Age-discrimination claims have hit an all-time high, up more than 49 percent, from 16,550 claims filed in 2006 to 24,600 in 2008, according to the Equal Employment Opportunity Commission (EEOC). And that's before the worst of the recession even began. Why the upsurge? What can employers do to protect themselves? To find out, DiversityInc asked discrimination-law attorney Weldon Latham.

DiversityInc: What's fueling this trend?

Latham: There's an increasing number of aging employees in the workplace--the baby-boomer generation. With their retirement plans dwindling, they're more likely to stay on the job longer. Between 1977 and 2007, the number of workers age 65 and older in the work force increased 101 percent.

Laid-off older workers may be taking more legal action to recover their jobs or lost wages because it's taking them longer than younger workers to find new employment. The U.S. Bureau of Labor Statistics recently reported that a disproportionately high share of workers 45 and older collect long-term unemployment (six weeks or longer). Older workers also struggle against stereotypes about energy and stamina, physical and mental abilities and the ability to adapt to change. Experiments have shown that, when credentials are equal, employers have a strong preference for younger workers. Some companies may also be targeting older workers in some layoffs because older, more senior employees are generally the highest paid and have the highest benefits--thus, their layoffs would create the greatest cost savings for companies.

DiversityInc: How is age discrimination in the workplace defined by the courts?

Latham: The Age Discrimination in Employment Act (ADEA) protects individuals who are 40 years of age or older from employment discrimination based on age. Under the ADEA, it's unlawful to discriminate against a person because of his/her age with respect to any term, condition or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments and training. In 2005, the Supreme Court broadened the interpretation to include cases in which there is no evidence of intentional discrimination, but there is evidence of disparate impact of a policy or practice. Using this legal standard, workers need to show only that older workers were disproportionately affected by their employer's decision.

In the recent Gross v. FBL Financial Services decision, the Supreme Court made it more difficult for ADEA plaintiffs to prove their cases. Although it is a fairly technical holding regarding burdens of proof in "mixed motive" cases, the court held that ADEA plaintiffs (unlike Title VII--race, gender, etc.--plaintiffs) must show that age was the main factor (not just one of several) that led to an adverse employment decision. Similar to the Lilly Ledbetter decision last year, this presents Congress with another opportunity to overturn a Supreme Court case curtailing rights of protected classes.

DiversityInc: What do companies need to know about ADEA?

Latham: The ADEA applies to employers with 20 or more employees, including state and local governments. It also applies to employment agencies and labor organizations, as well as to the federal government. The ADEA generally makes it unlawful to include age preferences, limitations or specifications in job notices or advertisements. However, a job notice or advertisement may specify an age limit only in the rare circumstances where age is shown to be a "bona fide occupational qualification" reasonably necessary to the normal operation of the business.

The ADEA does not specifically prohibit an employer from asking an applicant's age or date of birth. But because such inquiries may deter older workers from applying for employment or may otherwise indicate possible intent to discriminate based on age, requests for age information will be closely scrutinized to make sure the inquiry was made for a lawful purpose, rather than for a purpose prohibited by the ADEA. Therefore, we often advise clients to avoid such unnecessary inquiries.

DiversityInc: How can employers protect themselves? Can you offer any advice?

Latham: Employers must prepare for and conduct a layoff using careful planning well in advance of the anticipated layoff. The HR department, with help from the legal department or outside counsel, should outline the plan based on the company's business needs.

• Articulate the business justification for the layoff (e.g., loss in sales), and consider whether a layoff is the only effective approach. Establish legitimate selection criteria to make decisions regarding who will be laid off, criteria that bear a logical relationship to the business justification. Criteria might depend on the job category but need not be based on seniority.
  
• Train managers who will be implementing the criteria, and ensure that they adhere to the criteria--no exceptions--when making the initial decisions.
  
• Conduct an impact analysis of the initial results to determine whether the facially neutral selection criteria led to a statistical adverse impact on older workers or any other legally "protected class" of employees. If so, re-examine the criteria to determine whether other criteria--that still serve the business justification--can be used. 
• Prepare to implement the results. Consider severance packages and secure signed releases for affected employees. In the "messaging" process, be respectful of employees.
• Proceed cautiously and deliberately, and understand that any missteps can expose the company to significant legal liability. Age, race, gender, etc. should not play a role in selecting those to be laid off.
  

Here are additional steps companies can take on an ongoing basis to establish a culture that respects and values workers of all ages and to reduce the likelihood of age-discrimination claims:

• Ensure that company antidiscrimination and diversity policies include age.
  
• Include sensitivity to potential age bias in training sessions for all employees, particularly for hiring managers and supervisors.
  
• Establish interviewing and selection techniques that reduce or eliminate age-sensitive areas and questions.
  
• Create analytical structures to identify potential age bias in employment practices, such as recruitment and hiring, training, mentoring, performance management, compensation and advancement.
  
• Generally be sensitive to age issues in all company communications, including speeches, web content, advertising and newsletters.
  

DiversityInc: Can you provide examples where companies fell short? What was the outcome?

Latham: In August 2008, 10,000 television writers settled a class-action age-discrimination lawsuit against International Creative Management for $4.5 million. There are still 22 other class-action age cases pending against major TV networks and production studios. Recently, Kraft settled with the EEOC for $270,000 on a claim that its Nabisco unit had forced an older account manager to leave and replaced him with a younger, less experienced worker.

There are other individual class-action age-discrimination suits pending across the country. Late last year I predicted an upswing in all types of discrimination cases, including age, as a result of the poor economy and the meteoric rise in layoffs. Although it's too early to show a trend, some of these high settlement figures suggest increasing exposure of companies as their work forces age. Note: Age discrimination can be very hard to prove when so many people of all ages are getting laid off. But employers should not use the recession as cover for violating the law. There's a distinction between discrimination and a legitimate business decision. Employers of choice want to retain their best employees regardless of age, gender, race or any other characteristic currently protected by law. 

Weldon Latham is senior partner in the Washington, D.C., regional office of Jackson Lewis LLP, chair of the firm's corporate diversity counseling group and diversity advisory board chair for Deloitte LLP, No. 33 in The 2009 DiversityInc Top 50 Companies for Diversity®.

This article appeared in the July/August issue of DiversityInc magazine.