OK for Feds to Discriminate on Basis of Age

Exclamation Point

Unemployed older workers today are facing an unprecedented crisis. They are out of work at least twice as long as other workers. Many never find jobs and are forced to spend down their savings until they can retire, whereupon they receive reduced Social Security benefits for the rest of their lives.

So why would the United States  government blatantly discriminate against older workers in federal hiring?

A reader recently forwarded to  my attention a job recruitment  notice from the U.S. Citizenship and Immigration Services’ Department of Homeland Security (DHS).  The job advertisement seeks “recent graduates” to fill  numerous “asylum officer” positions in Houston, TX, that pay from $53,496 to $84,139 per year.  Applicants must have earned a degree –  ranging from a vocational/technical degree to a professional or doctorate degree –   within the previous two years.

My first thought was is this even legal?  “Recent graduate” is a not very subtle code word for “younger worker.”  The vast majority of recent graduates are under the age of 40.

The Age Discrimination in Employment Act (ADEA) supposedly protects workers aged 40 and over from age discrimination. It is almost inconceivable that there is a bona fide occupational qualification under the ADEA that would justify limiting asylum officer jobs to young people.  The job involves reviewing asylum applications at a desk in an office building.

I can now report that the  governments discriminatory hiring policy is perfectly legal under Executive Order 13562 , which was signed by President Barack Obama on December 27, 2010.  This order directed the Office of Personnel Management (OPM) to implement the “Pathways – Recent Graduates” program  throughout the federal government. The order is based on the premise that the federal government is at a  “competitive disadvantage compared to other sectors in recruiting and hiring students and recent graduates.”

There’s no competitive disadvantage in hiring older workers – neither the federal government nor the private sector wants  to hire them.

Nearly 2 million people ages 55 and older are looking for a job these days, twice as many as before the Great Recession.

The Bureau of Labor Statistics says it takes the average older worker 55 weeks to find a job, compared with 35 weeks for those ages 25 to 34.  However, many older workers disappear from statistical tables altogether because they exhaust all unemployment benefits. 

More than a third (33 percent) of Americans who are retired said they did not feel they had a choice except to retire, according to a 2013 survey by the Associated Press NORC Center for Public Affairs. Of these, 54 percent of retirees under age 65 felt they had no choice but to retire.  Forced early retirement means the older worker will receive significantly  lower monthly Social Security benefits for the rest of his or her life..

Four in 10 job seekers ages 50 and older say they need the money, according to the Associated Press-NORC survey.

The federal government has done virtually nothing to help older workers escape from their unemployment abyss. So it may be understandable if older workers resent federal job postings for vacancies that exclude  them from applying for decent paying jobs on the basis of age. On Sunday, there were about 120 Pathway recent graduate advertisements on USAJobs, which is the federal government’s recruiting site.  Many of those advertisements involved numerous job vacancies and all of them pay respectable salaries.

* NOTE: I’m writing a book about age discrimination and I would like to hear your story if you’ve experience the problem.  Please email me at barnespatg (at) gmail.com.

Grocery Store Arbitration Policy “Unconscionable”

no sale

Policy Rigged to Protect Employer

Employees today are  increasingly being forced to sign one-sided arbitration agreements that are rigged to protect the employer if something goes wrong.

A panel of the U.S. Court of Appeals for the Ninth Circuit in San Francisco this week put its “foot” down by refusing to enforce a take-it-or-leave-it arbitration agreement that Ralphs Grocery, which is  part of The Kroger Co. of Ohio, required applicants for employment to sign.

The appeals court said the agreement was  both procedurally and substantively “unconscionable” under California contract law. In fact, the panel said,  the agreement was unjustifiably one-sided to such an extent that it “shocked the conscience.”

The panel rejected Ralphs argument that the Federal Arbitration Act (FAA) preempts state law and therefore the policy had to be enforced even if it was unconscionable. The appellate panel said its unconscionability holding is not preempted because it applies to contracts generally and does not disproportionately affect  arbitration agreement.

“If state law could not require some level of fairness in an arbitration agreement, there would be nothing to stop an employer from imposing an arbitration clause that, for example, made its own president the arbitrator of all claims brought by its employees,” said the panel.

Ralphs had sought to compel individual arbitration of a claim by former Zenia Chavarria, a former deli clerk who filed a class action lawsuit against Ralphs’ alleging violations of the California labor laws.  Chavarria had worked at Ralphs for about six months.

The appellate panel cited the following problems with Ralphs arbitration policy:

  •  Signing the agreement was a condition of applying for employment and was presented on a “take it or leave it” basis.
  •  The terms of the arbitration agreement were not disclosed to Chavarria until her employment orientation, three weeks after she had agreed to be bound by the policy and after it went into effect.
  •  The policy’s arbitrator selection process always produces an arbitrator proposed by Ralphs in employee-initiated arbitration proceedings. The policy requires the arbitrator to be a retired state or federal judge and explicitly prohibits the use of an administrator from the American Arbitration Association (“AAA”) or the Judicial Arbitration and Mediation Service (“JAMS”).  The court noted that the AAA and JAMS  have rules and procedures to select a neutral arbitrator.
  •  Ralphs’ arbitration policy required the arbitrator impose significant costs on the employee up front and severely limited the authority of the arbitrator to allocate arbitration costs in the award. The arbitrators had to apportion their fees equally between Ralphs and the employee. The court said this  arbitrator-fee-apportionment provision had the effect of pricing employees out of the dispute resolution process regardless of the merits of their claim.

The evidence showed that  fees for a qualified arbitrator under Ralphs policy ranged from $7,000 to $14,000 per day. Ralphs’ policy requires that an employee pay half of that amount—$3,500 to $7,000—for each day of the arbitration just to pay for her share of the arbitrator’s fee. “This cost likely dwarfs the amount of Chavarria’s claims,” said the appeals court.

Basic contract law holds that contracts can be invalidated for fraud, duress, or unconscionability.

See Chavarria v. Ralphs, No. 11-56673, U.S. 9th Circuit Court of Appeals, Oct. 28, 2013.