Suits Claiming Age Bias Rise Over Layoffs : Benefits: Older managers have become targets of job cuts during hard times because they have higher salaries, lawyers contend.

From Reuter

As the sour economy forces more and more companies to cut staff, lawyers say middle-aged managers have become a prime target for layoffs and a rising number are fighting back with age discrimination suits.

"The proliferation of age discrimination suits is the flip side of corporate downsizing," said Allen Fagin of New York's Proskauer Rose Goetz & Mendelsohn.

"Often downsizing is accomplished by eliminating layers of management--often middle management that a company could afford when things are going well but can't afford now."

"The prospect for re-employment of older workers is probably dimmer than for a younger person, so the incentive to litigate is greater. There is nothing to lose," said Howard Ganz of the same firm.

The burst of activity in age discrimination cases has its roots in the high-flying takeover days of the 1980s. Layoffs became common as newly merged companies eliminated duplicate jobs or streamlined operations to pay off excessive debt.

The sluggish economy has made the situation worse, causing companies to continue slashing. Even powerful International Business Machines Corp. plans to cut 20,000 jobs next year.

"Making your organization as lean as possible means getting rid of your most expensive workers, and your most expensive workers are your older workers," said Nancy Smith, a prominent plaintiffs' lawyer in West Orange, N.J.

Smith represented a 59-year-old former IBM executive who last month won an age discrimination case against the company.

Lawyers agree that the typical age discrimination client now is a white male, middle-management, long-term employee in his 50s or 60s who never thought he would be terminated.

"Now people are getting thrown out, and they are getting thrown out by young people who are fairly ruthless," Smith said, adding that often a worker is told suddenly that his performance has precipitously declined or that his position was eliminated.

"We're often able to show that it's impossible to eliminate the position. There might be a change of title or the work was divided up, but somebody else is doing the functions--the responsibilities don't disappear," she said.

Lawsuits can be brought in federal court under the Age Discrimination in Employment Act that prohibits mandatory retirement in most cases and provides protection to workers beginning at age 40. The federal law provides for jury trials and double damages based on lost wages.

Suits can also be brought under state law, which sometimes allows for punitive damages aimed at punishing the employer.

To get workers to leave legally, employers often offer severance packages, but these deals usually require workers to sign a waiver promising not to sue the company. These waivers have become a hot area of litigation, lawyers said.

The Older Workers Benefit Protection Act, which amended the Age Discrimination act last year, establishes minimum standards for waivers and says signing the documents must be voluntary.

The act also provides that a waiver must advise the employee to have a lawyer review the document. The worker must also be given at least 21 days to consider the agreement and can revoke it within seven days of signing it.

In group layoffs, companies must inform each affected worker of the titles and ages of others being fired. This makes it easier to determine if employees of a certain age were targeted, lawyers said.

Mark Brossman of New York's Chadbourne & Parke said the act has placed a heavy burden on employers and corporations that--afraid of discrimination suits--are increasingly seeking legal advice before instituting layoffs.

"Companies who carefully plan reduction in forces can minimize the risks of age discrimination claims. In reality, what companies should do is conduct studies of all the different groups to determine what impact layoffs will have on them," he said.

Paul Tobias, a Cincinnati lawyer who founded the National Employment Lawyers Assn., a San Francisco-based group of about 1,100 plaintiffs' lawyers, said well-planned layoffs have made winning age suits more difficult.

"Companies have become more sophisticated. They monitor the layoffs closely and study the statistics carefully. They are very conscious of age discrimination claims," he said.

Because of this, much of his work involves negotiating with companies to obtain better severance packages for his clients. But with the economy in such bad shape, even this is difficult.

"I often tell people if they offer you six months' severance package, take it. You don't know if they'll be in business next year," Tobias said.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World