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Consider this scenario: In an effort to combat the company’s declining sales, Kathryn is faced with the daunting task of reducing her sales staff by 20%. Bob, 59, one of the department’s oldest workers, is among those designated for layoff. While Bob consistently hits his numbers, he’s been resistant to many of the new initiatives Kathryn has tried to implement, and he insists on doing everything exactly the same way he’s done it in the past. When Bob learns that his position is being eliminated, he is outraged. He’s been with the company for 25 years, much longer than Kathryn, has excellent performance evaluations and was the company’s top salesperson two years earlier. Within weeks of Bob’s layoff, the legal department advises Kathryn that Bob has filed a charge of age discrimination with the Equal Employment Opportunity Commission (EEOC), naming both Kathryn and the company. Kathryn insists that Bob’s age had nothing to do with her decision. She doesn’t understand how Bob can even sue her for age discrimination since they’re only six years apart. Her concern turns to shock, however, when she learns that the EEOC charge accuses her of failing to discipline two employees who told ageist jokes at a client dinner. The charge also recounts a lunchtime conversation during which Kathryn asked Bob when he planned to retire. Although the foregoing is a hypothetical situation, similar real-life scenarios occur every day in workplaces across the country, and are leading to damages awards totaling tens of millions of dollars. Today, more than ever, it is important for employment lawyers to encourage their clients to be proactive in guarding against costly age-bias litigation. The U.S. Supreme Court’s recent ruling in Smith v. City of Jackson, 125 S. Ct. 1536 (2005), is just one reason companies should be concerned about the threat of increased age discrimination litigation. Some legal experts fear that the high court’s holding that disparate impact claims are cognizable under the Age Discrimination in Employment Act (ADEA) will produce a flood of claims based on completely unintentional conduct. Another factor that is already contributing to a rise in age-based litigation is the nation’s aging, but healthier, populace. Many workers choose to remain in the workplace well past the typical retirement age, which slows the availability of promotional opportunities for younger employees, causing resentment against workers who delay retirement. These factors, coupled with the failure by human resources (HR) professionals to educate managers adequately regarding age discrimination, makes the possibility of increased age discrimination litigation not just a possibility, but a probability. Statistically, juries award more money to victims of age discrimination than to victims of any other type of bias. According to Jury Verdict Research’s report, Employment Practice Liability: Jury Trends and Statistics, during a seven-year period studied by the group, plaintiffs filing age discrimination lawsuits received the largest jury awards. The study found that between 1997 and 2003, older workers who sued their employers received a median compensatory damages award of $255,143-22% more than the next highest category, disability discrimination. See Employment Practice Liability: Jury Award Trends and Statistics-2004 Edition, available at www.juryverdictresearch.com. In recent years, companies have been hit with age-bias verdicts that are significantly higher than the median award noted by the Jury Verdict Research report. In one of the most stunning verdicts, an Ohio jury awarded $30.6 million to a branch manager for Olsten Health Services Inc. who was terminated following the merger of two offices. Fredrickson v. Olsten Health Services Inc., No. 98CV1937 (Mahoning Co., Ohio, Ct. C.P. 2000). The plaintiff, 68, who was replaced by a 46-year-old, claimed that the company gave her the choice either to retire or to be fired, while younger workers were offered jobs she was qualified to perform. In another Ohio case, a 59-year-old district manager who sued Abbott Laboratories for age discrimination received no front pay or back pay, but won an award of $25.7 million in punitive damages. Jelinek v. Abbott Laboratories Inc., No. 99 CVH-09-7505 (Franklin Co., Ohio, Ct. C.P. 2002). The district manager alleged that he was forced into early retirement even though he was a top-performing salesman. A year later, however, the trial judge overturned the verdict, finding that there was not enough evidence to support the plaintiff’s discrimination claim. Just last year, a Denver jury awarded $1.5 million to a golf course superintendent who was fired after 40 years on the job. Garcia v. Pueblo Country Club, No. 00-D-60 (D. Colo. 2004). The plaintiff, 58, was replaced by a 41-year-old. The judge also ordered defendant Pueblo Country Club to pay the plaintiff’s attorney $672,000 in legal fees, one of the largest attorney fees awards ever awarded by a Colorado judge in an age discrimination case. Effective training programs Lawyers can assist clients in protecting themselves from such troubling awards by helping them design effective training programs that serve the dual purpose of educating managers about age discrimination and communicating that the company will not tolerate discriminatory conduct. Such training is necessary not only for newer, inexperienced managers, but also for long-time, high-level managers as well. Here are five key areas that training aimed at preventing age discrimination claims should address. Stereotypical beliefs regarding older workers. One factor that has fueled high-verdict jury awards is evidence of a decision-maker’s belief that older workers can’t cut it. Such beliefs are often held by older managers themselves and can be costly for a company if a manager makes employment decisions based on such misconceptions. Woolworth, now owned by Foot Locker Inc., settled a class action in 2002 for $3.5 million after the plaintiffs alleged that a director of HR told managers that older employees “were slower and they’re not a part of the new company . . . .The company’s passed them by.” EEOC v. Foot Locker Specialty Inc., No. 99 Civ. 4758 (S.D.N.Y. 2002). The HR director allegedly went on to state: “Why would I come in here? The lady has to be 60 years old and homely up at the front. Why don’t we have somebody nice, young, nice, smiley [sic], perky-type of person?” While it is shocking that an HR professional could be accused of making such statements, these beliefs are not uncommon and highlight an obvious lack of education and training regarding age discrimination. To combat stereotyping, companies should be sure to include age bias in their diversity initiatives and EEO training, and communicate that it values workers of all ages. It must send the message that employees will be judged on their performance, not unfounded, broad-based stereotypes. Failure to address ageist jokes and comments. While it is important to create teamwork and camaraderie in the workplace, managers should react quickly to quell joking behavior based on age. With our aging population, the “O” word has no place in the workplace. A manager who hears an employee joking with a co-worker about being “old” or “ancient,” must not sit back and ignore it as harmless kidding. That same manager may later be called to testify that he did nothing to discourage the conduct and, therefore, condoned it. These types of comments, although made in jest and taken as such by the plaintiff at the time, will be used to support a claim of age harassment once a lawsuit is filed. The lax view of age discrimination. Many individuals seem to view age discrimination, unlike race, sex and disability discrimination, as a less egregious form of bias and, therefore, see nothing wrong with expressing a preference for younger workers. In 2003, an appeals court upheld a Los Angeles jury’s award of $5.16 million against Nestle U.S.A. Inc. Herr v. Nestle U.S.A. Inc., 109 Cal. App. 4th 779 (Calif. Ct. App. 2d Dist. 2003). In that case, a 53-year-old manager alleged that he was repeatedly passed over for promotions in favor of younger employees, despite his excellent performance reviews. At trial, the plaintiff introduced a memorandum written by the company’s chairman that encouraged executives “to continue identifying and developing young people . . . for future management.” A Cleveland-area engineer fired by Philips Medical Systems Inc. as part of a reduction in force sued the company for age discrimination and won a jury award of $7.8 million. Sadowski v. Philips Med. Sys. Inc., No. CV02-477154 (Cuyahoga Co, Ohio, Ct. C.P. 2003). The 54-year-old employee produced evidence that the company was pursuing a college recruitment strategy targeting “bright, young engineers” and openly discussed the need to recruit young engineers. Managers who would never utter a racist word might freely announce their desire to hire younger workers. Such statements are akin to managers expressing a preference for white workers. Training should work on dispelling stereotypes about older workers and point to the fact that Americans are living longer, working longer and doing it well. The manager who acts like a friend. As demonstrated by the verdicts discussed above, comments that indicate a bias against older workers are typically the driving force behind high-figure punitive damages awards in age discrimination cases. Such statements often occur when managers “let their hair down” and make inappropriate comments in confidence to co-workers, or even subordinates, whom they view as friends, never envisioning that the statements could be used against them and the company. Off-hours comments count Managers must understand that they represent the company at all times, which include working hours and nonworking hours. Once discovery begins, the plaintiff’s counsel will depose co-workers to find out if the defendant-manager ever made ageist comments. While a comment may have been conveyed in confidence, the deponent will be obligated to disclose it. Training should emphasize that managers must act professionally at all times, including noncompany-related social events where co-workers are present. They should be reminded that, as managers, they represent the company; hence, when they speak, the company speaks. To ensure that this message is heard, managers should be advised that not only can discriminatory conduct create significant liability for the company, it can lead to their termination. Lack of understanding of the litigation process. Most managers have little understanding of what happens once a company is sued for discrimination. Hence, when they are sued, they view the allegations of ageist behavior as bogus and assume that “justice” will prevail. They fail to understand that justice can cost the company hundreds of thousands of dollars in fees and, therefore, settlement is often the best course of action. Any effective training program should walk managers through the litigation process from beginning to end, explaining how time-consuming the discovery process can be, how easily plaintiffs can raise a disputed issue of fact to avoid summary dismissal of their claims and how risky trying a case before a jury can be-even when the evidence weighs in favor of the company. Managers are often upset when they learn that the legal department has recommended settlement of what they feel is an unfounded charge of discrimination. But managers must be taught the economics of litigation. Training should explain that resolving a case for $20,000, even when an HR investigation confirms that the manager did nothing wrong, may be preferable to a trial victory that costs the company upward of $200,000 in legal fees to achieve. Managers should also be advised that even the best case can result in a damages award against the company. It can be a year or more before a case gets to trial and, by that time, witnesses may have a poor recollection of what occurred. In other instances, company witnesses who are nervous or hostile when questioned at trial by plaintiff’s counsel can cause the jury to distrust their testimony and assume that the company acted inappropriately, just as the plaintiff alleges. Lawyers should work hand in hand with companies to ensure that they implement effective and regular training programs which communicate that bias of any kind will not be tolerated. Doing so will greatly reduce the risk of litigation and ensure that managers and HR professionals make employment decisions based on legitimate, nondiscriminatory reasons. Pamela Samuels-Young is a managing counsel, specializing in labor and employment law, for Toyota Motor Sales U.S.A. Inc. in Torrance, Calif.

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