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Susan Harriman and Ben Berkowitz Defeat Putative Class Action

San Francisco Chronicle

A Bay Area company that operates gyms and fitness centers isn’t violating age-discrimination laws by charging reduced membership fees to 18- to 29-year-olds, who tend to have lower incomes than older adults, a state appeals court has ruled.

State law does not prohibit all business practices that treat older and younger customers differently, only those that are “malicious, hostile or damaging,” the First District Court of Appeal in San Francisco said Monday.

“Offering a reasonable discount to a particular age group does not suggest that the group is better than another” or “perpetuate any harmful stereotypes” about either age group, Justice Henry Needham said in the 3-0 ruling.

The court upheld a judge’s dismissal of a lawsuit by Daniel Javorsky against Western Athletic Clubs, which operates 10 high-end exercise centers in the Bay Area and a sports resort in San Diego. In 2013, when the suit was filed, the company’s Bay Club San Francisco charged $140 a month to its “Young Professional” members — ages 18 to 29 — and $195 to those ages 30 to 64.

The clubs offered similar discounts on separate “initiation fees.” Members 65 and older had the option of paying $80 a month for access limited to nonpeak hours between noon and 5 p.m.

The company presented a demographer’s report that said the median income of 18- to 29-year-olds was lower than the income of 30- to 64-year-olds, both statewide and in the Bay Area counties where the clubs operate — a 50 percent gap in San Francisco and even more in Marin County, where the younger group made only 23 percent as much as the older group.

Javorsky’s expert witness said that the disparities didn’t hold up for all age groups — those ages 25 to 29 were about as well off as their elders — and that the clubs should base discounts on income, not age. His lawyers also cited the California Supreme Court’s 1985 ruling, written by Chief Justice Rose Bird, that struck down “ladies’ day” and “ladies’ night” discounts at bars and car washes, finding that they were arbitrary acts of discrimination that served no legitimate social purpose.

But the appeals court said age-based price discounts, whether for children, seniors or young adults, are legal when they provide some social benefit to an economically disadvantaged group and do not indicate hostility to others.

Distinctions based on age, Needham said, are “less likely to perpetuate stereotypes than discrimination on the basis of immutable characteristics such as sex and race.”

Javorsky’s lawyers could not be reached for comment.