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Commission Meeting of July 15, 2009 - Age Discrimination in the 21st Century—Barriers to the Employment of Older Workers



STUART J. ISHIMARU, Acting Chairman


JAMES LEE    Deputy General Counsel
PEGGY R. MASTROIANNI    Associate Legal Counsel
BERNADETTE B. WILSON     Program Analyst

This transcript was produced from video tapes provided by the Equal Employment Opportunity Commission.



PANEL 1: Experienced or Expendable?
Stereotyping, Disparage Impact, and
Mixed-Motive Analysis in the Meacham and Gross era

Michael Campion,
Professor, Purdue University

Cathy Ventrell-Monsees,
President, Workplace Fairness

Rae Vann,
General Counsel,
Equal Employment Advisory Council

PANEL 2: Workers Explain How Age-Based
Policies Have Harmed Them

Anna Y. Park,
Regional Attorney, EEOC
Los Angeles District Office

Michael L. Barnes,
Plaintiff, Republic Services

John K. Stannard,
Plaintiff, Meacham v. Knolls Atomic Power Lab

Nancy D. Edmonds,
Senior Trial Attorney
EEOC Indianapolis District Office

Dennis Halfhill,
Plaintiff, Kentucky Systems v. EEOC

PANEL 3: Pondering Pensions: Employee
Benefits in the Kentucky Retirement era

Laurie McCann,
Senior Attorney, AARP

Eric Dreiband,
Partner, Jones Day Law Firm


10:07 a.m.

CHAIRMAN ISHIMARU: The meeting will come to order. Thank you all for being here. We're excited about the possibilities of doing this meeting and, certainly for me, this is one that I've been hoping we'd do for a long time, so, delighted to have it actually happen.

In accordance with the Sunshine Act, today's meeting is open to public observation of the Commission's deliberations and voting.

At this time, I'm going to ask Bernadette Wilson to announce any notation votes that have taken place since the last Commission meeting.

Ms. Wilson?

MS. WILSON: Good morning, Acting Chairman Ishimaru, Acting Vice Chair Griffin and Commissioner Barker. I am Bernadette Wilson from the Executive Secretariat.

We'd like to remind our audience that questions and comments from the audience are not permitted during the meeting, and we ask that you carry on any conversations outside the meeting room, departing and reentering as quietly as possible.

Also, please take this opportunity to turn your cell phones off or to vibrate mode.

I would also like to remind the audience that in case of emergency, there are exit doors to the right and left as you exit this room. Please note, the rest rooms closest to this room are currently under repair. To get to the next-closest rest room, turn left as you exit the glass doors, take the next right and the rest rooms will be on your right and left just before the elevators near the main entrance.

During the period June 16, 2009 through July 14th, 2009, the Commission acted on one item by notation vote, approving the lease and maintenance of a nationwide mail management system.

Mr. Chairman, it is appropriate at this time to have a motion to close a portion of the next Commission meeting in case there are any closed meeting agenda items.

CHAIRMAN ISHIMARU: Great. Thank you. Thank you, Ms. Wilson.

Do I hear a motion?


CHAIRMAN ISHIMARU: Is there a second?


CHAIRMAN ISHIMARU: Any discussion?

(No response.)

CHAIRMAN ISHIMARU: Hearing none, all those in favor say "Aye."

ALL: “Aye.”


(No response.)

CHAIRMAN ISHIMARU: The "ayes" have it, the motion is carried.

Today's meeting has a twofold purpose. We're going to hear in a few minutes from a variety of experts on recent developments under the Age Discrimination in Employment Act.

We'll also hear from workers who had firsthand experience with age-based policies and practices. But first, we're going to talk about a document we're going to be issuing today, a technical assistance document on waivers.

As we all know, many employers have chosen in recent years to reduce their workforces to cope with difficult economic times. As part of a reduction in force, an employer will offer severance pay or some other benefit in exchange for an employee's promise not to bring any legal claims against the employer, including claims that the employee is entitled to bring under the civil rights laws that the EEOC enforces.

In those situations, laid-off workers must weigh their need for the economic cushion provided by the severance pay against the right of the -- against their right to pursue discrimination claims and potentially recover damages.

Understandably, an employee faced with this choice is bound to have questions about whether the agreement is legal and whether he or she should sign it.

It's important to understand that waiver agreements can be valid. In fact, the Older Workers Benefit Protection Act has specific requirements for waivers of ADEA claims, but the rules about these agreements are often difficult to understand for both employees and lawyers alike. So I'm pleased today that we are publishing a valuable resource for anyone who has questions about waivers executed as part of a severance agreement.

I'd like to thank our Office of Legal Counsel for drafting this up, particularly Joyce Walker-Jones, who took primary responsibility for producing a document that deals with a very technical issue in a manner that's, hopefully, very helpful for the public.

The document, written in a question-and-answer style, provides examples of the kinds of waivers that will and will not be considered valid. In addition, the document includes a user-friendly checklist of recommendations for employees who are offered severance agreements that include a waiver of equal employment opportunity claims.

I encourage both employees and employers to use this when reviewing severance agreements and hopefully this will be helpful. Copies are available today and they'll be posted on our website at at the end of the hearing.

So today we're going to hear from experts as well as employees who have been affected by age discrimination. Waivers, as I just mentioned, represent just one example of the many employment issues and challenges encountered by older workers.

The older worker population has expanded in recent years, partially as a result of the Baby Boom generation getting older, as well as medical and technological advances that have increased our life expectancies and enhanced our quality of life.

We're living and working longer, some by choice, but many, lately, out of financial necessity. Pension schemes have changed, benefits have changed, and frankly, they've disappeared, forcing people to have to work longer.

And this has happened at all levels of the economic spectrum, from low-wage workers to people at the midlevels, to people at high-end jobs. They've seen their retirement savings disappear for a variety of reasons that many of us are familiar with.

But the economy isn't the only impetus for older workers to remain employed or seek employment. Regardless of economic climate, many older workers voluntarily choose to remain in the work force after a normal retirement age. These men and women find their work stimulating and interesting and take well-deserved pride in their ongoing accomplishments. These individuals defy misconceptions that older workers want or need to slow down, don't enjoy developing new skills and don't make meaningful contributions to the workplace. Nevertheless, these workers, like so many others, have increasingly been affected by job losses, and have experienced difficulty finding another job.

And we've seen here at the EEOC an increased number of charges coming in involving age discrimination claims. In Fiscal Year 2008, ADEA charges increased 29 percent over the prior fiscal year, more than any other basis tracked by the EEOC.

In 2008, approximately 25 percent of our charges included an allegation of age discrimination. And it cuts across all sorts of groups, all sorts of racial groups, men and women, people with disabilities, people in white collar jobs and blue collar jobs and small towns and big towns across the spectrum.

And it's something frankly, that I think we need to pay more attention to at the EEOC, and that was one of the reasons why I wanted to do this hearing today.

And to complicate matters even further, there have been a series of Supreme Court decisions in recent years that have made enforcement of the ADEA even more difficult and more challenging for a federal enforcement agency, so, we'll hear, during the course of our meeting today, a number of people talking about those cases as well. But at this point I'd like to turn to my colleagues for any opening statements they may have. Madam Vice Chair?

VICE CHAIR GRIFFIN: Thank you. Thank you Chairman Ishimaru, for having this meeting. This is a topic which I think is of growing concern to a lot of us that are getting a little older, and part of the protected class. And I want to also thank our Office of Legal Counsel for their efforts in putting all of this together. Kudos to Joyce Walker-Jones for the waiver, it really is great. And I look forward to hearing from all of our panelists. As always -- we're grateful that you take the time to come and do this for us and for the general public.

The statistics showing a marked increase in the filing of age discrimination charges over the last couple of years are beginning to become startling. In 2008 in which the current economic crisis really began, there was close to a one-third increase in the ADEA -- I'm getting all my statutes mixed up. -- charge receipts. I think it's fair to anticipate that age discrimination charges will continue to rise rapidly with our rise in unemployment numbers as the effects of this financial crisis plays out in the country.

And unfortunately, it's our older workers that are going to bear the brunt of this crisis. Employers tend to cut costs in a downturn by laying off their most expensive workers, and those are typically people over 40 years old. In fact, just last week, the Labor Department reported that workers over the age of 55 were jobless on an average of 30 weeks, as compared to 21 weeks for those under 55.

Moreover, more and more companies are cutting their pension benefits, as Stuart said, have lost the ability to pay the pensions entirely that they promised to workers, forcing retirees to rejoin a workforce who then face long odds against actually getting hired because of their age.

And finally, at the same time our population is aging, it's becoming increasingly difficult to support oneself on a pension as well as social security benefits alone. These factors, combined with the diminished values of our 401(k) plans, as we've all seen, as the stock market has declined, will result in more of our older workers putting off retirement because they just can't afford to do so. Studies indicate that these workers are likely targets of age-based stereotyping and bias.

The EEOC must remain vigilant in our protection of older workers, especially as the courts continue to chip away at the protections afforded by the ADEA. I'm heartened by the issuance of our technical guidance on the use of waivers by employers in severance agreements, losing one's job in a reduction of force or downsizing is one of the most traumatic experiences someone can go through.

Employees are put in the unenviable task of having to choose to accept the employer's severance package and waive their rights, even if they believe their termination was discriminatory, or giving up crucial financial support at a time when they need it the most.

Let's face it. For most employees, this is really a Hobson's Choice. Few of us can really afford to face unemployment with no severance whatsoever from the employer, and the way the courts have been denying age discrimination claims; it could be seen as folly to turn away an employer's financial incentive to actually leave quietly.

I think this is especially true for older employees as they face bleak prospects in finding a new job.

The waiver guidance will, at a minimum, give employees a fighting chance to make informed decisions on whether to accept an employer's severance package. It provides employees important information about what constitutes a knowing and voluntary waiver, and then lets them know that if they believe discrimination occurred, they may still file a charge with the EEOC despite the fact that they signed a waiver.

Finally, the guidance reinforces the intent of the Older Workers Benefits Protection Act, which was designed to ensure that our older workers and our older employees are not railroaded into accepting unfair severance packages and, instead, are allowed to take the time to make knowing and informed decisions before signing a waiver.

I want to thank you again for coming here. This is going to be a terrific meeting. Thanks.

CHAIRMAN ISHIMARU: All right. Thank you.

Commissioner Barker?

COMMISSIONER BARKER: I want to diverge a little bit from our subject this morning before I get started to congratulate my colleague, Christine Griffin again for her nomination by the President to the position of Deputy Director of OPM. And Chris goes for her hearing before Congress tomorrow, and so we will be with her in spirit, and hopefully in person. I hope to at least to go and support her.

VICE CHAIR GRIFFIN: Thank you. Thank you very much.

COMMISSIONER BARKER: We're so proud of you, Chris, and I'm sure you'll -- you know, your hearing will be a shoe-in, and you won't have any trouble with the, you know --

VICE CHAIR GRIFFIN: From your lips to God's ear, right, or, to Senator So-and-so's ears.

COMMISSIONER BARKER: But to the matter at hand. This is an area that I have a particular interest in, coming from my background of being a litigator and representing a number of companies who went through reductions in force, and also employees. I have drafted I don't know how many severance agreements myself, and had to carefully research the requirements of the Older Workers Benefits Protection Act, and struggle with the font type and all of the things that you have to consider in the exact, you know, word-for-word of every word in that severance agreement to make sure it complied with not only the technical requirements, but the spirit and intent of that statute, to make sure that the person that it was aimed toward would have no difficulty understanding the full impact of it, because they are heavy agreements.

And I've also been on the other side where I have negotiated for the best terms for an employee who was being subjected to a reduction in force, or if it was just separating from a company. So, this is something I'm very concerned with, as we all are. I won't go through all the reasons why this is important. I think the Acting Chairman and the Acting Vice Chairman have covered that very well as our panelists will.

I do want to compliment Office of Legal Counsel for their work on this, and particularly Joyce Walker-Jones, because I thought she really did a masterful job of doing a document that was not only technical -- technically correct, but easy to understand.

It's so difficult for us as a Commission to implement regulations and guidelines that the average person can understand, and that's what we should be doing, and I think she did an excellent job of that here.

So, with that said, I'm looking forward to what our panelists have to say and I appreciate you all taking your time to be with us this morning.

CHAIRMAN ISHIMARU: Great. Thank you, Commissioner Barker.

The first panel will give us an overview of the situation, including talking about stereotypes of older workers, giving us an update on recent Supreme Court decisions, and talking about some of the best practices that employers have taken to deal with the issues of older workers and trying to avoid ADEA liability.

Leading off the Panel will be Professor Michael Campion, a Professor of Management at Purdue University. He's a prolific writer and speaker on industrial psychology and human resource management. And more importantly, in February of this year, Profession Campion and Professor Posthuma, published an article, "Age Stereotypes in the Workplace, Common Stereotype Moderators of Future Research Directions," in the Journal of Management, and I think he's going to talk about that during the course of his testimony today, delighted to have you here, Professor.

Joining him will be Cathy Ventrell-Monsees, who has practiced employment discrimination law for many years. And she's the co-author of "Age Discrimination Litigation," and is currently the President of Workplace Fairness, a nonprofit organization dedicated to educating workers about their employment rights. She also teaches employment law at the American University School of Law.

And also on the Panel with her is our friend Rae Vann, the General Counsel of the Equal Employment Advisory Council. Ms. Vann runs the whole legal operations there and is a good friend of the EEOC. We're delighted that she is with us today to give us a perspective on what employers have done and will continue to do, in dealing with age issues.

So, Professor, let us start with you. Your statements will be made a part of the record, so we ask that you talk to us for a period of time. We have lights, I guess, Peggy. So, to the extent you can, please follow the guidance from the lights. No doubt we'll have questions and hopefully a lively discussion, so, Professor?

DR. CAMPION: All right. Thank you very much for having me here this morning. Getting right to business, my goal is to discuss with you very briefly an overview of the age stereotyping literature as it applies to the work setting, and then think about how that may play out in a downsizing context. The field of industrial and organizational psychology, which is my field, has conducted extensive research on age stereotyping in the workforce. And we have, myself and Dr. Posthuma, an associate of mine at Texas, the University of Texas at El Paso, have tried to summarize this literature, about 120 articles, and glean from that, the most common age stereotypes in the work setting, and how those may play out. This article, as you mentioned, was published and is available to those who may be interested.

The problem with stereotypes is they’re a logical way our brains classify the world. We must use stereotypes in order to get through a world that's full of all kinds of stimulation. So, stereotypes are common and they are a natural way people think.

Well, unfortunately, they can work for us or against us. In the case of age stereotypes, most of us have concepts about older workers that may impact the way we view them and judge them. Interestingly, older workers share many of these same stereotypes. So having older workers at top levels in organizations may not protect us from age stereotyping problems because they often share those stereotypes.

The difficulty is these perceptions often influence decisions in the employment context, and that can have a big impact. Also, there are -- there are industries that are particularly age-oriented, I think, in the sense that employees in those industries are generally expected to be at a certain age. For example, younger workers are more common in retail, insurance, finance and information technology. In those fields, I think we see particular problems.

Common age stereotypes about older workers include things such as they may be more costly, harder to train, less adaptable, maybe less motivated, maybe less flexible, more resistant to change, perhaps less competent and less energetic. Similarly, we often think that their job performance declines with age. I can say here that the field of industrial psychology has studied that particular question extensively, and many studies have been conducted, so many so that we call them meta-analyses, meaning studies of studies.

When you summarize across all those studies within the normal range of age in the workforce and across a wide range of jobs, we find no deterioration with age. In fact, we often find an increase in certain types of job performance, such as helping behavior, citizenship, things of that nature.

The way to think about job performance and age is that within any given age group there is a wider range of differences in job performance, but the differences on average between age groups are very small or nonexistent. And one's job performance depends substantially more on one's skill and personal health than it does with age.

Another common stereotype is that older workers provide a lower return on investment of training because they have less time left in their careers. Not so, most often your return on investment from training comes back to the employer within a couple of years. And, older employees are less likely to quit. So, actually, ironically, older employees may be a better investment for training dollars.

There's also many positive stereotypes about older workers. They include that they are more stable, dependable, honest, trustworthy, loyal, committed -- gosh; it could have been Boy Scouts, I guess, less likely to miss work, less likely to turn over.

Again, research supports many of these, particularly the fact that they are less likely to turn over and provide other -- other positive benefits such as I mentioned, helping behavior.

Now, the difficulty from a human resource management point of view, and that's where I live. I teach MBA's in human resources and consult widely on this topic, is that age has gotten less attention from HR managers, and I think it has something to do with the fact that we all get older, and there's -- maybe we're less sympathetic about it than we are for those who are either minorities or women who have been discriminated against. So, age has gotten less attention. That's very unfortunate, but these age stereotypes can have a negative influence and research, a lot of it conducted on this topic, shows that very often, older employees with the same credentials, are judged more poorly in interviews or performance appraisal contexts. Now, this, I think, especially plays out in downsizing situations in the following ways: One, as was mentioned already, older workers are presumed to be more costly. So, perhaps these stereotypes are impactful in downsizings because of that stereotype.

Also, usually downsizing decisions are not made based on an explicit analysis of what the future work is going to be or what the skill requirements are going to be. More often, in my experience, is, we start with a list of the employees. And in that way, age stereotypes tend to operate more greatly, a point I'll come back to later. If we can help employers focus on the jobs and the skills, the impact of age stereotypes are much less. But in a typical downsizing, they'd start out with a blank slate or a list of the employees, and who should we get rid of. Usually little information is gathered and considered on employees' skills or credentials. You'd be amazed at how many cases where they won't even have looked at the personnel files, they just literally sit down with a blank sheet.

Criteria tend to be vague, poorly-defined, highly subjective, and occasionally downsizing will be based, in part, on your past job performance, but also based, in part, on your future potential. And potential-related judgments tend to be susceptible to age stereotypes because older workers have less time left, and I think in that way they are viewed as having less potential.

Managers are virtually never trained on how to make downsizing decisions. And here's one that's often surprising, is, HR documents will often show date of birth. Why? Because we don't use social security anymore because we're afraid to use that for various reasons. So, because employees tend to have the same last name, will often have date of birth there to confirm that it's the right employee. We show that to managers in downsizing decisions not thinking about the fact that we are at just the key moment giving them the data that makes age so relevant.

Also, downsizing decisions are made often autonomously by a single manager, very often there's not independent evaluations, and often there is no review. They don't do enough adverse impact analysis and feed that information back.

I see that I'm out of time, but let me just confirm the research supports the points made, that unemployed older workers tend to take longer to gain reemployment; they tend to make less when they get reemployed than younger workers, and so double jeopardy, I guess.

I have some suggestions for recommendations. Maybe during the Q's and A's you can come back to this, but I'm out of time now.

CHAIRMAN ISHIMARU: Great. Professor, thank you very much.


MS. VENTRELL-MONSEES: Thank you, Chair Ishimaru, for holding this hearing. And as a long-time advocate for the rights of older workers, I applaud the Commission's decision to hold this hearing and also pleased that the Commission is issuing this technical assistance to help employees understand the very difficult and complex area involving waivers. The guidance is most-timely and sorely-needed. So, again, thank you for doing that.

My statement today will focus on three areas, the courts' disparagement of ageist comments as proof of discrimination which follows up on Professor Campion's stereotype research.

The second area is the Supreme Court cases which have really decimated the ADEA, and the third area is the urgent need for Congressional action to bring the ADEA into parity with Title VII, an area that's very near and dear to my heart, having worked on these problems for, I'd say, too many years. In one of those aspects, I have seen courts for years justify age discrimination and relegate the ADEA to a second-class status, which they do not do with other forms of discrimination.

Age discrimination is viewed as less serious and plainly less harmful than other forms of discrimination, say, as race or sex discrimination or disability. And the courts' treatment of ageist comments as the term "stray remarks," typifies this denigration of age discrimination and the ADEA. So, one would typically think that a clear, derogatory comment about an employee's age would be deemed relevant evidence of discrimination; it's probative of the employer's motivation, not so. The courts routinely dismiss ageist comments as stray remarks or even colloquialisms, a classic example, as the Supreme Court case of Reeves.

The ageist comments in Reeves are almost legendary. Mr. Reeves presented evidence that several months before he was fired; his supervisor told him that, “he was so old he must have come over on the Mayflower." That would be the ship.

Two months before firing Reeves, the same supervisor said to him that, “he was too damn old to do the job” when Reeves was having difficulty operating a machine. You would think that might be good evidence of age discrimination. Not so, said the U.S. Court of Appeals for the Fifth Circuit, because the statements were not made in the direct context when Reeves was fired. Fortunately, the U.S. Supreme Court rejected this very restrictive view and did not even question that such statements made months before the actual termination would be relevant evidence.

The Supreme Court used two simple criteria to determine the relevance of the comment: "Did the comment indicate animus, ageist animus?" and second, "Was the speaker of the remark primarily responsible for the adverse action?" Fairly simple standard, yet the courts typically reject the Supreme Court's guidance and use their own notion of what should be acceptability and admissibility with respect to ageist comments.

So, for this area, I urge the Commission to develop guidance to set forth the standards, uniform standards for the relevance and weight of comments, so that those same standards apply to the ADEA, to the ADA and to Title VII. That would be tremendously helpful to the courts, given the wealth of knowledge and the studies about stereotyping.

And the second area of concern I'd like to address is the decimation of the ADA by the U.S. Supreme Court in recent decisions that have severely narrowed the protections of the ADEA.

The Gross v. FBL Financial Services decision is the most recent Supreme Court case that drastically undercuts the ADEA. In Gross, as I'm sure you know, the Court held that an older worker must satisfy a higher standard of proof to show unlawful discrimination than victims of other discrimination under other civil rights laws must show.

Now the majority decision in Gross is shocking in a number of ways. One could characterize the opinion by Justice Thomas as the epitome of judicial activism, the majority ruled on an issue that had not been raised or briefed by the parties. It ignored well-established precedent to construe language in the ADEA like identical language in Title VII and to apply Title VII case law to the ADEA. These are the very points made by Justice Stevens in his dissent, calling for Congressional action to overturn the majority's overreaching decision in Gross.

Now, before the Supreme Court's decision in Gross, age discrimination cases were no more difficult to prove than cases brought under Title VII. After Gross, it's a new ball game, and not a level playing field.

First, victims of age discrimination are now subject to different and higher standards of proof than, say, individuals with race or sex discrimination claims under Title VII. This is an extremely problematic issue for older women and older minorities who often bring claims under both statutes. But, second, the damage to ADA enforcement by Gross may go far beyond the holding of the case. Older workers with ADEA cases are already facing motions from employers, arguing that Gross changed the established standards of proof in age cases.

Specifically, employers are already arguing that Gross means courts should not apply the McDonnell Douglas pretext theory of proof which we have lived with for so many years and should require a heightened standard of proof that age was the sole reason for the adverse action, a nearly impossible standard to establish. Gross is a truly fatal blow to the ADEA and must be overturned. I commend Senator Leahy for calling for swift Congressional action and urge Congress to overturn both the reasoning and holding of this damaging case.

The Supreme Court has also undercut the ADA's protection in the area of disparate impact claims, which I'll just briefly address. This Court has suggested that the standard in age cases is again different, and more lenient than in other discrimination cases such as Title VII. Now in this area, the EEOC has already proposed regulations that would define the elements of the reasonable factor other than age defense to disparate impact claims. It's critical that the EEOC regulations fully define the components of the reasonable factor other than age defense. We have to put meat on the bones of that defense, and define the scope of the burden on the employer to plead and prove the defense. Now, one would expect that since EEOC has substantive rulemaking authority under the ADEA, Section 9, the courts would hopefully give deference to the EEOC's regulations.

The last area I wanted to cover is to draw attention to the serious disparity between the treatment of age discrimination and other forms of discrimination, and it really has come down to a second-class status.

This hearing calls attention to the seriousness and pervasiveness of age discrimination. As both the Chair and Vice Chair have mentioned, ADEA charges jumped by more than 29 percent in the last fiscal year. It is a huge increase. We will continue to see age discrimination charges go up and more cases brought.

So, what really needs to be done from the perspective of advocates is for Congress to really end the second-class treatment of age discrimination. Congress should enact legislation that brings the ADEA into parity with the force of Title VII, specifically the same protections, the same standards of proof, the same remedies. It is really time for the equal treatment of older workers and of the federal law protecting them. Thank you for this opportunity to speak with you this morning.

CHAIRMAN ISHIMARU: Great. Thank you. Thank you very much.

Ms. Vann?

MS. VANN: Thank you, Chair Ishimaru, Vice Chair Griffin, Commissioner Barker and colleagues. On behalf of EEAC, I thank you for giving us the opportunity to present our views and hopefully close out this panel on a more positive note insofar as presenting to you and talking about some of the best practices that EEAC member companies have initiated in order to prevent and eliminate workplace age discrimination.

As you know, EEAC is a nationwide organization of large corporate employers committed to eliminating all forms of workplace discrimination. All of the EEAC's member companies are subject to the ADEA as well as other federal and state age and other discrimination laws, and therefore are very acutely aware of their obligations to do whatever they can to ensure compliance with those laws and regulations. They are also very acutely aware in light of the statistics that have been discussed by my colleagues and by the Commission with respect to the increase in age-related discrimination charges.

Our EEAC member companies are committed to preventing and eliminating practices that not only discriminate intentionally on the basis of age, but insofar as the application of practices and procedures that have statistical disparate impact on the basis of age.

Given the reality of an aging U.S. workforce which is a point that also was brought up by Chair Ishimaru and the potential associated skills gap. For instance, many EEAC member companies have established programs and initiatives designed not only to ensure that knowledge and expertise of workers who are close to retirement age or thinking about leaving the work force, that that knowledge and expertise is passed along to younger workers, but also to retain older workers seeking to remain in the workforce for various reasons past traditional retirement age and to attract back to work recent retirees who have the skill sets and expertise that oftentimes is difficult to replace under terms and conditions that are attractive to both the employee, as well as the employer.

In light of the nation's current economic climate, I would point out, too, that it's been reported as Chair Ishimaru, and Vice Chair Griffin pointed out, as well I believe, that many older workers who perhaps had planned on retiring are now being forced to work longer than anticipated.

Many employers welcome the opportunity; certainly EEAC member companies welcome the opportunity to find creative ways to retain those employees while respecting their desire to structure their work arrangement in a manner that makes the most sense for them personally.

With that said, as I noted at the outset, my remarks will focus primarily on the best practices that large employers have undertaken to ensure that the talents of older workers are being leveraged in a way that benefits both the employees and the companies for which they work. Strategies such as those that I will describe promote equal employment opportunities for older workers by breaking down some of the stereotypes that Professor Campion discussed, and those types of behaviors or thoughts that often lead to age bias in the workplace.

I will conclude my remarks by describing some of the efforts that our member companies undertake to ensure that force reductions are implemented or thought about in a compliant way and have no unlawful impact on protected groups, including older workers.

In preparing my testimony today, I asked for input from member company representatives with respect to those practices that they're currently thinking about and engaging in to ensure that older workers are treated fairly in all aspects of the job. The feedback that I received, which I'll discuss in further detail, center around attracting and retaining the best-qualified employees with, for instance, flexible work arrangements and retiree "Hire-Back" programs, as well as facilitating a smooth transition to retirement through formal retention and/or phased retirement programs.

With respect to flexible work arrangements, this -- this is an aspect of employer best practices that benefits all employees, not just older workers, but in my discussions with member companies, we concluded that flexible work arrangements can be particularly beneficial to older workers in terms of attracting and retaining them who, because of for various reasons are interested, as I said before, in retaining more control over their time and schedules than was available earlier in their careers.

Since corporate workplace flexibility programs are intended specifically to provide these types of options to employees, again, they can be particularly useful tools in keeping talented workers and attracting new ones with highly-sought-after skills who may be approaching retirement age and thinking about leaving the workforce.

The types of flexibility programs offered to employees may vary, depending on the employer, depending on the type of work or job being performed, as well as the company's business needs and the particular needs of the employee, but, at their core, these programs are designed to create attractive ways of addressing the needs of employees, as well as the business needs of employers. Some of these arrangements often include adjusting work hours, modifying work weeks and/or offering telecommuting options to employees.

But again, it may be attractive particularly to older workers who, for financial reasons, wish to continue to work at or near full time, but for personal reasons, want to scale back on how much time is actually spent on the job.

Some EEAC member companies also report having formal programs designed to attract recent retirees back to the workforce to perform special projects that take advantage of particular expertise or knowledge that that recent retiree may have, which has not yet been replaced by workers who retain -- have been retained or remain on the workplace.

One company, for instance, offers recent retirees, folks who have been gone for some period of time, typically six months at a minimum, just to create a clear break in service, but this company offers recent retirees the opportunity to return to the company to consult on an as-needed basis. This so-called rehired pensioner retains his or her status as a retiree and thus continues to receive company-sponsored retiree health benefits. This company happens to be one of those who continues to be able to offer those types of benefits to pensioners, but the retirees are limited in the number of hours that they are permitted to work in a given time frame.

Another company has a -- what they call a retiree bring-back program, which is designed in part -- I say principally to ensure a smooth transition with respect to customer relationships. So, the retirees returning to the workforce helps to continue a longstanding plan and business relationships that were cultivated during their time with the company. The returning retiree might assist his or her successor in developing a rapport and relationship with this long-term client in understanding key business relationships that are needed to continue, thus helping to ensure, again, that smooth transition for both the client and the company representative.

Among the strategies that companies are developing to manage impending labor and skill shortages are flexible or phased-in retirement programs. Companies see phased-in retirement programs as a way of combatting sometimes perceptible skills gaps, which we've been talking about this morning, that result in too many experienced workers retire before fully-qualified replacements are ready to step in.

The idea behind phased retirement is to enable older workers to begin working a reduced schedule while drawing on a partial pension or other retirement benefits and a partial salary. The concept of phased retirement is both popular -- is popular with both workers who would like to scale back without leaving the workforce entirely, and it's also popular with employers who, again, are concerned about this “skills gap” or “brain-drain” associated with the exiting of experienced older workers from the workplace.

In addition to concerns over brain-drain, our members are acutely aware of some of the care-giving responsibilities that older workers have to manage, being part of the "sandwich generation."

I see that my time has expired. I'd like to reserve the remainder of my time for questions that you may have on some of the cases that were covered.

CHAIRMAN ISHIMARU: Yes, ma'am. Thank you very much.

Madam Vice Chair.

VICE CHAIR GRIFFIN: Thank you all very much. This is very interesting, and actually, I'd like to give Michael Campion the chance to talk a little bit about your recommendations, if we could.

DR. CAMPION: Thank you very much. I'll try to be very brief. As I alluded to in my comments, I believe the -- a mechanism for reducing the impact of stereotypes is some procedures that will attract management attention to the individuating aspects of people, the individual differences between people and away, then, from the stereotypes.

And, as you know, I don't mean to oversimplify human resources, but many of the things we do are --

VICE CHAIR GRIFFIN: Oh, please do.

DR. CAMPION: Well, many of the things we do is to try to encourage managers to do things that may not necessarily -- they may not have time for or may not necessarily do so, programs to encourage them to do things they would, agree that they should do, anyway. And so, I would suggest that, in this context, the smartest thing to do would be to rely on our processes in other contexts.

In the history of human resources and all of research and industrial psychology and your very own uniform guidelines, the fundamental starting point is: What are the jobs to be performed? What is the work the organization will need to do in the future? From that, then, define what the skill requirements are and then develop some systematic means of determining who -- which of the employees is most capable of doing that in the future. I would couple that with training that involves not only how to do those procedures, evaluate those jobs, evaluate employees, but also reminding people about stereotypes and how they may operate, and finally giving them feedback at the critical time about the -- the consequences of their decisions in terms of the ages of the employees being terminated.

VICE CHAIR GRIFFIN: Well, basically training to choose whoever is going to be implementing or making decisions about a layoff or downsizing, that they actually get trained first?


VICE CHAIR GRIFFIN: Do we -- do you know of any companies doing it? Rae, did you hear that in your survey or --

MS. VANN: It didn't come up in my discussions with --

VICE CHAIR GRIFFIN: It's interesting, though. It would be smart. Do you know of companies that actually do something like this?

DR. CAMPION: My clients do.

You know, I think the logic of looking at the work to be performed is such a fundamental idea that it's -- it's a correct extension of the way we manage other employment decisions, and would make sense here.

Many organizations, though, I think, during downsizing, don't systematically look at the work to be performed necessarily. They think "We've got to cut costs. How can we cut costs? We'll live with kind of what we have left, but we need to cut costs right now because we're bleeding." And so, they look to reduce costs and not to systematically think about the strategic issues, and I think that's a big mistake. If you -- there's been an overwhelming amount of research on what happens to organizations after they downsize, and it is hard to find any good evidence that downsizing results in positive outcomes for an organization. Even though I know there are some organizations who say if we had not downsized, we would be out of business. I'm sure there's some of those, but when you compare companies that have downsized and those that have not, over the long run their stock prices and other outcomes, it's hard to demonstrate a positive effect.

VICE CHAIR GRIFFIN: Cathy, you talked a little bit about guidance that you thought we could issue. Can you say a little bit more about that?

MS. VENTRELL-MONSEES: Yes. And I think it really plays into Professor Campion's research. I'd love to take that research and show it to courts across the country to explain to them how stereotypes actually work.

When Professor Campion said, for example that -- I mean, we all hold stereotypes. Older managers also hold ageist stereotypes. And the courts have come up with doctrines like the same actor inference where if the supervisor who hired the older worker also fired the older worker sometime later, how could that possibly be age discrimination? Weren't they wonderful in the first instance to hire the person?

Those same kinds of inferences apply in Title VII cases and ADEA cases. They are so contrary to the literature, this wealth of literature that we have out there that we haven't taken and used in our enforcement of the civil rights laws. An ageist comment is probably the most obvious example where we don't use that research, the courts sort of shoot from the hip, frankly, as to what sounds like, is it really bad or offensive. Did the supervisor really mean, you know, to say to Reeves, "You're so old that you must have come over on the Mayflower"? We all know what that means.

VICE CHAIR GRIFFIN: I actually, I remember my father when he was 85 referring to someone else who was 89 as being really old. It's true. I said, "Dad, I can't believe you just said that." And he said, "Well, they are", so.

MS. VENTRELL-MONSEES: So I do think that actually guidance from the EEOC would be very helpful. It's difficult in cases to present that kind of literature, you know, from the Supreme Court Brandeis type brief we can do that, but we really need to educate HR managers, the courts, about how all of this works, the stereotyping and how it plays out in everyday conversations in employment decisions.


CHAIRMAN ISHIMARU: Commissioner Barker?

COMMISSIONER BARKER: One of the most interesting things I heard was, Rae, your discussion of the phased-in retirement. This is not something that I was aware that the companies were doing.

Can you talk a little bit more about that? I mean, is this something that is increasing in popularity? I mean, or how difficult does it -- is it something that generally only large companies can do?

MS. VANN: Well, phased-in retirement programs are not without their concerns, and employers, I think, by and large, at least large employers have been fairly hesitant over the years to adopt these programs because of just procedural and legal and regulatory issues associated with phased-in retirement, from the pension benefits aspect.

I think the Pension Protection Act helped to clarify and loosen some of -- lessen some of the burdens that are associated with implementing the programs, but there are still IRS-associated issues that I think tend to make phased-in retirement programs more limited, less widespread than we would want.

But as I said, as a matter of principle, employers would like to be able to accommodate older workers in this way because certainly not over the last 12 to 18 months, I think the people wanting to retire and actually following through that whole ability has changed, given the economic decline. There are more people who want to stay full time, but certainly previously employers have wanted to be able to, again, tap into the vast resources available from older workers while accommodating their desire to kind of scale back.

COMMISSIONER BARKER: Well, I think it's a great thing for employers to try to do, to the extent that they can, from the standpoint of reducing just the trauma associated with, you know, spending your whole life work, doing something, and suddenly it's gone.

And so that's -- I'm glad to see that that's out there. I don't have any other comments other than to say all of your remarks were wonderful and insightful, and I really, you know, learned from each of you. So, thank you.

CHAIRMAN ISHIMARU: Thank you, Commissioner Barker.

I guess I'm troubled by, how things have changed in recent years. We've gone from a working system where in the not-so-distant past, there were defined benefit pensions where people work for a period of time, usually worked at the same company for most of that time, retired at a certain age and got a pension that gave them enough resources to live on for the rest of their lives.

And that whole scheme has seemingly changed, and given that, I wonder whether employers, or whether the public generally realizes that age discrimination is illegal, much like the problems we face with pregnancy discrimination, where people think that, you know, there are no protections against pregnancy discrimination, therefore you can take adverse action against people who are pregnant, women who are pregnant.

Does the same thing happen here where, because of the differing standards that have developed in the courts to -- is there a need to raise awareness somehow and what's the best way to do it?

Cathy, do you --

MS. VENTRELL-MONSEES: Yes. I think there's a dramatic need to raise awareness because I don't think people really understand what age discrimination is, who is an older worker. I mean, the law was enacted in 1967 with a mandatory retirement age of 65. Sixty-five is pretty young these days, and people need to continue. They need to continue working as well as want to.

So, I do think, an educational campaign to say, you know, age is no different. I mean the fact that we all age doesn't mean that you may not experience discrimination because someone thinks, the supervisor, that you're not as productive because you've hit some arbitrary point in your life.

And there are, you know, 50-year-old's with kids who -- babies and college and the whole range. So, you can't just arbitrarily pick an age and say, "Okay. That's when you're done," or "It's time to retire," or "There's no potential there." Where, in other areas, I think the country has come so far and human resource managers have come so far in understanding the complicated issues of race and gender and disability, national origin, even religion. We haven't had a phenomenon in our country, really, that forces us to confront age as we have had in other areas.

I don't want to have that phenomenon, frankly. I would like to just take an affirmative step where we say the country is aging. We really need to take a better look and figure out how we retain these very productive people and not have a brain-drain.

CHAIRMAN ISHIMARU: Anyone else on the Panel?

MS. VANN: Well, to that point, I think that's right and while, as I've said repeatedly, time and time again, large corporations are heavily compliance-oriented and they strive to break down these stereotypes.

You can't control every one of your 100,000 employees, especially with respect to the point about specific stereotypical remarks, and people understanding that those types of things are inappropriate. It shouldn't be said in the workplace.

So, I agree with my big colleague, that it would be helpful for the EEOC to begin to educate the public as to the types of statements and things that really not only are hurtful and undermine good business practice, but could potentially result in liability for age discrimination.

But I also point to Dr. Campion's point about people being less sympathetic to age issues because age affects all of us. Again, I think that goes to the awareness of how age bias can come into play in ways that, frankly, folks in the executive suites would not have contemplated and certainly would never condone.

CHAIRMAN ISHIMARU: But it's somewhat of an interesting conundrum, though because everyone ages.

MS. VANN: Right.

CHAIRMAN ISHIMARU: Hopefully, and much like in the disability context where people get aware because they experience disability either to themselves or someone in their family or within their social group, why doesn't the same thing happen here that, you know, people see they're getting older. You know, they know they can still do the job. They may want to do the job. They may want to do it at a high-performance level where, you know, more hours than not. Why -- you know, why the fall-off here?

COMMISSIONER BARKER: You know, Stuart, can I say something, too. You know, I think another aspect of this that, you know, I think needs to be mentioned is that while we're concerned about discrimination against people who age, we also need to realize that, you know, there is, in certain lines of work or in the minds of certain people, an extra or more likely to occur discrimination against women who age.

CHAIRMAN ISHIMARU: Well, I -- right.

COMMISSIONER BARKER: You know, I mean, there is that double standard with men getting more distinguished or more distinguished-looking, look like they are more authoritative, you know, and more the CEO, you know, type if you have, you know, grey or white hair, you look more like the guy in charge. Whereas, you know, unfortunately, a lot of women, as they get older, they're just, an older woman. So, it certainly doesn’t occur in every aspect of every industry, but particularly in those areas where, for whatever reason, appearance is valued. And, I think that's a real concern.

VICE CHAIR GRIFFIN: You know what I think, too, I think that we, as a society, you know, as I sit here thinking about it, you know, we -- we're not happy about aging, and we talk a lot about it, and you know, we say things about ourselves in the workplace -- "Oh, you know, I'm forgetting more." You know, we say these things ourselves. We actually -- you know, we're kind of conditioned, I think in some respects, and so it needs -- we need to really change all of that thinking.

COMMISSIONER BARKER: And while I -- you know, I do think, Stuart, that it would be hard to find an employer who's not aware that age discrimination is against the law, and it would be hard to find an employer that's not aware that 40 is the cut-off mark. I think what would be easy to find is an employer who doesn't really understand the delicacies that -- you know, just like Michael was talking about with all the subtle ways that you can unintentionally stereotype employees as they become older, and compare them against younger employees. I mean, how often do companies talk about wanting to get fresh blood in, you know. I mean, what are they talking about, they want, you know, younger and cuter.

MS. VANN: That's right. And to Vice Chair Griffin's point as well, I think employers, workers, supervisors and managers, need to be aware and cognizant of how their own self-deprecating comments may be perceived by their subordinates.

If they're dissing themselves because, you know, they think as a result of age they can't remember their children's age as well, then perhaps the subordinate may feel that they hold that same view of them.

VICE CHAIR GRIFFIN: You know, that just occurred to me as I was sitting here and I know I'm guilty of that, and I think that's exactly right, that we sometimes are our worst enemy in that regard.

DR. CAMPION: Can I make a suggestion? One area where some guidance would help would be in the analysis of age discrimination, the notion that people, when they reach 40 are old and younger than that are young, may have made some sense in the Sixties. It makes absolutely no sense these days, and it becomes a problem in many contexts because an employer will say, well, gee, all my employees, or most of them are over 40. But if you look at the data and the downsizing context, there's a systematic increase in your probability of termination with age. So, you look at 40, 45, 50, 55, and it makes a stair step of increasing likelihood of being terminated. But what they argue, these organizations, and I guess if I were working with them, I would, too. I'd say, "Well, gee, everyone's over 40, so therefore how can age be discrimination?"

But I think as was alluded to earlier, you can have -- you can have someone hire an older person, but later terminate them because of their age and the fact that they hired them previously doesn't mean they didn't discriminate based on age in their termination.

So, it's tricky. If the EEOC could give us some guidelines there that would be very helpful.

CHAIRMAN ISHIMARU: Great. I want to thank the Panel for joining us, very, very helpful. We hope we can call on you in the future to help us in trying to do more in this area. But we appreciate your contribution. Thank you very much.

DR. CAMPION: Thank you.

MS. VENTRELL-MONSEES: Thank you very much.

MS. VANN: Thank you.

CHAIRMAN ISHIMARU: Sometimes when you have panels, like our lead-off panel where you get a legal and technical and detailed discussion, sometimes it's easy to lose sight of the fact that there are real people involved and real issues involved.

And one thing that we wanted to do during the course of this hearing was to bring people who have been adversely affected by age discrimination, and to have them come and tell their stories.

So, I'm extremely pleased that Michael Barnes, John Stannard and Dennis Halfhill are here today to join us to tell us about their stories, their problems that they encountered with age-based policies and practices.

This panel will also feature two of our attorneys, Anna Park, who is the Regional Attorney in Los Angeles, and Nancy Edmonds, a Senior Trial Attorney from Indianapolis. Both Anna and Nancy have had extensive experience litigating ADEA cases and we're pleased that they could be with us today. So, if the next panel could come forward, that would be great. And find your places.

And I believe we're starting with Anna, right? So, once we get everyone situated. Again, welcome all of you. I know some people have traveled far to get here. We appreciate your efforts. I know traveling these days sometimes is an adventure in and of itself. So, we're delighted you could join us.

So, we'll start with you, Anna.

MS. PARK: Good morning, Chairman Ishimaru, Vice Chair Griffin and Commissioner Barker. Again, my name is Anna Park. I am the Regional Attorney for the Los Angeles District Office. As you know, as Regional Attorney, I'm tasked to litigate on behalf of the Commission.

Despite the passage of the ADEA over 40 years ago, employers still engage in unfair assumptions about the older workers' productivity and think that somehow replacing them with younger workers will be more cost-effective. Oftentimes that has turned out to be untrue. Stereotyping of older workers seems to continue to be socially-acceptable. People who would not even dream of making a sexually-provocative statement or using a racial epithet will think nothing of calling someone "Grandpa," an "old mutt," or an "old bag." We often hear of cases where older workers were not hired because employers assume that they'll be, “not energetic enough” or would bring “fresh new ideas.” The impact of these persistent stereotypes is devastating.

By way of example, in EEOC v. Republic Services that our office is litigating, our investigations show that the employer systematically discriminated against older workers by subjecting them to ongoing harassing comments and terminating them based upon unfair and unfounded stereotypes.

Republic Services is the largest waste management company that operates in Nevada, which we cover. The company discriminated against three classes of individuals: foremen, drivers and administrators. The EEOC identified over 40 men and women who were subjected to ageist comments and conduct. By way of example, the managers made ageist comments such as the president of the company, himself, referred to older workers as, quote, "Hey, old man, when are you going to get your old ass out of here?"

Or, other managers who would openly say "Hey, old man, when you going to retire? It's time for you to get out of here. You've been here long enough." Most of the recipients were in their 50's and 60's.

The company brazenly ran newspaper ads and hired younger workers to replace the older workers. Interestingly, after years of litigation, the employer advanced a new theory that terminations were somehow intended to reduce costs. However, the evidence did not support this notion. In fact, the employer actually expended more costs because it had to hire more younger workers to perform the very duties accomplished by a smaller group of older workers. The company ran up more cost for salaries and overtime. Despite this evidence, sadly, the court had cut the EEOC's class from 40 class members to approximately 21. One of those casualties whom you'll hear from is Mr. Barnes who's here today to share with you his experiences he had with age discrimination.

To those who doubt the impact of age discrimination, I want to close by sharing with you a statement of a charging party in the Republic case, Mr. William Lacy. He was a foreman who dedicated his life to the company. He is a Purple Heart recipient, having served our country honorably. He couldn't be here today because he's very ill. Mr. Lacy, who is also African-American, was fired only to be replaced by younger men who couldn't perform all the tasks that he performed. Mr. Lacy's statement reads: "I served my country and I served the company with honor, blood and sweat. I never thought I would be here -- be where I am today. I lost my house and I lost my savings. At a time when I should have been looking forward to the fruits of my hard work, I'm reminded every day of the pain and indignation I have to endure because of what the company did to me due to my age. I am left with nothing."

The EEOC is determined to seek justice for him and others in that case. Thank you.

CHAIRMAN ISHIMARU: Thank you, Ms. Park.

Mr. Barnes, we'll hear from you?

MR. BARNES: Good morning, Ms. Griffin, Mr. Ishimaru and Ms. Barker. Good morning. I'm here to introduce myself. My name is Michael Barnes. I'm 46 years of age and I reside in Las Vegas.

If you will give me a moment. I was invited here to speak in front of you outstanding ladies and gentlemen to share my story and give testimony to the age discrimination and unlawful acts Republic Services committed. I started to work in Silver State Disposal in 1994. I had no knowledge of the disposal business at that time, but I worked hard and I worked on the back of a truck and I pitched garbage and I eventually was -- went up in the company. I was promoted, I was rewarded and the company just rewarded people from -- as you grew, they rewarded you for your hard work and your contribution that you did in the company, like she said about Mr. Lacy.

I obtained my commercial driver's license while I was in my thirties. I attended classes; I even was in production of a company safety movie. I taught younger drivers how to drive trucks and have leadership training. I was even hand-picked for promotion, only to be fired when I reached 41 years of age. For all the hard work I did and accomplishments I did, it didn't make -- it didn't matter to the company.

When Republic took over in 1997, everything changed. As a lead man, I have knowledge. I was involved in meetings and calls were heard, comments by upper management talking about how people were old or too old and they weren't going to go with the Uncle Tom mentality again. I heard them call people Uncle Toms and say we're too old, you were too slow. But when I tried to defend them, I was told to be careful because I was old just like them. In terms that I would be broken off - it was a terminology they used that they inflicted pain physical, emotional and mental distress on anyone that spoke out of line. This practice was used as a tactic by the higher-ups, to force out the older workers.

But the older workers were instructed to train the younger, inexperienced people to do their jobs and at times younger employees were paid more than a veteran employee. And let it be known, not once, not never, did Republic question the capability, the competence or the proficiency of the older men that trained these individuals. However, they were told, the older -- the older employees were told that their positions were going to be eliminated and the younger men came in and took over the jobs. They lacked experience and they lacked the work ethics to keep the company at the level it was, and it showed an increased worker comp claims and accidents that happened, and it took away from the company profits.

Older employees worked to the point where they were not able to keep up with the truck or load the trash fast enough and would -- fast enough. What would happen is usually a younger driver was instructed to break the older individual off, work him to a point where he couldn't keep up running behind the truck in the heat of 100 degrees plus for, you know, hours at a time, and he couldn't keep up. And this was a direct violation of the company safety policy, but they didn't care, and you know, they worked too hard and they didn't have any compassion towards you. I have seen people cramp up from heat exhaustion. Some cases ambulances have been called. They would literally exhaust you to the point where you would want to quit.

When I turned 41, I lost my position as a lead and rather than utilizing my skills, I was forced back to become a driver. I was subjected to the “break him off” practice. It was there that I got hurt.

Unlike younger employees who have received leniency and were accommodated with their injuries, I wasn't allowed to come back to work. Within days of getting hurt, I was fired.

I was injured around June of 2004, a simple sprain while pitching garbage. I was seen by the company chiropractor and was essentially told that I was too old to return to work. The company made no attempt to give me a chance to recuperate. They just told me I was gone. When I was a lead, I was in charge of the casualty reports and I reviewed them daily. I remember those reports showed younger employees being allowed to return to work for more serious injuries than mine. When I was in my thirties, I got injured and I was allowed to come back to work. But as soon as I hit my forties, I got a call from Republic telling me my injuries were too severe and I was fired. Another physician that was on the Republic Service provider list treated me, evaluated me and gave me -- released me back to work, but the company still didn't honor it. And in doing so, they removed him from the provider list, essentially breaking him off because he wrote a report for me saying that I was able to go back to work.

So, I'm here today in front of you, the EEOC because they contacted me, wrote me a letter and asked me would I appear, and I just appeared because I want some justice.

For six years I've endured this injustice, only to be throwed out of a lawsuit that everyone should have been in. And I'm going to speak up for those older people so that this discrimination doesn't happen to anybody else.

You know, I gave them my life. I lost a lot of my career, you know. I make less money than I made before. I have to deal with the humiliation, the hardships that they took away from me.

And, you know, I'd just like to thank you and may God bless you for this opportunity and I hope it helps change someone else's life.

CHAIRMAN ISHIMARU: Mr. Barnes, thank you very much, and thank you for coming.

We'll next hear from Mr. Stannard who was one of the plaintiffs in Knolls Atomic Power Lab case. Mr. Stannard?

MR. STANNARD: Yes, I want to thank everybody for having me here today, and I also would like to put a name and face to age discrimination. I have a statement to read. My name is John Stannard. I'm one of 17 remaining plaintiffs in an age discrimination case named Meacham v. KAPL. I would like to start by thanking the EEOC for all the assistance as provided in filing amicus briefs in our case. These briefs have gone a long ways towards educating the courts on the appropriate interpretation of the Age Discrimination in Employment Act, the ADEA.

I would also like to thank you for holding these hearings to investigate the effects of age discrimination in the United States today, especially as our economy slumps. I can tell you from the firsthand experience that the economic and the emotional effects of losing one's job as a result of age discrimination is devastating and long-lasting.

My date of birth is April 14th, 1948. For 27 years, I worked at Knolls Atomic Power Lab, KAPL, in Niskayuna, New York. KAPL is a facility owned by the United States Department of Energy, DOE, and operated by a private contractor which, at the time of my layoff, was Lockheed Martin Corporation, Lockheed. The purpose of the facility is to train U.S. Navy personnel in the operation of nuclear powered vessels.

My last position at KAPL was as a specialist involved in pressure testing nuclear containment systems. I always enjoyed working at KAPL and was proud to be serving my country and helping to train our Navy personnel.

In 1995 KAPL announced it had been ordered by DOE to cut its workforce. A voluntary separation program, VSP, was offered only to employees with at least 20 years of service. The program included a $20,000 payment to those who agreed to voluntarily retire. One hundred seven people volunteered to resign under the VSP program. That meant that KAPL was only one person above its workforce ceiling. However, KAPL decided to go ahead with plans to hire 35 employees, average age of 27. This meant that 36 employees are being voluntarily terminated. Five of those terminated were hourly employees.

Of the 31 salaried exempt employees who were terminated, including me, 30 were over the age of 40, 97 percent. KAPL's exempt workforce numbered over 2000. Fifty-eight percent of the exempt workforce was 40 years of age or older, 42 percent were under 40.

In selecting the 31 exempt employees to be terminated, KAPL relied heavily on the numerical rankings based largely on the completely subjective criteria of flexibility and criticality. These subjective criteria were poorly-defined and little or no oversight of the process was provided in order to ensure that age bias did not affect the decision-making. I was one of the 31 employees selected for layoff.

On December 5th, 1995 I was told to pack up my belongings and I was then escorted out of the building by security personnel.

In January of 1997, I and 27 other terminated employees brought suit against KAPL, Lockheed and the General Manager, John Freeh, alleging, among other things, we had been subjected to adverse impact age discrimination in violation of the ADEA. In November of 2000, after a jury trial lasting several months in the US District Court for the Northern District of New York, the jury returned a verdict for us, finding that KAPL implemented an age-neutral employment policy which had an adverse impact on the exempt terminated employees because of our ages, and that the discrimination was willful.

Almost nine years later the case remains on appeal. It has been before the US Supreme Court twice and the Second Circuit Court of Appeals four times. In the nine-year appeal period, two of my fellow plaintiffs have died. Others continue to suffer from economic and emotional effects of losing their jobs. No resolution is yet in sight, and I truly believe that some preference should be granted by the courts in age cases. Time is definitely not on our side.

I believe that I was selected for layoff merely because of the false stereotype which characterizes older workers as less flexible and critical. For 27 years my performance was always rated as good or excellent. I was proud to do a job that I considered important to our national security. When I was laid off I felt completely betrayed.

My family's standard of living was severely impacted. My son had to drop out of the Albany College of Pharmacy because I could no longer afford to help with tuition payments. In desperate need of money I took the only job readily available, which was a janitor position at KAPL. I was cleaning the wastebaskets of my former colleagues. I took nearly a 50 percent wage cut. It was humiliating. I suffered anxiety, stress, loss of self esteem, which resulted in physical symptoms, such as sleeping, eating problems, high blood pressure, back pain, and trigeminal neuralgia. This is a condition which -- caused by stress, which results in very intense pain in your face.

I believe my life has been severely negatively impacted due to age discrimination. I hope that my testimony will help others to understand the devastating effects on people's lives which result from such actions. John K. Stannard.

CHAIRMAN ISHIMARU: Mr. Stannard, thank you.

We'll go next to Nancy Edmonds of our Indianapolis office.

MS. EDMONDS: Good morning, Chairman Ishimaru, Vice Chair Griffin, Commissioner Barker. I thank you for having me here today to talk at this important hearing about age discrimination. Because my time is extremely brief, a fuller version of my comments has been submitted for the record.

I'm here to talk about today the Commission's ultimately failed attempt in EEOC v. Kentucky Retirement Systems to challenge the provision of lesser benefits for older police workers, firefighters, other state and county workers who become disabled in the State of Kentucky or are injured at work, and also to introduce Mr. Dennis Halfhill who was one of the workers who was affected by the outcome of the case. Mr. Halfhill worked as a Sheriff's Deputy in Kenton County, Kentucky for eight years until he was injured in the line of duty on the job at age 56. Under the state's plan, Mr. Halfhill was denied the opportunity to take disability retirement because he was age 55 or older and instead he had to take regular retirement. He got a smaller retirement benefit as a result. Also, because he had to take regular retirement, he wasn't eligible like police officers under age 55, to take a non-hazardous duty job and to draw disability retirement benefits.

To understand why the Commission believed that Kentucky Retirement System's policy was unlawful, you need to understand a little bit about the program. It's complex, but I'll simplify it for you. Hazardous duty employees such as Mr. Halfhill are eligible for normal retirement, either when they have 20 years of service, regardless of age, or when they are 55 years old and have at least five years of service. Under Kentucky's Disability Retirement plan, employees who become disabled before they've worked for 20 years are eligible for disability retirement if they are under age 55, and if they are, they get imputed years of service resulting in a higher pension. However, those who become disabled with less than 20 years of service, because they are eligible -- if they are eligible for normal retirement by virtue of age, i.e., 55, they are not eligible for disability retirement and instead they receive a benefit based only upon their years of service, they have to take regular retirement.

The state justified it by saying people who become disabled need to have income, and if they're not yet eligible to retire, they need an additional source of income, and that made sense.

Upon closer scrutiny, however, the Indianapolis District Office determined that this just wasn't fair and it didn't seem to comply with the law. Eligibility for normal retirement is based, in part, on age, and as a result, younger workers with the same number of years of service will often get more years of service added on when they become disabled. That means they end up with a higher pension. Very often the younger disabled worker gets a pension that's 100 percent higher than the older disabled worker. Also, the cost of health insurance is dependent upon how many years of service you have, whether it's actual years of service or imputed years of service. So, the younger worker who gets imputed years of service has a lower cost for health insurance, sometimes has no cost.

It should be noted that officers who are injured in the line of duty and have a total or permanent disability, have even additional benefits given to them if they're under 55. They’re guaranteed a monthly pension, a minimum of 25 percent of their final monthly pay, even if they've only worked for a few months. They are given free family health insurance benefits, and they are also given a dependent child benefit if they have dependent children under age 22 which is ten percent of their final rate of pay. However, officers injured in the line of duty who are over 55 aren't eligible for any of these benefits.

The Commission brought suit on behalf of a class of older workers alleging that Kentucky Retirement Systems' plan was facially discriminatory because it used age to limit eligibility for enhanced benefits. Ultimately the Sixth Circuit, reversing its prior precedent, agreed with the EEOC and agreed with all other courts to have decided the issue, holding that a benefit -- a plan that uses age as a factor in calculating a benefit is facially discriminatory.

Despite that uniform precedent supporting the Sixth Circuit, the Supreme Court reversed in a five-four decision and said, no, that plan doesn't violate the ADEA and they held any time benefits are tied to a pension plan, even one that uses age as an explicit factor in calculating benefits; the plaintiff has a higher burden of proof and has to show additional evidence of the intent to discriminate.

The Supreme Court's decision raises new hurdles for ADEA enforcement, obviously, a higher burden of proof as was discussed with the first Panel. As you'll hear later, there have been several cases following Kentucky Retirement Systems that have used the decision to further restrict rights under the ADEA.

With that background, I'm going to turn this over to Mr. Halfhill. He's agreed to testify in hopes of calling to attention what he believes to be a fundamental unfairness in the law. His story is only one of many stories of injured workers who were forced to retire because of an injury, but unfortunately, because they were over 55, they received fewer benefits.


MR. HALFHILL: Mr. Chairman, Vice Chair Griffin, Commissioner Barker, my name is Dennis Halfhill. I am 67 years old. I live in Fort Wright, Kentucky. I worked more than 20 years at National Distillers Products Company as Assistant Division Traffic Manager, until the distribution department was moved to Clermont, Kentucky, about two and a half hours away. I then obtained a position with the Kenton County Sheriff on December 23rd, 1991. I worked there first as an office deputy for one year, then as a court bailiff for almost a year. I then went to the police academy and became a road deputy after graduation in February 1994. As a road deputy, I performed general police duties, including traffic stops, traffic investigations, served warrants, transporting prisoners, backing up police agencies in Northern Kentucky. I was classified as a hazardous service employee for the purpose of benefits due to the Kentucky Retirement System.

In December 1997, I was injured in the course of duty. I was 56 years old. I was delivering a trial subpoena in my cruiser, was hit by another motorist. The other car ran through a red light, broadsided me. The driver's side door of my cruiser was hit and my cruiser was knocked into a pedestrian sign post. When my cruiser was hit on the left side, it threw me against the pointy metal chrome handle of my cruiser spotlight. The handle jabbed into my shoulder and it felt like I was hit with a baseball bat in my shoulder. I suffered rotary cuff, neck and tendon damage. At that time of the accident I was in perfect health. I ran about a mile a day, had no plans to retire from the Sheriff's Department. My performance appraisals were always excellent and approximately two months prior to the incident, I had been told there were plans to make me a supervisor. At the time of the accident I was earning around $34,000, $35,000. I received health benefits at no cost. I had two sons, aged 26, 28, living at home and attending school.

After the accident I had taken off one or two days for the pain, but I expected to fully recover. I continued working on a regular basis for the Sheriff's Department but was in pain and experiencing numbness. After one year of therapy, there was little improvement, so I had an operation in June of 1999 to correct the rotor cuff damage and was placed on light duty after the operation. Three months I was sent for testing by the Sheriff's Department to St. Elizabeth's Medical Center Business Health. They determined that I still could not perform all the regular job duties and my doctor was unable to tell exactly how long it would take to recover. He said it could take three to four years. Because I needed a hundred percent use of both arms in order to perform my job, the Sheriff and the Chief Deputy told me in September 1999 that I need to apply for disability retirement because they could not keep me on light duty any longer.

I applied for disability retirement on September the 22nd, 1999 when I was 57 years old. I received a letter back from Kentucky Retirement Systems on September 29th, 1999, stating I was ineligible for disability retirement because I was over 55 years old, too old to qualify. I was told that I need to take regular retirement. Because I wanted to keep working I searched for other county, state jobs, but none were available at the time, and I had to take regular retirement based on eight years of service, amounts to approximately $550 a month. If I had received disability retirement, I would have gotten up to eight years of imputed service resulting in the doubling of my monthly pension of $1100 a month. I would have been able to hold a non-hazardous position and because -- if one came available, which receiving hazardous disability benefits because I was injured in the line of duty.

Also, if I'd received disability retirement because I was a hazardous employee injured in the course of duty, my health insurance benefits would be paid in full. Because I was not allowed to take disability retirement, it would cost me 75 percent of my cost of health insurance premiums, or $400 a month, if I wanted to continue to get health insurance through the state. At age 57 I was eight years away from eligibility for Medicare. Compared to some I was lucky, because I got health insurance benefits through the wife's employer. The insurance cost about $400 and would have paid for the coverage through the state, but I was -- it was still costly. My wife had been paying $125 a month for individual coverage, and when we switched to family coverage, there was an increase of $225 per month, for a total monthly premium of $350 per month. As you can see, more than half my monthly retirement benefit from the KRS was used to pay health insurance.

I searched for alternate employment, being told many times I was either overqualified or under qualified. I got a part-time job in July 2000 at St. Elizabeth's Medical Center in Kentucky as a security officer. The job was to fill in for other employees. I received about $15 an hour, no benefit. I work at St. Elizabeth's at the information desk now, seven to fourteen hours, earning about $17 an hour with no benefit. After I was denied disability I spoke with a member of the KRS Board. He said he was -- it was not right. I have been denied disability retirement and the age should be eliminated as a requirement. He told me that he had argued in favor before the Board, but they disagreed. I retained a lawyer who filed suit for me in the state court in October 1999. I lost at the trial court level on summary judgment, won in the state appellate court, but lost at the state supreme court. The judge ruled that I was discriminated against, but it wasn't intentional, and they were following the federal court. It cost me about $20,000. My lawyer said if I wanted to further such a petition with the federal Supreme Court it would cost an additional $25,000, which I did not have and the chances were 50 percent at best.

At this point I was aware the EEOC had filed a suit against Kentucky Retirement Systems in federal Court, and I was a class member and hope that the EEOC might be able to get relief on my behalf. After many years of litigation, it's my understanding that the Supreme Court said I wasn't discriminated against because of age. All I know, if I had been younger than 55 when I applied for disability retirement, I'd be much better off than today. I hope something can be done which will correct the injustice that I and other older workers suffered and will continue to suffer.

I don't see how it can be anything but age discrimination when you are told that your eligibility benefits are solely based on your age. It is especially concerning when your disability is a result of injury in the line of duty. Thank you.

CHAIRMAN ISHIMARU: Mr. Halfhill, thank you very much. I want to thank the Panel. These stories are difficult to tell, difficult to tell in public.

Madam Vice Chair?

VICE CHAIR GRIFFIN: I just want to thank you, too. It is difficult, but it not only helps us, it helps everyone that's here and it helps everyone that reads the transcript that will be published as a result of this meeting. So, it's important.

I'd like -- you know, and Nancy, in your statement, I don't think you actually said it, but I think it's compelling that if there was a younger cop with you or a younger person from the Sheriff's Department with you the day of that accident and they were injured, too, the difference in what would have happened with the two of you is really compelling. And how anyone can look at that and say that's not, you know, age discrimination, is remarkable. So --

CHAIRMAN ISHIMARU: Commissioner Barker?

COMMISSIONER BARKER: I don't have any further comments other than to, you know; reiterate what the Acting Chairman and Acting Vice Chairman have said. I really appreciate your coming, especially some of you like Mr. Barnes that came such a long way. Thank you, Mr. Barnes and Mr. Stannard and Mr. Halfhill, I appreciate your testimony. And Nancy and Anna, we sure appreciate the good work that you all are doing. Please keep it up.

CHAIRMAN ISHIMARU: You know, Mr. Barnes' case illustrates to me why we have the age where it is because, certainly Mr. Barnes, once you hit 40, you were subject to different treatment?

MR. BARNES: Yes, sir.

CHAIRMAN ISHIMARU: It was certainly the wall there. And earlier panelists talked about, and I know there have been discussions about whether the age should be lifted. But certainly in your case it was a stark reality that, once you got into your forties, things changed adversely to you.

MR. BARNES: Yes, sir. It was very traumatic, and so you -- I wouldn't wish that on my worst enemy. It's a very denigrating thing to face, the humiliation, and just the -- just the ability to be a provider for your family. The words can’t express the difficulty.

CHAIRMAN ISHIMARU: Mr. Stannard, in your case, the employer hired new people on the basis of flexibility and criticality. Had that ever been used in the past in evaluating whether you and your fellow employees had given value to the company?

MR. STANNARD: No, not that I remember. It was basically how you function as an individual in your position, what you can -- if you're more or less qualified to do the job and you're able to, you'll be ranked accordingly. But flexibility, criticality, I think that was something brought up especially for the involuntary separation that they went through, the RIF.

CHAIRMAN ISHIMARU: Was it ever defined to you what flexibility and criticality meant?

MR. STANNARD: There might have been some definition of it at some point in time, but I -- you know, I don't remember. If it was -- if management, when you asked them, it was always very vague in their mind what it represented, very subjective.

VICE CHAIR GRIFFIN: At the time -- can I jump in? At the time that you actually were laid off did they say anything? Did they give you any criteria or did they just say, "This is our decision and that's it"?

MR. STANNARD: No, I think it was -- I believe it was through discovery when we actually got these matrix sheets of different individuals and they popped numbers in and like that, we discovered how it was actually done. Basically, no, "Here's your letter. Good-bye. You're already locked out of your computer," so you know --

VICE CHAIR GRIFFIN: But no chance to say, "Well, you know, can we discuss this? Why me or why us?"

MR. STANNARD: Absolutely none.


MR. STANNARD: No. You were escorted off the premises very quickly. It's -- it was brutal.


MR. STANNARD: Very cruel, very cold, very heartbreaking to say the least.

VICE CHAIR GRIFFIN: Almost like you had stolen from them or something or --

MR. STANNARD: That's right. Hate -- builds up very quickly, put it that way, as you're being escorted away.

VICE CHAIR GRIFFIN: How much -- how much of the decision, given that it was operated by a private contractor, but it was really a federal agency; how much of the decision-making was shared by the federal government versus the private, or do you --

MR. STANNARD: Decision-making on personnel?

VICE CHAIR GRIFFIN: And decision-making on the decision of who to lay off?

MR. STANNARD: I don't think they, the government itself got involved whatsoever. That was done at a local level by the contractor; in this case it was Lockheed at the time.

VICE CHAIR GRIFFIN: It's still a federal agency.

CHAIRMAN ISHIMARU: I want to thank the Panel for joining us. It's very difficult to tell these stories, and I appreciate -- we all appreciate you coming here, some of you from very far away, to share with us.

I'll ask my colleagues if we need to take a quick break. So, we will take a quick break without objection and stand in recess for, what, five minutes or so.

(Whereupon, a short recess was taken.)

CHAIRMAN ISHIMARU: The meeting will come back to order. We now turn to Panel 3, entitled "Pondering Pensions: Employee Benefits in the Kentucky Retirement Era."

As we started to talk about on the last panel, employee benefits are one of those arcane topics that are both extremely important, but also complex and potentially confusing.

I'm delighted that we have two experts who will explain both the historical framework of employee benefits issues as they relate to the ADEA and the current state of employee benefits in the wake of the recent Supreme Court ruling in the Kentucky Retirement System v. EEOC.

Testifying first today is Laurie McCann, a Senior Trial Attorney with the AARP Foundation Litigation Team, she has extensive experience at all levels of the court, a noted speaker and writer on age issues.

Joining her will be our former colleague from here at the EEOC, Eric Dreiband, a partner at Jones Day. Eric served as our General Counsel for a number of years, a delightful colleague. It's always good to see him and welcome him back to the fold. I don't know if it's the first time visiting 131 M Street, but we're delighted to have him back. Why don't we start with Ms. McCann?

MS. McCANN: Thank you very much for the opportunity to be here today to discuss the Supreme Court's decision in Kentucky Retirement System v. EEOC, as well as other pressing issues arising under the Age Discrimination in Employment Act.

The ADEA’s history of prohibiting age discrimination in employee benefits, it's long and storied, and I presented at great length in my written comments, but for the purposes of today I'll make it far briefer.

In 1990, Congress enacted the Older Workers Benefit Protection Act to overturn the Supreme Court's decision in Public Employee Retirement System v. Betts. June Betts was denied disability retirement benefits because, by virtue of her age, she was over 60, and her years of service, as with the Kentucky case, had a minimum five years of service to -- and plus the age, you were eligible for normal retirement benefits. She was eligible for the age and service benefit.

Ohio law at the time provided that disability retirement payments could be no less than 30 percent of the individual's final average salary. No such requirement applied to their age and service benefit. Consequently, the age and service retirement benefit that Ms. Betts received was only about one-half of what she would have received had she not been denied the disability retirement benefit.

In a decision that Justice Thurgood Marshall described as draconian, the Betts Court held that the ADEA did not prohibit age discrimination in employee benefits because Congress had left the employee benefit battle for another day. Congress disagreed and swiftly enacted the OWBPA to overturn both the reasoning and the holding in Betts, and to make it unmistakably clear that the ADEA does prohibit employers from denying or reducing benefits based on age.

After the OWBPA was enacted, in the face of a claim of unequal benefits, an employer's only defenses should be to prove either, A, that it provides the same benefits to its older workers as its younger workers, or two, that age-related costs justify the differences in the benefits, or finally, that the difference in benefits is protected by one of the OWBPA's narrow safe harbors. However, almost 20 years later the Supreme Court was asked to consider the legality of another state disability retirement plan, and we heard about it at great length from Ms. Edmonds and her client.

The Kentucky plan, as with the Ohio plan categorically excluded still working employees age 55 and older from receiving disability retirement benefits because their age qualified them for normal retirement age benefit. And we heard about all the other benefits that were denied to people just because they became disabled after age 55, as opposed to prior to age 55.

As I explained, that is exactly what happened to Ms. Betts, and exactly the reason she was denied disability retirement benefits. Yet, in another what I would term draconian decision, the Kentucky Retirement System court ruled that the OWBPA was beside the point. It is still incomprehensible to me now how in a textbook case of age discrimination in employee benefit, where older workers were indisputably denied benefits provided to younger workers, and the reason they were denied those benefits was because of their age, the OWBPA could be "beside the point."

But ignoring the OWBPA, the Kentucky Retirement System court announced a new rule that states, "When an employer adopts a pension plan that includes age as a factor, and that employer then treats employees differently based on pension status; a plaintiff, to state a disparate treatment claim under the ADEA, must adduce sufficient evidence to show that the differential treatment was actually motivated by age, not pension status." It takes us back to before Betts to actually to -- to Betts where now, once again, an age discrimination plaintiff is required to prove the subjective motivation of the employer for denying him or her benefits despite the fact that the plan was facially discriminatory.

Although the KRS decision did not make the headlines that the Ricci decision did recently, the dissent in the KRS case did seem to understand the portentous significance of this new rule.

Justice Kennedy, writing for the dissent stated "If the ADEA allows an employer to tie disability benefits to an aged-based pension status designation; that same designation can be used to determine wages, hours, health care benefits, reimbursements, job assignments, promotions, office space, transportation vouchers, parking privileges and any other conceivable benefit or condition of employment." He pointed out that the KRS decision created a virtual safe harbor for policies that discriminate on the basis of pension status, even when pension status is tied directly to age, and then linked to another type of benefit program.

I ask you, after Kentucky Retirement System, how long will it be before older workers are denied early retirement incentives because, by virtue of their age, they are already eligible for a pension.

Similarly, when will we see our first case in this dire economy when, in a reduction in force, employees who are eligible for retirement benefits, even reduced retirement benefits, are told that by virtue of their eligibility for that age-related benefit; they are ineligible for severance benefits, and instead, must draw on that reduced pension to pay for college tuition or to pay their grocery bills.

Already we have examples of cases where older workers have been denied benefits that younger workers were provided and the OWBPA is not even mentioned in the decision, not even in a footnote. So, we have the EEOC v. Baltimore County case, which the Commission itself is litigating where older workers -- all workers were required to contribute to the pension plan, however, the older you were when you were hired, the higher your mandatory payroll deduction.

The OWBPA is not mentioned in that decision. Instead, the court says -- the new rule under Kentucky Retirement System is what governs that case. The court also, in that case said unbelievably, that the decision was not based on age, but the number of years until the person reached normal retirement age.

In another case, Schultz v. Windstream Communications, this was a reduction in force, and people who were impacted by the reduction in force; there were employees who were younger than 50, but who were within two or three years of 30 years of service. And under Windstream Communications' pension plan, if you had 30 years of service you were eligible for an unreduced pension. They amended their pension plan so people younger than 50 could get those extra two to three years to get them to the 30-year unreduced pension.

There was another group of employees who were over age 50 who were also within the two to three-year range of reaching that 30-year unreduced pension, but had 25 years of service. At 50 years of age and 25 years of service you were entitled to a reduced pension. These employees were denied the unreduced pension because, by virtue of their age, they were eligible for the reduced pension.

Again, the OWBPA not mentioned, not in a footnote, not anywhere. Instead, we are told that that's perfectly permissible now under the Kentucky Retirement System case.

Significantly, one of the reasons cited by the Kentucky Retirement System court for why the KRS plan treated employees differently, not based on age, but instead on pension status, was that Kentucky System did not rely on any sort of stereotypical assumptions that the ADEA sought to eradicate.

It didn't rely on the stereotype that older workers' capacity to work was lower compared to younger workers.

This sort of unexpected and erroneous reasoning that an employee benefit plan that denies benefits based on age does not violate the ADEA unless the underlying reason is a stereotype, comes from another Supreme Court decision, the 1993 Hazen Paper decision, where Justice O'Connor just commented that the essence-based discrimination is for an employee to be denied -- to be discriminated against because of inaccurate and stigmatizing stereotypes.

In the wake of that sort of innocuous comment, what we have seen is the ADEA's prohibition of decisions because of age become a prohibition of discrimination based on inaccurate and stigmatizing stereotypes, which is not in the text or anywhere in the statute, and it's created great havoc.

The one-two punch of Hazen Paper and Kentucky Retirement System that a decision cannot be because of age unless it's motivated by inaccurate and stigmatizing stereotypes, was followed by the knock-out punch of Gross, which Ms. Ventrell-Monsees talked about earlier.

These decisions have reduced the ADEA's promise to older workers that they have the right to be judged based on their ability and not age and be free of arbitrary age discrimination to merely words on paper. As Ms. Ventrell-Monsees explained, the Supreme Court has repeatedly interpreted the ADEA to provide less protection than Title VII and to impose greater burdens of proof. Congress should enact legislation as soon as possible to restore the protections of the ADEA by making it clear that all differential treatment based on age is prohibited by the ADEA.

Just in closing, I once litigated a case with AARP where we brought the case -- it was a disparate impact case, and we brought it in the State of Michigan because, as we all know, bringing a disparate impact claim under federal law is, you know, futile. And the defendant in that case brought a motion to dismiss, arguing that you should not get disparate impact under the law because it was an age discrimination case similar to federal law. And the state court judge in Michigan said in this state, age is on equal footing as race and gender discrimination. I hope we sometime see the day where a federal judge can make that same statement.

Thank you very much for your time.

CHAIRMAN ISHIMARU: Thank you, Ms. McCann.

Mr. Dreiband?

MR. DREIBAND: Good afternoon, Acting Chair Ishimaru, Vice Chair Griffin, Commissioner Barker and other friends and former colleagues here at the Commission. I thank you and the entire Commission for inviting me here today and it's a real privilege and personal pleasure as well to return here to the EEOC where it was my honor, as you mentioned, to serve here as your General Counsel.

The Court's opinion in Kentucky Retirement, as you've heard, considered whether a disability retirement plan that explicitly considered age, complied with the prohibitions against age discrimination contained in the Age Discrimination in Employment Act. And, as you've heard, the Court found no violation of the Act, despite Kentucky's decision to exclude older workers from eligibility for the plan and despite Kentucky's use of age to calculate benefits in its disability retirement plan, even for those people who do qualify.

The Court stressed, of course, that age must actually motivate the decision, but that generally speaking, the Court followed a line of cases, some of which we've heard about today, where the Court views age discrimination more narrowly than the Court views race, sex and other forms of prohibited discrimination.

The Court then, in its decision, announced a new six-factor test that provides little guidance to the public about how and when employers may consider age as a factor in disability retirement and other benefit plans and still comply with the prohibitions against age discrimination contained in the Age Discrimination in Employment Act.

Several of the factors suggest that circumstances that surrounded the Kentucky plan indicate that age did not actually motivate the decisions, but the Court did not define how those factors might operate when applied to other plans.

For instance, the Court relies on the presence of, "Clear, nonage-related rationales," and "several background circumstances” that, according to the Court, suggest that pension status was not a proxy for age. The Court's position, however, failed to identify any such background circumstances or rationales that might enable an employer to evaluate its own plan after Kentucky Retirement.

As a result, it falls to the Commission, as the federal agency charged with enforcement of the Age Discrimination in Employment Act, to provide guidance to the public about the meaning, both of the Court's decision, the Older Worker Benefit Protection Act, and how employers can craft disability retirement and other benefit plans that consider age, if at all, and still comply with the prohibitions against age discrimination.

The Court's test also raises several questions about the meaning of age discrimination itself. For example, in light of the Court's observation that there were no stereotypes involved in Kentucky's plan, to what extent are stereotypes required to prove a violation? And, given that the Court crafted a hypothetical that compared two employees with different ages and different years of service, what does it mean now to be similarly situated for purposes of the Age Discrimination in Employment Act?

Now in the Kentucky case, as you've heard, age unambiguously determined both eligibility for benefits and the amount of benefits, and the Court, as it found no violation, then raised a question which is: How large a role can age play before the Court or any court or the Commission will deem it to be a violation of the Act's prohibition against age discrimination? The public is left to wonder, for example, whether a benefit plan may permissibly consider age without some kind of undefined stereotypes and still comply with the Act.

Most fundamentally, the Court's opinion in the Kentucky case provides little guidance about how the public should react going forward. For example, while the Court did announce six factors that informed its decision, there's a question about how many of those six factors going forward must an employer or a particular benefit plan satisfy in order to comply with the ADEA's prohibition against age discrimination. For example, would an employer comply with the Act if it satisfied four of the six, two of the six, or must an employer satisfy all six or some other standard that may -- may or may not apply outside the benefits context, and at what point will these factors point towards a finding of liability or at least a violation of the prohibitions under the Act.

Because the question is both created and left unanswered by the Court's decision, I think it's important for the EEOC to guide the public, especially in the context of benefits about the meaning of the Older Workers Benefits Protection Act in the aftermath of the Court's decision, and as well about the meaning of the prohibitions generally contained in the Age Discrimination in Employment Act.

Section nine of the Age Discrimination in Employment Act provides the Commission with broad authority to issue rules, regulations and exemptions through notice and comment rulemaking, and my recommendation to the Commission is the Commission consider noticing comment rulemaking and with the idea ultimately of producing a regulation for several reasons.

First, the Kentucky Retirement factors are ambiguous at best and undefined and a regulation would benefit both the Commission and the public and enhance compliance with the ADEA.

The comment process that would be required by the Administrative Procedure Act would allow all interested parties to be heard and would create a record from which the Commission could craft informed and reasoned regulatory guidance. Additionally, regulation would give employers administrative guidance that they may use both to craft their benefit plans and to avoid liability under the Age Discrimination in Employment Act.

The Age Discrimination in Employment Act specifically incorporates Section 10 of the Portal-to-Portal Act and an employer may therefore avoid ADEA liability if it relies on a Commission regulation.

And so, by issuing a regulation, the Commission would both enable employers to follow that regulation and thereby draft their benefit plans or whatever else the Commission had to say and thereby comply with the Act, but also to avoid liability on a going-forward basis, even if a Court later declares the regulation invalid.

The courts are familiar with the EEOC's rulemaking process, and generally defer to appropriate regulations promulgated by the Commission but, as we've seen, the Supreme Court itself will not shy away from declaring EEOC regulations invalid. And the advantage of a regulation is that because of the Portal-to-Portal Act, employers can essentially follow whatever guidance the Commission issues and thereby comply. And, even if the regulation is deemed invalid, they will not be found liable and they will then feel free to craft benefits plans in the way the Commission deems appropriate.

Alternatively, the Commission could issue sub-regulatory guidance without the notice and comment of rulemaking process, and the Commission has determined that opinion letters signed by the Legal Counsel and approved by the Commission may be relied upon by employers for a Portal Act defense. So, of course, I would recommend that approach if the Commission decides not to pursue notice and comment rulemaking. But, nevertheless, even in the absence of that, I think given the fact that the Supreme Court in the Kentucky Retirement case considered and rejected the Commission's Compliance Manual standards about benefits and older workers, at least at a minimum, changes to the Compliance Manual appear to be warranted in the aftermath of the Court's decision.

Again, if the Commission does pursue even sub-regulatory guidance, the courts will defer to that guidance to the extent that the guidance has the power to persuade the courts and the court has done so. Even the Supreme Court has done so, perhaps not in Kentucky Retirement, but in other cases recently, as recently as 2006 when the Court announced its decision in a retaliation case called Burlington Northern, v. White.

I will add one thing that I had not intended to say, though, about the Kentucky case, upon hearing Mr. Halfhill and other people's testimony today. That is a case that I worked very closely with Dori Bernstein and others on when I served as General Counsel and I argued that case before the Panel of the Sixth Circuit. And I recall when I was arguing the case that many of the Judges on the Panel expressed great skepticism about the Commission's position at the time, in part because they reasoned that younger people who become disabled are likely to need more money for longer periods of time than older people because their children might be younger, they might have to put their children through college and so forth. And I became flustered with the questions by the Panel that, in my view, were based on stereotypes, candidly, so much so to the point that I finally said to the Panel, "You know, older people need money as well as younger people."

And I think that still proves true in the aftermath of the Supreme Court's decision. And I will just leave the Commission with that thought. And I'm happy to take any questions you have and delighted to be here and look forward to your questions. Thank you.

CHAIRMAN ISHIMARU: Thank you to the Panel, very, very helpful in having you lay this out. I must say that time does pass rather quickly. I remember when the Court came down with the Betts case which does not seem like all that long ago but, indeed, it's been 20 years now, and Congress responded to that case as well as other cases that came down during the 1989 term.

Madam Vice Chair?

VICE CHAIR GRIFFIN: I just -- you know, it's interesting how -- because it really comes down to money. I mean, that's really what all this is about, and so the employer who says mean things and is blatant and, you know, anyone over 40 is probably going to be more liable but, I mean, the underlying issue is usually about money, what things cost, and I just find that it's interesting that the courts are sort of allowing that to be, you know, that to demonstrate that it really is an age-based. It's just -- it's interesting. I was wondering if Ms. McCann would react to Mr. Dreiband's suggestion about regulatory -- the recommendation for us to do any of those things?

Do you think that's the best approach?

MS. McCANN: I think the best approach is that the KRS decision needs to be overturned by Congress. I mean, I think it's a direct slap in Congress's face to say that a statute that was crafted by it in response to a case with the exact same facts was "beside the point."

If that cannot happen, then I totally agree with Mr. Dreiband that guidance is needed. I mean, he was right on point of these totally ambiguous six factors. I believe at least one of the decisions I mentioned, one of the two, it might have been Baltimore County that said -- well, four of them are present here, but it didn't say that, you know, so it's more than half, so it counts. So, it really -- I do think it's very confusing, but I do think the best decision is that we get back to the OWBPA that if there's a difference in benefits based on age, then you need to either -- you need -- then you go back to the cost. I mean, Congress provided an answer for age-based difference in benefits and we need to go back to that.

CHAIRMAN ISHIMARU: Commissioner Barker?

COMMISSIONER BARKER: Well, you've both been exceedingly helpful and, you know, we've got two great legal minds here and it's a pleasure to be the recipient of such insight and knowledge and I appreciate it. I imagine we'll be having future conversations with both of you after this. Thank you.

MS. McCANN: Can I just make one comment following up on Commissioner Griffin's comment where you talk about it's a money issue.


MS. McCANN: That's been one of the most frustrating things to me, working on this issue for over 20 years, myself, is that age discrimination is not seen as a civil rights issue. It's seen as an economics issue, and that's --

VICE CHAIR GRIFFIN: It's economic and it's okay, because that's a good decision, you know, for your business, even though it's discriminatory.

MS. McCANN: And as we saw from the Panel before us it's not an economic issue, it's a civil rights issue.


CHAIRMAN ISHIMARU: I too, want to thank the Panel, very, very helpful, and I hope we'll be able to call on you as the Commission does further work in this area.

I want to thank the Office of Legal Counsel for helping us to set this up, Peggy Mastroianni and Dianna Johnston, and Dianna's team and all their work in putting this together, very, very helpful. I'm hopeful we will do more in this area. Lots of useful suggestions today, and again, I thank the Panelists on this Panel and on previous Panels for joining us.

So, with that, I'll entertain a motion to adjourn.




CHAIRMAN ISHIMARU: Any discussion?

(No response.)

CHAIRMAN ISHIMARU: All in favor, say "Aye."

ALL: “Aye.”


(No response.)

CHAIRMAN ISHIMARU: The "ayes" have it. The motion carries. The meeting is adjourned.

(Whereupon, at 12:30 p.m., the meeting was concluded.)