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The Office Organizer: 10 tips on file organizing, clutter control, document management, business shredding policy, record retention guidelines and how to organize office emails
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- EEOC drives a stake into the heart of age-based retirement policies
EEOC drives a stake into the heart of age-based retirement policies
- By Mindy Chapman, Esq., Mindy Chapman & Associates
- 10/11/2007 - 3:00pm
- Discrimination & Harassment
Mindy Chapman, Esq., Mindy Chapman & Associates
Mindy is a nationally recognized authority in EEO laws and is a contributing editor to the HR Specialist: Employment Law
monthly newsletter. She is highly regarded for her workplace compliance
training that “clicks and sticks,” because it is practical and
memorable. She is also the coauthor of the American Bar Association’s
bestseller and authority on civil rights training, “Case Dismissed! Taking Your Harassment Prevention Training to Trial."
The Society for Human Resources Management (SHRM) has recognized Mindy as one of its Top Ten Speakers nationally. She has trained extensively in all industries at all levels of the
workforce—from boardroom executives to managers and supervisors and to
hourly employees in union and non-union environments.
Question: Does your organization have a policy requiring employees to retire (or step down to a lesser position) once they hit a certain unbecoming age? Does that sound like your strategic succession plan—push your working geezers and geezeretts out the door so younger workers can climb the ladder? If so, a groundbreaking $27.5 million EEOC settlement last week shows that you better retire those policies … not the people.
Here’s why: The federal Age Discrimination in Employment Act (ADEA) prohibits employers from using policies or rules that require employees (over 40) to retire when they reach a particular age. In the past, some organizations believed they could skirt the ADEA by implementing partnership agreements that classified certain employees as “partners” under state partnership law. As partners, they’d be one of the firm’s “employers” and, thus, excluded from the ADEA. But that old trick no longer works, as last week’s big settlement shows.
Case in Point: A few years back, Sidley Austin LLP—an international law firm with, ironically, a solid employment-law practice—initiated a restructuring plan. Partners over age 40 were required to either quit or take demotions to lesser positions like “senior counsel.” Also, the firm’s previous mandatory retirement age of 65 was scaled down to the range of 60 to 65. These new policies affected about three dozen attorneys who were in the prime of their careers. These lawyers complained to the EEOC, which sued on their behalf.Sidley openly shared its strategic plan: target partners in their 50’s to enhance the leadership opportunities of younger partners. How else can a business really create a viable succession plan? Not that way, the EEOC said. (EEOC v. Sidley Austin LLP, N.D. Ill., No. 05 C 0208, 10/4/07)
How did this case end…and what lessons can be learned?
After losing key preliminary rounds in the courts, Sidley Austin decided last week to settle the case by agreeing to a consent decree that dishes out $27.5 million to 32 former partners. The EEOC boasted that the per-employee settlements were among the “richest” ever negotiated by the EEOC, with the highest being $1.8 million. The average payment was about $850,000. (Despite getting the proverbial EEOC pie thrown in its face, Sidley denies any wrong doing.)
“This settlement ought to send a signal that if you are thinking about discrimination on the basis of age… you had better think three times before you do it,” said John Hendrickson, the EEOC’s regional attorney in Chicago. He said the settlement shows a dramatic shift in the legal understandings of the boundaries of “partnership.” The EEOC has always asserted that the attorneys were “partners in name only” and the ADEA applied to them like it did to employees.
And it’s not just about law firms. The EEOC’s general counsel Ronald Cooper said the outcome of the case, “is important to the broader spectrum of employers managing an aging workforce. The demographic changes in America assure that we will see more opportunities for age discrimination to occur and that it is increasingly important that all employers understand the impact of the ADEA.”
3 Lessons Learned … Without Having to Go to Court
1. Examine your policies to identify any that require employment decisions be based on age. Some companies have very old policies that need to be dusted off and read closely. Mandatory retirement policies are not uncommon. If you have one in place today, you’d better “deep six” it immediately.
2. Succession planning is about skills, not age. Succession plans should identify gaps in knowledge and then provide your workforce with the opportunities to gain experience in those areas. This practice grooms employees for leadership when the opportunities arise naturally. Firing, demoting or laying off older workers should never be part of your succession plan.3. Never retaliate ... ever. It’s illegal to lash out at employees for exercising their rights under the ADEA or any other federal or state anti-discrimination laws. In this case, the EEOC appointed an outside monitor to take in all reports of retaliation (and discrimination) during the course of the consent decree.
Bottom line: The EEOC has once again proven that no organization is exempt from their clutches—not even law firms that pride themselves in knowing all the “legal loopholes.”
The Office Organizer: 10 tips on file organizing, clutter control, document management, business shredding policy, record retention guidelines and how to organize office emails
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