BUSINESS WATCH

U.S. Supreme Court Clarifies “Disparate Impact” Rules for Age Discrimination Claims By Robert T. Cannella

 

 

There are two basic types of unlawful job discrimination – “disparate treatment” discrimination and “disparate impact” discrimination.

 

Disparate treatment discrimination consists of treating similarly situated individuals differently because of some unlawful factor, such as race or gender. Individuals who claim to be victims of disparate treatment discrimination are generally required to prove that they were subjected to intentional discrimination.

 

In comparison, “disparate impact” discrimination consists of applying some neutral factor that actually operates in a discriminatory manner, such as a high school diploma requirement that disproportionately screens out members of racial minorities or a “speak English only” rule that disproportionately screens out applicants or employees for whom English is not the primary language. Historically, proof of discriminatory intent has not been required to prove “disparate impact”  discrimination. Rather, proof of the disparate impact of a specifically identified test, job requirement or job practice has been sufficient to establish the claim. Employers have been able to defend such claims, once proved, only by proving that the “neutral on its face but discriminatory in operation” test, requirement or practice is justified by “business necessity.”     

 

On March 30, 2005, the U.S. Supreme Court decided Smith v. City of Jackson, Mississippi and provided important guidance regarding “disparate impact” age discrimination claims under the federal Age Discrimination in Employment Act (“ADEA”). The case involved a police department pay plan in which the city had given proportionately greater pay raises to police officers with less than five years of service. Older officers claimed they were adversely affected by the plan because they tended to occupy the more senior positions and therefore received, on average, smaller percentage pay raises.

 

No single opinion enjoyed the support of a majority of the Supreme Court’s nine members, but five members of the Court agreed that “disparate impact” discrimination claims based on age must be analyzed differently than “disparate impact” discrimination claims based on sex, race, or other prohibited factors. To summarize the Court’s significant holdings:

 

 1.     The ADEA does prohibit “disparate impact” age discrimination.

 

 2.     Unlike Title VII – which prohibits employment discrimination based on race, color, religion, sex and national origin – the ADEA allows a specific statutory defense “where the differentiation is based on reasonable factors other than age” (“RFOA”). That statutory defense significantly narrows the coverage of the ADEA.

 

 3.     In response to the Supreme Court’s 1989 Wards Cove decision, Congress in 1991 amended Title VII to expand the scope of “disparate impact” discrimination. But Congress did not at that time similarly amend the ADEA or speak to age discrimination. Therefore, the Court held that the pre-1991 Wards Cove rules continue to apply to “disparate impact” age discrimination claims under the ADEA. That meant that to succeed in their lawsuit, the police officers were required to isolate and identify “the specific employment practices that are allegedly responsible for any observed statistical disparities.”

 

 

 

 

Continued

 

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