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‘Downsizing’ may lead to age discrimination claims increase

Jeff Sykes

Jeff Sykes

In the current economic climate, business owners in the construction industry face difficult decisions to ensure the company remains financially viable until the economy improves. One course of action to ride this economic low tide is to reduce operating costs.

Maureen Ryan

Maureen Ryan


Since a company’s wage expense is likely to be its largest operating expense, reducing payroll expenses becomes a likely choice. Construction companies often choose

When engaging in downsizing activities, employers should be aware of the potential consequences of taking adverse employment action against older employees. When former employees have trouble finding the next job after being laid off or terminated, they may start investigating whether or not there are grounds for an employment discrimination claim. Age discrimination is just one of the types of discrimination that is prohibited under federal and state law.

Employees over the age of 40 are protected from discrimination under both the federal Age Discrimination in Employment Act of 1967 and Idaho’s human rights statutes. Employees over 40 are protected from age discrimination in various aspects of the employment relationship, including the advertisement of positions, hiring, termination, promotions and benefits.
In order for an employee to prevail on an age discrimination claim, he or she must prove that age motivated the adverse employment action.
As described by the Idaho Supreme Court, the employee’s age must have “actually played a role in that process and had a determinative influence on the outcome.” In other words, age must have been a motivating factor behind the adverse employment action.
An employee believing he or she was the victim of age discrimination must file an administrative complaint with the Idaho Human Rights Commission (IHRC) within one year of the alleged discrimination. An employee must file a complaint with the IHRC before filing a lawsuit in state or federal court against an employer.
Upon an employee’s filing a complaint, the IHRC may try to resolve the dispute between the employee and the employer through informal action, such as meetings, letters, etc. If the matter is not resolved through the preliminary informal processes, the IHRC will generally schedule mediation for the parties. If mediation is unsuccessful, the IHRC will conduct an investigation to determine whether or not there are reasonable grounds to believe that unlawful discrimination has occurred.
If the IHRC finds no reasonable grounds to believe that unlawful discrimination has occurred, the IHRC enters an order to that effect and the proceeding is dismissed.
If the IHRC does find reasonable grounds to believe that unlawful discrimination has occurred, or if the IHRC fails to conclude its investigation within one year, the IHRC may issue a “right to sue” letter enabling the employee to move forward with his or her claim in a lawsuit in state or federal court. An employee may file suit in federal or state court with or without a favorable determination from the IHRC, so long as the IHRC investigation has concluded.
In addition, the IHRC may determine to initiate its own legal proceedings against the employer.
On its website (http://humanrights.idaho.gov/discrimination/age.html) the IHRC notes that “down-sizing” is currently of particular concern to the IHRC. Many older employees are finding their positions eliminated as company’s struggle to cut costs.
A few years ago, an experienced employee who had been laid off may have had an easier time finding a new job at a different company.
When an employee finds that new job quickly, he or she is less likely to worry about the underlying reasons for the adverse employment action at the previous job. However, in the current economy many people are not finding new jobs. This is especially true for the more highly compensated older employees.
Employers should be aware of the fact that employees over the age of 40 have heightened protection under the age discrimination laws. An employer with questions about whether or not adverse employment action against an older employee will result in a claim of age discrimination should contact an attorney for advice.

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Jeff R. Sykes is a partner with the law firm Meuleman Mollerup LLP. He represents businesses and individuals with legal problems and concerns involving contracts, construction, insurance, employment, and real property matters. Maureen Ryan is an attorney with Meuleman Mollerup. She focuses her practice in the areas of employment law, contracts, construction law, and real property matters. They can be contacted at 208.342.6066, or by email at sykes@lawidaho.com or ryan@lawidaho.com. More information is available on the web at http://www.lawidaho.com.


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