Wednesday, June 25, 2008

Supreme Court clarifies ADEA burden shifting

On June 19th the U.S. Supreme Court made several employment-related decisions. Of most interest for us is their decision in Meacham v. Knolls.

The case involved workers over 40 who were suing over their layoffs. They claimed they lost their jobs due to age discrimination, claiming a violation of the Age Discrimination in Employment Act (ADEA). Although they claimed both disparate treatment and disparate impact, the important issue here is the latter--employment decisions that may not intentionally discriminate but have that effect.

How the court ruled is closely tied to its 2005 decision in Smith v. City of Jackson, in which they held that adverse impact cases could be brought under the ADEA, but employers could prevail if they could show (per the language of the ADEA) that the employment decision was based on a "reasonable factor other than age" (RFOA).

So what was the decision? The court made it clear that the employer in these cases bears both the burden of production and the burden of persuasion that the employment decisions were based on a RFOA. This is similar to other adverse impact discrimination cases, such as those brought under Title VII, where an employer must show their practice was "job related and consistent with business necessity."

So what does this mean? It doesn't mean a new requirement. It reinforces that all employment decisions--hiring, firing, and everything in between--should be based on logical, non-discriminatory reasons. The fact that the employer may face a slightly easier hurdle in ADEA disparate impact cases compared to, say, race or gender cases, is practically insignificant.

Important note: the plaintiffs in this case provided expert testimony that employee scores on "flexibility" and "criticality" had both the most manager discretion and were tied the strongest to outcomes. Words like these are often invoked in age discrimination cases (a jury can easily see how these types of words might be proxy for "young"), and employers are wise to strongly consider in hiring and firing situations whether the rating factors are tied to benchmarks and can be shown to be important for success on the job.

No comments: