How Companies May Use Layoffs to Hide Age Discrimination

What to do when reductions-in-force are questionable

A round of layoffs hits your company, and your job is one of those to go. But when you look at the other workers who lost their jobs, you notice you all have one thing in common: you’re all over 40.

It happens more often than you’d think.

Age discrimination is illegal, but employers can and do sometimes use general layoffs to mask the large-scale firing of older employees and the hiring of younger workers. Here’s how they get away with it.

Firing based on salary. Employers have to justify large-scale layoffs in a way that won’t lead to lawsuits, and one way to do that is by firing people based on what they earn: salary, benefits, bonuses, and commissions.

This often has the practical effect of shedding large swaths of older, more experienced workers who’ve had time to earn higher salaries—leaving the employer free to hire cheaper, younger workers. This is functionally the same as age discrimination—even if it’s justified on paper.

Replacing your job. Some companies will eliminate the jobs of older employees, then pull a sleight-of-hand—re-introducing the old job with a new title, and hiring a younger employee to fill that role.

Bonus points if the new job ad asks for “digital natives” or you overhear executives around the water cooler talking about bringing in “new blood.”

Firing some younger workers. Whenever there’s a mass layoff, employers are required to release the titles and ages of all those fired—to show they’re complying with age discrimination law. Sometimes, employers fire a token number of younger employees to obscure what they’re really doing.

If you’re noticing mostly older workers have been caught up in recent layoffs, you may still have a case—even if some younger workers were also let go.

Offering early retirement. Some employers offer early retirement incentives to older employees. This isn’t discriminatory in and of itself, but it can be—if the package is only offered to older employees, or it’s mandatory and your only other option is being fired.

Your rights under the Age Discrimination in Employment Act (ADEA)

The Age Discrimination in Employment Act was enacted in 1967 to protect workers aged 40 or older from discrimination in the workplace. It applies to private employers with more than 20 employees, as well as those who work for federal, state or local government, labor organizations, and employment agencies.

The law forbids any type of discrimination based on age. Some of the actions it covers include:

• Biases in hiring, firing, layoffs, promotions, and wages.
• Specific statements about age preferences for a certain job.
• Refusal of benefits to older employees. Employers are allowed to reduce your benefits based on age, as long as your reduced benefits would cost as much as full benefits for younger employees.
• Mandatory retirement, unless you’re an executive over the age of 65 or work in an area of public safety, such as firefighting or law enforcement.

What should you do if you suspect you were laid off due to age discrimination?

Your first step should be to talk to an experienced lawyer who specializes in employment law. Your lawyer will help you determine whether you have a case—and what your strategy should be in proving discrimination. Consulting with a knowledgeable lawyer early in the process will save you both money and time.

If you’ve been the victim of age discrimination, you can fight back—and we can help. Email us at murphy@phillyemploymentlawyer.com or call us at 267-273-1054 for a free, confidential consultation.