When companies cut payrolls, their targets are clear: Workers over 40 who earn good salaries but aren't on a promotion track and workers near retirement who don't have much more to give to their jobs.
So how come there aren't more age-discrimination lawsuits?
It's illegal to fire someone solely on account of age. The law protects everyone 40 and older. Yet in 1989, the Equal Employment Opportunity Commission brought only 133 age-discrimination suits, exceeding, for the first time, the number brought in 1986.
Mark Arian of the consulting firm Hewitt Associates believes that the number of lawsuits will balloon as the baby-boom generation ages. But that's not apparent yet.
"There's a slight increase in lawsuits every year, but not giant," says Cincinnati attorney Paul Tobias, executive director of the National Employment Lawyers Association.
One reason for the paucity of lawsuits may be that many companies have kept their layoffs within the letter of the law. It's perfectly legal to:
Offer an early retirement bonus to workers over a certain age.
Pare payroll costs by slashing middle management, even though they're preponderantly older people.
Transfer you to a job or a location that your company suspects you will probably refuse.
Replace an older worker with a younger one, if there's a legitimate business reason for the switch. In one such case, a company argued successfully that it needed someone more attuned to modern purchasing methods, says Paul Grant, associate professor of industrial relations at Loyola University's Industrial Relations Institute in Chicago.
What does it take to beat the rap? You have to show specific age discrimination, with no business purpose except to can you. You might win a lawsuit if you overheard a discriminatory remark -- for example, a supervisor's saying, "She's gotten too old to do the job."
Or if you're fired during a downsizing when a similarly situated younger person is transferred to another position. Or if a much higher percentage of people over 40 are fired in a general layoff than people under 40. Or if you're replaced by a younger person for no defensible reason.
An employee-rights law passed as part of the budget compromise last fall clarified what a company can and can't do when it offers an incentive plan for early retirement. Unfortunately, the law isn't retroactive, so it gives no help to workers who have lawsuits pending.
The following rules are effective immediately for new plans, on April 14 for most older plans, on the next bargaining date for union plans and on Oct. 16, 1992, for state and local government plans:
You must be allowed at least 21 days to consider the early-retirement offer, if it came to you individually, and 45 days for a general offer to a group of employees. You can't be forced into a one-day decision as has happened in the past.
The offer must be made to all employees above a certain age. Companies can't leave out, say, workers over age 60. Nor can companies offer less money to people closer to retirement age.
If younger people are offered severance pay, older people must get it, too. Previously, companies often paid severance only to younger people. There's just one exception: During a downsizing, plant closing or other significant corporate adjustment, an older worker's severance pay can be reduced by the amount of his or her retiree health benefits or any sweetener added to the early-retirement pot.
If you're asked to sign a waiver giving up your right to sue, as part of an early-retirement bonus plan, the company has to disclose the class of employees eligible for the offer, their job titles and their ages. This rule is effective immediately.
The information on who got the exit offer may be fodder for age-discrimination suits, if a company isn't careful.
But the hard truth is that, for a 55-year-old worried about his job, a goodbye bonus is an offer he or she usually can't refuse.
Perhaps the major reason for the small number of lawsuits is that this age group can't afford them.