“Ask Sheila” Column

Dear Readers,

This column will be a little different. Rather than respond to a question, I’ll be discussing transitions, and in particular, retirement. First, an announcement. I will be retiring on December 31 of this year, after 35 years practicing employment law. My partner, Sarah Glaser, will be assuming leadership of Lloyd Gosselink’s Employment Law Practice Group. Sarah is an experienced employment attorney with whom many of you have had the pleasure of working. I am thrilled to be leaving my practice and clients in such competent hands.

And speaking of retirement, let’s talk about your employees who are (or may be) nearing the end of their careers. They may already be eligible for retirement under your plan or eligible for Social Security or Medicare. They may be in a job that is taking a toll on their bodies physically, or are ready to leave the time commitments and stress of a management job. Regardless of their reasons or age, be aware that the decision to retire is theirs, and theirs alone. With rare exceptions, mandatory retirement is illegal age discrimination, and pushing employees toward retirement can subject employers to serious legal liability.

Under the law, an employee cannot be “too old” for a job. That doesn’t mean that you can’t manage performance based on physical or mental limitations that might be related to age, but age itself should never be the reason to address an employee’s departure. A 30-year-old with physical concerns should be treated the same as a 75-year-old with physical concerns. Numerous cases under the federal Age Discrimination in Employment Act (“ADEA”) or the similar provision under Texas law (protecting applicants and employees over 40) show that suggestions of retirement or discussions among decision-makers about the aging workforce are used as compelling evidence against employers to show that decisions were motivated by age.

Comments to employees like, “wouldn’t you rather be fishing with your grandkids?” and “you are eligible for retirement, why don’t you take it?” rather than addressing the performance concerns, make employers vulnerable to age discrimination claims. In one case, evidence that an executive said in a meeting, “sometimes you have to cut down the old trees to let the new ones grow” was devastating to the employer in an age discrimination case stemming from a reduction in force. Even birthday cards signed by decision-makers that reference getting older become “Exhibit A” in age claims. Supervisors have told me that they didn’t feel comfortable addressing serious performance concerns with an older employee because they were taught to be respectful to their elders – but giving a positive performance review and then commenting on retirement before a reduction in force will buy you liability. And supervisors must understand (and be trained) that it is not respectful to hide performance concerns from employees and then terminate them.

The Americans with Disabilities Act also comes into play here, as we often see cases that charge both age and disability discrimination. Avoid these claims by focusing on the employee’s actual ability to perform essential job functions, and whether limitations can be reasonably accommodated, rather than the employee’s age or overall health. Be sure to engage the employee in discussions about potential accommodation, called the “interactive process” in the ADA regulations.

Watch out for stereotypes about what older or disabled people should be able to do, and instead address the particular employee’s abilities. This holds true, not only for your current employees, but also for applicants. Have all candidates show you they can do the job in the hiring process, not just those who are older or appear to have an impairment. And if an older employee is rude to coworkers or customers, address that behavior without calling it “crotchety.” Don’t be overheard saying “you can’t teach an old dog new tricks.”

There is a way to encourage retirement without violating the law, but it has some technical landmines and requires close adherence to the law. You can offer an incentive to certain employees to take an early retirement package and sign a release and waiver agreement, so long as you follow the portion of the ADEA called the Older Workers Benefit Protection Act. To be compliant, employers must offer the severance package to all employees in a designated work unit who are eligible under the employer’s formula (such as age plus years of service). The waiver agreement must be written without legalese, provide for a 45-day consideration period and a seven-day revocation period, advise lawyer consultation, and provide age and job statistics on who received the offer. And it must be truly voluntary, with no direct or indirect pressure to accept. Not to self-promote, but you do need a lawyer to guide you on this.

With that, I say farewell! Contact us (meaning Sarah and her team) if you need help with employment law compliance, training, investigations or defense.

“Ask Sheila” was prepared by Sheila Gladstone, Chair of the Firm’s Employment Law Practice Group through the end of 2022. If you would like additional information or have questions related to this article or other employment matters, please contact Sarah Glaser at 512.322.5881 or sglaser@lglawfirm.com.