The Age Discrimination in Employment Act (ADEA) prohibits an employer from terminating the employment of an employee or otherwise discriminating against any employee with respect to the employee’s compensation, terms, conditions, or privileges of employment, because of age provided, that an employee is at least 40 years of age. There are two types of age discrimination claims. In a disparate-treatment case, an employee is treated differently at the workplace due to the employee’s age. For instance, a 50-year-old employee with a good performance record is terminated and his replacement is 25 years old and the employee argues that there was intent to discriminate based on age. The other type of age discrimination claim is a disparate-impact claim which addresses an employer’s action that does not require proof of discriminatory intent. In this type of case the employer’s policy at issue may be fair in form, but the impact of the policy as implemented is found to be discriminatory. Disparate-impact claims usually focus on statistical disparities that have an impact on older employees due to their age.
In defending age discrimination claims employers sometimes argue that if other employees who are 40 years of age or older were not subject to discriminatory action that somehow proves that no one in the protected class (anyone who is older than 40) could possibly have been treated differently due to their age. This argument misconstrues age discrimination law and was rejected by the United States Supreme Court over 20 years ago, in O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308 (1996), an ADEA disparate-treatment case, in which the court held that a 56-year-old employee who was fired and replaced with a younger worker who was over age 40 could bring a successful claim under the ADEA.
A recent United States Court of Appeals for the Third Circuit case addressed the issue of whether an employer’s policy that impacts workers over 50 due to the age could be found to violate the ADEA if the same policy did not negatively impact the entire group of employees when the group was defined as all employees over age 40. To state a prima facie case for disparate impact under the ADEA, an employee must identify a specific, facially neutral policy, and (2) proffer statistical evidence that the policy caused a significant age-based disparity. Once a plaintiff establishes a prima facie case, an employer can defend by arguing that the challenged practice was based on reasonable factors other than age. In Karol v. Pittsburgh Glass Works, LLC, no. 15-3435 (3rd Cir. January 10, 2017), the court found that in a reduction in force case where there was a company-wide layoff, a group of employees who are 50 or older could use statistical data that showed that they were treated differently due to their age. In Karlo, the question before the court was whether a disparate-impact claim is cognizable where a “subgroup” of employees at the upper end of that range-in this case, employees aged 50 or older, were alleged to have been disfavored relative to younger employees.
In Karlo, the employer, Pittsburgh Glass Works, a Pennsylvania manufacturer of automotive glass engaged in several reductions in force (“RIFs”), laying off employees due to deteriorating sales. The RIF at issue resulted in the termination of the employment of 100 salaried employees. Directors were provided with broad discretion in selecting whom to terminate and the employer did provide any written guidelines or policies as to how go about selecting which employees to lay off. In Karlo each of the employees that filed the lawsuit were 50 years of age or older and they were all selected for layoff by the same supervisor (other employees later opted into the class action lawsuit). The Third Circuit found that the central question was whether so-called “subgroup” disparate-impact claims are cognizable under the ADEA.
Disparate-impact claims in ADEA cases ordinarily evaluate the effect of a facially neutral policy on all employees who are at least forty years old, that is, all employees covered by the ADEA. In Karlo, the employees argued that they identified a policy that disproportionately impacted a subgroup of that population: only employees that were older than 50. The court held that an ADEA disparate-impact claim may proceed when employees offer evidence that a specific, facially neutral employment practice caused a significantly disproportionate adverse impact based on age with various forms of evidence by using a statistical data group of employees who were 50 years of age or older (a subgroup) rather that all employees who were 40 years of age or older. The court’s holding was premised on the principle that the ADEA prohibits disparate impact based on age, not 40 and-older identity. Thus, the court found that a rule that disallowed subgroups of age brackets over 40 would ignore genuine statistical disparities that could otherwise be actionable through application of the plain text of the ADEA.
In Karlo, relying on the Supreme Court’s decision in O’Connor the court held that a specific, facially neutral policy that significantly disfavors employees over 50 years old supports a claim of disparate impact. Thus, in Pennsylvania, employees who bring age discrimination claims under either age discrimination theory can use evidence that they were treated differently than younger employees even when those “younger” employees are over age 40.
Andrew Abramson represents Pennsylvania employees who have age discrimination claims against their employers. For more information on age discrimination see https://www.job-discrimination.com/age-discrimination.html