EEOC Issues Final Rule Under ADEA On Defense to Disparate Impact Claims

With an emphasis on practical strategies to improve productivity and performance, and limit potential liabilities, Bulletin to Management™ concisely analyzes new developments in employment and human resources management.

By Kevin P. McGowan  

The Equal Employment Opportunity Commission March 30 published a final rule in the Federal Register (77 Fed. Reg. 19,080) amending its existing Age Discrimination in Employment Act regulations to conform with two U.S. Supreme Court decisions that recognized ADEA disparate impact claims and put the burden on employers to prove the act's “reasonable factors other than age” (RFOA) defense.

According to an EEOC press release, the rule clarifies that the ADEA prohibits policies and practices that have the effect of harming older individuals more than younger individuals, unless the employer can show that the policy or practice is based on “reasonable factors other than age.” The rule “strikes the appropriate balance between protecting older workers from discriminatory, unreasonable business decisions and preserving an employer's ability to make reasonable business decisions,” EEOC said

EEOC last November voted 3-2 to approve a final rule, which incorporates the Supreme Court's decisions in Smith v. Jackson ( 544 U.S. 228, 92 FEP Cases 1824 (2005); 56 BTM 105, 4/5/05) and Meacham v. Knolls Atomic Power Lab. ( 554 U.S. 84, 103 FEP Cases 908 (2008); 59 BTM 207, 6/24/08) into the commission's ADEA regulations (62 BTM 369, 11/22/11).

In an introduction to its final rule, EEOC acknowledged that some commenters on the agency's February 2010 proposed rule (61 BTM 63, 2/23/10) expressed concerns it would “place significant burdens on employers.” EEOC said its proposal was not intended to “impose unwarranted burdens” on employers but said its final rule includes some changes made to address business concerns.

AARP Applauds, Chamber Criticizes Rule

In a March 29 statement, AARP welcomed EEOC's final rules as “helpful guidance” that will aid both workers and employers in dealing with potential age bias. EEOC's new guidelines offer a “better chance of preventing discrimination before it happens,” said Nancy LeaMond, AARP executive vice president in Washington, D.C. “But if it does, older workers will have a meaningful chance to get their day in court and prove their case.”

But Michael Eastman, executive director for labor law policy at the U.S. Chamber of Commerce, said the final rules are “bad policy” in that they represent an attack on employers' subjective decisionmaking and will require employers to undertake costly disparate impact analyses for virtually every employment decision. The rule will allow EEOC and plaintiffs' lawyers to “second guess” even “routine” business decisions affecting older workers, Eastman told BNA March 29.

By Kevin P. McGowan  


Text of the EEOC final rule is available at http://op.bna.com/dlrcases.nsf/r?Open=kmgn-8suj9b.