The U.S. Equal Employment Opportunity Commission (EEOC) recently announced that Scripps Medical Group (Scripps) has agreed to pay $6.875 Million to settle an age/disability discrimination charge that had been filed with the EEOC. According to the EEOC, Scripps “subjected a class of physicians to a mandatory retirement age, regardless of the individuals’ abilities to do [their] job.” See the EEOC’s press release, here.
Scripps rescinded the policy in 2018, in response to the EEOC’s investigation. Six years later, the company finally succumbed to the EEOC’s hefty demands. Scripps explained that it agreed to the EEOC’s demands, without admitting any wrongdoing, to avoid the continued expense and distraction of litigation. See more on Scripps’ response, here.
The monetary settlement is part of a broader conciliation agreement with the EEOC. In addition to the payment of $6.875 Million to a class of individuals allegedly impacted by Scripps’ already rescinded mandatory retirement age policy, Scripps has agreed to:
- Reaffirm the rescission of the mandatory retirement policy;
- Notify employees of the already rescinded mandatory retirement policy;
- Notify employees that it does not have a policy in which age is a factor in making employment decisions;
- Revise – with EEOC oversight – all of its policies and procedures against age/disability discrimination; and
- Require its executive leadership, division leadership, department leadership, and human resources personnel to attend training on the Age Discrimination in Employment Act (ADEA) and Americans with Disabilities Act (ADA).
The EEOC’s oversight of compliance with the conciliation agreement will last four years. In other words, although the expense and distraction of the litigation itself will come to an end, Scripps will have ongoing and continuing compliance obligations.
The EEOC’s Stance on Mandatory Retirement Age Policies
The EEOC has long taken the position that policies which require mandatory retirement of any individual over the age of 40 violate the ADEA. See the EEOC’s February 2, 2000 Informal Discussion Letter, here. While the ADEA does contain an exception known as the “bona fide occupational qualification” (BFOQ) which would allow for a mandatory retirement age, the EEOC views the exception so narrowly that it is almost non-existent. Specifically, the EEOC’s regulations require the employer to prove:
- The age limit is reasonably necessary to the essence of the business; and
- All or substantially all of the individuals excluded from the job are in fact disqualified; or
- That some of the excluded individuals possess a disqualifying trait that cannot be ascertained except by reference to age.
See 29 C.F.R. § 1625.6(b), here. For example, in 2006, the EEOC opined that the Federal Aviation Administration’s proposed mandatory retirement age for commercial airline pilots may not meet the BFOQ test. See the EEOC’s November 15, 2006 Informal Discussion Letter, here. Simply put, if the EEOC disagrees that the safety of commercial airline passengers justifies a mandatory retirement age, it is hard to imagine a BFOQ exception that would receive EEOC’s approval.
Closing Thoughts
Mandatory retirement age policies are heavily scrutinized by the EEOC. Employers who have such policies should immediately audit the policies to determine whether the BFOQ exception applies. The EEOC has made clear that generalized safety concerns are not a sufficient justification. Employers should be prepared with substantial proof of how the policy effectuates the specific safety objective and that no other alternatives to advance the goals with less discriminatory impact exist. It is important that employers undertake this process with an exceptionally critical eye, and focus on the possibility of defending a systemic case brought by the EEOC.
Rather than having a generalized retirement age policy, employers should consider assessing employment decisions based on safety objectives on a case-by-case basis in consideration of the specific facts when age or disability status may be at issue.
Protecting older workers is part of the EEOC’s Strategic Enforcement Plan from 2024-2028. See more on the EEOC’s Strategic Enforcement Plan, here. Additionally, mandatory retirement age policies are a red flag for the EEOC. See what else the EEOC views as a red flag, here.