A Publication of WTVP

Business publications such as The Wall Street Journal and Fortune periodically feature articles that deal with companies and their hiring practices. With rapid technological developments, the migration of jobs overseas and office or plant closures, people lose their jobs. The neutral term, of course, is “downsizing,” a word which strikes fear into employees because they might be “let go” due to business conditions or business relocation.

One disturbing development in recent years is downsizing that singles out people in their 50s and 60s or those who are just a few years from retirement. Business publications highlight how their positions are redefined or merged into other positions in the organizational hierarchy. Yet if they were to visit their former employers, they would discover that they were replaced by twentysomethings. The main reason for job elimination: age. And that raises great ethical problems.

A person downsized on the basis of age has recourse in the courts to sue for age discrimination. Many prominent companies have been sued recently by older employees who were relieved of their responsibilities. In some cases, not only were they replaced by younger employees, but they were let go a year or two prior to retirement, ensuring that their pensions and benefits would not be available to them.

In other cases, a company may have wanted to implement a new management system or technology which required retraining, but the amount of time and money needed for training and implementation would be lost on those who were to retire in a few months or years. It would be wasted on those who would not be around to put it to work or who would resist it because of the familiar phrase: “We’ve never done it that way before.”

There are financial issues, to be sure, but there are also efficiency and morale issues. Employees who have been in the system for a while are sometimes unwilling or unable to adapt. They may have matured in the organization under a different form of management and cannot integrate well into a new system. Their managers may be 20 or 30 years younger, with huge differences between the age groups. In such cases, conflict can develop.

Even when there are good explanations for the problems that older employees encounter—or create—with their employers, the problem of age discrimination still exists. Ethical issues can also surface when older employees are set aside or eliminated from the employment relationship. One is that people are not valued for their contributions to the workplace. They are seen merely as economic commodities, and the decision to do everything but fire the employee is a denigration of their experience and knowledge.

Another ethical issue is the avoidance of corporate commitments. If people are commodities, then they can be disposed of when the company believes they have lost their value and are worth little or nothing. Certainly, one commitment is to honor promises surrounding retirement. It is grossly unethical to terminate older employees just before they are entitled to receive benefits for which they worked for years. The corporate excuse? These commitments are too costly and put us at a disadvantage with shareholders and the larger market.

The Chrysler Group is a great example of this ethical quagmire. Now that the automaker has been sold to Cerberus Capital Management, employees at every level have been told that they will not be given pension benefits as promised. There are plenty of good reasons, including the fact that these accumulated commitments may drive the automaker to bankruptcy in the fast lane. At the same time, shouldn’t these employees, who counted on financial promises by the company, be entitled to some level of financial support in retirement? Shouldn’t a company do everything to honor its commitments to its employees—especially older ones who have worked for the company for years?

Older employees sometimes create their own problems because of resistance to change and a sense of burnout. At the same time, an employer has an ethical duty to treat employees fairly and not single them out because of age. This ethical challenge will become even more pronounced in the next decade as baby boomers make their way to retirement and are let go by employers in enough time so that they don’t have to honor commitments and promises. Older employees need to think twice about giving their best in their work. Employers need to remember that their promises are part of the sacred commitment to the employment relationship—and they need to give their best to their older and most experienced employees. IBI