EEOC rule defines "reasonable" in ADEA cases
Commission seeks to outline employers' defense in age discrimination litigation
February 29, 2012 at 07:00 PM
6 minute read
Just how much the Equal Employment Opportunity Commission's (EEOC's) proposed new rule defining “reasonable factors” that justify an employment action against older workers will impact age discrimination litigation depends on whether you see the glass as half empty or half full. Employment defense lawyers' opinions on the topic range from assertions that the rule will make summary judgment for employers virtually impossible to contending it will help employers by providing a road map of what is needed to win.
The commission adopted the proposed rule in the wake of two Supreme Court decisions that established the defense that “reasonable factors other than age” (RFOA) justified an employment action, such as termination, against an employee older than 40. The high court rulings did not define what it meant by “reasonable factors,” leading to varying lower court interpretations. In general, those interpretations have made it easier for employers to win summary judgment in Age Discrimination in Employment Act (ADEA) cases than in those brought under Title VII. So the EEOC decided to step in.
The EEOC voted 3-2 to approve the new rule in November 2011. It includes nonexhaustive lists of factors relevant to determining whether a factor is “reasonable” and “other than age.”
“Anytime the EEOC goes out of its way to issue rules of this type, which it doesn't often do, it's worth taking notice of,” says Dennis Brown, a Littler Mendelson shareholder. “It shows the EEOC administration is concerned that the law has developed in a direction that they think is unclear, unwise or unwarranted. It's an indication of their belief that the courts have been too lenient on employers, and an attempt to level the playing field.”
Tougher Test
In its 2005 decision in Smith v. City of Jackson, the Supreme Court held that an employment practice that has a disparate impact on older workers is discriminatory unless the practice is justified by a “reasonable factor other than age.” In doing so, the court rejected the more stringent requirement that the employer justify the action as a “business necessity.”
Three years later, in Meacham v. Knolls Atomic Power Lab., the court reaffirmed that the business necessity test is not appropriate for ADEA cases, but held that the employer bears the burden of proving the RFOA defense.
Because neither Smith nor Meacham elaborated on the meaning of “reasonable factors other than age,” the EEOC issued the proposed rule.
“The EEOC is bringing more attention to that reasonableness factor by saying employers have to prove reasonableness, and these are the factors that go into the reasonableness test,” says Mark Cheskin, a partner at Hogan Lovells. “The EEOC is trying to put forth a checklist that employers must follow.”
Defining Discrimination
The proposed rule explains that a “reasonable” factor is one that is “objectively reasonable when viewed from the position of a reasonable employer under like circumstances,” both in its design and in the way it is administered. The criteria for determining that include whether the employment practice and its implementation are common business practices; the extent to which the factor is related to the employer's stated business goal; and the extent to which the employer took steps to define and apply the factor fairly and accurately.
Maria Danaher, an Ogletree Deakins shareholder, says those criteria in essence reinstate the business necessity test that the Supreme Court rejected, which she views as “a step backward.” Brown agrees that the EEOC has raised the bar for employers, but adds the lower courts will attempt to reconcile the rule with Supreme Court decisions.
The criteria for a “reasonable” employment action also include the extent to which the employer took steps to assess the adverse impact on older workers and minimize the harm to them.
Cheskin says the adverse impact assessment is common practice among larger employers, but notes that in many layoff situations the number of terminated employees is too small for a statistically valid assessment.
The rule also lists factors relevant to the definition of “other than age.” These center on whether supervisors are trained to assess employees objectively rather than according to age-based stereotypes, and preclude basing decisions on perceptions of the employee's flexibility, willingness to learn and technological skills.
“What jumped out at me was that criterion such as flexibility of the employee can be subject to age-based stereotyping,” Cheskin says.
Varying Views
Cheskin sees the rule as potentially helpful to employers because it sets out a road map to follow when taking employment actions such as reductions in force.
“I don't see this as bad for employees,” he says. “These factors can be used by employers as a checklist to show why their practices were not designed to discriminate against anyone.”
But Danaher fears the rule will make summary judgment much more difficult for employers because it states that “whether a particular employment practice is based on reasonable factors other than age turns on the facts and circumstances of each particular situation and whether the employers acted prudently in light of those facts.”
By suggesting the decisions must be made on a case-by-case basis, the EEOC is effectively precluding summary judgment because juries will have to decide the specific facts of each case, Danaher says.
Brown adds that by specifying criteria for the RFOA defense, the rule makes summary judgment less likely.
“By setting forth these guidelines, the EEOC makes it more difficult for judges to merely apply common sense to the facts before them,” he says. “It will come down to a sharper focus on what the rule sets forth as opposed to common sense factors that courts typically have used.”
Of course, the actual impact won't be known until the rule, still under review by the Office of Management and Budget at press time, is finalized and court decisions reveal how judges are using it. But employers should be prepared for more trials, especially because age cases continue to grow as demographic forces create an older workforce, financial pressures cause more older workers to defer retirement and the weak economy continues to dislocate workers (see “Going Up”).
While the rule emphasizes the need for fair employment practices and supervisor training, the best insurance against age claims when laying off workers is a severance program that includes a general release, Brown adds.
“There is no guarantee against age discrimination litigation unless you have a release,” he says.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllHunter Biden Sues Fox, Ex-Chief Legal Officer Over Mock Trial Series
Judge Sides With McDonald's In Attorney-Client Privilege Dispute With Former Executives
4 minute readMarriott's $52M Data Breach Settlement Points to Emerging Trend
Trending Stories
- 1The Law Firm Disrupted: Playing the Talent Game to Win
- 2Preparing Your Law Firm for 2025: Smart Ways to Embrace AI & Other Technologies
- 3BD Settles Thousands of Bard Hernia Mesh Lawsuits
- 4GlaxoSmithKline Settles Most Zantac Lawsuits for $2.2B
- 5A&O Shearman Adopts 3-Level Lockstep Pay Model Amid Shift to All-Equity Partnership
Who Got The Work
Blank Rome partner Andrew T. Hambelton has stepped in to defend Fragrancenet.com in a pending trademark infringement lawsuit. The case, filed Aug. 29 in New York Southern District Court by the Blakely Law Group, targets the defendants for allegedly selling counterfeit fragrance products. The case, assigned to U.S. District Judge Lorna G. Schofield, is 1:24-cv-06521, Abercrombie & Fitch Trading Co. v. Quester (US) Enterprises, Inc. et al.
Who Got The Work
Davis Polk & Wardwell partners Mari Grace and Edmund Polubinski III have entered appearances for Australia-based Bitcoin-mining company Iris Energy and other defendants in a pending securities class action. The action, filed Oct. 7 in New York Eastern District Court by the Rosen Law Firm, contends that the defendants concealed the inadequacy of the company's site in Childress County, Texas, including it being 'ill-equipped' and unable to operate the company's proprietary design. The case, assigned to U.S. District Judge Peggy Kuo, is 1:24-cv-07046, Williams-Israel v. Iris Energy Limited et al.
Who Got The Work
Ryan S. Stippich of Reinhart Boerner Van Deuren has entered an appearance for biopharmaceutical company Veru Inc. and other defendants in a pending shareholder derivative lawsuit. The action, filed Sept. 30 in Wisconsin Western District Court by the Brown Law Firm on behalf of June Ovadias, accuses the defendant of failing to disclose that small sample sizes and other issues rendered it unlikely that the FDA would grant Emergency Use Authorization for the cancer drug candidate sabizabulin as a potential treatment for COVID-19. The case, assigned to U.S. District Judge William M. Conley, is 3:24-cv-00676, Ovadias, June v. Steiner, Mitchell et al.
Who Got The Work
Holland & Knight partners Cynthia A. Gierhart and Thomas Willcox Brooke have entered appearances for Pakistani American Political Action Committee and Rao Kamran Ali in a pending trademark infringement lawsuit. The action, filed Sept. 24 in District of Columbia District Court by Jackson Walker on behalf of Pakistani American Public Affairs Committee, accuses the defendants of using a mark that's confusingly similar to the plaintiff's 'Pak-Pac' marks without authorization. The case, assigned to U.S. District Judge Randolph D. Moss, is 1:24-cv-02727, Pakistani American Public Affairs Committee v. Pakistani American Political Action Committee et al.
Who Got The Work
Lauren M. Rosenberg and Yonatan Even of Cravath, Swaine & Moore have stepped in to represent Israel-based Oddity Tech Ltd. in a pending securities class action. The case, filed Aug. 30 in New York Southern District Court by Pomerantz LLP and Holzer & Holzer, contends that the defendant made materially misleading statements regarding the capability of Oddity's AI technology and ongoing civil litigation, resulting in the artifical inflation of the market price of Oddity's securities. The case, assigned to U.S. District Judge Margaret M. Garnett, is 1:24-cv-06571, Hoare v. Oddity Tech Ltd. et al.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250