This New York Times article reports a 7-1 decision by the U.S. Supreme Court to put the burden of proof on employers, not employees, in age discrimination cases. The Court concluded that had been the intent of the Congress in writing the law, which covers employees who are 40 or more years of age.
The bottom line for managers: if you do something that can be interpreted as "adverse" to a covered employee, you'd better be able to prove you had good business reasons for the move that were unrelated to the employee's age. Before firing, laying off, demoting, transferring, reassigning or passing over for promotion a covered worker, ask yourself this question: "Can I prove in court that this action was unrelated to the employee's age?" Sympathy, to the extent it exists, is likely to be for your employee, not for you.
It is not sufficient to know you've acted for reasons unrelated to age. You need to be able to prove to a Federal court that you acted for such reasons. Your human resources professionals will be able to assist you and a paper trail of accumulated evidence of employee malfeasance or poor performance which has been shared with the employee as it happened will definitely help.
Good luck....