Age Rage

This story appears in the April 2004 issue of Entrepreneur. Subscribe »

When most people think of age discrimination in the workplace, they think of older employees getting angry over preferential treatment given to twentysomethings. But now, fortysomething employees are up in arms over how companies treat workers in their 50s and 60s.

This trend-called "reverse discrimination"-is at the heart of the Supreme Court case General Dynamics Land Systems Inc. v. Dennis Cline et al. Citing rising health-care costs, defense contractor General Dynamics, which for years fully funded the health costs of its retired employees, renegotiated its policy so only longtime employees over 50 remained eligible for full medical benefits after retirement. A group of fortysomething General Dynamics workers sued, citing discrimination because they were deemed too young to be entitled to the retirement health benefit. The 6th U.S. Circuit Court of Appeals ruled in favor of General Dynamics' employees.

If the Supreme Court upholds that decision, it will affect companies' ability to offer generous early retirement packages and will lead to more layoffs and lawsuits, says William Kilberg, a senior partner for Gibson, Dunn & Crutcher LLP in Washington, DC, and an attorney representing General Dynamics in the case. "Every employment decision you make [will] now [be] open to litigation on the grounds of age," he says. "[Employers] will have to justify each business decision as being made for reasons other than age."

It's a good time to review benefit policies with an expert to weed out obvious inequities based on age, regardless of what the Supreme Court decides, says Adrienne B. Koch, a partner with Esanu Katsky Korins & Siger LLP in New York City: "It may take time and expense, but it's an ounce of prevention."

The Cline case could be a sign of growing conflict between fortysomething boomers and older workers over benefits, especially with steady productivity increases allowing companies to stay lean as younger boomers inch toward retirement. "You've got fewer workers carrying more retirees," Kilberg says. "And it's going to get worse."