New York Employment Lawyer Blog

Age discrimination in technology firms is rampant. Thousands of experienced (experienced = old as in 40+) tech engineers cannot find jobs. This is because the tech world prefers young, inexperienced engineers who work for less, are eager to learn new technology, don't have family obligations, and will work all night. Older engineers, on the other hand, have to leave by 6 to get the kids to soccer practice and require double the pay and are perceived to be slower to learn new things.

Two UC Berkley professors just published their book, "Chips and Change" and they document Bureau of Labor and Census data for the semiconductor industry and found that salaries rose sharply for engineers in their 30s but that the increases slowed in their 40s and began dropping in their 50s and beyond. See the article in Techcrunch, "Silicon Vally's Dark Secret: It's All About Age."

The tech industry denies overtly shopping for young engineers. A Microsoft employee, for example, "acknowledged that the vast majority of new Microsoft employees are young, but said that this is so because older workers tend to go into more senior jobs and there are fewer of those positions to begin with. It was all about hiring the best and brightest, he said; age and nationality are not important."

Over the years, I have represented a number of older high tech workers in age discrimination cases. The cases are typically long and drawn out but in the end they mostly settled for decent numbers. Age discrimination is tough to prove and companies tend to defend them vigorously. Frankly, I do not understand why companies fight these cases so hard. I suppose it is because they have a lot to lose. We all know that age discrimination is an epidemic in the tech industry. Maybe in our next case we will call the two Berkley professors as experts witnesses. Their statistics could be useful.

How can older workers prove age discrimination when they are part of a reduction in force? The best way to prove any kind of employment discrimination is to focus hard on the explanations provided by the company. This is even more important when an employee is part of a group termination. By focusing on the details, it sometimes becomes clear that the explanations are not logical and this can expose the real motive for the firing.

In EEOC v. Tin, for example, the plaintiff did a good job of questioning the explanation provided by the company. In Tin, an Arizona plant manager was fired and replaced by someone 15 years younger. The company said the younger manager was more qualified because the younger person used to manage a very profitable plant. But by focusing on the details of a plant managers job, it became apparent that a plant's profitability was not impacted by the plant manager. Instead, plant profitability was driven by other factors that were outside of the manager's control.

The Court ruled that plant profitability was not an indication that the younger manager was more qualified. In rejecting the companies argument, the Court allowed the age discrimination claim to advance to trial and denied the companies motion for summary judgment. The details won the day in that case and prevented the company from getting the case dismissed.

Brokerage firms often expect experienced financial advisers to generate more business than less experienced ones. However, the EEOC is now investigating whether these brokerage firms discriminated against older brokers who didn't meet that higher standard.

In a letter dated Nov. 6 obtained by Dow Jones Newswires and sent to hundreds of former Morgan Stanley brokers, the U.S. Equal Employment Opportunity Commission said it is conducting an investigation into large-scale layoffs by the New York-based firm in August 2005.

At the time, Morgan Stanley laid off around 1,000 brokers who failed to meet new production hurdles. As brokers gained seniority, they had to generate higher commissions and fees to remain employed.

The practice is common at brokerage firms. A number of them, including Morgan Stanley and Citigroup Inc. unit Smith Barney, ratchet up demands on experienced brokers. For a given production level, newer brokers retain a higher percentage than more experienced brokers of the commissions and fees they generate, particularly those in the low or middle ranges of production.

In Morgan Stanley's case, the firm went so far as to lay off experienced brokers who didn't generate a high enough production.

The EEOC probe isn't the only potential challenge to Morgan Stanley over age discrimination. A federal lawsuit filed by Edward Sullivan, former regional director at the firm's wealth management unit, is pending before the U.S. District Court of the Southern District of New York. Sullivan, a 25-year Morgan veteran in his mid-50s at the time, alleged that he was fired in May 2006 because of his age.

Some lawyers at brokerage firms and consultants say an adverse finding by the EEOC on the Morgan Stanley layoffs could force a rethinking of pay structures linked to years of service.

Lawyers at brokerage firms say it makes sense to require more production from more experienced advisers. "It has nothing to do with age, it has to do with the number of years of production," said a lawyer at a Morgan Stanley competitor. Still, with an adverse EEOC finding, depending on specifics, "you'd have to change the pay structure," the lawyer said.

To ward off potential lawsuits, said Robert Salwen, a compensation consultant, firms could implement a pay structure based purely on production. Pegging part of compensation on length of service may discourage veteran brokers from resting on their laurels, but "if that's the case, then there may be an age discrimination component."

Growing demands on aging brokers will become an issue because, say consultants, the age of the average broker is rising. "It's an aging industry and it's becoming a bigger problem," said Philip Palaveev, a senior consultant on financial advisory at Moss Adams.

If the EEOC probe concludes the brokers' complaint has merit, the commission can pursue the case before a federal court on the plaintiffs' behalf, or simply advise the plaintiffs to pursue a court case on their own. If the investigation proves favorable to Morgan Stanley, the plaintiffs will have a hard time pursuing a federal lawsuit unless the court overturns EEOC's decision.

On November 6, 2007, the U.S. Supreme Court will hear argument in Federal Express Corp. v. Holowecki. The case considers what procedures a plaintiff must follow in order to successfully invoke her rights under the Age Discrimination in Employment Act (ADEA) - the federal law that prohibits employers from discriminating against employees aged 40 and over on the basis of age.

In 2001, Patricia Kennedy filed an “intake questionnaire” with the Equal Employment Opportunity Commission (”EEOC”) alleging age discrimination by her employer, Federal Express Corporation (”FedEx”), against her and other couriers. Because she did not file a formal “charge” document, the EEOC did not notify FedEx, investigate the claims, or begin conciliation efforts.

Five months later, Kennedy, along with 13 other past and present FedEx couriers over the age of 40, filed suit over this issue in federal court. The trial court granted FedEx’s motion to dismiss, ruling (among other things) that Kennedy could not sue because she never filed a timely charge with the EEOC as required by the Age Discrimination in Employment Act (”ADEA”). The U.S. Court of Appeals for the Second Circuit reversed, holding that Kennedy’s intake questionnaire is a “charge” for the ADEA’s purpose because it manifests her intent to activate the EEOC’s investigation and conciliation process.

The Supreme Court now takes up the question of whether, “even in the absence of evidence that the EEOC treated the form as a charge or the employee submitting the questionnaire reasonably believed it constituted a charge”, an intake questionnaire meets the requirements of a discrimination “charge”.

With people having children later in life, and therefore expenses such as college tuition looming over parents who are in their 50's and 60's, more workers say they plan to stay on the job well past normal retirement age.

The question is, will workplaces welcome these older workers? Despite progress at some companies, age discrimination appears to still be a pervasive problem.

An appeals court ruled last week that a former Google Inc. (GOOG) executive can move forward with his age-discrimination lawsuit against the tech company. The former employee claims colleagues called him an " old fuddy-duddy" and told him he was fired because he wasn't a "cultural fit," according to court documents.

As an employment lawyer, I hear cases similar to the Google case all of the time. Many of my clients don't even think to tell me about most of the comments that have been made because they have become so accustom to that type of environment and have therefore become numb to the discriminatory conduct in the workplace.

According to a study by the Employee Benefit Research Institute in April, 24% of current workers say they'll retire at age 66 or later, and another 27% plan to retire at 65. This data suggests that age discrimination cases are going to increase in the near future.

The same EBRI study finds 37% of retirees said they left the work force earlier than planned, with 28% pointing to health problems, 28% citing "changes at their company, such as downsizing or closure" and another 18% citing work- related reasons.

If you feel you have been pushed out of your job based on your age, you should contact an attorney.

A huge corporate law firm, Sidley & Austin, just paid 27.5 million to 32 lawyers that it forced into retirement. The EEOC sued Sidley & Austin for violating the lawyer's rights under the Age Discrimination in Employment Act. The 27.5M was paid to settle the suit.

It is illegal to force employees to leave a company due to their age. My 13 year old son knows that a company cannot fire people just because of their age - unless they are pilots or ambulance drivers. Sidley & Austin has its own employment law department, but apparently the firm did not get good advice.

The Equal Employment Opportunity Commission filed an age-discrimination lawsuit against Sidley Austin in 2005. The suit alleges that the firm violated the Age Discrimination in Employment Act when it demoted 31 partners in 1999 on account of their age.

Discovery has begun and it is becoming obvious that the firm is facing an extensive and invasive battle. The EEOC just filed a motion to compel the firm to produce “all client complaints received by Sidley about any partner of Sidley” from 1995-1999. Sidley claims that it demoted some of the partners in 1999, because of clients’ complaints. This motion is intended to expose that reason as “pretextual.” Sidley responded by calling the EEOC’s request “overbroad and unduly burdensome.”
This motion comes on the heels of the New York State Bar Association’s Position that firms should not force partners to retire based on age.

This case, coming on the heels of the Bar’s position paper, could shake up firm organization and employment procedures statewide. This is one to watch.

The New York State Bar Association has called on all New York law firms to end the practice of forcing retirement when partners reach a certain age. This practice may constitute age discrimination in New York. "Mandatory Retirement-requiring a partnr to leave the firm upon reaching an arbitrary age -is not an acceptable practice."

The New York TImes reports,http://www.nytimes.com/2007/01/19/business/19law.html?_r=2&oref=slogin&oref=slogin, that 57% of law firms with 100 or more attorneys have a mandatory retirement age. The New York State Bar's announcement comes on the heels of a law suit brought by the EEOC in Chicago claiming that Sidley Austin practiced age discrimination when it demoted or forced retirement of 32 older partners in 1999. This raises an interesting question of firm management.

Should a law firm work from a corporate model which squeezes out older lawyers so that the younger ones can take more business and earn more profit or should firms reward the experience that comes with age by encouraging older lawyers to remain on the job? I feel the latter is the better option. Law is not purely a business. Law is a profession that must, at times, act like a business. Further, law is a service profession and service is an learned art. Why discard the most learned of our artists just when they have gained the expertise necessary to guide the young attorney? It seems more logical that, in our profession, the most experienced members of the bar should be retained as long as they still hold value both monetarily and other. Law was originally an apprenticeship profession. While most would-be lawyers now gain legal education through formal schooling, almost all will tell you that law school teaches the law while your mentors in working world teach you how to practice it. Practice is an interesting word. It implies incompleteness and potential for growth and improvement. Perhaps we shouldn't be so quick to rid ourselves of our most practiced professionals.

Older workers are disfavored when a company switches to a cash balance pension plan. Some say this amounts to age discrimination. Cash balance pension plans work the same as a savings account. Employees put money into them, interest accrues and they can withdraw the money whenever they leave rather than having to wait until retirement. Any two employees who start the program and end their employment at the same time can put away and then withdraw the exact same amount. This is regardless of age, race, religion, gender or sexual orientation. This sounds fair so what's the problem?

The problem is that when a company switches from a traditional pension plan which vests after a number of years, thereby rewarding employees who stay, to a cash balance pension, the older employees do not have as much time to invest in the plan and thereby they will be short changed despite years of service. Is this legal?

Yes. The Supreme Court let stand, in Cooper v. IBM personal Pension Plan, the decision of the Seventh Circuit Court of Appeals which held that the plan does not discriminate because the cash balance pension formula did not use age as a factor. It does not matter that older workers are disadvantaged when a company switches to a cash balance pension plan.

Nonetheless, IBM is abandoning the cash balance pension plan on January 1, 2008 in favor of strengthening its traditional 401(k).

For obvious reasons, it is often easy for both the lawyer and the client to get consumed with the details of a particular case. Most times, the client has been wronged by his or her employer and not only is the client's pride on the line, but his or her financial security as well.

It is far too often that I find my blood pressure rising when talking to my adversary, much the same way my client's blood pressure must rise when they relay their employment story to me.

Unfortunately, it sometimes takes tragedy to put things back in perspective. I received a call yesterday letting me know that a client of mine had passed away from a heart attack at fifty one years old. While stress is an inevitable part of litigation, we should always remember that we cannot become consumed with it.