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Disparate Impact and the ADEA

Since Congress enacted the federal Age Discrimination in Employment Act (ADEA) in 1967, the law has evolved significantly both as a result legislative amendments and judicial interpretation. Most recently on March 30, 2005, the Supreme Court decided the case of Smith v. City of Jackson, Mississippi.

The ADEA protects most workers age 40 and older from age discrimination in hiring as well as all other aspects of employment, including compensation, job assignments, training, promotions, and layoffs. The Smith case clarifies the concept of "disparate impact" as it relates to age and employment.

The Issue: Thirty officers and dispatchers in the Jackson, Mississippi, police department, all at least 40 years old, sued the city, challenging a pay system that granted higher percentage salary increases to workers with five or fewer years on the job. Nearly all the workers who qualified for the larger increases were under the age of 40.

United States Supreme Court Ruling: On March 30, 2005 the court ruled that workers over 40 years old could sue under the ADEA when an employer's action has a "disparate impact" on their age group and the employer's action was not "reasonable." Significantly, the employees are not required to prove that the employer intended to discriminate against older workers in a disparate impact case.

Note: The following questions and answers are written without the legalese generally used in describing legal decisions to give employers and human resource professionals a layman's understanding of the court's decision, its impact on your company's human resource procedures, and provide food for thought on business policies that affect older workers.

This content is provided for general information only and cannot be accepted as legal advice. For more specific legal information contact your employer's legal counsel.

Under the Supreme Court decision in Smith v. Jackson, Mississippi:

Question: Must all employers comply with the decision?
Answer: No. Small employers are not covered by the ADEA. The ADEA applies to private employers, to state, local, and federal government organizations with 20 or more employees, and labor unions with 25 or more members.

Question: When did the court decision go into effect?
Answer: The court decision was issued on March 30, 2005, and became effective on that date. It can apply to all pending cases of alleged employer age discrimination before March 30, 2005, and other new cases occurring after the issue date of the decision.

Question: Did the court rule that workers over 40 years of age can only sue for age discrimination when the employer's actions were blatant and intentionally targeted older workers in favor of younger workers? For example:

• Denying all older workers promotions because they were near retirement age.
• Denying training opportunities to all older workers because they are "fixed in their ways."

Answer: No. The court ruled that workers over age 40 can sue under the ADEA for a more subtle form of age discrimination - "disparate impact" - which involves employment policies or practices that on the surface are age-neutral, in that age is not specifically mentioned, but in fact fall more harshly on older workers. For example:

• A school district with a policy that it will not hire any new teachers with more than 10 years of teaching experience.
• An employer's job requirement that focuses on computer literacy for a position that does not require computer use.
• A layoff policy that targets high-salaried workers or those eligible for retirement.

Question: Does the Smith decision give older workers the same protection against unintentional acts of discrimination ("disparate impact") that are given to women, blacks, and members of other groups that sue under Title VII of the Civil rights Act of 1964?
Answer: No. In Smith, the Court clarified that the defense to a disparate impact case is less burdensome than under Title VII. Under Title VII, an employer must establish "business necessity" for the policy or practice that results in the disparate impact. Under the ADEA, employers need only establish that the policy or practice is "reasonable."

Question: If an employee alleges an employer's policy or action violated the employee's rights under the ADEA, can the employer prevail under the ADEA if the employer can show that it acted based on a "reasonable factor other than age"?
Answer: Yes. For example, an employer may disqualify applicants for a job if they don't have the requisite educational degree. However, to be lawful, the "reasonable factor other than age," must be applied equally; it cannot, in any way, include age; and it must be job-related.

Conclusion
Implementing programs and policies to attract and retain workers aged 40+ will become increasingly important and will present American businesses with new opportunities and challenges. Now that older workers have the right to challenge more subtle forms of age discrimination, regardless of intent, the Supreme Court decision is a reminder to evaluate your policies and practices to ensure that:

• Employment practices are age-neutral.
• They do not provide special benefits to one age group of employees over another.
• They comply with the ADEA and other state and local age discrimination statutes.

How do your company's employment practices rate in age equity?

Resources

Age Discrimination: What Employers Need to Know
Covers age discrimination laws, evolving issues, trends, and age equity in the workplace.

AARP Age Equity in Employment Checklist for Employers
An online checklist to help employers assess their company's policies and practices and ability to attract and keep valuable employees, including older workers. Topics include policy development, training, recruitment, and job redesign.

AgeLine Database
A searchable database including over 65,000 book and article summaries, research reports, policy papers, and video summaries. Searching is free but the number of searches at any one time is limited.

Equal Employment Opportunity Commission (EEOC)
Check out the EEOC Website for information about age discrimination.