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‘Early Career’ Recruiting Strategies Risk Age Bias Liability

Oct. 5, 2022, 9:25 AM

Companies face growing risks for age-bias lawsuits in their pursuit of younger hires, in no small part due to language they use in recruitment that plaintiffs can construe as discriminatory even when it’s “coded.”

The EEOC brought the latest major lawsuit along these lines last week, accusing Lilly USA of violating the Age Discrimination in Employment Act after the biopharma giant’s executives allegedly pledged to add more “early career” professionals to the company to the detriment of older workers.

Age bias appears to be a ripe area for claims from the Equal Employment Opportunity Commission and private plaintiffs, with US workers retiring later than they once did. Nearly 80% of older workers say they’ve seen or experienced age discrimination in the workplace, according to a 2021 survey by AARP.

Though age discrimination claims can be hard to prove, statements from company leadership like those allegedly made in the Lilly USA case are often what get companies in trouble.

Workers at International Business Machines Corp. settled a similar age-bias lawsuit in August that had revealed emails from executives calling older workers“Dinobabies” who should be made an “extinct species.”

“That’s the kind of fact pattern we often see in these cases,” said Shannon Liss-Riordan, a Boston-based attorney who represents the IBM workers in several age-discrimination suits. “The language that they’re using are just code terms for age.”

Common Pitfalls

Lilly USA’s Senior Vice President for Human Resources and Diversity, Steve Fry, said in a 2017 company town hall that his goal was to reach a 40% “early career” hiring rate to correct a workforce that was “skewed toward the older generations” nationally, according to the EEOC complaint. The ADEA lawsuit was filed Sept. 26 in the US District Court for the Southern District of Indiana.

The EEOC alleges that after Fry’s comments, hiring managers at Lilly USA intentionally under-hired older workers for pharmaceutical sales representative roles through 2021.

Lilly USA denied the EEOC’s allegations in a statement to Bloomberg Law.

Employment attorneys warn that using problematic euphemisms in recruiting language, either in job postings or through statements from leadership, presents a major pitfall for companies trying to avoid bias suits.

Travis Gemoets, a partner at Jeffer Mangels Butler & Mitchell LLP, recommends clients avoid using phrases like “early career” or “digital native” when looking to recruit. Instead, employers should specify what skills they’re looking for in a candidate or what software and systems the candidate must know.

Employers often view age as a proxy for digital competency, even if they have years of experience using the systems necessary for a given position, Liss-Riordan said.

A tendency to conflate age and digital skills may explain why technology companies have recently been the target of age-discrimination lawsuits alleging bias around hiring.

Several age bias lawsuits against IBM followed a a large-scale rebranding that started in the early 2010s and allegedly displaced thousands of older employees to make room for millennial recruits.

The company’s strategic shift toward cloud services, social media, and data analytics was accompanied by what one 2021 lawsuit said executives referred to as “continuous talent refresh” and “correcting seniority mix.” That lawsuit tentatively settled last month.

A systemic age discrimination lawsuit filed against Hewlett-Packard Enterprise Co. in 2020 revolved around a similar drive for younger talent. Former CEO Meg Whitman stated the company needed “early-career people” to “keep up with this next generation.” That case ended in arbitration.

On the Rise

Gemoets said the rise in age-discrimination claims is a “nationwide trend,” and cited other recent examples in the pharmaceutical industry, another high-tech field.

Novo Nordisk Inc. was sued in June by the EEOC for allegedly denying a lateral transfer to a 62-year-old employee because of her age.

“In the biopharma industry, this hasn’t been lost on anyone,” Gemoets said. “Once you see your competitors get sued for this kind of stuff that reemphasizes the importance of knowing what those laws are and following them on a daily basis.”

The EEOC has lately doubled down on age-bias lawsuits, announcing five in the last month of its fiscal year. The agency tends to prioritize systematic cases or those where the victims are bound by arbitration agreements.

Several of the cases dealt with hiring, including a complaint that R3 Government Solutions LLC allegedly retaliated against a recruiter who refused to execute hiring practices based on age and other protected characteristics.

In a suit against Fischer Connectors Inc., also filed by the EEOC last week, a human resources director was allegedly let go due to her age. The employee witnessed the company’s new leadership lead a campaign to oust older people in management positions, according to the commission.

Suits alleging age discrimination will only increase in frequency as the face of the workforce continues to change, said Deborah Marcuse, an attorney with Sanford Heisler Sharp.

The number of people staying in the workforce at age 75 and beyond is expected to grow by 95% by the end of the decade, according to a November 2021 report from U.S. Bureau of Labor Statistics.

“I wouldn’t say by any means that there’s more discrimination now than there was,” Marcuse said. “I would say that the people experiencing discrimination are increasingly unwilling to put up with it and have increasingly seen some very prominent examples of other people successfully standing up against it.”

Cases under the ADEA became more difficult to win following a 2009 U.S. Supreme Court ruling in Gross v. FBL Financial Services Inc., which imposed a higher burden of proof on employees alleging age discrimination than is required for other workplace claims based on different protected characteristics. Plaintiffs now must prove that age was the sole factor in their adverse treatment and not just a “motivating factor.”

There are efforts in Congress to change that standard. The bipartisan Protecting Older Workers Against Discrimination Act would harmonize age-discrimination proof standards with those for other forms of workplace bias. The bill has passed the House but has yet to move in the Senate.

To contact the reporter on this story: J. Edward Moreno in Washington at jmorenodelangel@bloombergindustry.com

To contact the editors responsible for this story: Rebekah Mintzer at rmintzer@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com