000, by the EEOC. This section covers complaints of discrimination in compensation based under the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the Civil Rights Act of 1964 (Title VII), and the Equal Pay Act (EPA). The following are examples of compensation discrimination addressed in the Compliance Manual:

an employer pays employees inside a protected class less than similarly situated employees outside the protected class, and the employer's explanation (if any) does not satisfactorily account for the differential;

an employer maintains a neutral compensation policy or practice that has an adverse impact on employees in a protected class and cannot be justified as job-related and consistent with business necessity;

an employer sets the pay for jobs predominantly held by protected class members below that suggested by the employer's job evaluation study, while the pay for jobs predominantly held by employees outside the protected class is consistent with the level suggested by the job evaluation study;

a discriminatory compensation system has been discontinued, but salary disparities caused by the system have not been eradicated; or

the compensation of one or more employees in a protected class is artificially depressed because of a discriminatory employer practice that affects compensation, such as steering employees in a protected class to lower paid jobs than persons outside the class, or discriminating in promotions, performance appraisals, procedures for assigning work, or training opportunities.

Title VII, the ADEA, and the ADA prohibit discrimination in "compensation" based on race, color, religion, sex, national origin, age, disability, or protected activity.

updated 4/13/08 to add 72 Fed. Reg. 36873 and to create link to cases page (MLO)
updated 4/20/08 to add proposed rule

Last Revised 20-Apr-08 02:30 PM.