Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: October 18, 2016
The Firm
201-896-4100 info@sh-law.comThe American workforce is aging rapidly, and many companies are not equipped to manage the legal challenges. Nearly every week, a major U.S. company is named in an age discrimination lawsuit. HP and Tesla are among the latest.The risk of liability will only increase as the Baby Boomer generation ages and works longer. The percentage of older workers over the age of 55 is projected to be one in four by 2022, according to the Bureau of Labor Statistics. With these numbers in mind, is your business prepared to deal with these potential employment law challenges?
Under the Age Discrimination in Employment Act of 1967 (ADEA), employers are generally not allowed to hire, fire, promote, or determine a worker’s compensation based on their age (defined as those over age 40). Accordingly, employers must work to ensure that they are making decisions based on abilities, not age.
When making hiring decisions, ageism can play a significant role, even if it’s not intentional. A recent study at the University of California at Irvine and Tulane University revealed age discrimination often impacts hiring. The researchers submitted 40,000 fake job applications that included signals regarding the ages of the applicants and then analyzed the response rates. Overall, applicants age 49-51 applying for administrative positions had a callback rate 29 percent lower than younger workers. For workers over age 64, the response rate was 47 percent lower.
While age discrimination can occur across industries, the tech industry has recently come under fire for explicitly seeking out younger workers using advertisements that seek “new grads.” Because the jobs ads discourage older workers from submitting resumes, the Equal Employment Opportunity Commission (EEOC) takes the position that they are discriminatory. Even more subtle hiring motivations, such as “we need young blood around here” “or “let’s bring in the young guns,” could be the basis for an ADEA claim.
The good news for employers is that ADEA claims are more difficult to prove under the Supreme Court’s 2009 decision in Gross v. FBL Financial Services, Inc. By a slim majority, the Court held that plaintiffs must show that age was the “but for” cause of discrimination to establish ADEA liability. Nonetheless, the EEOC still secured more than $99 million in ADEA cases on behalf of aggrieved employees last year.
Questions of age discrimination often arise when an older worker is terminated, particularly when the employment decision is not based on cause. To minimize the risk of potential litigation, many employers offer departing employees a severance package in exchange for a release (or “waiver”) of liability for all claims connected with the employment relationship, including those under the ADEA.
When drafting severance agreements, employers must be cognizant that, in addition to meeting the requirements for a valid contract, waivers of age discrimination claims must comply with provisions of the Older Workers Benefit Protection Act (OWBPA).
The OWBPA sets out specific minimum standards that must be met in order for a waiver to be considered knowing and voluntary and, therefore, valid. They include the following:
If a waiver of age claims fails to meet any of these seven requirements, it is invalid and unenforceable.
If you have any questions or if you would like to discuss the matter further, please contact me, Jorge R. de Armas or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

High-profile founder litigation is more than just a media spectacle. For startup founders, these cases underscore the legal and structural risks that can arise when rapid growth outpaces formal oversight. While launching a new company can be both an exciting and deeply rewarding endeavor, founders must be mindful that it also comes with significant risks. […]
Author: Dan Brecher

Every New Jersey company should periodically evaluate its governance framework. Strong corporate governance protects directors and officers, builds investor confidence, reduces litigation exposure, and positions a company for sustainable growth. The first quarter of the year is a great time to evaluate your corporate governance practices and perform any routine maintenance needed to keep that […]
Author: Ken Hollenbeck

Being served with a lawsuit is one of the most stressful legal events a business or individual can face. Whether the claim involves a contract dispute, an employment matter, an intellectual property issue, or another legal challenge, the actions you take in the first few days can significantly shape the outcome of your case. Acting […]
Author: Robert E. Levy

Special Purpose Acquisition Companies (SPACs) continue to gain momentum as we move through 2026. After enduring a significant contraction following the 2021 boom and the regulatory scrutiny that followed, SPAC activity rebounded sharply in 2025 and now carries forward into 2026 with real momentum. The SPAC resurgence reflects broader improvements in both market conditions and the […]
Author: Dan Brecher

Compliance programs are no longer judged by how they look on paper, but by how they function in the real world. Compliance monitoring is the ongoing process of reviewing, testing, and evaluating whether policies, procedures, and controls are being followed—and whether they are actually working. What Is Compliance Monitoring? In today’s heightened regulatory environment, compliance […]
Author: Dan Brecher

New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]
Author: Charles H. Friedrich
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!