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Older Workers Challenge Firms’ Aggressive Pursuit of the Young

Apr 16, 2017 / Media Coverage / Wall Street Journal — Jacob Gershman

In one class action against PricewaterhouseCoopers, two men say they were rejected because they lacked the youthful profile possessed by many PwC recruits

PricewaterhouseCoopers bills itself as the “place to work for millennials,” who have taken jobs and internships with the accounting giant in droves. The firm annually recruits thousands of newly minted college graduates.

The firm’s aggressive pursuit of youth is now the focus of a class-action suit, part of an emerging wave of litigation that is both testing the boundaries of age-discrimination liability and casting a legal cloud over college recruitment programs.

Employment lawsuits alleging age bias aren’t new and are usually brought by fired employees. Cases like the one against PwC allege discrimination against job applicants, whose civil rights involve a surprisingly unsettled area of law.

The named plaintiffs in the PwC case are two men—one 53 years old and the other 47—whose applications for entry-level associate positions at the firm were rejected.

The litigants have years of accounting and bookkeeping experience under their belts, but both failed to make the cut. They allege they were turned down because they lacked the youthful profile possessed by so many PwC recruits. To “attract and maintain ‘millennials,’ PwC intentionally screens out individuals ages 40 and older...and denies them employment opportunities,” claims their lawsuit in San Francisco federal court.

Such favoritism toward millennials, the suit alleges, violates the federal Age Discrimination in Employment Act, or ADEA.

The plaintiffs say the ADEA was meant to cover hiring practices that may not intentionally discriminate against older workers but have a disproportionately adverse effect on them.

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Courts have upheld so-called “disparate impact” claims against hiring practices in other contexts, such as lawsuits accusing firms of gender and race bias. Those other categories are covered by a different civil-rights statute.

But the idea that company recruitment efforts aimed at students and recent graduates can be unlawful is a controversial premise that no federal appeals court has ever endorsed.

Courts have looked at the question more closely in the aftermath of a recession that saw many seasoned workers lose their jobs and toil to find new ones. Advocates for older Americans say age discrimination in hiring is driven by a common misperception that younger workers are more productive, creative, trainable and cheaper.

Their legal arguments have gotten support from the U.S. Equal Employment Opportunity Commission and a sympathetic hearing from some judges, including from the district-court bench presiding over the PwC case.

“The history of the ADEA’s enactment reveals that Congress was concerned not just with age discrimination within the workplace, but also with the barriers to older workers finding employment in the first place,” wrote Judge Jon Tigar of San Francisco in February when he declined to dismiss the case.

The ADEA prohibits an employer from depriving an individual of employment opportunities “or otherwise adversely affect[ing] his status as an employee” because of the person’s age.

It is the meaning of “status as an employee” that is hotly contested. Lawyers for PwC say the words clearly restrict the protections to the currently employed, not job seekers.

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The Supreme Court could soon provide clarity on the question. The justices are considering whether to take up a similar class action brought against R.J. Reynolds Tobacco Co. , which was sued by a 49-year-old man rejected for a sales position.

A three-judge panel of the 11th U.S. Circuit Court of Appeals in Atlanta voted to allow that suit to be heard. The 2-1 ruling was later overturned by the full appeals court, prompting the plaintiff to take the case to the Supreme Court.

The PwC plaintiffs focus on the company’s “campus track” jobs portal that the lawsuit alleges prevented individuals no longer affiliated with a college campus from applying for entry-level openings.

The complaint points to PwC recruitment brochures filled with images of fresh-faced 20-somethings and the firm’s estimate that 80% of its employees were born in 1980 or later. The suit also cites a Harvard Business Review article authored by a top PwC executive trumpeting the firm’s “strikingly young” workforce.

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AARP, the powerful lobbying group for older Americans, told the Supreme Court in a brief that unless these age-discrimination suits are allowed to proceed, “the ADEA will become mere words on paper for” older, jobless Americans who have struggled to bounce back.

Unemployed workers between 45 and 54 have been unemployed for an average of 10 weeks longer than jobless Americans between 25 and 34, according to the U.S. Bureau of Labor Statistics. At the same time, the percentage of new hires who are recent college graduates is up by more than 40% from a decade ago, according to the National Association of Colleges and Employers, which tracks college hiring.

The Supreme Court has asked for briefing in the R.J. Reynolds case but hasn’t decided whether to hear it.

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