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'Disparate Impact' and the Age Discrimination in Employment Act

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, Miss., 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.

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