Early Retirement - Voluntary Leave Incentives - Age Discrimination Issues

  1. It must be a voluntary program, with employees not targeted for layoff or otherwise threatened, such as a threat to abolish or rescind vested benefits.

  2. Make sure the offer is not specifically aimed at older workers - do not condition it upon age, but rather upon tenure or other theoretically neutral criteria.

  3. Any potential reduction in force should be based upon skill level, prior evaluations, willingness to accept new assignments or training, and other neutral, non-age-related criteria (i.e., try not to use seniority as a criterion that would give an older worker a higher chance of being laid off).

  4. Any employees accepting such an incentive should sign releases explaining their rights under federal law.

  5. Give at least 21 days for employees to have a chance to consult their attorneys or other advisors (45 days in the case of group reductions in force).

  6. Employers must give employees 7 days to rescind their acceptance of an early retirement incentive.

  7. Never give the appearance of trying to push someone toward retirement - try not to bring the subject up, but be ready to respond in a purely informational manner if an employee asks about it. Caution is advised - a "suggestion of retirement would not alone give rise to an inference of discrimination." Kaniff v. Allstate Insurance Co., 121 F.3d 258, 263 (7th Cir. 1997); Greenberg v. Union Camp Corp., 48 F.3d 22 (1st Cir. 1995). However, frequent inquiries or suggestions about retirement plans can let a jury reasonably find that the employer was biased against older workers (see Greenberg at 28 - 29).

  8. In the event of an ADEA age discrimination claim, "to establish a prima facie case of age discrimination under the ADEA through the indirect method, the plaintiff must prove that (1) he is a member of a protected class; (2) his performance met the company's legitimate expectations; (3) despite his performance, he was subject to an adverse employment action; and (4) the company treated similarly situated employees under 40 more favorably." Martino v. MCI Communications Services, Inc., 574 F.3d 447, 453 (7th Cir. 2007). "Choosing to terminate someone on the basis of old age is impermissible; choosing to let someone go because they have an obsolete skill set, on the other hand, is completely kosher." Martino at 454.

  9. Avoid the "age discrimination never-says".

Return to Businesses & Employers
Return to TWC Home