Firing due to salary can be considered age discrimination 

Dana K. from Russian Hill asks this week’s question:

Q: “I am 54 years old. I work for a large company that is having a ‘reduction in force.’ I was told I am being let go. I was asked to sign a release in exchange for a severance. I am the only one working in my family right now and I need the money to help while I try to find another job. The company said that it was ‘trimming its budget as times were tough and it needed to reduce expenses.’ I was told that I made too much money. I signed the release but, afterward, I found out that my boss had told a co-worker that I had been let go because I was ‘an old dinosaur from the Stone Age’ and the company needed ‘people who were young like the heads of all these new start-up companies.’ After talking to my colleagues, I found out that only about seven of us were let go and, compared to the rest of the workforce, we are older. What are my rights?”

A: Dana, this presents an all to familiar set of facts. Over the 20 years that I have been practicing law, I have seen upticks in age discrimination in cycles such as the dot-com collapse, the recent recession and, tellingly, now as the Bay Area’s workforce at Google, Twitter, Facebook, etc., is growing largely comprised of a very youthful workforce. I’ve heard stories where terminated employees have been told, “Who wants to do business with someone that is old enough to be their grandfather?” And the employer is shifting to a new operating system and, “You can’t teach an old dog new tricks.” It is not only insulting — it also deprives companies of valuable experience and perspective gained over the years — it is illegal.

There is a federal law called the Age Discrimination in Employment Act (29 United States Code 623) and a California law called the Fair Employment and Housing Act (California Government Code Section 12940) designed to prevent discrimination and harassment in the workforce based on age.

People over 40 years old are part of a class of individuals who are deserving of protection. If a person over 40 is fired and a younger person is hired to replace them, this is considered a prima facie case of discriminating. An employer charged with employment discrimination then has to provide a legitimate, nondiscriminatory and good-faith reason for the termination. If the employer does so, then the burden shifts back to the employee to demonstrate that the reason given by the employer was false.

Laid-off workers may claim that a reduction in force was intended to or had the effect of discriminating against them because of their race, religion, gender, nationality, etc. Such discrimination violates both Title VII of the Civil Rights Act and the California Fair Employment and Housing Act. Therefore, a company cannot use age as a criteria for a layoff. However, protected status under discrimination laws does not provide employees with any more protection against a company-wide workforce reduction than they would otherwise possess.

After a case that was upheld by the appellate courts where a court ruled companies could use salary as a basis for layoff — even if that had an adverse effect on the older, protected workers — the Legislature passed California Government Code Section 1941(a).

It declared the Legislature’s intent that the use of salary as the basis for differentiating between employees when terminating employment may be age discrimination if use of that criterion adversely impacts older workers as a group.

As far as the release goes, the law recognized that people under economic duress may not be able to think clearly. The rushed take-it-or-leave-it approach doesn’t provide people with time to consider their rights and options. As a part of the federal law, there are specific steps that a company must take in order to have any type of release be effective against claims of age discrimination. As you may have some pressing time constraints — and I don’t have space in the column this week to provide all those requirements — I will email them to you, while our other readers will have to tune in next week to find out for themselves.

Many people say that they don’t like lawyers. While I think that is an unfair generalization, from what I have seen, that perspective changes when something like this happens.

Christopher B. Dolan is owner of the Dolan Law Firm. Email questions to help@dolanlawfirm.com.

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