California High Court Rules on Age Discrimination Case

While a state regulation forbids employers from discriminating against over-40 employees by offering fewer benefits, California Supreme Court justices said the law on which the regulation is based doesn’t go that far, according to a Los Angeles Times story.

“The Legislature has prohibited employers from discriminating in the terms and conditions of employment on the basis of a variety of factors,” Justice Joyce L. Kennard wrote for the court. “But the employee’s age notably is not one of those factors.”

The decision, in a case in which an Orange County worker was denied access to corporate assistance for education because of his age, is expected to apply to benefits and working conditions, including sick leave, job scheduling, vacation, and stock options.

Workers over 40 can still sue under federal antidiscrimination law. However, federal court is a less favorable forum for plaintiffs because of ceilings on monetary damages and a unanimous jury requirement. In a state court, only nine of the 12 jurors must agree on a verdict in a civil case.

Lawyers say the ruling could have major consequences for California employees, giving them more “leeway” to discriminate.

The case already has spurred introduction of a bill in Sacramento to restore protections for older workers’ benefits.

Background

According to court papers, Dan Esberg was hired at age 42 by Union Oil Co. of California as a telecommunications specialist. The company paid his expenses to obtain an undergraduate degree.

At 56, Esberg told his supervisor that he and another colleague were planning to obtain master’s degrees in business administration and would finance their education through the company’s education benefits program.

Esberg’s supervisor was not encouraging.” You’re too old to invest in,” the supervisor told him.

A few months later, the company denied funding for Esberg’s graduate degree. Three younger employees, including a 42-year-old, received the assistance.

Esberg sued, and a jury voted to award him $51,000 in economic damages and $35,000 in noneconomic damages, including emotional distress. Esberg’s employer had a policy against age discrimination, and the jury found that it had violated this policy.

But violation of a contract cannot be penalized with emotional distress damages. The trial judge struck down the $35,000 emotional distress award on the grounds that the state’s Fair Employment and Housing Act, which does allow for such damages, offers no protections against age discrimination in the awarding of job benefits.

State Appeals Court Concurs

Unocal Corp., the parent company of Union Oil, denied discriminating against Esberg because of his age. Esberg, 64, has left Union Oil and now works for a construction company.

In upholding the lower court decisions in Esberg’s case, the California Supreme Court said the state’s antidiscrimination law bars bias in working conditions and benefits on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex or sexual orientation – but not age.

The case is in Esberg v. Union Oil.