Wilson Vetoes Legislation Drafted to Protect Jobs of Older Workers

SACRAMENTO —  Gov. Pete Wilson sided with California business groups Friday and vetoed a controversial bill that would have protected workers over 40 from being replaced by younger, lower-paid staff.

Wilson said older workers are already protected by the state’s anti-discrimination laws. He also said it is important for the state’s economy to let businesses consider the cost of keeping an employee--even if that means selecting a younger worker over an older one.

“It is unacceptable practice for employers to use age as a criterion in the workplace unless otherwise required by law,” Wilson wrote in a veto message issued at the close of business Friday. “On the other hand, in a competitive market-based economy like California’s, employment decisions which consider salary appear not only reasonable, but essential.”

The controversy over treatment of older workers erupted last year when a state appellate court ruled that employers can give younger workers preference over their older counterparts if the moves are justified by economic conditions--not age.

The ruling prompted legislation by Sen. Quentin Kopp (I-San Francisco) to establish a prohibition against companies that might try to improve profits or streamline their operations by removing or replacing older, higher-paid workers.

Kopp’s bill would allow companies to consider salary differences in cases of economic necessity, such as a move to avoid financial loss or bankruptcy.

The state Chamber of Commerce, the California Manufacturers Assn. and other business organizations urged Wilson to veto the bill. They said it went beyond the issue of age discrimination and inappropriately limited an employer’s ability to respond to economic conditions.

Without Wilson’s veto, Kopp’s bill “would have given lifetime tenure to workers over 40,” Julie Broyles, lobbyist for the California Chamber of Commerce, said Friday. She said workers over 55 will make up 73% of the national work force by 2020.

“Are you going to give the group that makes up the majority of the work force additional protections?” she said. “It’s not smart to do that” and unfair, she said, “to the younger workers coming behind them.”

Democratic supporters of the bill countered that it is inhumane to allow corporations to try to improve their profit margins by dismissing older, qualified workers only because of higher salary levels.

On Friday, they also disagreed with Wilson’s portrayal of state laws that already protect older workers against age discrimination.

Kopp said the appellate court decision effectively closed the door on most of those age discrimination lawsuits because it eliminated the primary grounds used in many cases. Previously, he said, employees fired for the high cost of their salaries were able to sue if they could show a pattern of discrimination against older workers.

Kopp and other supporters of the older-worker protection are now watching two similar bills making their way through the Legislature that are not considered to be as broad--one of the complaints Wilson leveled against Kopp’s version.

Assemblywoman Martha M. Escutia (D-Bell), the author of one bill, vowed to press on despite the fact that “the industry hates my bill.” She said she “could only hope” that Wilson would treat her bill--or another by Sen. John Vasconcellos (D-Santa Clara)--differently.

Advocates for older workers were also putting their hope on the next round of legislation.

“This is an extremely important issue,” said Zoe Ann Murray, chairwoman of the legislative committee for the American Assn. of Retired Persons. “It’s discrimination that is as strong as any sexism or racism. It’s just not fair and . . . it’s been hurting a lot of people and will continue to do that.”

A spokesman for Wilson said the governor has not seen the Escutia or Vasconcellos bills and has no position on them now.

Economists and experts in aging said the impact of the July 1997 court decision has been blunted so far by the strong economy.

The unanimous decision came in the case of former aerospace accountant Michael J. Marks. Marks was transferred, despite his objections, from Michigan to California in 1988. He asked to be returned to Michigan when the company sold its California office, but instead, the company returned only its younger, lower-paid staff.

The court said employers cannot lay off older workers based on the belief that they are harder to train in new technologies or likely to be less productive than their younger counterparts. But it said companies can lay off their highest-paid workers, even if most of them happen to be over 40, the age in California at which employees are protected from age discrimination.

Wilson said employers should be able to consider the younger employee’s salary as a possible marketplace advantage. Otherwise, he argued, an employer would be forced to choose the older of two equally qualified workers in order to avoid litigation.

“Employers may very well determine that the only way out of this morass is to always select the employee who is over the age of 40,” Wilson wrote. “That was not the intent of the age discrimination laws.”

Times staff writer Virginia Ellis contributed to this story.