Age Discrimination Cost Company $1 Million

By Rebecca R. Hastings, SPHR Jul 25, 2011
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​The U.S. Equal Employment Opportunity Commission (EEOC) announces age discrimination-related settlements worth tens or even hundreds of thousands of dollars on a regular basis. But it will cost Richmond, Va.-based Cavalier Telephone a cool million to settle a suit that originated in May of 2003.

The EEOC’s announcement, released July 18, 2011, said that Cavalier Telephone’s mid-Atlantic region had a practice of not hiring applicants age 40 or older for sales account executive positions and had indicated verbally and in writing that the company was looking for candidates for its sales positions who were “recent college graduates” and in their “early 20s or 30s.”Moreover, the company had offered its employees a $500 bonus for referral of a “friend’s younger brother and sister.”

The EEOC alleged that, as a result of the recruitment and hiring practices used by the company, Cavalier maintained a workforce that underrepresented people age 40 or older in its sales positions in its mid-Atlantic region, which covers Virginia, Maryland, Pennsylvania, Delaware, New Jersey and Washington, D.C.

The EEOC’s complaint included individual claims of retaliation against two former Cavalier employees who said they had been demoted for complaining about the company’s discriminatory hiring practices. According to the EEOC, one of the demoted employees resigned from Cavalier and the other continued to complain about age discrimination until terminated.

Cavalier agreed to pay $1 million in monetary relief to the two individuals who claimed retaliation and to a class of individuals age 40 or older who the EEOC determined were not hired because of their age.

Avoiding Age Discrimination

Age discrimination violates the Age Discrimination in Employment Act of 1967 (ADEA), which protects those aged 40 or older from discriminatory treatment based on their age and from retaliation for complaining of age-related discrimination. The EEOC filed suit (Equal Employment Opportunity Commission v. Cavalier Telephone Company, Inc.; Civil Action No. 3:10-cv-664 in U.S. District Court for the Eastern District of Virginia, Richmond Division) after failing to reach a pre-litigation settlement through its conciliation process.

In a statement, Lynette A. Barnes, regional attorney for the EEOC’s Charlotte District Office, which oversees litigation filed by the agency in Virginia, said, “Stereotypes concerning the abilities of older workers often lead companies to make discriminatory hiring decisions. This lawsuit and settlement will serve as a reminder to all employers that companies must make employment decisions based on an applicant’s ability to perform the job, not his or her age.”

Making business decisions based on stereotypes and assumptions about members of a particular demographic group rather than on an assessment of individual capabilities can lead an organization to reach false conclusions. “I know some thirty-something’s,” said Devora L. Lindeman, a partner with the New York-based firm of Greenwald Doherty LLP, “that are stick-in-the-muds and work at a snail’s pace, while the 60-year-old down the hall always has a sparkle in her eye and fresh ideas for improvement.”

Instead of focusing on age-related qualities like “youthfulness,” companies “should identify the specific job-related qualities they are looking for that can be articulated without referencing age,” Lindeman explained. “For example, are they looking for cheerful people that exhibit exuberance, energetic individuals with a positive can-do attitude or free-thinkers willing to bend the box, not just think outside it?” she asked. “Then look for people with those qualifications, without regard to their age.”

Lindeman suggested:

  • Set a salary range commensurate with the duties of the position.
  • Use the phrase “entry-level position” instead of “seeking a recent college grad” to signal that this is not a high-paying job.
  • Ask people to “refer friends and colleagues” without specifying an age range.

“Just like race, gender and religion, age should not factor into the hiring process,” she added. What should be considered? “Ability, merit, skills, qualifications, education and experience”—tied to the requirements of the job.

“The manager needs to determine whether the applicant in front of him or her has the qualifications being sought—and not stereotype because of the candidate’s age,” she said. “Find out specifically what this candidate has to offer.”

Moving Forward

The three-year EEOC consent decree, which applies to Cavalier’s locations in its mid-Atlantic region and is designed to help the company prevent future episodes of age discrimination:

  • Requires Cavalier to provide jobs to qualified applicants age 40 or older who were denied employment because of the alleged discriminatory hiring practices.
  • Prohibits Cavalier from discriminating against job applicants or employees because of age and retaliating against any of its employees or applicants.
  • Requires Cavalier to use an applicant tracking system and to provide specific information to the EEOC about its hiring of applicants by age.
  • Mandates that Cavalier provide training to staff, post a notice about its commitment to equal opportunity and a diverse workforce, and report compliance to the EEOC.

In December 2010, after the lawsuit was filed, Cavalier was acquired by PAETEC. According to its website, the combined companies deliver telecommunication services in 86 of the top 100 metropolitan statistical areas in the United States.

“This particular litigation stemmed from recruiting activities … by Cavalier, a company that PAETEC acquired in December 2010,” said Mary O’Connell, PAETEC’s general counsel and executive vice president over human resources, in a statement. “PAETEC acknowledges the importance of nondiscrimination in all aspects of the work environment and will continue through our integration activities to ensure compliance with laws and ethical behavior by all acquired company employees.”

Rebecca R. Hastings, SPHR, is an online editor/manager for SHRM.

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