Question: We are downsizing our accounting department. Two long-term employees over the age of 60 have repeatedly mentioned their intention to retire soon. They also have the highest salaries in the department. Can we eliminate their positions in the reduction in force?
Answer: Not for the reasons you suggest! Proximity to retirement is an age-based factor that cannot be used in your selection process. The fact that these employees earn more than their counterparts may also be age-related. In a recent federal case, a long-term sales employee sued for age discrimination under the Age Discrimination in Employment Act (ADEA) when his position was eliminated in a restructuring. The employee had been a consistently strong performer during his fourteen years with the company. He commented on his retirement plans often, but hadn’t given notice of a retirement date. The company didn’t review his prior performance reviews or sales metrics when selecting employees for downsizing. Nor did the decision-maker consult with the employee’s prior supervisor. Instead, the company said that the employee was chosen for termination because he was “aggressive” and “forceful” and therefore not a good fit. The company also said it couldn’t afford to pay his salary. Internal documentation created in connection with the restructure mentioned the employee’s “stated retirement ambitions” and a “retirement timeline” of 18 months. A federal district court judge sent the case on to a jury because sufficient evidence showed that the employee’s proximity to retirement played a substantial role in the decision to terminate him (Fife v. MetLife Group, Inc., D Mass, Nov. 2019).
When undertaking the selection process to downsize or restructure, use only objective, measurable criteria based on business needs and document the entire process from planning to layoff. You must be able to prove that the company relied exclusively on legitimate, nondiscriminatory factors in making each employment decision. Engage your Vigilant employment attorney early to help you through this process. Also see our Legal Guides, Age Discrimination in Employment and Downsizing and Layoff Checklist.