Recruiting for youthful workforce leads to age discrimination lawsuits

by McAfee & Taft

Some companies may believe that projecting a youthful and energetic image is important to their brand. Two recent court cases, however, show that employers who focus their hiring policies and practices too much on young workers may open themselves up to age discrimination lawsuits.

PwC sued for age discrimination over hiring practices

In a class and collective action filed in federal court in San Francisco, a 53-year-old CPA alleged, on behalf of himself and all other unsuccessful PricewaterhouseCoopers (PwC) accountant applicants aged 40 and over from 2013 to the present, that PwC’s continuing policy, pattern and practice of age discrimination violates federal and state laws, including the Age Discrimination in Employment Act of 1967 (ADEA) and the California Fair Employment and Housing Act. The named plaintiff in the suit alleged that despite years of accounting and bookkeeping experience, he was turned down for an entry-level associate position because he lacked the youthful profile desired by PwC.

PwC recruiting practices

The substantive allegations in the complaint are denied by PwC. According to the complaint, as evidence of systemic discrimination, PwC bills itself as the “place to work” for millennials. PwC has three main “tracks” for recruiting and hiring: Campus, Experienced and Executive. The firm actively recruits at colleges, and the firm’s “campus track” allegedly prevents individuals not on college campuses from applying for entry-level positions, as the application process requires a current college affiliation, seeking the name of the college and college status. Allegedly, these entry-level positions are not posted on the firm’s website. The complaint points to recruitment brochures loaded with pictures of 20-somethings and PwC’s own estimate that 80% of its employees were born in 1980 or later.

The plaintiff noted that PwC commissioned a comprehensive global generational study on how to retain millennials in 2013. The University of Southern California and the London Business School conducted “PwC’s NextGen: A Global Generational Study” into the attitudes of “Millennial” employees (those born between 1980 and 1995 and were under 33 years of age). The complaint also cites the agreed retirement age for partners and principals at age 60 (this allegation was not denied by PwC), as evidence older individuals would not be hired.

Disparate impact discrimination claim permitted to advance

In this case, the plaintiff alleged intentional discrimination and also disparate impact discrimination. Disparate impact discrimination is discrimination based on a rule or a practice that appears neutral on its face, but which, in its application, has an unfair or discriminatory impact on a protected class. PwC filed a motion to eliminate the disparate impact claim, but U.S. District Judge John S. Tigar denied the motion, finding the ADEA could support a disparate impact claim by job applicants. The judge noted the history of the ADEA showed that Congress was not just concerned with discrimination against “employees” but also “applicants.” Noting that in the Act’s purpose statement, Congress described how older workers find themselves disadvantaged in their efforts to regain employment when displaced from their jobs.

How the case will be resolved is unknown. At this point, all we know is the plaintiffs’ claims will move forward as alleged.

Texas Roadhouse pays 12M to settle age discrimination lawsuit

In March 2017, the U.S. Equal Employment Opportunity Commission announced that Texas Roadhouse had agreed to pay $12 million to settle an age discrimination suit brought by the agency on behalf a class of applicants that the EEOC charged had been denied front-of-the-house positions – such as bartenders, servers, hosts and server assistants – because of their age.

The suit claimed the restaurant chain violated federal law by engaging in a nationwide pattern or practice of age discrimination in hiring front-of-the-house employees, alleging that only 1.9 percent of Texas Roadhouse’s hosts, bartenders, and servers were 40 or older, compared with 21 percent of employees in similar jobs nationally. It also claims that Texas Roadhouse’s job applications show employees in their teens or 20s, and that the company talks up its “young, fun, cute, and bubbly people” in training meetings. The lawsuit says some older applicants were told they “wouldn’t fit in” or might not be able to keep up, and that the restaurant was looking for someone “young and perky.” The restaurant chain countered that even if the policies had a statistically adverse impact, they were lawful because they were job-related and consistent with business necessity. Employees are required to dance, wear jeans and work weekends. EEOC countered by taking the position that employers should not assume older applicants do not have “the energy or excitement or whatever they’re trying to capture.”

In addition to the monetary payment, Texas Roadhouse agreed to a consent decree for the next 3½ years requiring the restaurant chain to increase recruiting and hiring of employees age 40 and older for front-of-the-house positions. The company must also establish a diversity director and pay for a decree compliance monitor.

How these cases could affect hiring practices

Americans are working longer and are returning to the workforce at an older age. Age discrimination complaints at the EEOC are up at least 15% since 2004. Courts and the EEOC are not buying the argument by companies that they need younger employees to reflect their brand or attract customers.

Companies must review policies and practices to make sure, whether intentionally or not, their hiring practices do not have the undesired effect of discouraging or eliminating individuals over 40 from consideration for positions.

Recruiting millennials is not wrong, but check to see that the recruiting program you are using to attract millennials does not inadvertently eliminate those over 40 from being considered.

Rabin v. PricewaterhouseCoopers LLP, U.S. District Court for the Northern District of California, No. 3:16-cv-02276.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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