United States: U.S. Supreme Court Expands Federal Protection Against Age Discrimination

Originally published Spring 2005

On March 30, 2005, the U.S. Supreme Court issued a decision that has important implications for employers and employees. The Court determined that the Age Discrimination in Employment Act (ADEA) protects workers who are 40 years of age or older against employment practices and policies that disproportionately affect older workers. As a result of Smith v. City of Jackson, older workers may recover against employers if they can show that a practice or policy has a disparate impact on them, even though the practice or policy may have been adopted with no discriminatory intent or motivation.

In 1967, Congress enacted the ADEA to promote employment of older persons based on their ability rather than age, to prohibit arbitrary age discrimination in employment, and to help employers and workers find ways of meeting problems arising from the impact of age on employment. The ADEA made it unlawful for employers to fail or refuse to hire, to discharge, or to otherwise discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment, because of such individual's age. It also made it unlawful for employers to limit, segregate, or classify employees in any way that would deprive or tend to deprive any individual of employment opportunities or would otherwise adversely affect the employee's status because of age. However, employers may take an action otherwise prohibited when age is a "bona fide occupational qualification" that is reasonably necessary to the normal operation of the particular business or when the "differentiation" is based on reasonable factors other than age.

In the City of Jackson case, the city had adopted a pay plan to improve retention and bring starting salaries of police and public safety officers up to the regional average. Under the policy, officers who had less than five years of tenure would receive proportionately greater raises when compared to their former pay than those with more seniority. Most officers over the age of 40 had more than five years of service.

A group of older officers sued the city, claiming that the salary increases they received violated the ADEA because the increases were less generous to officers over the age of 40 than to younger officers. In their suit, the officers claimed that the city deliberately discriminated against them because of their age (the "disparate-treatment" claim) and that the city's plan adversely affected them because of their age (the "disparate-impact" claim). The trial court ruled for the city on both claims. The Court of Appeals for the Fifth Circuit reversed the judgment on the disparate-treatment claim, but affirmed on the disparate-impact claim because, in its view, disparate-impact claims were unavailable under the ADEA.

The U.S. Supreme Court disagreed and determined that the ADEA authorizes disparate-impact claims. The Court observed that, except for the substitution of the word "age" for the words "race, color, religion, sex, or national origin," the ADEA provision that makes it unlawful to limit, segregate, or classify employees in any way that would deprive or tend to deprive employees of employment opportunities or otherwise adversely affect their status because of age is identical to a Title VII provision that the Court had already determined permits disparate-impact claims under Title VII. The Court indicated that the focus of this ADEA provision, like the nearly identical Title VII provision, is on the consequences or effects of employer practices and policies on employees, not on employer motivation or intent. In the history surrounding the adoption of the ADEA and the recognition of the disparate-impact theory by the administrative agency charged with implementing the ADEA, the Court found additional support for its conclusion.

Although the Court determined that ADEA permits disparate-impact claims, the Court also decided that the scope of disparate-impact liability under the ADEA is narrower than under Title VII. The Court noted that the ADEA, unlike Title VII, permits employers to take an action otherwise prohibited when the "differentiation" is based on reasonable factors other than age. Thus, in disparate-impact claims under the ADEA, employers are not liable if the adverse impact is attributable to a "non-age" factor that is "reasonable." The Court observed that employees bringing disparate-impact claims under the ADEA have the burden of isolating and identifying the specific employment practices that are allegedly responsible for any observed statistical disparities, a burden employees must bear so that employers are not made liable for "the myriad of innocent causes that may lead to statistical imbalances."

Ultimately, the Court ruled that the officers in City of Jackson failed to prove their disparate-impact claim because they failed to identify the specific employment practice responsible for the statistical disparities. The Court also concluded that the record demonstrated that the city's plan was based on reasonable factors other than age. The Court attributed the disparate impact to the city's decision to award salary increases on the basis of seniority and position to match salaries in surrounding communities. Thus, the Court held that the city's decision "to grant a larger raise to lower echelon employees for the purpose of bringing salaries in line with that of surrounding police forces was a decision based on a 'reasonable factor other than age' that responded to the city's legitimate goal of retaining police officers."

This decision expands both the rights of older workers under the ADEA and the potential liabilities of employers. Although employers understand that the ADEA prohibits them from intentionally discriminating against workers based upon their age, employers must now understand that they face liability for practices and policies that adversely affect older workers, and thus they must be mindful of the consequences or effects their practices and policies could have upon older workers. In establishing and reviewing their practices and policies, employers must ensure that practices and policies that adversely affect older workers are based upon reasonable factors other than age. Although this decision announces a reasonableness standard that simply requires employers to use means that are rationally related to some legitimate business objective (in other words, practices and policies do not have to utilize the most reasonable means to accomplish the employer's goals), it is advisable for employers to consider other means to achieve the same goals that may not have the adverse impact upon older workers.

Michael J. DeBoer is an associate attorney practicing in RJ&L's Colorado Springs office where he represents religious institutions, nonprofits, and corporate clients in a variety of legal matters, including policy development, litigation, employment, and First Amendment law. Mr. DeBoer graduated magna cum laude in 1998 from Valparaiso University School of Law where he was the editor-in-chief of the Valparaiso University Law Review.

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