If a company eliminates its contributed pensions except for employees 54.5 and olderbut then lays off employees 55 years and up, is this illegal?

UPDATED: Dec 5, 2011

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If a company eliminates its contributed pensions except for employees 54.5 and olderbut then lays off employees 55 years and up, is this illegal?

Asked on December 5, 2011 under Employment Labor Law, Connecticut


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It *may* be illegal--it depends on the circumstances. The law prohibits discriminating in employment against those age 40 or higher. That means they can't be fired, for example, because of their age. However, they may be terminated for non-age-related reasons. So if it happens that the over-55-year olds had (legitimately) the lowest performance ratings; or were all in an office/division which was (legitimately) eliminated for economic or strategic reasons; or happened that they all violated company policy; etc., then it may be legal to terminate them. (By "legitimately," I mean that the stated reason must be true; not a pretext or excuse.)

Say that two 55-year olds were eliminated, one allegedly for excessive absenteeism, the other for poor performance; if the company can substantiate those issues, that it probably is legitimate and legal.

On the other hand, say that ten or more 55-year-olds were eliminated, and the company has weak (if any) documentation of non-age-related problems...that is much more  likely to be illegal discrimination.

So the facts are critical. If the affected employees believe they were the victims of age-related discrimination, they should consult with an employment law attorney to evaluate whether they have a case and should move forward with it.

Note that companies do have a great deal of discretion to change or eliminate pensions, including doing so by "grandfathering in" older employees--but viewed in the overal context of event, a company's actions in this regard could substantiate age-based discrimination.

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