Older Workers

By Robert Grossman Aug 1, 2003

HR Magazine, August 2003Older workers say they aren't treated well, but many HR professionals - to their own potential detriment - aren't getting the message.

Karl Gustafson was in his mid-50s and had Florida on his mind. But unlike some older workers whose careers are winding down and who see the Sunshine State as a land of golf and early-bird specials, Gustafson headed south to work—not to retire.

For him, Florida meant accepting a new challenge as vice president of HR for Baptist Hospital in Coral Gables. Now called Baptist Health South Florida, the organization is the state’s largest not-for-profit health care provider, with 8,900 employees.

Today, at 64, Gustafson is still at the helm and thriving, more than justifying Baptist’s decision to hire him: Despite the fact that the health care industry has a crisis-level staffing shortage, Gustafson has helped Baptist stay ahead of the pack. Turnover is only 9 percent—half the industry norm.

Part of the reason for that success is that Gustafson has extended to other older workers the same opportunity that he enjoyed a decade ago. Twenty-five percent of the Baptist workforce is 50 or older.

“There’s a vast amount of opportunities for everyone here,” says Ralston Mairs, 60, a pre-op technician in South Miami Hospital, which is part of the Baptist system. This year, Mairs was named the hospital’s employee of the year, earning him a bonus, a plaque and, most important, he says, his own parking space.

Mairs could work anywhere, but he’s stayed put for 26 years. “They’re loyal to their workers and they listen to us,” he says.

As happy older workers who are utilized effectively, however, Gustafson and Mairs may be the exception, rather than the rule. Even though experts predict a looming labor shortage that can be countered by hiring and retaining older workers, many older employees feel they aren’t being given a fair shake. And the primary federal tool for protecting them—the Age Discrimination in Employment Act (ADEA), which bars discrimination against those who are 40 and older—doesn’t seem to be helping their cause. (For more information on the law, see "The ADEA" sidebar.

Winking at Age Bias

The idea that the ADEA may not be adequately protecting workers is surprising because the law appears to have sharp teeth. For example:

  • The median age discrimination verdict in federal district courts was $269,350—tops for all types of discrimination—from 1994 to 2000. The median verdict for state cases was about the same.

  • Employees who file age discrimination charges have a 78 percent success rate at both state and local jury trials, according to a study by Jury Verdict Research of Horsham, Pa.

  • The median out-of-court settlement for all age cases was $65,000 from 1994-2000, according to Jury Verdict Research.

Indeed, the passage of the ADEA has positively changed the nation’s workplaces by drastically reducing obvious age discrimination.

“When ADEA was enacted, 45 percent of the job announcements had a maximum age listing saying people 30 or 35 need not apply,” says Laurie McCann, senior attorney, AARP, Washington, D.C. “Some states had anti-discrimination laws on the books, but they weren’t enforced. Employers had free range to discriminate based on age.”

While “the most blatant forms of discrimination are gone,” says McCann, a closer look at the ADEA’s impact suggests that it has not been entirely effective as a deterrent.

The law can’t change fundamental societal attitudes regarding age, acknowledges Howard Eglit, a professor at the Chicago-Kent College of Law and author of a three-volume treatise, Age Discrimination, published and updated annually by The West Group. “You can’t legislate attitudes, but—by legislating away the most prominent offenses—hopefully, there will be a ripple effect,” he says.

But a closer look shows that Eglit’s optimism may be misplaced. Despite the passage of the ADEA, society has tended to wink at age bias. For many, the notion that older people have had their day and should make room for the next generation is deeply ingrained.

Case in point: Ann Klingert, 64, of Bronx, N.Y., recalls with astonishment the public response to a claim she filed with the Equal Employment Opportunity Commission (EEOC). Klingert was fired by the Woolworth’s chain of stores and prohibited from applying for newly created part-time jobs, most of which were filled by students.

“When the lawsuit was reported in a local New York City newspaper, Our Town, people were outraged,” she says—but at her, not the company. “They wrote letters to the editor saying things like ‘Why don’t you just retire? Just take your Social Security and go away.’ ”

Mindy Farber, managing partner at Farber Taylor LLC in Rockville, Md., also has caught a first-hand glimpse of the disturbing way some individuals view older workers. Farber hired a new associate in her mid-50s and was shocked by the way other employees reacted.

“I was surprised how open people were about talking about the wisdom of my decision,” she says. “If I had hired an African American, they would have been silent. Here, they told me straight out that I had made a mistake.”

“The idea that you can’t teach an old dog new tricks does not seem to carry the same taboo status in society as stereotypes involving race and gender,” agrees Todd Maurer, associate professor, industrial-organization psychology at Georgia Institute of Technology.

But Maurer says that broad generalizations about older workers are particularly misguided. “One size does not fit all. There can be older individuals who are both interested in and able when it comes to learning,” he says. “Research has found large differences within older groups in things like training performance and in abilities like memory and reaction time.”

McCann says that until more attention is focused on the treatment of older workers, “We may not be making the inroads we need to address the intractable, subtle discrimination that is so pervasive. I don’t think employers want to discriminate. They don’t hate older workers. It’s the stereotypes. They may not even know they harbor these biases.”

But workers know.

Workers Grumble

Last year, when AARP surveyed 1,500 employed workers age 45 to 74, 67 percent said that age discrimination is a fact of life in the workplace and that they have concerns about “opportunities to re-enter the workplace and advance in their current jobs as they age.” Sixty percent said they believe that older workers are the first to go when employers make cuts.

A 2002 Conference Board survey of 1,600 workers age 50 and older found similar discontent: Of workers planning to retire in the next five years, 25 percent said they were leaving because they were being held back or marginalized because of their age.

Linda Barrington, labor economist at The Conference Board, a nonprofit business research and training organization in New York, says the percentage is cause for concern. “It’s twice as big as I might have expected,” she says.

Perception, of course, is not reality, but Barrington says it doesn’t matter. “Perceptions affect the way you work; if you’re feeling undervalued, that discouragement will affect your work. Is it perception or reality? Either way, it has to be dealt with.”

But there is evidence that HR professionals are failing not only to deal with these perceptions, but also even to recognize them. A study released earlier this year by the Conference Board polled 150 HR executives and revealed startling contrasts between workers’ perceptions and HR’s. In fact, significant numbers of HR executives seemed oblivious to the concerns expressed by older workers.

Howard Muson, author of the study, was amazed at the lack of awareness. “I had the sense that some didn’t even know if they dealt with age differences in their training,” he says.

Some of the disconnects include:

  • Employees say supervisors perpetuate negative stereotypes by reserving promotion opportunities for younger employees. But the vast majority of HR executives (75 percent) say older workers get the same promotion opportunities.
  • Older workers say age-diversity training is important, especially for managers. But 81 percent of HR executives say their diversity training does not address supervisor attitudes toward older workers.
  • Two-thirds of older workers want more training and leadership development opportunities. Two-thirds of HR executives say their companies do not offer training for mature workers as an incentive to upgrade skills.

Why aren’t these concerns showing up on the radar screens of HR professionals all over the country? One reason may be that these issues don’t often qualify as actionable offenses under the ADEA. In fact, the way age issues are handled under the ADEA may actually be helping employers underestimate the growing concern over age issues.

Does the ADEA Deliver?

While the ADEA may have clamped down on obvious discrimination, it has not dealt as effectively with more subtle bias, experts say.

Part of the reason may be that, under the ADEA, employers can avoid liability for age discrimination if they can show that they had valid, non-discriminatory reasons for any actions they took. “So long as you can show you would have done it anyway, you’re off the hook,” says Harlan Miller, an attorney with Miller, Billips and Ates in Atlanta.

And that can make it easier to hide prejudicial attitudes against older workers.

“It’s almost impossible to catch a crafty employer discriminating,” says David Neumark, a nationally recognized expert on the ADEA and senior fellow of the Public Policy Institute of California in San Francisco. “I can always get around it if I’m smart. Only idiots get nailed for disparate treatment.”

Further, in an effort to gain legal protection from ADEA suits, many employers may be inadvertently closing the door to information that could help them recognize and respond to concerns over the way older workers are treated. For example, most companies inoculate themselves against age complaints by asking dismissed older workers to sign releases and confidentiality agreements in exchange for retirement with incentives, severance and buyouts.

While these agreements gain legal protection for the employer, they come at a potential price—continued ignorance over the scope of the problem.

Employees who complain often are dealt with quietly. “Any employer with some brains knows it’s expensive to litigate,” Eglit says. “In a simple case, it will cost a defendant $100,000 from the time a complaint is filed with the EEOC to a trial. So when employers get wind that an employee is disgruntled, they move in and settle the matter right there.” Again, because of confidentiality agreements, these settlements leave no footprints.

And at this point, older employees often are relieved to accept a face-saving exit deal. In reality, their options are meager. If they are still working or are owed pension money, they are scared of losing their jobs or pensions; if they’ve been terminated, they probably lack the funds to pursue legal action.

That’s especially likely since older people who lose their jobs often are “out of work longer [than younger counterparts], have difficulty finding jobs with comparable responsibilities and wages, and tend to become disheartened and ‘retire’ rather than continue a depressing quest,” says Neumark. As a result, the true extent of joblessness among older workers is understated in unemployment statistics because people who “retire” out of frustration are not tallied.

The absence of income makes it even more difficult to afford an attorney, most of whom don’t come cheap: On average, it costs about $50,000 for a lawyer, and most attorneys won’t handle these cases on a contingent basis because they know their chances of winning are slim, Eglit says. (While the odds are good that employees will win a jury trail, most claims never make it that far, as discussed below.)

Further, even if workers win an award, the odds aren’t good that it will be large enough to cover their legal costs. A few high-profile EEOC settlements reveal just how little workers win when they press the ADEA to the limit:

  • In March, the EEOC announced a settlement with Gulfstream Aerospace (owned by General Dynamics) on behalf of 66 workers for $2.1 million, an average of approximately $32,000 for each manager the EEOC claimed had been wrongfully terminated. Ninety-three percent of the claimants accepted the deal.

    Some of those who settled say their careers are now in shambles. Many may never work full-time again, says Steve Tapper, senior trial attorney for the EEOC in Atlanta.

  • When Foot Locker Inc. settled with 764 former employees, the complainants, mostly low-paid hourly workers, walked off with an average of $4,000 per person. Overall, the $3.5 million was a small price to pay for a 40,000-worker retailing giant like Foot Locker. (For more information, see the side bar item ' Chump Change'.)

Even when ADEA claimants win, their damages are limited to double their lost salary, unlike individuals who allege other types of discrimination. “Why shouldn’t someone who’s old be compensated for pain and suffering just like someone who’s fired for their religion, race or gender?” Miller asks. “There’s nothing worse than, after 30 years service, to be fired.”

Tip of the Iceberg

Most claimants don’t win, though, according to EEOC statistics. In fact, EEOC data reveal that filing with the agency is a dead-end for most claimants.

Last year, of the cases before it, the agency found “reasonable cause” that age discrimination may have occurred only 4.3 percent of the time. It found “no reasonable cause” 52 percent of the time. Only 6.5 percent of cases were settled.

Why do older workers file ADEA claims? The three biggest reasons behind an allegation of age discrimination include the following:

  • Fifty-three percent of the cases related to job loss, an increase of 34 percent since 1999.

    These types of cases are “easier to prove,” Eglit says. “If you’ve been working at a place for 20 years, look around and see five other people fired, you have a case.”

    But a pattern is not always necessary. One person can be booted out illegally, directly or indirectly. Constructive discharge is an example, says Dorothy Stubblebine, president of DJS Associates in Mantua, N.J., and an expert witness for both plaintiffs and defendants. “Typically, the older person is pushed out by giving him a really hard time,” she says. “He’s given the worst assignments till he can’t take it anymore.”

  • Twenty-five percent of claims were based on failure to hire, an increase of 200 percent since 1999.

    These cases are harder to prove and, because damages are limited, it can be hard to find a private attorney without paying up front. “If you’re not hired, how do you know what the reason was?” Eglit says. “It’s not so easy to figure it out.”

  • Twelve percent of claims alleged harassment—antagonism or intimidation creating a hostile work environment, an increase of 31.5 percent since 1999.

    When workers report harassment, their claims often don’t rise above the threshold set by the ADEA, says James Rubin, an employment attorney with Farber Taylor.

“A lot of people who think they’ve been screwed over have it wrong,” says AARP’s McCann. “Though I’m an advocate, I’d be the first to admit that when someone gets fired or doesn’t get promoted, they yell foul.”

An age discrimination claim often is the last resort for older white males, Eglit says. “If you’re a 55-year-old male who’s lost your $70,000 job, what do you do? The odds of finding any job, let alone a comparable job, are slim. So you fight.”

Under the Radar

Observers agree that there’s a lot of subtle discrimination against older workers, although most is under the radar and not in violation of the ADEA.

“Everyone may feel some bias; people may make jokes, young people may leapfrog over old. But bias is not the equivalent of provable discrimination under the ADEA,” says Paul Salvatore, partner at the law firm of Proskauer, Rose in New York. “Bias is a social problem — an atmospheric problem...more a diversity kind of thing and one that HR people will have to pay more attention to in the future.”

Smart HR professionals may want to take a cue from Baptist Health South Florida, which was named by AARP as one of the “2002 Best Companies for Workers aged 50 and over.” That organization’s cultivation of older workers can be attributed to factors other than the ADEA.

Baptist believes it has a moral commitment to treat older workers fairly. That commitment comes through in ways that benefit older workers and contribute to retention.

For example, any potentially adverse action proposed for a worker with 15 years of service is reviewed by the Long Service Review Committee, which consists of the CEO, the worker’s divisional VP and Gustafson. “Our charge is to see that whatever action we take causes the person the least possible harm,” Gustafson says.

Baptist also makes it possible for people who retire to return without losing ground. Workers who leave and return within five years are “bridged,” retaining seniority and salary level.

The company also adjusts training programs to better suit older workers. “Younger workers respond more to visual and hands-on learning; older ones do better reading and witnessing demonstrations,” says Gustafson. While these training strategies differ, the costs and end-results equal out, he says.

“The experienced older worker, when treated appropriately, has a lot to offer,” says Gustafson. “They catch on readily in training and are able to work in the high-tech areas as effectively as younger workers.”

The practices and attitudes at Baptist Health South Florida have paid off for the organization, and other employers would be wise to consider following suit. Although labor is currently plentiful, the tide is turning. U.S. Bureau of Labor Statistics projections show the percentage of younger workers age 25 to 44 will drop. The percentage of workers age 55 and older will rise from 13 percent now to 20 percent by 2015.

Visionary employers will need a range of policies to enable them to attract and retain productive older workers. And they’ll have to develop creative employment arrangements that will make returning to work an attractive option for retirees.

According to William Rothwell, professor of workforce education and development at Penn State University, the current economic slump is the calm before the storm. When the economy turns around and there’s more demand for products and services, the worker shortage will be the No. 1 issue.

When that time comes, those who have been paying scant attention to age issues -- including demographic planning, worker perceptions, knowledge transfer and diversity training of supervisors—will face an uphill struggle.

Robert J. Grossman, a contributing editor of HR Magazine, is a lawyer and a professor of management studies at Marist College in Poughkeepsie, N.Y.

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