Bob Edwards: Hello, I'm Bob Edwards with an AARP Take on Today.
Despite 13 consecutive years of top performance reviews, Jack Gross was suddenly demoted by his employer FBL Financial Group. After many of Jack's colleagues over the age of 50 were met with a similar fate, he decided to fight back against what he believed to be a clear injustice, and at first, the courts were on his side. However, the case was appealed all the way to the Supreme Court. In 2009, the nation's highest court handed down a decision that has since served as a barrier for older Americans who face age discrimination in the workplace. Losing his case the second time around, Jack Gross refuses to give up.
Jack Gross: One thing I guess my dad taught me is you don't start fights, but you don't run from them.
Bob Edwards: Mike Ellison, a special contributor on this week's show recently sat down with Jack Gross to hear about his decades-long fight. Welcome to the show, Mike.
Mike Ellison: Thanks for having me, Bob.
Bob Edwards: Tell us about yourself.
Mike Ellison: I was born in Ethiopia, raised in Weston, Virginia and as I like to say, transformed in Detroit.
Bob Edwards: You have experience as an actor, musician, spoken word artist. What inspires your art?
Mike Ellison: I would say I'm most inspired by purpose and environment. I started out on one path. I was raised in Weston, as I mentioned, and went to the University of Virginia where I studied communications. I started in public relations in the sports field, which is what brought me to Detroit and then the city with all of its culture conspired to turn me into an artist. And just finding ways to combine that skill set with artistry and attach it to meaningful causes is really what drives me.
Bob Edwards: Is this story part of your cause?
Mike Ellison: I think so. I think we're all storytellers, and a big theme in my work is what I call the continuum. I like to challenge the notion of generations. People say of this generation versus that generation. I think we're more, there's a continuum. There's a 93-year-old artist in Detroit that inspires a lot of us, and he's still with us. He's not from another alternative universe. So the continuum is an important theme, past, present and future and how they collide. And so I think as it relates to Jack Gross and the battle to fight age discrimination is definitely relevant.
It burned Jack Gross when the Supreme Court decision came down. He'd done his part. He's worked hard day and night since he was a kid in Iowa, delivered papers, worked on his grandfather's farm, studied at night, worked some more, slept, repeat. Ambition and a strong work ethic defined Jack Gross. It's why he excelled at Farm Bureau Life Insurance in Iowa, overperforming at every level. He thrived so well in his job, he even taught and trained countless colleagues. So at age 54, to hear that the United States Supreme Court decision came down against him, it burned Jack to the core, and it didn't stop there.
Jack Gross: This is a little bit about ego for me now because, well, my name has been associated. There's a lot of people who had probably pretty good cases who would have had their day in court, but they go to an attorney, and their attorney will say, "Well, after the decision in the Gross case, these are so tough to prove. We don't want to take anything on a contingency basis like this anymore."
Mike Ellison: So let's just take a moment. If you didn't catch that, Jack said that most lawyers won't take these cases on a contingency basis anymore. In a contingency case, a lawyer agrees to represent you, and you only have to pay them a percentage of what you win from your case. If you don't win, you don't pay. Jack is saying it is now so hard to win these cases, that lawyers are refusing to take them unless you can pay upfront. That's a big deal. Because recently 60% of older people said they saw age discrimination, yet only 3% brought it to court.
Jack Gross: I'm tired of seeing that. I have my Google Alert set for all age discrimination cases and anything with my name on it, and it just pops up too frequently, and I see those and say, "Well, there's another poor soul that's not getting their day because of what happened that I started."
Mike Ellison: And they don't know your back story and how hard you fought. All they know is because of Gross versus FBL, I'm not getting what is due to me.
Jack Gross: That's it.
Mike Ellison: That's a big part of our interest in telling this story, Jack, is because most people are just going to see the court decision. They're not going to know the back story.
Through the years, the Court's 2009 decision has continued to decimate the Age and Employment Discrimination Act of 1967, putting older workers at risk. The decision shifted the burden away from employers and onto the American worker. When I sat down with Jack face to face, two things struck me. Number one, Jack is very real, transparent, pragmatic, fair. Number two, he fights when he needs to, and like his work ethic, he comes by that honestly.
Jack Gross: One thing I guess my dad taught me is you don't start fights, but you don't run from them when you've got a cause that's worth fighting for. You take your lumps and you go do it.
At home, my parents I guess you would say were pretty strict. My dad came out of the Navy in World War II right into Highway Patrol. He was a very spit polish type of guy. So we grew up absolutely respecting all people regardless of color. My parents are very compassionate. Dad would occasionally bring home people who he'd found alongside the road, and we would give them a meal. Dad would gather up other guys in town, and they'd take up a collection and make sure that they were taken care of. Those were the values that you were taught. That you look out for other people. On the farm I was taught the value of hard work. My grandparents, I remember people would drive by and they might say, "Well, he drives too fast and he drinks too much, but he sure is a worker." And that just seemed like is absolved him of all other crimes. If you could say the man's really a worker, everything was good.
Mike Ellison: So you had a lot of equity as long as you worked hard?
Jack Gross: That's right. Yeah. Strong emphasis on hard work. Yeah, we were very patriotic family. I was not able to pass the physical to get into the service myself. I've never passed a physical. I grew up with severe health problems and had to overcome those at the same time. But had I been able to pass the physical, I would never shirk my duty for going. I think there's a reason for everything, and I think I was being toughened up during those early years for this battle. I think I was able to survive this because I had survived other tough circumstances.
Mike Ellison: It's very clear to me, Jack Gross lives his values. The work ethic, the ambition, the achievements, standing up for what's right, even in the face of personal risk, this is who he is.
Jack Gross: To be real honest, yes, I did take some risk moving out, but I filed my suit on my 55th birthday. That's the day I went to see my attorney. That was also the day I was fully vested in my retirement program. So at that point, I was somewhat home free. What they were doing was going to have a financial impact on what my projections were going to be for my retirement. But at least I wasn't going to be destitute, and so financially, I was better equipped to take on the fight than other people might have been. I dealt with litigation through my work experience. I'd handled Farm Bureau's litigation and had dealt with attorneys a lot. I wasn't as afraid of the legal system as a lot of people had been.
And I'd seen a lot of people who probably had very good discrimination cases, but they didn't follow through because they were worried about financial impact, impact on their careers, reputation, being able to find another job after you were labeled as litigious because you'd already taken on your employer. So I understood a lot of people couldn't take this fight, and that's partly why I decided I was probably the one that should. And we had all been getting projected payouts for when we retired based on either 3% raises or 5% raises whether that would have been good or bad, I'll never know. But also at the time, I'd visited with some others and they did not cut our salaries, they just demoted us. But what they didn't understand, we have a very complex defined benefit retirement plan.
Mike Ellison: Jack goes on to describe how their pensions worked at FBL. It gets a little complicated, so I reached out to one of AARP's experts and here's what they explained.
Cristina Martin Firvida: I'm Cristina Martin Firvida from AARP. Commonly, pensions are calculated using the average of an employee's three to five highest-paid years. So if you're an employee and your salary is frozen in those last three to five years, which are typically going to be the highest paid years of your career, you're going to lose out on those raises that slowly but surely increase your pension. This had a significant financial impact for someone like Jack Gross and his colleagues.
Mike Ellison: Jack knew this, and again, it burned him. These demotions were intentional and calculated and he understood that these demotions for himself and his colleagues might not impact paychecks for the short term, but over the long term, they were going to devastate pensions and their long-term financial security.
Jack Gross: So everybody was looking at that final number, and I tried to explain to him the way the formula works that with the demotion, you're not going to get anymore 3% or 5%. You're not going to get any raises, and the impact that that's going to have on that final number is very significant. I had calculated my own, and it was in the six figures.
Mike Ellison: What you basically calculated that these new executive basically financed their pay and retirement at the expense of all of your retirements, is that correct?
Jack Gross: My best estimate was that the amount that they increased their benefit package was roughly the amount they decreased our benefit package when they demoted everybody over 50 on the same day in our area. The total financial impact looked suspiciously similar.
Mike Ellison: Whoa. So after his demotion, FBL kept Jack onboard in a meaningless role with essentially no responsibilities. For one of the hardest working people you'll ever meet, this was really tough to swallow.
Jack Gross: You can't even imagine, it's the most stressful period in my life. They removed me from access to any of the corporate things on the computer. I'd gone from just extremely busy, I was in meetings all day, barely had time to get to my desk. At 6:00, I'd load a briefcase, come home and eat and get all my desk work done at home. I would typically work until 2:00 in the morning.
Mike Ellison: Not only was Jack the ultimate company man, he was one of the most qualified insurance professionals in the entire state of Iowa, let alone FBL.
Jack Gross: I got three professional designations within two years. That normally takes 10 to 15 years. There's only 23 of us in Iowa that had what they called the trifecta of the professional designations.
Mike Ellison: The demotion devastated Jack professionally and took a terrible toll on his health.
Jack Gross: I had no job description, so for five years, I kind of went in there and stared at the wall. I was developing some anxiety problems. Took three ambulance trips because my chest would tighten up, my left arm would go numb. A few times, they always said it was anxiety, but they said keep calling because your symptoms are exactly like a heart attack. There are a few times, I hate to admit this, I actually, there's a heart center about five blocks from our office. I would drive over there during the noon hour thinking something serious was going on, pop open my door so if this was for real, I'd fall out right in front of the heart center. It was just kind of five years of just pure hell frankly.
Mike Ellison: So that's Jack Gross's story. Or at least part of it. And it's one, unfortunately, shared by too many qualified aging workers. When the Supreme Court ruled 5-4 against Jack, they erased 40 years of legal precedent. Gross versus FBL is already affecting countless Americans. And as 40 million of our workers are currently age 50 or older, the problem has the potentially to get much worse. It's not easy to change things once the Supreme Court has spoken. But as we'll learn in part two of my conversation with Jack, this fight is far from over.
Bob Edwards: That was Mike Ellison. He'll be back on June 27th to share part two of Jack Gross's story.
Last week, the House Education and Labor Committee approved the Protecting Older Workers Against Discrimination Act or POWADA, a key step toward enactment. This represents the first Congressional Committee vote on the POWADA legislation and the bill now advances to the full House of Representatives for consideration. POWADA was first introduced with strong AARP backing after the 2009 Supreme Court in Gross versus FBL Financial Services, which made it harder for older workers to prove claims of illegal bias based on age. AARP research has found that more than three in five older workers report that they have experienced or seen age bias in the workplace. POWADA would restore fairness for older workers by treating age discrimination just as seriously as other forms of workplace discrimination. It would restore longstanding protections under the Age Discrimination and Employment Act. Visit AARP.org/advocacy to learn more and to take action today by calling your representatives in Washington.
Bob Edwards: And now AARP's Christina Martin Furvida. Welcome.
Cristina Martin Firvida: Thank you, Bob.
Bob Edwards: What would the Protecting Older Workers Against Discrimination Act do?
Cristina Martin Firvida: So the bill, which goes by the acronym POWDA, will help workers like Jack have a fair day in court. It says that discrimination is discrimination no matter what, and that all workers deserve to be treated the same in court. So currently because of Jack Gross's case before the Supreme Court, if you're an older worker, you actually have fewer rights in court than a worker who's is protected under other Congressional statues. So you have fewer rights that someone who is discrimination against on the basis of gender or race or religion. And what the POWADA bill does is it makes everything the same for anyone who is discriminated against no matter what kind of discrimination it is.
Bob Edwards: What's the latest update on this legislation?
Cristina Martin Firvida: So the latest update is that we have had a terrific bipartisan vote in the committee that has jurisdiction over this bill, that has control over this bill that means that now we're looking to go to the floor of the House of Representatives. Hopefully with also strong bipartisan support and if we can do that this summer, let's see how far we can get in the Senate and maybe get this bill signed into law this year.
Bob Edwards: How can people get involved?
Cristina Martin Firvida: Absolutely. We'd love it if people would like to get involved. They can go to our action page at action.aarp.org/protectolderworkers.
Bob Edwards: And take action today by calling your representatives in Washington.
The Securities and Exchange Commission issued a new regulation this week that consumer advocates say fails to protect investors from financial advice that is not solely in their best interest. Retail investors lose as much as $17 billion annually due to profit-driven advice from financial advisors and brokers. Along with their Social Security, Americans today rely on 401Ks and IRAs rather than pensions to help fund their retirement making these loses even more troubling.
Joining us again is AARP's Christian Martin Firvida. What does this regulation mean?
Cristina Martin Firvida: Well, this regulation which is very confusing, and so I want to say that up front, has made some really big changes in the ways that your brokers and advisors will handle your money going forward. And the biggest change is that we know that everyone who saves or invests for their retirement wants financial advice that puts their financial interest first ahead of the financial interest of their agents, their brokers, their advisors. And what this rule does, unfortunately, is it says to all of those people giving you advice, that they are not really required to do that under the law at all. They don't have to put you first.
Bob Edwards: What is AARP doing about this?
Cristina Martin Firvida: So the first thing that I want to make sure everyone knows is we spent quite a lot of time communicating with the agency as well as with Congress about this problem, and a lot of our listeners have engaged on this issue here previously. So we have been in this fight for a long time, and we plan to continue to be in this fight. And we are exploring all avenues to do something about this new rule, which is bad for your pocketbook.
The second thing we're going to be doing is we're going to be putting together a very robust education campaign to make sure that your listeners are hearing about it today but lots of others won't know. And so we want to make sure that people understand when they're getting advice what questions they should be asking, and what they can do to protect their money.
Bob Edwards: So what action can investors take to protect themselves?
Cristina Martin Firvida: Well, because of this new rule, it's important to understand you should not assume that an advisor is going to put your financial interest first. And so there are some hard questions that you need to be asking your advisor about conflicts of interest they may have, commissions they may be charging, hidden fees. It's a buyer beware kind of a world right now.
One thing that folks can certainly do to help themselves is look for a certified financial planner. That is a special designation that some advisors seek, and it means that they've received extra education, they've taken some really hard tests, and they've received a certification that states for you, hey, this person really will put my interests first, and it's something that you can trust when you see that designation.
Bob Edwards: While SEC Chairman Jay Clayton said the regulation with raise the standard of conduct for brokers, others contend that the final regulation falls short of its stated goal of helping everyday investors.
Last August, AARP joined with the certified financial planners and Consumer Federation of American, an association of more than 250 national, state, and local consumer organizations founded in 1968 to test whether everyday investors in three cities could understand the disclosure materials financial professionals would give clients under the proposed regulation. The test found that most users still were confused about fees and costs, didn't fully understand the impact of conflicts of interest and also did not understand when financial professionals were legally obligated to put their client's interests first.
For more, visit AARP.org/podcast. Become a subscriber and be sure to rate our podcast on Apple podcast, Google Play, Stitcher and other podcast apps. Thanks for listening. I'm Bob Edwards.
A loss at the Supreme Court on age discrimination is no match for Jack Gross as he fights in extra rounds for Congress to act. Find out in this two-part series. Listen to "Part 2: Jack Hits Back."
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