BUSINESS WATCH

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

 

 

4.      The “business necessity” defense to a Title VII disparate impact claim asks whether there are other ways for the employer to achieve its goals that do not result in a disparate impact on a protected class. However, the “business necessity” test does not apply to claims of “disparate impact” discrimination under the ADEA. The “reasonableness requirement” [namely, the RFOA defense] under the ADEA “includes no such [business necessity] requirement.”

 

5.      The employees in the Jackson case did not identify any specific test, requirement or practice within the pay plan that had a disproportionate adverse impact on older employees. Further, and more importantly, the City’s explanation for the differential between older and younger workers was that the City perceived a need to make less senior officers’ salaries comparable with the regional marketplace. The City thus decided to give raises based on seniority and position. Reliance on those factors was “unquestionably reasonable given the City’s goal of raising employees’ salaries to match those in surrounding communities.” The plan was therefore permitted by the RFOA provision of the ADEA.

 

As a postscript, it may be noted that the Nebraska statutes prohibiting employment discrimination because of age contain a similar “reasonable factors other than age” provision.

 

The significant lesson: As long as an employer bases its employment decisions “on reasonable factors other than age,” the Court’s new decision and the “disparate impact” theory of discrimination should not cause the employer any significant age discrimination concerns.

 

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