Ex-defense worker wins age-bias caseAs defense companies...

WORKPLACE & CAREERS

November 06, 1992

Ex-defense worker wins age-bias case

As defense companies reduce their work forces, many laid-off workers charge that older, higher-paid workers are being unfairly targeted.

In one of the first resolutions of such charges, an Arbutus man last month won a $100,000 settlement of an age discrimination lawsuit against a Maryland defense contractor.

Vitro Corp., a missile testing company based in Wheaton, paid the man, Joseph Bienlein, a former software engineer, two years' worth of back pay to settle an Equal Employment Opportunity Commission complaint.

The company denied that it had illegally discriminated against Mr. Bienlein and said it paid the settlement "to avoid the cost and disruption" of the lawsuit.

Mr. Bienlein was a 59-year-old section leader when Vitro laid him off in the fall of 1989. He had been employed by the company since 1963 and was one of its highest-paid employees.

Vitro was reducing its staff because of defense cutbacks. But because the Navy was continuing to pay for basic missile testing, Vitro retained some of the workers under Mr. Bienlein to run the tests.

The EEOC had maintained that if the company no longer needed a section leader but did need testers, Vitro should have laid off a younger worker and allowed Mr. Bienlein to continue working at a lower salary as a tester.

Jobless insurance cost rises fastest in Md.

The cost of unemployment insurance rose faster in Maryland this year than in any other state, a survey by the Potomac-based Laurdan Associates Inc. shows.

The average Maryland employer paid $287 per worker for unemployment insurance this year, nearly double last year's cost of $154.

Maryland, where unemployment insurance had been among the cheapest in the nation in 1991, now ranks 13th in cost. The state's fees are nearly half again more expensive than the national average of $203, said Ronald Adler, president of the consulting company.

And the outlook isn't bright for either unemployed workers or employers who hope to reduce insurance costs.

Mr. Adler's study discovered that laid-off Maryland workers seemed to have bad luck finding new jobs. On average, laid-off Marylanders spend 16.7 weeks on the unemployment rolls, the sixth-longest average stint in the nation.

And, Mr. Adler says, Maryland employers should expect insurance costs to remain high.

Maryland employers saw their costs nearly double this year because a rush of layoffs nearly drained the state fund. To save that fund, state legislators placed a 2.2 percent surcharge on each worker's wage, Mr. Adler explained.

The surcharge will be reduced next year, but that doesn't mean that employers will see big savings.

The state, which used to charge its insurance fee on only the first $7,000 of every worker's wage, will raise its cap to $8,500 in January, Mr. Adler notes.

Mr. Adler advises companies that are worried about increasing insurance costs to emphasize prevention rather than cures. He suggests, for example, that companies consider job sharing and other alternatives to layoffs.

But he often finds that employers aren't ready to address unemployment insurance costs until they are hit with big bills or the need for immediate layoffs.

"In good times, this stuff is overlooked," he says. "In bad times you see the financial impact, and that usually gets people's attention."

Are health costs higher for smokers? Maybe not

Many employers are discouraging workers from smoking these days, not only for altruistic reasons, but also in the belief that non-smokers cost health insurance plans less.

A new book by a Duke University economist may make some strictly dollars-and-cents employers reconsider their anti-smoking bias.

The author, W. Kip Viscusi, points out that the higher health costs are often offset by lower pension costs.

To those employers who consider only economics, Dr. Viscusi says, "Smokers actually save pensions money because they die sooner. If you have a pension plan, they're a bargain."

Dr. Viscusi says that in today's economy, with low interest rates, the pension savings of a smoker's early death balance out the higher health insurance costs.

"It is a close call," he said, adding that different economic situations could throw off the balance, and make smokers either cheaper or more expensive to a company.

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