As a company’s workforce ages, some thoughtful managers may be concerned about business continuity and planning. And it seems pretty obvious that much of that planning will depend on when certain older workers plan to retire. Or a manager may see an older worker becoming less productive, and begin thinking that the person should retire. But, asking about an employee’s retirement plans – or even requiring an employee to retire – can be very problematic. I thought it might be helpful to review the rules on retirement under the Age Discrimination in Employment Act (ADEA).
Generally, ADEA prohibits employers from forcing employees to retire because of their age. The only exception to this prohibition for private employers is certain bona fide executives or high policymakers. For those individuals, ADEA allows employers to require mandatory retirement at age 65 if the individual has been:
- Employed in that capacity for at least two years prior to retirement; and
- Is entitled to immediate and non-forfeitable annual retirement benefits from the employer that total at least $44,000.
The ADEA regulations issued by the Equal Employment Opportunity Commission define a bona fide executive as one: whose primary duties involve managing the enterprise or a department or subdivision; who routinely supervises the work of two or more employees; who participates in the hiring, firing, advancement, and promotion of other employees; who exercises considerable control over a large number of employees and a large volume of business; and whose other duties (beyond these listed ones) constitute no more than 20% of his or her overall duties. As for the high policymaker, the regulations provide that they may have “little or no line authority but [their] responsibilit[ies] are such that they play a significant role in the development of corporate policy and … implementation.” But be warned – the definition of a bona fide executive or high policymaker is very narrow. For example, in the case of Whittelsey v. Union Carbide Corp., the chief labor counsel for the company was found not to meet this exemption!
Discussions of retirement with employees beyond this limited executive/policymaker exception can be extremely problematic, as demonstrated in the recent case of Lee v. Cleveland Clinic Foundation. In that case, the U.S. Court of Appeals for the Sixth Circuit found that a supervisor’s repeated questioning of the employee as to when she was going to retire could support a claim of harassment based on age and could have been intended to force her to quit (i.e. constructive discharge). So the rule for employers is: Don’t ask when the employee is planning to retire!
Now if the employee volunteers that he or she is thinking about retirement, it is fine to ask if the employee has any specific ideas about when that might be, so that the employer can begin planning. But if the employee doesn’t have a particular date or timeframe in mind, it is not appropriate to ask them to pick one!
But what to do about an older employee who appears to be slowing down, becoming less productive and less efficient – or even forgetful? This should be managed from a performance and conduct standpoint. The older employee can be held to the same standards of performance and conduct expected of other employees. (And these standards should be consistent for all employees, regardless of age!) Go through the normal disciplinary process – and document, document, document!