Supreme Court Makes It Harder to Defend Disparate Impact Age Discrimination Claims
In 2005, the United States Supreme Court issued its ruling in Smith v. City of Jackson, 544 U.S. 228 (2005), recognizing that employees can bring disparate impact claims for age discrimination under the Age Discrimination in Employment Act (ADEA) (claims based on evidence that older workers are disproportionately affected by an employment decision, even if the decision was not taken because of the employees' age).
Yesterday, the United States Supreme Court issued its opinion in Meacham v. Knolls Atomic Power Laboratory, setting forth its interpretation of the burden of proof in such cases.In a 7-1 ruling (Justice Breyer did not participate), the Court held that in disparate impact ADEA claims , the employer bears the burden of both producing evidence and of ultimately persuading the fact finder that there is a reasonable explanation other than age for the company's action.As a result of this decision, in disparate impact cases, if the employer cannot meet its burden of proving both (a) that the decision was based on a factor other than age, and (b) that the decision was "reasonable," liability will be established simply by the employee establishing that the decision had an adverse impact on older workers through statistical or other evidence.
Justice Souter issued the opinion and the lone dissent was issued by Justice Thomas, who continued to assert his belief that disparate impact cases are not cognizable under the ADEA.In the opinion, the Court specifically held that "there is no denying that putting employers to the work of persuading factfinders that their choices are reasonable makes it harder and costlier to defend than if the employers merely bore the burden of production; nor do we doubt that this will sometimes affect the way employers do business with their employees."However, the Court specifically held that it could only interpret the statute and that it is up to Congress to modify the language if a different result were to be reached.
In light of the Court's opinion, employers who are considering layoffs or reductions in force should make sure they carefully examine whether such action will have an adverse action on older workers.If the statistics demonstrate such adverse action, employers must take extra precautions to ensure that they have legitimate and objective explanations supporting the selection process that are entirely separate from age or age-related characteristics and are likely to be considered reasonable by an independent factfinder.Failure to engage in such an analysis prior to implementing a layoff or reduction in force, is now more likely to expose the employer to substantial liability.