SUMMARY AND RECOMMENDATIONS

In responding to the questions and issues raised by the Senate Subcommittee on Labor, several options for changing the age limit and other aspects of the Age Discrimination in Employment Act emerge.

1--Raising the Upper Age Limit

There no longer exist compelling reasons to hold the upper limit of the ADEA to where it currently is--age 65. The Administration supports the principle of the proposed amendments. If the Senate Human Resources Committee decides to act favorably on the proposed legislation, the Administration requests that the effective date be extended to January 1, 1979. It is also important that the legislation clearly permit the establishment of a retirement age less than 70 where age has been shown to be a significant indicator of decreased job performance.

While age 65 may have been appropriate as an upper limit
when the ADEA was first enacted in 1967, there is enough
evidence on the productivity, health, and continuing abil-
ity of older workers to warrant the upward adjustment to
age 70.

There has been enough experience with flexible retirement
rules and systems with no mandatory age limit both in
industry and government to challenge the sensibility of
retaining the current limit.

The labor force impact of raising the mandatory retire-
ment age to 70 would be extremely small and would not be
expected to create any significant dislocations in other
age brackets of the labor force.

Raising the upper limit to age 70 would, over the long
run, lead to significant savings in the social security
system. This will be especially true when the large
"baby boom" post World War II cohorts become older but
can exercise an option to remain employed--thus deferring
Social Security benefits for which they are eligible.

• Raising the upper limit will have a positive effect on
pension plans. Deferred retirement will lead to overall
savings to pension funds since older workers will not be
drawing benefits while they remain employed.

• Raising the age limit to 70 will not lead to conflicts between
the ADEA and the Employee Retirement Income Security Act.
Officials from the Department of Labor with ERISA responsibilities
agree on this matter.

Public opinion, as manifested in several national polls, strongly
supports the proposition that individuals, able and willing to
work, should be permitted to do so regardless of chronological age.
Most experts in geriatrics and gerontology support raising the
age limit to 70. They contend that the option to continue work
will have positive physiological, psychological, economic, and
social effects on older people.

On balance, the reasons for raising the age limit to 70 are compelling and the Department recommends that the upward adjustment be made. There are no major obstacles to prevent such legislative action.

2--Setting a New Limit

If age is to be accorded full civil rights protections, then there is an argument for total abolition of mandatory retirement. However, practical considerations suggest an intermediate step. After the initial adjustment is made to a new age limit, we will be dealing with single groups of post-65 older workers who choose to remain in the work force rather than retire. This will give the Department the chance to assess the impact of the change and report the findings to the Congress (a requirement in both the House-passed and Senate Labor Subcommittee bills).

3--Clarifying Section 4(f) (2) of the ADEA

Both the House-passed and Senate Labor Subcommittee bills add clarifying language to Section 4(f) (2) of the Act, which will make it clear that involuntary retirement prior to the age limit set by Section 12 is unlawful unless the retirement is supported by a reason other than age--such as inability to work or substandard job performance.

The Department has been deeply involved in litigation surrounding this exception and welcomes congressional activity in this matter. The language proposed in S. 1784, as reported out by the Subcommittee, is, in our opinion, appropriate.

4--Tolling the Statute of Limitations/Notice of Intent to File Suit

Assistant Secretary Elisburg, in his testimony before the Subcommittee on Labor, proposed two procedural amendments to the Age Discrimination in Employment Act. The reason for both of these amendments was to make it more likely that the courts would reach the merits of the cases of the aggrieved individuals, and do so more expeditiously, whether the suits are initiated by the Government or by a private person.

Before any individual can institute suit, he or she must file a written notice of intent to sue with the Department of Labor.. The notice of intent to sue must be given to the Secretary within 180 days "...after the alleged unlawful practice occurred" (which period is extended to 300 days if the individual is located in a state which has an age law which provides a potential remedy). This time limit within which to notifythe Department runs concurrently with the Act's two- or three-year statute of limitations and in no way extends it.

Given these strict time limits, it is easy to understand why many individuals and/or their attorneys miss complying with one or more of these requirements and their suits are, therefore, dismissed out of court without a hearing on the merits. Indeed, an estimated two-thirds of all private lawsuits instituted under this Act are dismissed for failure to comply with these provisions. The Secretary has proposed that the 180day (and 300-day) time limit in which an individual must give him a notice of intent to sue in order to preserve any right of private action, simply be removed because that is the requirement which has created the most problems for the individual litigants. The Act's two- and three-year statute of limitations would, of course, continue to apply.

The Secretary's other proposed amendment, involving the Act's conciliation requirement, applies only to suits brought by the Secretary. It is not intended to remove any requirement, but rather to make that requirement more workable. The Act requires that before the Government can institute a legal action "...the Secretary shall attempt to eliminate the discriminatory practice or practices alleged, and to effect voluntary compliance with requirements of this Act through informal methods of conciliation, conference, and persuasion." Several courts have held that failure to comply with this requirement in the detailed manner specified in those court decisions can result in dismissal of the lawsuit. The Secretary often finds that before he can hold such detailed conciliation discussions, he is up against the general two- or three-year statute of limitations. It thus becomes very easy for a potential defendant to draw out the conciliation discussion to such an extent as to considerably lessen or even preclude its liability for the violation. Moreover, if the Secretary goes ahead and files a suit to stop the running of the statute of limitations, the case may be dismissed for failure to conciliates It obviously oftentimes benefits a potential defendant to protract these discussions. Under Title VII, the EEOC does not have this problem because the filing of a charge with the Commissioners (which occurs even before formal conciliation is commenced), rather than the filing of the lawsuit, stops the running of the statute of limitations. The Secretary's proposed amendments would accomplish a comparable result for the ADEA..

We are pleased to note that the Subcommittee has taken action to incorporate these in reporting S. 1784.

INTRODUCTION

The Subcommittee is well aware of the fact that the issues of age discrimination in employment and mandatory retirement are reaching the dimensions of a full-scale civil rights debate. Various groups representing older people, industry, and labor organizations as well as experts in gerontology have made their views known on these subjects. The hearings held before this Subcommittee and the various House Committees and Subcommittees on proposed amendments to the Age Discrimination in Employment Act reflect a wide range and diversity of views.

Some groups seek total abolition of mandatory retirement. They regard age protections in employment as much a civil right as race, sex, religious, and other protections afforded by Title VII of the Civil Rights Act of 1964. The American Association of Retired Persons/National Retired Teachers Association, the National Council on the Aging, and the National Association of Retired Federal Employees have stated their positions favoring total "uncapping" of the Age Act. The National Council of Senior Citizens is against mandatory retirement when imposed unilaterally by any employer group. They support, however, a set retirement age when arrived at through the collective bargaining process. It should be noted that taken collectively, the above groups represent over 14 million older members and over 2,000 professional service organizations and agencies serving the nation's elderly.

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Other groups, representing industry and certain labor unions, take a different position. They have, through various testimony before appropriate House and Senate Committees, manifested interest and concern in amending the Age Act but urge that caution be taken. These groups foresee difficulties arising in their retirement benefit systems as well as in the practical personnel steps required to deal with raising the age limit of the ADEA. In addition, some spokesmen from industry and labor raise questions of the unknown impact on other age groups in the labor