Dan Esberg wanted to cash in on his company's educational assistance program. The company paid Esberg $16,000 for his bachelor's degree after he had turned 50. But when Esberg decided to go for an M.B.A., the company refused to foot the bill.
No official reason was given, but one supervisor told Esberg, "You're too old to invest in." The company did pay for three younger workers who were enrolled in masters' programs.
Illegal discrimination? Not under California law, the court said. The state law that bars discrimination in the terms and conditions of employment, in contrast to hiring and firing, doesn't include age as a protected characteristic. (Esberg v. Union Oil Co. of Calif., No. G022069, Calif. CA, 2001)
Advice: Ignore this decision. The company would have been clobbered in court if Esberg had brought his lawsuit under federal law instead of state law.
Why? The federal Age Discrimination in Employment Act (ADEA) specifically bans age discrimination in the terms, conditions and privileges of employment, including educational benefits. Refusing to fund the education or training of older workers is based on a stereotype that they will retire at a certain age.
You can protect your education investments without discriminating. Example: You pay a partial tuition reimbursement upon course completion and pay the balance, or a bonus, after the employee has been with the company for, say, two years.