Mandatory Retirement or Medical Exams Based on Age?

By Fiona Ong - Shawe Rosenthal LLP

December 21, 2023

This week, the Equal Employment Opportunity Commission announced a $6.875 million settlement (ouch!) with Scripps Clinical Medical Group over its mandatory retirement age policy. Which reminded me that the EEOC has also sued Yale New Haven Hospital for its “Late Career Practitioner Policy,” requiring certain doctors age 70+ to undergo certain medical testing. Since my husband is a doctor (of a certain age), I am particularly interested in these developments – but I note that these principles apply across all employers.

According to a medpagetoday.com article, the Scripps Clinical Medical Group instituted a mandatory retirement age of 75 in 2014 to ensure patient safety. The policy was permitted under a California law that allows medical groups to require doctors to retire at age 70. While acknowledging the policy’s legality under California law, the EEOC nonetheless asserts that such a blanket policy violates the federal Age Discrimination in Employment Act. (By the way, Scripps abolished this policy back in 2018, after the EEOC started its investigation – and yes, this matter dragged on for years…).

As for the Yale New Haven Hospital case, the employer requires neuropsychological and eye testing for those doctors over the age of 70 who apply for or seek to renew staff privileges – again, in the interest of patient safety. But the EEOC says that this policy violates the ADEA because such screening is based solely on age, without regard to whether the individual doctor is exhibiting signs of cognitive decline or impaired vision. (And according to the EEOC, it also violates the Americans with Disabilities Act since the testing is not job-related or consistent with business necessity, as required for medical exams under the ADA).

So what does the ADEA actually say about mandatory retirement or age-based medical exams anyway? Of course, the ADEA prohibits employment decisions that are based on age – with two exceptions:

• It permits the compulsory retirement of any employee age 65+ if both of the following conditions are met:
        - For the 2-year period immediately before retirement, the employee is employed in a bona fide executive or higher policymaking position,
        - The  employee is entitled to an immediate nonforfeitable annual retirement benefit from the employer’s pension, profit-sharing, savings, or deferred compensation plan, or any combination of such plans, equaling at least $44,000 (that amount was a lot more significant back when this provision was enacted decades ago)

• Where age is a bona fide occupational qualification (BFOQ) for a specific job. And in order to prove a BFOQ, the EEOC’s regulations require the employer to show that “(1) the age limit is reasonably necessary to the essence of the business and either (2) that all or substantially all individuals excluded from the job involved are in fact disqualified, or (3) that some of the individuals so excluded possess a disqualifying trait that cannot be ascertained except by reference to age.” (This exception is narrowly construed, and really has primarily been applied only when there are safety concerns – but even that has been challenged. For example, the Federal Aviation Administration has an “Age 60” rule that prohibits individuals from serving as pilots on commercial flights after, well, age 65 (it was raised in 2007). The EEOC sent an informal discussion letter to the FAA back in 2006, saying that the rule violated the ADEA by excluding everyone over the age of 60, since “Pilot skills and health can be assessed accurately on an individual basis, regardless of age, thus eliminating the need for dependence on a maximum age limit.” Warring federal agencies – what fun!)

So the lesson for employers here is to be very careful about implementing (or maintaining) policies that require retirement or testing based solely on age. Don’t make assumptions based on negative stereotypes about age (e.g. less strength, decreased cognitive ability, other physical limitations, limited capacity to learn new technologies, shortened amount of time before retirement, etc.). Focus on the employee’s performance and hold them accountable regardless of their age. Only require medical examinations where the employee’s conduct or performance issues appear to be related to a health condition, and the exam is both job-related and consistent with business necessity. Keep in mind that state law and federal law are not always in alignment. And wise employers will consult with their employment counsel when doing any of this!

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