This post (the first of three) discusses common errors made by employers when terminating employees, all of which can be easily avoided.
Mistake No. 1: Offering an Older Employee a “Retirement” Package
Well intentioned employers sometimes are tempted to characterize a performance-based, involuntary termination of an older employee as a “retirement.” However, the mere mention of the word “retirement” in connection with a termination decision, even when offering an enhanced severance package, can lead to liability under the Age Discrimination in Employment Act (the “ADEA”).
Interestingly, the original version of the ADEA excluded from coverage employees who were 70 years old or older, as well as employees who were under the age of 40. Accordingly, employers could force employees to retire at age 70 under the original version of the ADEA without facing liability. However, the ADEA was amended in 1986 to remove the exclusion for employees who were 70 years old or older. Thus, with the exception of employees in safety-sensitive positions (e.g., pilots, firefighters, and police officers), employers generally may not force an employee to retire due to age.
Despite this well-settled law, some employers mistakenly believe that they can force an older employee. Perhaps this confusion stems from the original version of the ADEA, or may it is because the prohibition against age discrimination is not intuitive. Indeed, unlike other protected traits that have no bearing on one’s ability to perform the job in question (e.g., race, sex, and national origin), there sometimes is a correlation between