Is a Mandatory Retirement Policy Illegal Age Discrimination?

Older Worker at Desk - Forced into Mandatory Retirement

If you have a milestone birthday approaching, you might be getting anxious about losing your job. Some companies use a mandatory retirement policy to try to limit the age of their work force. But that could be illegal age discrimination, depending on your job.

In this blog post, I will address a recent settlement by the U.S. Equal Employment Opportunity Commission and Professional Endontics, P.C., surrounding the company’s mandatory retirement policy. I will review the federal Age Discrimination in Employment Act (ADEA) and consider whether a mandatory retirement policy is a form of illegal age discrimination.

Older Workers Are Protected Against Age Discrimination

The Age Discrimination in Employment Act (ADEA) protects workers over 40 years old from age discrimination at work. It protects older workers and potential employees from adverse employment decisions based on their age. This can include:

  • Non-Hiring
  • Passing over for a promotion
  • Assigning to "light" duty or less desirable tasks or shifts
  • Firing

The ADEA is one of the many federal civil rights laws enforced by the Equal Employment Opportunity Commission (EEOC). Workers who think they have been the target of age discrimination can file a complaint, with the help of an employment discrimination attorney or on their own. The EEOC will investigate the claim and help facilitate a solution. When that fails, either the EEOC or your private attorney can file suit in federal court.

Is a Mandatory Retirement Policy Illegal Age Discrimination?

Being fired because you are "too old to do your job" may be an obvious form of age discrimination, but can a company impose a mandatory retirement policy that applies uniformly to all employees? That was the issue in EEOC v. Professional Endodontics, P.C., Case No. 4:17-cv-13466. In that lawsuit, the EEOC represented Karen Reurat, an employee of an oral surgery facility in a suburb of Detroit, Michigan. Reurat had worked for Professional Endodontics, P.C., for 37 years, until she was fired just days after her 65th birthday in January 2016. The company had a mandatory retirement policy which required all employees to retire when they hit that milestone birthday.

The EEOC said the policy violated the ADEA by illegally discriminating against employees based on their age. By firing employees explicitly because they had reached age 65, the EEOC said the medical company had committed illegal age discrimination. The EEOC had tried to use its informal conciliation process to resolve the complaint, but eventually had to file suit in the U.S. District Court for the Eastern District of Michigan. Once the litigation got started, the parties agreed to settle for $47,000, together with new anti-discrimination policies and training about the ADEA.

Exceptions When Mandatory Retirement Policies May Be Allowed

Mandatory retirement policies are generally illegal under the ADEA, but there are exceptions:

  • The job includes a Bona Fide Occupational Qualification (BFOQ)
  • Some state judges and elected officials
  • High policy-making positions

Bona Fide Occupational Qualifications are necessary duties of the job that cannot be performed by people above a certain age (usually for safety or efficiency reasons). Common examples are child-acting rolls or safety concerns connected with old-age drivers in public transportation. It is hard for employers to prove BFOQs are truly necessary. They usually turn out to be illegal shortcuts too broad to properly address the true underlying safety concern (such as maintaining a valid driver license).

The exception for high policy-making positions only applies to managers with the authority to hire or fire other employees and supervise at least two subordinates. Individuals in these positions must spend at least 80% of their working time on management and supervision duties (60% in retail or service industries). These top-level employees play a significant role in developing and implementing corporate policy, so they are less likely to create a mandatory retirement policy that works against them without a good reason.

Some states have passed laws legally limiting the age of their elected or appointed officials. Many, including Michigan, where the this settlement was entered, require their judges to retire at age 70, or prohibit judges from seeking reelection after their 70th birthday. In 1991, in Gregory v Ashcroft, 501 U.S. 452 (1991), the U.S. Supreme Court said that mandatory retirement laws, particularly a provision of the Missouri Constitution, were not illegal age discrimination under the ADEA. The Court said that the state's appointed judges were not "employees" under the ADEA. Instead, they were more like high policy-making executives. The court said that there was a "rational basis" for states to distinguish between judges and other state officials when it came to age restrictions.

Most private employees and government workers are protected against age discrimination in the form of mandatory retirement policies. If your milestone birthday has you worrying about your employment, the employment discrimination attorneys at Eisenberg & Baum, LLP, can help. We will meet with you to review your company's policy and your options, so you can continue working and retire on your own terms. Contact Eisenberg & Baum, LLP, today for a free consultation.

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