Avoiding an Ageism Suit
As some older members of the American workforce try to launch new careers and compete against millennials for entry-level jobs, labor-law experts are urging employers that rely only on college-campus recruiting to fill those positions to be vigilant that they don’t inadvertently exclude older applicants from the process.
The caution flag was first raised after 53-year-old CPA and career-switcher Steve Rabin filed a lawsuit in 2016 saying that PricewaterhouseCoopers effectively discriminated against him and older candidates. The plaintiff in Rabin v. PriceWaterhouseCoopers argues that the financial-services company’s near-exclusive reliance on campus-recruiting practices—that includes on-campus career fairs and posting jobs on university-affiliated job sites—prevents older workers from applying for these jobs.
Rabin’s legal team, which includes attorneys from the San Francisco and New York offices of Outten & Golden as well as the advocacy group AARP, contend that PwC had a clear bias toward younger workers, with hiring data showing that 18 percent of the people under age 40 were hired for the entry-level positions, compared to only 3 percent of those over 40.
The plaintiffs did not argue there was overt discrimination, however, which is covered under the Age Discrimination in Employment Act of 1967. Rather, the suit says, the PwC system violated the ADEA because it was unintentionally discriminatory against the class of older applicants, which is called “disparate impact.”
PwC’s lawyers from Kirkland & Ellis argued that its campus-recruiting practices do not violate the statutory language of the ADEA.
That cautionary flag was then raised even higher after attorneys recently asked the judge in the case, U.S. District Judge Jon S. Tigar, to allow 14,000 older workers to join the suit, whom they claim were similarly disadvantaged by the accounting firm’s system of finding applicants at university career fairs and school-affiliated job websites.
(Tigar is expected to decide whether to add those workers who didn’t get job offers from PwC to the suit in the coming weeks.)
Legal experts say one of the questions central to this case and others now working their way through the courts is whether applicants can sue for unintentional discrimination and disparate impact in the same way employees can and, if so, how the targeted applicants might be determined.
In the Rabin case, the judge previously rejected the ADEA argument by declining to follow the Eleventh Circuit Court of Appeals decision in Villareal v. R.J. Reynolds. Tigar said the case could proceed, and he would decide later whether it represents an issue of disparate impact based on the facts presented.
In the Villareal case, the circuit’s judges ruled 6-5 that the ADEA language protects employees on a disparate-impact basis but not applicants. (Last June, the U.S. Supreme Court declined to hear the Villareal appeal. Experts say circuit courts are not required to follow each other’s rulings, and differences in interpretations are often settled on appeal to the Supreme Court.)
Kirkland & Ellis’s Emily Nicklin says PwC “in a very affirmative way complies with all of the anti-discrimination or civil-rights laws and does that in the belief that a robust diversity policy and robust support of the anti-discrimination laws is helpful to having the best possible workforce.”
She adds that PwC makes entry-level job postings available to any applicant online.
On the other side of the case, Laurie McCann, senior attorney at the AARP Foundation Litigation, says the case in no way challenges the practice of on-campus recruiting.
“What it challenges,” she says, “is the almost exclusive reliance on campus recruiting,” adding that requiring a university affiliation to apply for certain jobs also kept older workers out of the running. “It’s a myriad of policies and practices that altogether have an impact on screening out older workers.”
McCann says her client is not asking PwC to entirely change its business plan, but rather to change some policies and practices to make sure that older workers have a fair shot.
“We are not asking for special treatment,” she says, “but equal treatment.”
The case is significant from a legal perspective in that it represents a new take on disparate impact, says Angela Reddock-Wright, an attorney, mediator and investigator with Reddock Law Group in Los Angeles. The Rabin case, and others like it, she says, reflect the larger societal impacts of Americans working longer than previous generations.
“We can no longer operate by the same rules,” Reddock-Wright says. “We have to ensure that the workplace is open to everyone, no matter their race, gender, ethnicity or age.”
From an HR perspective, she says, organizations need to have hiring and recruitment practices “that don’t, by their very nature, exclude any one particular group from our society. I think it’s a good opportunity for companies to evaluate and reexamine their policies and practices regarding recruiting and hiring.”
Reddock-Wright and labor-law experts agree that, although the case is not yet decided, companies should not give up on campus recruiting. But, she adds, they should not ignore the potential risk of indirectly discriminating against older applicants.
Marcia Washkuhn, chair of the national employment group at Kutak Rock, recommends that HR professionals look carefully at their job descriptions as well as their recruiting processes: “You want to make sure you are not using terms that, from a normal person’s viewpoint, would be discriminatory [such as gender, race, sexual orientation] and that would include age.”
Steven Rothberg, president and founder of the job-search site CollegeRecruiter.com, says the case is interesting because it is not a simple one.
“PricewaterhouseCoopers is not a bad actor,” he says. “It’s not an organization [that tried to] deliberately discriminate against older workers.”
He says the practice of campus recruiting may simply fall out of favor over time, as large employers find that it doesn’t always generate candidates who naturally become the next generation of managers and executives or even people who are the most productive. Some firms have already reduced or eliminated their reliance on college connections, he says, and they are now “forced to be more inclusive, to do more open houses, to rent a hotel ballroom in town and have a career fair—that will open the door to more career changers.”
Meanwhile, Brett Schneider, chair of the labor and employment practice group at Weiss Serota Helfman Cole & Bierman, advises employers to analyze their hiring data for implicit bias. If there’s not a reasonable match between the demographics in the applicant pool and new-hire pool, there could be a problem, he says.
Could there be more age-discrimination challenges to hiring practices in the future? Rothberg thinks so, particularly involving systems that rely on artificial intelligence and machine learning to assess job applications. “AI companies seem to think the way to determine who the next hire should be is based on who your most recent hire was,” he says.
For example, if AI sees that the last hire was a member of a fraternity, it will assume the next hire should come from one as well, which could then cause discrimination against female candidates.
“That will naturally reduce the diversity in the workforce and everybody you hire will start looking the same,” he says.