Print

Age Discrimination: US Supreme Court Increases Employer's Burden In Disparate Impact Claims

Volume 7, Issue 6
June 25, 2008

On June 19, 2008, in Meacham v. Knolls Atomic Power Laboratory, 554 U.S. --- , 2008 WL 2445207, the United States Supreme Court clarified that, in regard to a specific employment practice challenged as having a disparate impact on older workers in violation of the Age Discrimination in Employment Act ("ADEA"), the employer bears the burden of proving that the challenged policy or practice is based on reasonable factors other than age.

The employer, Knolls Atomic Power Laboratory, laid off 31 employees as part of a reduction in force ("RIF"); all but one of the employees were at least 40 years old. The laid-off employees were selected based on scores pursuant to three scales - performance, flexibility, and critical skills - together with points added for years of service. A group of these employees sued under the ADEA. They alleged, in relevant part, that the RIF had a discriminatory impact on older workers and that the scores for "flexibility" and "criticality" "had the firmest statistical ties to the [disparate] outcome."

A disparate impact claim, like the one at issue here, entails a challenge to a seemingly neutral employment practice or policy which has unlawfully, albeit unintentionally, discriminated against a protected class of individuals. In a disparate impact claim premised upon age discrimination, the plaintiff is responsible for isolating and identifying specific employment practices that are allegedly responsible for any observed statistical disparities. Once the plaintiff has made this showing, the burden shifts to the employer to demonstrate that the employer's decision was based on "reasonable factors other than age" ("the RFOA defense").

The Court in Meacham determined that in satisfying its burden, the employer must do more than simply produce a factor other than age. It must also persuade the jury as to the reasonableness of that factor. As such, rather than placing the ultimate burden of proof upon the plaintiff, the Court determined that the employer bears the burden of production and proof as to the reasonableness of its practice or policy.

The Court acknowledged that placing the burden of proving reasonableness on the employer "makes it harder and costlier to defend" ADEA disparate impact claims and that the ruling will certainly "affect the way employers do business with their employees." The Court concluded, however, that such policy implications must be raised with Congress because the language of the ADEA renders the RFOA an affirmative defense

. At a time when many employers are considering or implementing layoffs, this decision is important to keep in mind. In conducting a RIF or similar program, employers should carefully analyze whether its selections will have a disparate impact upon members of protected classes. Conducting such an analysis before implementing a layoff allows the employer to consider adjustments which may curtail legal challenges or improve the employer's ability to defend such challenges. At the very least, such a proactive analysis allows an employer the ability to fully weigh the risks of its proposed actions.

For the full text of this case, please see: www.kzalaw.com/engine/file_writing/file_uploads/ls4dEF2xr3pSmVQ5.pdf

Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.