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Does disparate impact theory apply in age discrimination cases?
February 01, 2005 by Ross Runkel at LawMemo
In Smith v. Jackson, Mississippi the US Supreme Court will decide whether the disparate impact theory of proof can be applied in a case arising under the Age Discrimination in Employment Act (ADEA).
Plaintiffs were City police officers and dispatchers over the age of 40 who claimed that the City's performance pay plan granted substantially larger pay increases to employees under age 40. Under the pay plan, employees with five or fewer years of tenure received proportionately greater raises when compared to their former pay than those with more than five years of tenure. Plaintiffs offered statistical proof that average pay increases differed by age and older employees received smaller raises than younger employees. The trial court held that the disparate impact theory could not be used in an ADEA case; the 5th Circuit affirmed [Full text pdf]. The US Supreme Court is reviewing the 5th Circuit decision [Briefs], and heard oral arguments [Transcript pdf] on November 3, 2004.
Circuit courts are split on this issue. Those allowing use of the disparate impact theory are the 2nd, 8th, and 9th. Those not allowing the disparate impact theory are the 1st, 5th, 7th, 10th, and 11th.
It all started with Griggs v. Duke Power, 401 US 424 (1971). The employer required a high school diploma for entry into certain jobs. This requirement disqualified Blacks at a much higher rate than Whites. The US Supreme Court held that once the plaintiffs proved this "disparate impact," then the burden shifted to the employer to justify the practice by showing job relatedness or business necessity.
Griggs was a Title VII case. Smith is an ADEA case. The statutes are similar in one major respect: the primary prohibitory language is virtually identical. Of course, the plaintiffs latch onto that, plus an EEOC regulation that recognizes disparate impact.
On the other hand, the ADEA contains a clause that is similar to the Equal Pay Act (EPA). The ADEA has a specific exception for "where the differentiation is based on reasonable factors other than age" (RFOA), similar to the EPA's exception for "any factor other than sex." The Supreme Court has said there can be no disparate impact claims brought under the EPA, and that was in large part because of the "any factor other than sex" language. This favors the employer's position, and is the backbone of many lower court decisions.
An interesting twist is whether the Older Workers Benefit Protection Act (OWBPA) should be read as making the RFOA an affirmative defense rather than a redefinition of liability. NELA makes a great argument along this line in its amicus brief [brief pdf].
Finally, there is the fact that the Civil Rights Act of 1991 amended Title VII to make clear that disparate impact claims could be brought under Title VII, but made no such amendment to the ADEA. I think that will be irrelevant because the Court should not interpret Congress' non-action as evidence of Congressional intent.
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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
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