EEOC Issues Proposed Age Discrimination Regulations

In its 2005 decision, Smith v. City of Jackson, the U.S. Supreme Court stated that disparate impact claims (involving employment actions that have a disproportionately negative impact on a protected class) are recognized under the Age Discrimination in Employment Act (ADEA), but further explained that such claim is not stated where the employer shows that its decision was based on a “reasonable factor other than age” (RFOA) even though the impact of the decision disproportionately affects older workers. The EEOC has now issued proposed revisions to the ADEA regulations regarding the meaning of “reasonable factors other than age.”

Facts and Circumstances. The proposed regulation is intended to clarify the scope of the RFOA defense. Under the proposed revision, whether an employment practice is based on RFOA is determined by the facts and circumstances of each case. The regulation also defines “reasonable factor” to mean “one that is objectively reasonable when viewed from the position of a reasonable employer . . . under like circumstances.” An employer seeking to use the RFOA defense must show that the employment practice was (1) “reasonably designed to further or achieve a legitimate business purpose” and (2) “administered in a way that reasonably achieves that purpose in light of the facts and circumstances that were known, or should have been known, to the employer.”

Reasonableness. The proposed regulation provides a non-exclusive list of factors deemed relevant to the reasonableness determination:

– Whether the employment practice and the manner of its implementation are common business practices;

– The extent to which the factor is related to the employer’s stated business goal;

– The extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g. training, guidance, instruction of managers);

– The extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;

– The severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected, and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and

– Whether other options were available and the reasons that the employer selected the options it did.

Other than Age. The EEOC also proposes a non-exclusive list of factors for determining whether a factor is “other than age”:

– The extent to which the employer allows its supervisors to utilize unchecked discretion to assess employees subjectively;

– The extent to which supervisors were asked to evaluate employees based on factors known to be subject to age-based stereotypes; and

– The extent to which supervisors were given guidance or training about how to apply the factors and avoid discrimination.

The proposed revisions to the ADEA regulations are now open for public comment for 60 days from the date of publication. Once the comment period has expired, the EEOC will take some time to consider the comments before issuing final regulations.