Costly Age Discrimination Lawsuits on the Rise

man on steps
June 1, 2017

Earlier this year a federal jury awarded 66-year-old Robert Braden a whopping $51.1 million in damages against his former employer Lockheed Martin Corporation. Mr. Braden was not a high-level executive; instead, he was a mid-level manager who had been employed by Lockheed Martin for 28 years. He was discharged as part of a company-wide reduction in force (RIF). 

At trial, Braden’s counsel presented the following salient facts to the jury:

  • There were six people in Braden’s unit that were potentially eligible for the RIF and Braden, at 66, was the oldest employee. 
  • Two other employees with the same job title as Braden were not terminated. Both were substantially younger than Braden at 42 and 38. 
  • While the employer had a RIF policy, it did not follow the policy with respect to Braden. 
  • Braden offered evidence that older employees consistently received lower reviews and raises than younger employees. 
  • Braden offered evidence of “stray remarks” – age-ist comments made from time to time by his supervisors or other managers or executives in the company. 
  • The employees who testified on behalf of the company offered differing versions of why Braden was selected versus the younger employees.
  • One year after the RIF, the employer hired a new younger employee for Braden’s position.

Although an appeal is likely, this case serves as an important cautionary tale for employers. 

Age discrimination claims like Branden’s have become more common since the recession. The Equal Employment Opportunity Commission reports that the number of age discrimination claims last year in Michigan increased by 13 percent from 2015.

The increase in age discrimination claims is attributable to a variety of factors.

Baby Boomers are living and working longer than preceding generations. At the same time, the recession forced many employers to reduce their workforces to cut costs.  The residual effects of the recession made it more difficult for older workers who lost their jobs to find new positions. Extended periods of unemployment make them more litigious with their prior employer.

It is important for employers to put in place good employment policies, processes and procedures for evaluating employment decisions.  Employers should:

  • Not only have written policies for RIFs, but follow them; 
  • Have consistent application of employment policies and position descriptions;
  • Have demonstrably objective criteria for the termination decision; and,
  • Have several eyes on the decision, including legal counsel, as the direct supervisors may not see the big picture or appreciate the risk to the company of getting the analysis wrong.

Contributed by Ellen E. Hoeppner and Vanessa M. Kelley of Clark Hill PLC.

View the on-demand webinar “Age Discrimination: Lessons Learned from Recent Big Ticket Jury Awards” with Ellen and Vanessa.