Texas Roadhouse Settles Age Discrimination Suit for $12M

Employment law news has been dominated by high-profile allegations of sexual harassment by Bill O’Reilly at Fox News and managers at Uber. As the American population ages, however, age discrimination may become the dominant story. A recent settlement by the Texas Roadhouse restaurant chain provides a prime example.

Age Discrimination

The Age Discrimination in Employment Act (ADEA) generally prohibits employers from taking age into account when making employment decisions. The ADEA protects employees or job applicants who have reached the age of 40.

The ADEA permits employers to consider age when “age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business.” Wanting employees to reflect a corporation’s “youthful image” has not generally been accepted as a justification for treating age as a “bona fide occupational qualification.”

Texas Roadhouse Allegations

During the Obama administration, the Equal Employment Opportunities Commission (EEOC) filed an age discrimination lawsuit against Texas Roadhouse Corporation, a business that operates a chain of steak restaurants with a western theme. Headquartered in Kentucky, Texas Roadhouse operates more than 500 restaurants in 49 American states and a handful of other countries.

The EEOC accused Texas Roadhouse “of systematically avoiding hiring applicants over 40 years old for front-of-house positions like hosting, serving, and bartending.” In its complaint, the EEOC alleged that fewer than 2% of the company’s front-of-the-house employees were over the age of 40.

When the case went to trial in Boston, the EEOC presented evidence of a systematic effort to avoid hiring older employees.

Dozens of workers told tales of applying for jobs at various Roadhouses and being brushed off or, worse, quizzed on whether they had enough energy for the job or how they felt about working with young people. Some who applied for front-of-house jobs were told they weren’t perky enough for the company, were urged to look around the room to see why they wouldn’t fit in, or were simply told flat out that the company preferred younger employees.

Some of the most compelling evidence came from Post-it notes that interviewers attached to applications. The notes referred to job applicants as “old ’n’ chubby” or “middle age … Doesn’t really fit our image.”

Texas Roadhouse’s Defense

Texas Roadhouse argued that hiring younger workers was a business necessity because its “servers must line dance during shifts, wear jeans, and work evenings and weekends.” Carl Van Horn, a public policy professor at Rutgers University, commented that the defense was not rational because many older workers are capable of wearing jeans, working weekends, and dancing.

In fact, the point of the ADEA is to prohibit businesses from basing employment decisions on stereotypical assumptions about the abilities of older workers. If line dancing is a bona fide job qualification, asking an employee to dance during an interview would be a nondiscriminatory way to assess the applicant’s dancing ability.

Texas Roadhouse also claimed that “EEOC wants quotas, and we think the most qualified people should get the job.” Yet the evidence at trial suggested that Texas Roadhouse did not assess the qualifications of older applicants, choosing instead to regard young people as “the most qualified” simply because they were young, which the ADEA forbids.

Texas Roadhouse Settles

The trial ended with a hung jury when jurors could not reach the unanimous verdict that federal trials require. News reports suggest that six of the eight jurors would have held Texas Roadhouse responsible for age discrimination, while the other two either doubted that the incidents of discrimination reflected a corporate practice or did not think Texas Roadhouse did anything wrong.

A mistrial was declared and a new trial date was set. Before the case could come to trial again, however, Texas Roadhouse agreed to settle for $12 million. The consent decree that Texas Roadhouse accepted requires it to “comply with the ADEA and to increase its recruitment and hiring of employees age 40 and older for front-of-the-house positions,” and to hire a diversity director to assure that it obeys employment laws in the future.

Reactions to the Lawsuit

In response to complaints by Texas Roadhouse, Republicans on the House Education and Workforce Committee held a hearing on what some committee members deemed to the EEOC’s “systemic problem” of (in the words of Rep. Tim Walberg) “going after businesses without having to show that there’s a problem.” Of course, enforcing the ADEA is the EEOC’s job, even if discrimination victims do not ask it to do so. And showing “that there’s a problem” is the point of enforcement lawsuits.

Senator Rand Paul, representing the state where Texas Roadhouse is headquartered, referred to the lawsuit as “abhorrent” and suggested that EEOC’s general counsel should “resign immediately” for bringing it. He also claimed that EEOC was going against “everything America stands for” by bringing the suit in the absence of a formal complaint by a rejected job applicant.

Others believe that America stands for equal rights, including equal employment opportunities, as exemplified by laws like the ADEA. Advocates for the growing number of Americans who are over the age of 40 argue that maintaining a “youthful image” is less important than obeying laws that protect older workers from discrimination.

In the end, although Texas Roadhouse did not admit to liability, its agreement to change its practices suggests that a problem did exist. The lawsuit may therefore send a message to other businesses that their desire for a “youthful image” in an aging America is not an excuse for age discrimination.