Green Light Given For “Disparate Impact” Age Discrimination Suits
By David T. Andrews
On March 30, 2005, the United States Supreme Court decided that employers may be sued under the Age Discrimination and Employment Act (ADEA) for employment decisions that have a disparate impact on older workers, defined as workers 40 years or older. What this means is that plaintiffs can file lawsuits alleging discrimination if an employer takes any action, regardless of intent, that adversely affects older workers. In other words, you can be guilty of discrimination without even knowing it.
On one level, the ruling makes it far easier to bring a lawsuit under the ADEA, as it removes the requirement that an employee actually prove that an employer deliberately discriminated against older workers. In that regard, the new ruling brings the ADEA in line with the Civil Rights Act of 1964, for which the Court has also held that no proof of intent to discriminate is required.
On the other hand, the decision also requires the employee to prove the questionable employment decision was not based on “a reasonable fact other than age.” The Civil Rights Law, as currently interpreted, places the burden on the employer to prove that the action was based on “business necessity.” Thus, in age discrimination cases, the burden of proof remains on the employee. This is a significant development because, as any practitioner can tell you, the burden of proof is often the most difficult hurdle in proving any case.
The legal community’s response to the Court’s decision has been mixed, predictably enough. Some attorneys have noted that the new decision will likely make it harder to bring ADEA lawsuits, as the burden on the employee is a very hard standard to prove. Other attorneys, by contrast, have stated that the new decision gives plaintiffs’ attorneys a weapon that they did not previously have. Before the decision, many age discrimination cases alleged anecdotal evidence of age bias, such as a manager’s remark about bringing in “new blood” or “getting rid of dead wood.” Now, employees can file such lawsuits without such “smoking gun” statements, merely by showing evidence, statistical or otherwise, that a particular decision had a disparate impact on older workers.
The Court’s decision also settled a split among the nation’s appellate courts, where some courts had already been allowing ADEA cases to proceed without proof of an intent to discriminate. However, those courts had also been placing the burden of proof on the employer. Thus, the Supreme Court decision affirms those Circuit courts but establishes a harder standard than they were using hitherto.
The Court also clarified that the ADEA allows more latitude for practices that disparately affect older workers than for practices that disparately impact women or minorities, covered by the Civil Rights Law. The Court reasoned that “age, unlike race or other classifications protected by Title VII, not uncommonly has relevance to an individual’s capacity to engage in certain types of employment.”
Regardless of whether the ruling prompts a new rush of age discrimination complaints, company managers and human resource departments will have to be wary of this new decision. The decision is especially problematic for large employers, who generally have rich databases for statisticians to study in search of “proof.” Managers must look at practices such as transfers, promotions, pay increases, and reductions in force, all of which can have an unintended impact on workers 40 and over. It would be advisable for employers to conduct a thorough self-audit of their policies. If a policy does in fact have a disparate impact on older workers, employers would be advised to document the business reasons for the policy.
Employment discrimination claims continue to be the number one source of litigation in the country. Contact David, Lynn Schonberg, or Jerry Cline to learn more about how you can protect your company.