What a Recent California Court Decision Teaches Employees About Age Discrimination

California workers often assume that if a workplace policy affects older employees differently, it must be against the law. While that can be true in some cases, a recent ruling from the California Court of Appeals shows that not all policies that affect older employees differently are against the law. This case clarifies what employees must prove to establish age discrimination.

The case involved a group of City and County of San Francisco employees who joined the city’s retirement system at age 40 or older and later retired due to disability. The plaintiffs argued that the City’s method for calculating disability retirement benefits unfairly put older hires at a disadvantage and violated California’s Fair Employment and Housing Act (FEHA).

At the center of the case was the City’s use of two different formulas to determine disability retirement benefits. One formula applies when an employee has accrued enough years of service to reach a certain benefit threshold. When that threshold isn’t met, the City uses another formula. This second formula estimates how many years the worker would have worked until they turned 60 and uses that estimate to calculate benefits.

According to the employees, the second formula unfairly put those who joined the retirement system later in life at a disadvantage. Since older employees have fewer working years left before they hit 60, the formula could lead to lower benefits percentages compared to employees who joined at a younger age. The court rejected the age discrimination claim.

Why Did the Court Reject the Age Discrimination Claim?

After a bench trial, the Court of Appeal ruled in favor of the City. The court determined that the retirement formula was based on years of credited service and pension eligibility, not age. While age and service time can be connected, the court pointed out that they are not the same under the law.

To prove age discrimination under FEHA, employees must show that age was a significant motivating factor behind the employer’s decision or policy. In this case, the court found that the benefit formula was designed to align with standard retirement eligibility rules, not to disadvantage older employees due to their age.

The court also mentioned that the employees relied heavily on hypothetical scenarios to show discrimination. According to the court, the workers failed to present sufficient real-world data demonstrating that the formula actually caused a disproportionate adverse impact on the entire protected group (retirees hired by the City at or after the age of 40). Without that evidence, the claim could not succeed.

Lessons Employees Can Learn From This Case

Even though the employees did not win, this case provides valuable lessons for California workers considering bringing forward age discrimination claims, including:

1. Just because a policy or an employer’s decision causes unequal outcomes, that is not enough to prove age discrimination, even when the impact feels unfair. A policy or decision can affect older workers differently without violating the law if it is based on a legitimate, non-discriminatory factor.
2. Evidence is crucial. Courts expect employees to support their age discrimination claims with concrete evidence, not just assumptions or hypothetical situations.

Contact a California Employment Lawyer

If you believe an employer has discriminated against you because of your age, speak with an experienced California employment lawyer near you.