Target’s groceries may have a shelf life or best-used-by date, but its CEO no longer gets put on the shelf or has an expiration date at age 65. Target announced that it is dropping its mandatory retirement requirement for the CEO, allowing CEO Brian Cornell to stay on despite his age.
Cornell joined Target in 2014, but he is nearing 65, which means under the old rules he would be forced out, even though he pretty much revitalized the brand during his tenure. According to CNN Business, Target’s stock has dropped about 30% this year, so this move should help the company maintain its vision as inflation is changing the way people shop.
Is mandatory retirement even legal in the US?
The Federal Age Discrimination in Employment Act (ADEA) makes it illegal to discriminate against employees who are over 40 years old, except in very limited circumstances.
Under the ADEA, an employer can mandate a retirement age if the employer can demonstrate that age is a “bona fide occupational qualification.” We see this issue with pilots or firefighters, for example. One other exception under the ADEA applies to CEOs or “high policy-making positions.”
Companies can mandate retirement for C-suite positions under certain circumstances, but many companies have done away with mandatory retirement for CEOs.
Is mandatory retirement for CEOs outdated?
The ADEA allows for mandatory retirement of CEOs, but Supreme Court judges who make policy decisions for the entire US are appointed for life. Justice Oliver Wendell Holmes, Jr. was 90 years old when he retired. President Joe Biden is 79 years. The traditional retirement age may be past its prime.
Why put limits on how long people can work, unless these is a bona fide occupational qualification?
Let’s applaud Target for realizing that age shouldn’t be a determination for competence.