Succession Planning Without Ageism
November 2025By Diane Geller
There is often a fine line between potential age discrimination and the opportunity to train the next generation of company management to ensure continuity and a proper transition. Courts have generally recognized that companies have the right to make reasonable inquiries into an employee's retirement plans for the purpose of succession planning. How companies approach those planning discussions can affect whether the organization faces potential liability for age discrimination, though .
The federal Age Discrimination in Employment Act applies to employers with 20 or more employees and prohibits discrimination against workers age 40 or older. The Florida Civil Rights Act applies to employers with 15 or more employees and applies to employees of any age. Local age discrimination statutes can apply to employers with even fewer employees, with Broward County's Human Rights Act applying to those with 5 or more employees.
The federal Age Discrimination in Employment Act applies to employers with 20 or more employees and prohibits discrimination against workers age 40 or older. The Florida Civil Rights Act applies to employers with 15 or more employees and applies to employees of any age. Local age discrimination statutes can apply to employers with even fewer employees, with Broward County's Human Rights Act applying to those with 5 or more employees.
While merely asking an employee about their plans for retirement likely does not constitute age discrimination, properly approaching succession planning involves both consideration of the plan and how to avoid violating federal, state and local age discrimination laws. The issue often comes down to how the plan is communicated to employees. However, the simple act of making inquiries is often used as a basis for either a claim of age discrimination or retaliation if the employee involved is later terminated even for a legitimate, non-discriminatory reason such as performance. That is why having good documentation becomes key to protecting the company and successfully defeating a former (or current) employee's claim of age discrimination or retaliation.
A hot button that often causes substantial difficulty in preparing a defense is if management, especially decision makers, use buzz words or phrases when discussing succession planning. Comments such as wanting "younger people" to be promoted into management positions and references to the "next generation" need to be avoided to prevent creating the impression of ageism in the succession plan and workplace.
- Some tips and suggestions for employers:·
- Make sure to focus on the strategies of the company and the need for the transfer of knowledge.
- Focus on those positions that need continuity.
- Don't target older employees for inquiry into retirement or future plans. Ask all employees about their future plans.
- Document the succession plan before making any decisions. Define competencies and skills needed. Don't use any terms that imply that there is an age component. Don't make decisions tied to the age of employees. Qualified, older employees should be considered as part of the applicant pool.
- Review agreements with employees so that you know what is involved in any transition. Also be mindful of any promises made, whether oral or written, that are related to succession activities. It is also important to know about the employee's noncompete and
- confidentiality obligations. Make sure the organization's confidential information is protected.
- Make sure that the decisions regarding succession are based upon business requirements and not on any other characteristics that are protected by law (such as race, religion, national origin, sex, disability, etc.).
- Be mindful of retaliation claims -- particularly if the employee who was terminated or not promoted had recently engaged in protected activity or used protected leave (for example, under the Americans with Disabilities Act or the Family and Medical Leave Act).
- When terminating an employee who is in a protected class, employers should ensure that they have documented the non-discriminatory reasons for the termination. Using objective standards is especially helpful to defeat a claim that the negative job-related actions were taken against an employee simply due to their age. Employers should also consider offering a separation agreement to terminated employees with appropriate releases, including the release of any age discrimination claims in compliance with the Older Workers Benefit Protection Act.
In conclusion, plan ahead, don't make assumptions regarding an employee's retirement plans, don't target older workers, and be mindful in your conversations and especially careful about off-the-cuff remarks. Consult employment counsel to assist you in developing a strategic approach to succession planning.
Diane J. Geller is a partner in the Labor & Employment Department at Fox Rothschild. She focuses her practice on representing clients in the staffing industry and helps clients stay compliant with the ever-changing federal and state regulations governing the workplace, as well as the daily challenges facing business owners. She can be reached at dgeller@foxrothschild.com.
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