Public Policy and the Tyranny of the Bottom Line in the Termination of Older Workers

Abstract:     
This article discusses whether termination of an older worker in order to hire a younger worker for less money should be construed as a violation of the Age Discrimination in Employment Act (ADEA). Drawing on scholarship from the fields of business, psychology, sociology, and the law, the article concludes that allowing salary-based terminations is bad public policy. In additional to harming the terminated workers, such terminations also affect the remaining employees' morale and send younger workers the message that if they work hard and achieve high salaries, they will become prime targets for termination. The article also critiques the current corporate climate of excessive reliance on the bottom line and excessively high executive salaries.

Number of Pages in PDF File: 38

Keywords: Termination, older worker, salary, Age Discrimination in Employment Act, ADEA, sociology, psychology, public policy, morale, Wirtz Report, human capital, downsize, Hazen Paper Co. v. Biggins, Marks v. Loral, disparate impact, proxy theory, proxy doctrine, reasonable factor other than age

JEL Classification: A13, J14, J18, J63, J68, J78, K19, M12, M50

Accepted Paper Series