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.

Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Author: George McGowan

Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Author: Paul Grossman

The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman

The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
Author: Jay McDaniel

The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Author: Paul Grossman

New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena
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!