New Jersey employers can fire older workers with cause

The ADEA specifically prohibits basing decisions about hiring, firing, promotions, layoffs, compensation, benefits, job assignments, and training on a person’s age. It also prohibits harassment and retaliation against older employees because of their age.

You might feel confident that you would never fire someone simply because of their age, but your statements and actions could give a terminated employee grounds for a discrimination claim if you are not careful. Examples of actions to be aware of include things like the following:

• Performance reviews that mention lack of flexibility, being out of touch, or not keeping up with the times
• Replacing the worker with someone younger who is paid less
• Reducing headcount by terminating only workers who are older
• Fostering a youthful company culture that singles out older workers for not fitting in
• Hiring a younger person from outside the company instead of promoting an older worker, citing a need for “new blood” or “shaking things up”

Ideally, you have documented the worker’s failings, violations, poor performance, or other legitimate grounds for dismissal or other adverse decisions.

An amendment to the ADEA passed in 1990, the Older Workers Benefit Protection Act (OWBPA) applies specifically to benefits and staff reduction measures related to older workers. The Act prohibits age discrimination when offering benefits such as health insurance, life insurance, disability, pensions, and retirement benefits. Because providing these benefits can cost a company more for older workers than younger workers, an employer could try to reduce the benefits offered to older employees. This is illegal. However, companies can remain compliant as long as they can show that they are spending the same amount on older employees, even if their coverage is less.

The OWBPA also makes it illegal to target older workers when reducing headcount to save the company money and dictates what you can and cannot say when requiring an employee to sign a waiver in exchange for a separation package. This is complex legislation, and you should consult an attorney when developing company policy regarding staff reductions.

Complying with federal age-discrimination laws should not mean losing the power to make hiring, firing, and promotion decisions for your business. By consulting with an experienced business law attorney, you can make sure you are within the law when terminating an older employer or making staff reductions.

Don’t wait until you are being sued by an employee to call a lawyer. Be proactive and talk to attorney Frank Steinberg today. Contact us to schedule a consultation.