Age Discrimination

• Author: Laura M. Franze
• Pages: 105-146

 

23-1

CHAPTER 23

AGE DISCRIMINATION

BY LAURA M. FRANZE

23:1. FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT (ADEA)

A. Purpose and Scope

B. Covered Persons and Entities

1. Employers

a. Parent Corporation as Employer

b. Individual Supervisor as Employer

c. Immunity Under 11th Amendment

2. Covered Employees

a. Employees Over the Age of 40

b. Americans Working Abroad

c. The Bona Fide Executive or High Policy-Making Position Exemption

d. Coverage for Retiree Benefits

3. The ADEA Does Not Prohibit Reverse Discrimination

C. Administrative Procedures

1. Comparison to Title VII

2. Exhaustion of Remedies

23:2. TEXAS COMMISSION ON HUMAN RIGHTS ACT

A. Prohibited Conduct

B. Covered Persons and Entities

1. Employers

2. Exempt Employees

C. Administrative Procedures

D. Relationship Between TCHRA and ADEA

23:3. PROVING AN AGE DISCRIMINATION CLAIM

A. Disparate Treatment Prima Facie Case

1. Shifting Burdens of Proof

2. Employer’s Burden of Production

3. Proving Pretext

a. Proving Pretext Generally

b. Employer’s Stated Reason Is Demonstrably False or Employer Has Given

  

Inconsistent Reasons for Discharge

c. Nonsensical, Arbitrary, Inconsistent or Capricious Employment Decisions

d. Age-Related Remarks

4. Evidence Sufficient to Defeat Claim of Age Bias

a. Reasonable Business Decision

b. “Same Actor Defense”

B. Disparate Impact Prima Facie Case

C. Reduction in Force Cases

D. Class Action Age Discrimination Claims

23:4. AVAILABLE REMEDIES

A. ADEA Claims

1. Back Pay

2. Reinstatement v. Front Pay

 

a. Willful Violation

b. Relationship to Punitive Damages

4. Attorneys’ Fees

B. TCHRA Claims

C. Offsets and Deductions

D. Mitigation of Damages

23:5. DEFENSES TO AGE DISCRIMINATION CLAIMS

A. ADEA Statutory Defenses

1. Defenses to Claim of Intentional Discrimination

2. Defenses to Claim of Disparate Impact Discrimination Under the ADEA

B. TCHRA Defenses

23:6. WAIVER AND SETTLEMENT OF ADEA CLAIMS

A. Individual Employee Waiver

B. Reduction in Force (“RIF”) Waiver

C. Practical Ramifications of Releases/Waivers

1. Proof of Consciousness of Guilt

2. Enhanced Severance Benefits to Employee

3. RIF Cases: Rescission on Grounds of Involuntarily Execution

23:7. ARBITRATION

APPENDICES

Appendix 23-1 Minimizing Age Discrimination Claims Arising Out of a Reduction in Force

Appendix 23-2 Employer’s Reduction in Force Checklist

Appendix 23-3 Checklist for Employers: The “Don’ts” of Releases

23-3  §23:1

23:1. FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT (ADEA)

A. PS

The federal Age Discrimination in Employment Act (“ADEA”), 29 U.S.C.A. §621 (1985), broadly prohibits

discriminatory employment practices based on age. Except in certain limited situations, the ADEA prohibits

discrimination against individuals forty years of age or older. See 29 U.S.C.A. §631(a) (1985 & Supp. 1998). Congress

enacted the ADEA to promote the employment of older persons based on their ability, and to prohibit arbitrary age

   



The ADEA prohibits discrimination in virtually all aspects of the employment relationship, including hiring,

discharge, promotion, compensation, and other terms or conditions of employment. Specifically, the ADEA states

that it shall be unlawful for an employer to:

• Fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with

respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s

age (29 U.S.C.A. §623(a)(1) (1985));

  



age (29 U.S.C.A. §623(a)(2) (1985));

• Reduce the wage rate of any employee in order to otherwise comply with the ADEA (29 U.S.C.A. §623(a)

(3) (1985)); or

• Discriminate or retaliate against an employee for opposing any practice made illegal under the ADEA or

for participating in an investigation, proceeding, or litigation involving a charge of discrimination under the

ADEA (29 U.S.C.A. §623(d) (1985)).

B. CPE

1. Employers

The ADEA applies to employers, employment agencies, and labor organizations. 29 U.S.C.A. §623(a)-(c) (1985).

An “employer” is defined as a “person engaged in an industry affecting commerce who has twenty or more employees

for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.” 29 U.S.C.A.

§630(b) (1985). The term “employment agency” is defined at 29 U.S.C.A. §630(c); the term “labor organization” is

defined at 29 U.S.C.A. §630(d). This chapter focuses on the application of the ADEA to an employer.

a. Parent Corporation as Employer

To hold a parent corporation liable for alleged age discrimination by a subsidiary, a plaintiff must demonstrate

that the parent corporation—rather than the subsidiary for whom he or she works—is the “employer” for purposes

of the ADEA. Courts use various tests to determine whether a parent corporation can be held liable for the acts of

a subsidiary. These tests include: i) the agency theory test, under which the plaintiff must establish that the parent

company exercised a significant degree of control over the subsidiary’s decision-making; ii) the alter-ego test, under

which the plaintiff may be allowed to pierce the parent company’s corporate veil to prevent fraud, illegality, or

injustice; and iii) the instrumentality test, under which the plaintiff must establish that the parent company exercised

control over the subsidiary’s acts that gave rise to the litigation. See, e.g., Frank v. U.S. West, Inc

n.2 (10th Cir. 1993) (discussing various tests); Wood v. Southern Bell Tel. & Tel. Co

1989) (discussing and applying several tests); Castleberry v. Branscum

The Fifth Circuit applies the “single employer test” articulated in Trevino v. Celanese Corp

(5th Cir. 1983), reh’g deniedSee also Schweitzer v. Advanced Telemarketing Corp.,

Garcia v. Elf Atochem N. Am., 28 F.3d 446, 450 (5th Cir. 1994), overruled on other

grounds by Oncale v. Sundowner Offshore Servs. Inc.Chaiffetz v. Robertson Research Holding,

LtdTrevino formula for determining “single employer” liability of