Welcome to the first of our holiday-themed (at least in title) blog posts. As we approach the holidays at the conclusion of a financially challenging year, cost savings may be on the minds of many healthcare business owners. Healthcare employers may be considering—or have already considered—measures to save money and reduce payroll. 2020 was a difficult year for most businesses, and reducing payroll is an oft-appealing way to reduce expenses. Frequently, a business’s highest paid earners are also among the older employees. That fact prompts a look at the Age Discrimination in Employment Act of 1975 (“ADEA”) prior to making any employment decisions, such as eliminating positions.
For healthcare employers with 20 or more employees, the ADEA governs and makes it an unlawful employment practice to “discharge any individual or otherwise discriminate against any individual with respect to [her] compensation, terms, conditions, or privileges of employment, because of such individual’s age.” 29 U.S.C. § 623. The regulations create a protected class for individuals who are “40 years or older.” 29 C.F.R. § 1625.2. To be certain, the ADEA and accompanying regulations do not require preferential treatment of employees over 40, and “[f]avoring an older individual over a younger individual because of age is not unlawful discrimination.” Id.
An employee establishes a prima facie case of age discrimination by showing he or she “was (1) a member of the protected age group, (2) subjected to an adverse employment action, (3) qualified to do the job, and (4) replaced by or otherwise lost a position to a younger individual.” Johnson v. Unified Gov’t of Athens-Clarke Cnty., 209 F. Supp. 3d 1335, 1341–42 (M.D. Ga. 2016). The fourth prong, however, is generally not satisfied when it comes to position eliminations because the older employee was not replaced by anyone. See Mazzeo v. Color Resolutions Int’l, LLC, 746 F.2d 1264, 1271 (11th Cir. 2014). The law accounts for this by altering the fourth prong in “reduction in force” cases, requiring the employee to “present sufficient evidence from which a reasonable jury could find that the employer intended to discriminate on the basis of age through its employment decision.” Zaben v. Air Prods. & Chems., Inc., 129 F.3d 1453, 1459 (11th Cir. 1997). One such “method of establishing a nexus between age discrimination and adverse employment action is by statistical proof of a pattern of discrimination.” Pace v. S. Ry. Sys., 701 F.2d 1383, 1388 (11th Cir. 1983).
Using a facially neutral policy to determine which employment positions to eliminate, does not necessarily protect the healthcare employer if the policy disparately impacts older employees. See “Final Rule on Disparate Impact and Reasonable Factors Other than Age,” 77 FR 19080 (Mar. 30, 2012); see also Smith v. City of Jackson, 544 U.S. 228, 234–43 (2005) (holding the ADEA authorizes disparate impact claims). If employees over 40 are disproportionately impacted by the policy, the employer must have evidence to show the discriminatory policy was based on a reasonable factor other than age (“RFOA”). A RFOA “is a non-age factor that is objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances.” 29 C.F.R. § 1625.7(e)(1). “The employer bears both the burden of production and of persuasion as to the reasonableness of its choices.” Hunter v. Santa Fe Protective Servs., Inc., 822 F. Supp. 2d 1238, 1254 (M.D. Ala. 2011) (citing Meacham v. Knolls Atomic Power Lab., 554 U.S. 84, 93–94 (2008)).
If the employee shows his or her prima facie case, the healthcare employer is allowed the opportunity “to articulate a legitimate, nondiscriminatory reason for the challenged employment action.” Johnson, 209 F. Supp. 3d at 1342. As a final step, the employee can offer evidence “to show the employer’s stated reason is merely a pretext for discrimination.” Id.
Before you begin reducing your payroll or eliminating positions to save money, consider your above-duties under the ADEA. Our business and healthcare law firm follows developments in employment laws, such as the ADEA. If you would like to discuss your options or have questions about this post, contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, email@example.com. You may also learn more about our law firm by visiting www.hamillittle.com.
** Disclaimer: Thoughts shared here do not constitute legal advice. Please consult with an attorney to discuss your legal issue.