Amanda DeMatteis: Hi, Josh.
Josh Goodbaum: Hi, Amanda. What are we talking about today?
DeMatteis: I want to give you a hypothetical. You have a potential client that comes in to see you, and they say, “Josh, I’ve recently been terminated from my employment, and I think it’s because my salary is too high. But the only reason my salary is so high is because I’ve been working for this company for 10, 20, 30 years, and I’m older. I’m older than a lot of the new people that are coming in doing this job. Therefore, I’m paid a lot more than them. So, I was terminated because my salary is too high, but it feels like this is age discrimination.” What do you think?
Goodbaum: This is a question we get a lot, Amanda. There are a lot of older employees who are earning more money by virtue of their long tenure with their company who think, “If I’m terminated because my salary’s too high, that’s probably age discrimination.” On some level, they’re probably right. In that circumstance, if they’re genuinely being terminated because they make more money because they’ve been working at the company longer or have more tenure in the industry, because they’ve been living longer, then that is a connection between age and termination, and that looks like age discrimination.
The problem is that the courts uniformly hold that, if you are terminated for a factor that correlates with your age, but is not your age, then that is may not be actionable age discrimination. This is especially true with respect to compensation. So, if the only reason that you earn more money is because you’ve been working a longer time because you are older, that does not mean that a termination because of your salary is age discrimination. Being fired because you have a higher salary, because you have a higher hourly rate, or because you have a higher commission rate, these are terminations that the courts say are because of your compensation structure and not because of your age. In other words, if you are terminated for having a high level of compensation, that generally is a defense to a claim of age discrimination, not a fact that supports the claim.
That said, if you want to talk with an employment lawyer about your situation, we will certainly explore whether there are any other factors that tend to suggest that your age was a motivation in your termination. So, we’ll want to look at whether there was ever a conversation about you potentially taking a salary cut in order to keep your job, right? That’s something we would want to explore if we talk to you about whether this is a wrongful termination situation.
But on the hypothetical you gave me, Amanda – where someone is terminated because they make more money, they have a higher salary, a higher commission rate, or a higher hourly rate – that alone is not going to be evidence of, or at least dispositive evidence of, age discrimination under the law as the courts currently interpret it.
DeMatteis: Some other factors that you might want to look at for a potential age discrimination claim are the hiring and firing decisions of this company in recent months. Are they hiring younger people and letting go of older people? Are there any other remarks that have been made in the workplace that could create an inference of age discrimination? Those are other things that we might be able to look at, and from there, have a more successful argument to claim that this termination on the basis of a higher salary may be a sign of age discrimination.
This is really fact-specific, as we say about a lot of things that happen in this universe of employment law.
Josh, thank you so much, and thank you for watching. Take care.