Conventional wisdom in the world of layoffs and reductions in force has held that older workers are more at risk for layoff because they generally earn higher salaries than their younger colleagues.  However, in this downturn, employers’ concern about the high cost of age bias claims may have put the jobs of younger workers more at risk. According to recent Department of Labor figures, the unemployment rate among the 24-35 age group was 9.7% in April 2009, compared with a rate of 6.4% for workers over age 55.   One year ago, those figures were 5.1% and 3.1% respectively. 

The federal Age Discrimination in Employment Act (ADEA) prohibits an employer from treating employees over the age of forty less favorably than younger employees because of their age.   To effectively defend against a claim of age bias, an employer making a lay off decision must rely upon non-age related criteria.   Using compensation as a factor is generally not advisable because pay selecting higher paid employees for lay off will generally result in more workers over forty being in the lay off pool.    For better or for worse, it appears many employers have concluded it is easier to defend an age bias claim when the last employees hired are the first ones who are let go as part of a reduction in force.

Age bias claims are little more complicated under Iowa law.  The Iowa Civil Rights Act protects any employee from age discrimination who is 18 or older.    Therefore, under Iowa law, employers must be especially vigilant to avoid using factors that are related to age when making lay off decisions–whether the age is younger or older.  

According to a recent Wall Street Journal Article ("With Jobs Scarce, Age Becomes an Issue"), older employees might also be favored because of personal circumstances that are not likely to affect as many  younger, single employees, such as children in college or a spouse’s health problems. Another potential factor favoring older employees, as discussed in a a recent post here, is that the EEOC has recently issued guidelines for avoiding discrimination against employees who are caregivers.

To avoid age bias claims, or at least make them more defensible, employers may want to consider some of the following criteria when identifying employees for lay off:

1.  Use as many objective criteria as possible when evaluating employees;

2.  Avoid using salary or benefit levels as a criteria; some courts have held that the use of such criteria creates an inference of age discrimination;

3.   If performance criteria are used, determine whether existing performance data is current and relevant; consider risks and benefits of updating performance evaluations (e.g., a sudden downward change in performance might be viewed as a pretext for age discrimination)

 4.  If performance reviews are updated prior to the RIF, it is better if the reviewing manager has little or no knowledge concerning the RIF;

 5.   Consider who will make the decisions based upon the established criteria;

 6.  Stick to the criteria;

 7.  Be aware of the presence in the RIF group of “whistle-blowers” or persons about to vest pension or retiree health benefits;

 8.  Consider obligations under collective bargaining agreement or seniority system;

 9.  Consider whether “bumping” will be permitted, and if so, how it will be administered.