Human Resources Managemet

Human Resources Management

AT&T Faces Age-Bias Suit

Source (publication name or URL): http://online.wsj.com/article/SB125079223074747017.html

Brad, Chad and Cheng, Rober

Publication Date: 21 Aug. 2009

Subject / Main Ideas / Concepts of article: In 2006, at&T implemented a policy not to rehire any employees who had retired under the companies various retirement and severance programs. As a result of its actions, at&T is now facing a lawsuit from the Equal Employment Opportunity Commission (EEOC), alleging the company's policy not to rehire these workers discriminates against older workers. The EEOC lawsuit states that, "There is no legitimate business reason or purpose for at&T's no-rehire policies." Of source, at&T denies the claim of age discrimination against the company and asserts that it makes diversity and inclusion a top priority

Identify points that seemed new or insightful to you: Certainly, any reputable business is well aware that the Age Discrimination in Employment Act of 1967 (ADEA) prohibits from discrimination against workers who are 40 years of age or older. However, it seems ironic that an employee can accept a severance check or an early retirement package, then reapply to the very same company and sue if refused employment. While the lawsuit questions the legitimate business reason for the no-rehire policy, the reason for the initial terminations were most likely related to business conditions and were probably executed in a way that complied with age discrimination laws.

What questions, concerns, difficulties does this reading raise? To receive severance checks and retirement packages, employees typically are required to sign an agreement that includes a covenant not to sue. However, with the EEOC filing the suit, the agreement doesn't appear to offer the protection the company thought it would. Should the EEOC prevail in its lawsuit, one has to wonder what the value of severage and retirement agreements as well as packages exchanged for signing them would be to a company since they offer no guarantee that they will prevent lawsuits. Therefore, the outcome of this lawsuit could have broad implications for company layoff and retirement policies.

Further, companies should expect more age discrimination lawsuits even if they believe they have followed the law. This is inevitable given the increasing need for layoffs caused by the recession along with an aging workforce, many of whom want to stay employed past the traditional retirement age. The number of older workers wanting and needing to work full or part time is likely to grow in the face of longer life expectancy, better health and fitness, and economic necessity. Plus, there'a huge pool of retired employees who currently wish to return to work because the huge economic downturn has unexpectedly wiped out all of their retirement savings.