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Discrimination against older people in employment is a violation of ESG principles, but it is rarely mentioned in discussions of ESG. It violates the “S” (social) component. It also violates the “G” (governance) component in that companies are expected to comply with laws.

It is widely known, however, that employers routinely discriminate against older workers. Even though most large companies combat racial and gender bias with DEI policies and training, they seldom pay attention to age bias. The bias may be less than overt, but it is real. As an executive recruiter once told me, “Older applicants get the interview, but they never get the job.”

This blog post is focused on the rights of older workers in the United States.

The U.S. Age Discrimination in Employment Act of 1967 (“ADEA”) designates people over the age of 40 as a protected class, with certain exceptions for the physical demands associated with some occupations. The Act authorizes the Equal Employment Opportunity Commission (EEOC) to sue employers on behalf of affected workers.

According to the EEOC:

  • Age discrimination involves treating an applicant or employee less favorably because of his or her age.
  • The ADEA forbids age discrimination against people who are age 40 or older. It does not protect workers under the age of 40, although some states have laws that protect younger workers from age discrimination. It is not illegal for an employer to favor an older worker over a younger one, even if both workers are age 40 or older. Discrimination can occur when the victim and the person who inflicted the discrimination are both over 40.
  • The law prohibits discrimination in any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, benefits, and any other term or condition of employment.
  • It is unlawful to harass a person because of his or her age. Harassment can include, for example, offensive or derogatory remarks about a person’s age. Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that aren’t very serious, harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted). The harasser can be the victim’s supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.
  • An employment policy or practice that applies to everyone, regardless of age, can be illegal if it has a negative impact on applicants or employees age 40 or older and is not based on a reasonable factor other than age.

The remedies for violations of the ADEA are less than perfect. Financial compensation is usually limited to back pay and attorney fees. Moreover, employees are often required to sign agreements requiring disputes to be resolved in binding arbitration, thereby waiving their right to sue in court.

Connecting DEI with Ageism

In his excellent article on this subject, Adding Age A to DEI Is a Good Idea, Richard Kravitz, Editor in Chief of The CPA Journal, cites the work of Professors Michael North and Ashley Martin:

“The Intersection of DEI and Ageism

“Professors Michael S. North and Ashley Martin studied the advances that are being made in workplace diversity and inclusion, including the support for women and racial minorities. Their research focused on how these efforts are outpacing and, in some cases, hindering support for older workers. In nine studies, Martin and North found that people who hold egalitarian beliefs “harbor more prejudice toward and allocate fewer resources to older individuals as compared to other discriminated groups” (A.E. Martin and M.S. North, “Equality for (almost) all: Egalitarian Advocacy Predicts Lower Endorsement of Sexism and Racism, but not Ageism,” Journal of Personality and Social Psychology, vol. 123, no. 2, pp. 373-399, 2022, as reported in NYU’s Stern Business alumni magazine, Spring 2022, p. 11).

“Martin and North further report that age-based retirement expectations by multiple disadvantaged identities highlights that older people need to “step aside.” The authors “argue that egalitarian advocacy—efforts to create equal opportunity for all groups—predicts greater likelihood to support ‘succession’–based ageism, which prescribes that older adults step aside to free up coveted opportunities (e.g. by retiring).” (Martin and North, 2022) The researchers concluded that ageism not only gets left out of our conversations surrounding diversity, equity, and inclusion (DEI) efforts, but in some cases it is actually implicitly or even explicitly endorsed by DEI efforts.”

Call to Action:

We invite companies, their stakeholders, ESG advocates and ESG consultants and attorneys for ESG and business stakeholders to take note of this issue and include ageism in their ESG work.