You May Discriminate in Benefits
 
June 26, 2002
 

In another very significant and surprising case, Esberg v. Union Oil Company, 02 C.D.O.S. 5606, the California Supreme Court approved the denial to older workers of benefits that are provided to younger workers. Mr. Esberg had sought tuition reimbursement that was provided to his younger colleagues in connection with a master’s degree program. His supervisor at Unocal commented that he was “too old to invest in.” Esberg sued on the basis of age discrimination under California’s Fair Employment and Housing Act (FEHA). The Supreme Court noted FEHA separately defines the prohibition against discrimination in benefits and other terms of employment separately from the prohibition against discrimination in hiring, firing, promotion and demotion. Although FEHA explicitly prohibits age discrimination in hiring, firing, promotion and demotion, it does not list age among the types of discrimination prohibited with respect to other terms and conditions of employment. Based on this language, the Court ruled that age discrimination relating to benefits does not violate FEHA. Thus, based on the statutory language, the court felt compelled to dismiss the claim. The employee had not filed suit under Title VII. The court also rejected the common law claim of tortious violation of public policy, holding that educational benefits for workers over 40 do not involve a fundamental or substantial policy of the state. Employers can expect the state legislature to amend the FEHA to add age as a protected category with regard to terms and conditions of employment.

For more information, contact Wendy Lazerson at 888-688-8500 or via e-mail by clicking on her name.

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