During the trial in October, IBM officials insisted that Rathemacher had retired voluntarily, that he had trouble getting along with people and that Big Blue does not discriminate by age. At one point, though, Rathemacher’s attorney, Nancy Erika Smith, played an internal IBM videotape in which IBM chairman John F. Akers tells other managers “Our problem is to keep rejuvenating, keep on our feet, keep young at heart.” On the witness stand, Smith asked Akers to read the definition of “rejuvenate” from Webster’s (“to make, feel or seem young again…”). Last month the jury awarded Rathemacher $315,000 in compensatory damages–and potentially much more in attorney’s fees–though it denied his request for punitive damages as well. IBM is seeking a new trial.
Tough times mean reducing work forces, and some of the most tempting targets for layoffs are older, highly paid employees. It’s little wonder, then, that some experts are bracing for a surge in age-discrimination cases. The Equal Employment Opportunity Commission (EEOC) expects to receive nearly 17,000 age-discrimination complaints by the end of this year, up from 15,121 in 1990. The American Association for Retired Persons says requests for information on fighting age bias have jumped 55 percent in the last two years. Damage awards are also reaching new heights: last month a Los Angeles jury ordered a real-estate firm to pay $6.1 million to a 60-year-old executive who claimed he was forced to quit in 1988, while younger employees were kept on. The number of claims might be even higher, but many disgruntled employees don’t have the resources to bring lawsuits, many early-retirement plans require workers to waive their right to sue and companies are increasingly careful to avoid the appearance of age bias. Threatening age-discrimination complaints “has become such a hackneyed response,” says Eric Wallach, a New York employment-law expert, “that every employer dealing with the termination of an employee over 40 goes through the [legal] analysis in every situation.”
The federal Age Discrimination in Employment Act of 1967 protects workers 40 and older from arbitrary age discrimination in hiring, firing, pay, promotions, demotions, layoffs, benefits and training. Many states have antidiscrimination statutes as well. But actually proving discrimination can be difficult. Companies often say that a worker’s performance has declined, that he has been unable to adapt to changing conditions or that his expertise is no longer needed. To counter such claims, plaintiffs may need to show a pattern of biased behavior, such as an absence of older workers in certain jobs or derogatory remarks about “deadwood” or the need for “new blood.” Judicial interpretations of the laws keep changing, too. In one controversial ruling last July, the federal appeals court in New York held that employers may replace highly paid executives with lesser-paid ones for financial reasons, so long as age is not a factor. It comes down to a matter of proving discriminatory intent.
The procedure for pressing claims is equally complex. A worker can file suit under any applicable state or local law or complain to a state’s civil-rights agency. He can also file a complaint under the federal law with the EEOC and wait. EEOC staffers conduct a preliminary investigation, and if they believe the charge is warranted, the agency’s lawyers may decide to litigate on behalf of the plaintiff. In one such case, the EEOC is suing the National Football League for demoting 66-year-old Ben Dreith from referee to line judge, then letting him go when his contract expired. (An NFL spokesman insists that Dreith’s performance had suffered, but EEOC officials say that, in fact, Dreith’s evaluations were higher than those of some younger officials who are still working for the league.) Over all, the EEOC litigates only a fraction of the complaints it receives-last year it filed just 166 lawsuits. “The EEOC is futile,” charges Rathemacher, whose complaint against IBM was denied by the agency.
Like Rathemacher, employees can also bring their own age-discrimination suits to federal court, 60 days after filing a complaint with the EEOC. In August, the federal appeals court in New Orleans upheld a $3.5 million judgment against Monarch Paper Co., in the case of Dick Wilson, a vice president who was reduced to sweeping floors in a warehouse at the age of 60. (One supervisor even posted signs saying WILSON is OLD.) But bringing a lawsuit on one’s own can be extremely expensive and time consuming–especially against large corporations with the legal resources to drag out proceedings for years. Even for plaintiffs who win big judgments, the victory is often hollow. In September, Roberta and Donald Karp, former vice presidents at Woodward & Lothrop, won a $1.2 million verdict against the Washington, D.C., departmentstore chain after demonstrating that Roberta, 56, had been coerced into taking early retirement and Donald, 57, had been fired. So far, however, the couple haven’t seen any ofthe money and they aren’t likely to soon. The company is seeking to have the jury verdict overturned and if that fails, it vows to appeal. The Karps, who once earned $200,000 between them, are now living off their savings and are unable to find work “This is essentially a no-win situation” says Roberta Karp. “The only thing you win is the vindication.”
Rathemacher, now 59, has also been unable to find another job. “It’s extremely hard to find work at my age,” he says. “The most virulent kind of age discrimination is in the hiring area,” says attorney Christopher Mackaronis, an agediscrimination specialist in Washington. But proving why someone wasn’t hired is even more difficult than proving why someone was fired. “You can probably count the number of failure-to-hire suits on one hand,” says Mackaronis.
Demographics are on the side of older workers. As a declining number of young workers-the baby-bust generation–enters the job market, businesses will need the skills of older workers. Burton Fretz of the National Senior Citizens Law Center also cites “a subtle shift in the job market away from the kinds of positions that put a premium on physical strength and speed toward positions that put a premium on things like judgment, reliability, experience and honesty.” In the meantime, though, corporate America’s search for “young blood” will just be more fresh meat for the nation’s lawyers.
