Take extra care to avoid age discrimination

by on December 15, 2008 · 0 Comment POSTED IN: HR Info Center

In age discrimination lawsuits, Supreme Court puts burden of proving fairness on you.

Got any employees over 40? Most organizations do. If you’re among them, you won’t be thrilled to hear about the Supreme Court’s latest age discrimination and employment law decision.

The highest court in the land just made it much harder for you to reduce or restructure your workforce without violating the federal law protecting older workers from age discrimination. If more than one over-40 employee might be affected by such employment actions, you’ll have to take extra precautions.


We’ve already reported on how a reputedly business-friendly Supreme Court has made several decisions that have complicated the lives of employers – and especially HR people. This is another of those decisions.

Here’s what the case was about:


A nuclear propulsion lab in New York State was having business problems, and decided to reduce its workforce. Buyouts didn’t get the headcount down enough, so the employer came up with criteria for a reduction in force (RIF).

Managers gave employees points in four areas – performance, flexibility, critical skills, and length of service – with the lowest scorers to be discharged.

Despite what looked like a nondiscriminatory set of criteria, when it came time to lay folks off, 30 of the 31 people chosen were over 40 years of age.

A group of the laid-off employees sued, claiming the RIF made a disparate impact on older workers in violation of the Age Discrimination in Employment Act (ADEA).

Disparate impact occurs when an action or policy that appears neutral ends up having a heavier impact on older workers than others. Under the Age Discrimination in Employment Act, disparate impact is just as illegal as disparate treatment, which is intentional discrimination against over-40 people.


The New York case wended its way through the federal court system and eventually to the Supreme Court. The laboratory’s defense was that it structured the RIF based on what the ADEA calls “reasonable factors other than age,” (RFOA) and so didn’t break the law. But to the surprise of the laboratory and several employer groups that took its side, the court ruled in favor of the employees.

Key point: The lower courts said the employees, to win their age discrimination suit, had to disprove the employer’s RFOA claim. But the Supreme Court said that was backwards. The employer has to prove there was an RFOA, not expect the employee to disprove it, the court said.


This may seem like a small, technical point lacking great significance. It isn’t. In the case at hand, it meant the employer, having already spent a mint on legal fees, had to go back to the lower courts and spend more – or settle. And more broadly, employers will have a tougher time winning disparate impact cases in the future, according to employment lawyers at the Dewey & LeBoeuf firm.


What’s HR’s responsibility in light of this new situation? Remember, if a company action is challenged on age bias grounds, it’s up to you to prove it’s not age-based, and is legal.

So, according to Dewey & LeBoeuf’s Margaret Keane and Amy Metzger, if you’re planning an RIF, restructuring or other similar initiative that will affect more than one employee:

    • Make sure you and line managers carefully analyze the likely results ahead of time. Will a process that’s fair and rational on the drawing board turn out to have a disproportionate impact on your over-40 employees?
    • If the answer to the above question is “yes,” consider revising the process. You could, for example, give seniority more weight in a points system, to minimize the effect on older employees.
    • If changing the process isn’t practical, make absolutely sure that you’re applying your selection criteria objectively. For instance, if “job knowledge” is one of them, do you have a firm definition and measuring scale for such knowledge? Do managers have so much leeway in scoring the criteria that the process could be skewed against over-40s?
    • Finally, thoroughly document your age-neutral reasons for the RIF or restructuring, so you can prove your case if an employee brings a disparate impact age bias case.

Issue 7.2

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