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Age Discrimination Is Common, Winning Lawsuits Rare: QuickTake

Sept. 12, 2022, 2:13 PM

Discrimination against workers based on their age is illegal in many countries. Yet legal experts say that such unfair treatment, particularly of older workers, is widespread. Ageism is a growing concern for societies with advanced economies as their workforces grow increasingly old.

1. What is age discrimination?

Age discrimination is when someone is disadvantaged or treated unfairly because of age. Both young and older people can face it. In the US, the federal Age Discrimination in Employment Act (ADEA) of 1967 applies only to those 40 and older, although some state laws cover the young. The ADEA protects job applicants and employees against discrimination in hiring, promotion, termination, compensation, and the terms, conditions or privileges of employment. The UK’s 2010 Equality Act covers both discrimination that is direct, when an employee is treated differently from others because of age, and indirect, when work policies or procedures put an age group at a disadvantage. It also covers harassment -- humiliating, offending or degrading someone for their age -- and victimization -- treating someone badly for calling out age discrimination.

2. How common is it?

Polls suggest that age discrimination is very common in the workplace, and it appears to be especially prevalent in the technology andfinance industries. In a survey conducted by the American Association of Retired Persons in 2018, 61% of workers 45 and older reported seeing or experiencing it. A study by the Urban Institute and ProPublica published that same year found that 56% of workers 50 or older were pushed out of longtime jobs before they chose to retire. Research suggests that discrimination against elderly job applicants is pervasive. When researchers have submitted to employers fictitious resumes designed to be as identical as possible except for age, older applicants received fewer callbacks than younger ones.

3. Are gender and race factors?

Yes. In one study using fictitious resumes, researchers found that discrimination is more severe and starts much earlier for older women than for older men. In the AARP poll, disproportionately high percentages of women and Black workers (64% and 75% respectively) reported witnessing or experiencing age discrimination. In the UK, discrimination complaints involving menopause are increasing, with more older women ready to challenge companies that are failing to recognize their health needs.

4. How common are lawsuits?

There were just over 14,000 age discrimination claims filed in 2020 in UK employment tribunals, which judge legal disputes concerning labor law. Some included additional complaints, for example concerning disability. According to the Justice Ministry, the number was elevated by the pandemic, which led large numbers of older employees to leave the workforce sooner than expected, some of them involuntarily. In the US, roughly 13,000 complaints were filed in 2021 under the ADEA; these numbers don’t capture cases filed under state laws. Legal experts say the number of complaints represents a sliver of the actual incidents.

5. Why are lawsuits relatively rare?

For one thing, lawyers say, many cases are settled out of court, largely through severance payments made to older employees who’ve been dismissed. In other cases, employees may not know their rights or are intimidated from filing suits. Job applicants may not have evidence that they were rejected because of their age.

6. Can age discrimination ever be legally justified?

Yes. In the UK, age is different from gender and race in that the law allows employers to discriminate on the basis of it if they can show their action was justified, for example for reasons of health and safety or fitness. For example, UK-registered pilots are forced to retire from flying at age 65, even though mandatory retirement ages aren’t generally allowed. In the US, the ADEA provides a similar exemption toa ban on compulsory retirement, as well as an exception for certain employees in executive positions.

7. How difficult is it to win a case?

Like any other discrimination case, ageism lawsuits can be challenging to win. At the England and Wales employment tribunals, the success rate of such cases in 2021 was around 2%, according to data compiled by the law firm GQ Littler. In the US, because of a 2009 Supreme Court ruling, it’s necessary to prove that age was the deciding factor in an employer’s action. Legislation introduced in Congress in 2021 would establish that it’s sufficient to show that age was one motivating factor, as is the case with race and sex discrimination suits.

8. How much money could you be awarded in a case?

Awards for unfair dismissal are usually capped in UK employment tribunals at just over £93,000 ($112,430). But if discrimination is proved, the cap doesn’t apply and damages are unlimited. A Citigroup Inc. banker who was dismissed after being called “old” at the age of 55 won an age discrimination suit in 2020 and was awarded nearly £2.7 million, although Citi in July successfully appealed to have the case reconsidered. The largest ADEA resolution to date is a case filed against the California Public Employees’ Retirement System, California’s pension plan for state employees, by 1,700 disabled police officers, firefighters and other safety officers whose disability benefits were reduced based on their age when they were hired, according to the Equal Employment Opportunity Commission, a government agency that enforces federal laws against workplace discrimination. The pension manager agreed to pay $250 million to resolve the case in 2003.

9. How are aging workforces relevant?

It’s been estimated that about a quarter of all workers in developed countries will be over 55 by 2030. To ensure vacancies are filled in the future, labor experts argue, employers will need to reduce bias against this group.

The Reference Shelf

  • Bloomberg reports on Citigroup winning a lawsuit, on appeal, from a worker who was called “old” and on Kuwait’s sovereign wealth fund being sued in London for age discrimination.
  • Writing for Bloomberg Opinion, columnist Stephen Mihm argues that pushing older people out of the workplace was a last-century solution to make way for younger workers, and Economics Professor Teresa Ghilarducci says that solving the US labor shortage requires addressing age discrimination.
  • The UK Equality and Human Rights Commission’s webpage on age discrimination.
  • The US Equal Employment Opportunity Commission’s webpage on age discrimination.

To contact the reporters on this story:
Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net;
Katharine Gemmell in London at kgemmell2@bloomberg.net

To contact the editors responsible for this story:
Jeremy Hodges at jhodges17@bloomberg.net

Lisa Beyer, Peter Blumberg

© 2022 Bloomberg L.P. All rights reserved. Used with permission.