EEOC Proposes New Factors to Evaluate Defense in Age Discrimination Lawsuits
Posted: February 18, 2010
The Equal Employment Opportunity Commission has proposed redefining a key defense available to employers facing claims by employees under the Age Discrimination in Employment Act. The agency’s Notice of Proposed Rulemaking, released February 18, 2010, would amend its “Differentiations Based on Reasonable Factors Other than Age” regulation, 29 C.F.R. § 1625.7, by identifying new criteria for establishing the “reasonable factor other than age” defense in age discrimination cases.
Most claims of discrimination are brought under a “disparate treatment” model: the plaintiff alleges that the employer intentionally took action against him because of his race, sex or age. In 2005, however, the U.S. Supreme Court ruled that the Age Discrimination in Employment Act (“ADEA”) allowed claims under a “disparate impact” theory, as well. Smith v. City of Jackson, 544 U.S. 228 (2005). Under the latter theory, an employer may be found liable for discrimination based on its use of policies that disproportionately affect a particular protected class in an adverse way.
Despite its ruling, the Court in Smith held that ADEA defendants need not prove a policy that disparately affects older employees was justified by the high hurdle of “business necessity” in order to escape liability. Rather, it said, the policy at issue need be based on only a reasonable factor other than age.
In light of Smith, the EEOC on March 31, 2008 proposed amendments to its “Reasonable Factors Other than Age” regulation. The proposal would have eliminated the “business necessity” language in the regulation and specify that a disparate impact plaintiff had the burden of “isolating and identifying” an employer policy that was responsible for created statistical disparities adversely affecting older employees. It also would have eliminated the requirement that an employer validate tests that it claimed evaluated a “reasonable factor other than age,” if use of the tests had an adverse impact on older employees.
The EEOC, however, has yet to promulgate its proposed 2008 amendment to the regulation. The most recent proposal contains a number of factors for determining whether an employer’s practice or policy is “reasonable.” These include:
- whether the employer took steps to assess the adverse impact of its employment practices on older workers,
- the extent older workers may be harmed by the policy, and
- whether other options were available to the employer.
Measurement of “other options” includes elements of the plaintiff-friendly “business necessity” test rejected in Smith. The EEOC’s proposal tacitly acknowledges this tension, stating in a footnote that while an employer is not required to use “other options” (i.e., alternatives that would lessen any adverse impact on older workers), their availability is a factor in evaluating the reasonableness of the policy or practice in dispute.
The EEOC’s proposed regulation demonstrates that the agency expects employers to assess carefully their policies, the impact their policies would have on older employees and alternatives that would avoid or materially reduce age-related adverse impact. Jackson Lewis LLP regularly counsels clients on such issues, and defends clients facing EEOC pattern-and-practice investigations and lawsuits alleging disparate impact against older workers.
