Can plaintiffs make disparate-impact claims in age discrimination cases?

An important issue in civil rights litigation is whether disparate-impact claims can be brought under the Age Discrimination in Employment Act (ADEA). (1) The federal courts of appeals are split on the question.

The U.S. Supreme Court was expected to resolve the conflict this term in Adams v. Florida Power Corp. (2) The Court granted review on the issue of whether proof of discriminatory impact is sufficient for plaintiffs suing for age discrimination. The case was fully briefed and was argued on March 20. However, on April 1, the Court dismissed the case, saying certiorari had been "improvidently granted." The Court offered no explanation for its action.

Although Adams was dismissed, the issue remains, and the Court undoubtedly will need to address it in another case in the near future.

The reality for age bias plaintiffs is that discriminatory intent is far more difficult to prove than discriminatory impact--in other words, it is much harder to show that an employer meant to discriminate than it is to prove that the company's practices had a discriminatory effect on older workers. If the Court eventually rejects disparate-impact liability, plaintiffs will have a more difficult time prevailing. But if the Court allows this type of claim to be brought, it will open the door to recovery for many victims of age discrimination.

The Supreme Court has explained that a disparate-impact claim "involves employment practices that are facially neutral in their treatment of different groups but that, in fact, fall more harshly on one group than another and cannot be justified by business necessity." (3) Disparate treatment claims, on the other hand, require proof of discriminatory intent. Often it is possible to show discriminatory impact even when there is no evidence of discriminatory purpose.

The issue is particularly important because the American workforce is aging: In 2000, the median age in the United States was 36. It will be 42 by 2030 and 43 by 2040. (4) Meanwhile, many companies have downsized, and layoffs often disproportionately affect older employees. If the ADEA is interpreted to allow disparate-impact claims, these workers often will have a cause of action. But if discriminatory intent must be proven, many such claims will be impossible to pursue.

The circuits are split on the issue. The Second, Eighth, and Ninth have expressly held that disparate-impact claims under the ADEA are cognizable. (5) The First, Third, Sixth, Seventh, and Tenth have rejected disparate impact as a basis for proving discrimination under the act. (6) In Adams, the Eleventh Circuit joined the latter group.

Disparate impact rejected

These courts have made several arguments against permitting recovery in disparate-impact discrimination claims.

First, courts assert that the Supreme Court's Hazen Paper Co. v. Biggins decision implicitly decided the question. (7) Although Hazen Paper unquestionably involved a disparate-treatment claim, language in Justice Sandra Day O'Connor's majority opinion casts doubt on the permissibility of recovery based on disparate impact.

Writing for a unanimous Court, O'Connor stated that "disparate treatment ... captures the essence of what Congress sought to prohibit in the ADEA." (8) She explained that Congress enacted the law because of "its concern that older workers were being deprived of employment on the basis of inaccurate and stigmatizing stereotypes." (9) The law, she wrote, is inapplicable where the employment decision is "wholly motivated by factors other than age ... even if the motivating factor is correlated with age." (10)

The First Circuit relied on this language to reject disparate-impact claims. In Mullin v. Raytheon Co., the appeals court stated, "Since disparate-impact claims encompass the precise scenario that Justice O'Connor describes ... the inescapable implication of her statements is that the imposition of disparate-impact liability would not address the evils that Congress was attempting to purge when it enacted the ADEA." (11)

Second, courts that have rejected disparate-impact liability point to language in the act that permits an employer to "take any action otherwise prohibited ... where the differentiation is based on reasonable factors other than age." (12) The First Circuit, for example, declared, "[I]f the exception ... is not understood to preclude disparate-impact liability, it becomes nothing more than a bromide to the effect that `only age discrimination is age discrimination.' Such a circular construction would fly in the teeth of the well-settled canon of statutory construction." (13)

Third, courts have found that the language in the ADEA is almost identical to that in the Equal Pay Act, (14) which the Supreme Court has expressly interpreted to preclude disparate-impact claims. (15) The Equal Pay Act provides that wage discrimination on the basis of gender is prohibited unless the wage "differential is based on factors other than sex." (16) The Tenth Circuit emphasized that because this language is the same as that in the ADEA, the preclusion of disparate-impact liability should apply to both statutes. (17)

Disparate impact allowed

The Supreme Court should interpret the ADEA to allow disparate-impact claims. Neither the text of the act nor its legislative history addresses the question of whether liability can be based on disparate impact. (18) But the statute's overall goals, and its similarity to Title VII, support allowing such recovery.

The act unquestionably had a broad remedial purpose to deter and remedy age discrimination in employment. As the Court declared in Trans World Airlines, Inc. v. Thurston, "the ADEA broadly prohibits arbitrary discrimination in the workplace based on age." (19) Permitting disparate-impact liability is more consistent with that objective than imposing a requirement for proof of discriminatory purpose would be.

Judge Rosemary Barkett of the Eleventh Circuit explained this well in her "specially concurring" opinion in Adams:

  [T]he purpose of the ADEA, like the purpose of Title VII and the [Americans
  with Disabilities Act], is to eradicate employment discrimination based on
  the stigmatizing stereotypes of age, race, gender, or disability.
  Disparate-impact claims provide an avenue for members of protected classes
  to prove that discrimination occurred in the workplace when proof of motive
  is difficult or unavailable. (20)

Indeed, the ADEA is similar to Title VII, and that statute certainly authorizes recovery based on disparate impact. In Griggs v. Duke Power Co., the Supreme Court held that Title VII "proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation." (21)

The ADEA was modeled on Title VII and should be interpreted in a like fashion. Although the act has language that permits age discrimination if it is based on factors other than age, this is no different from Title VII's allowance for business necessity as a defense. Barkett's opinion correctly observed that "a reasonable interpretation of [section] 623(f)(1) [of the ADEA] is that it codifies the business-necessity exception to disparate-impact claims. (22)

In fact, this is exactly how the Equal Employment Opportunity Commission has interpreted the ADEA provision in its guidelines on the act. (23)

None of the other arguments for rejecting disparate-impact liability is particularly persuasive. Hazen Paper did not decide the issue of disparate impact, but rather expressly left the question open for future resolution. The Supreme Court said that the case--which involved a company's policy of firing employees who were close to being vested under its pension plan--was about firing employees based on their years of service. O'Connor explained that "an employee's age is analytically distinct from his years of service." (24)

The Court simply did not reach the issue of whether recovery could be had in the case based on disparate impact. "We have never decided whether a disparate-impact theory of liability is available under the ADEA, and we need not do so here," O'Connor wrote. (25)

The analogy to the Equal Pay Act fails as well. In its substantive provisions, the ADEA is similar to Title VII--not the Equal Pay Act--and Title VII clearly allows disparate-impact liability. The Equal Pay Act requires that employers provide only a neutral justification for differences in pay between men and women. As Barkett explained, the act's "broad defense for employers ensures that [it] targets only intentional, purposeful discrimination." (26)

The ADEA, like Title VII, however, prohibits age discrimination unless there is a proven business necessity.

For employees in age discrimination litigation, the availability of relief often will depend on whether liability can be based on a policy's disparate impact on older workers. Although Adams v. Florida Power Corp. has been dismissed, it is important for the Court to take another case presenting this issue, and ultimately to find that disparate-impact claims are permissible under the ADEA.

Notes

(1.) 29 U.S.C. [subsection] 621-634 (2002).

(2.) 255 F.3d 1322 (11th Cir. 2001), cert. granted, 122 S. Ct. 643 (2001), cert. dismissed as improvidently granted, 122 S. Ct. 1290 (2002).

(3.) Hazen Paper Co. v. Biggins, 507 U.S. 604, 609 (1993).

(4.) 1 HOWARD C. EGLIT, AGE DISCRIMINATION 14 (2d ed. 1995).

(5.) Byrnie v. Town of Cromwell Bd. of Educ., 243 F.3d 93 (2d Cir. 2001); Evers v. Alliant Techsystems, Inc., 241 F.3d 948, 953 (8th Cir. 2001); EEOC v. Local 350, Plumbers & Pipefitters, 998 F.2d 641,648 n.2 (9th Cir. 1993).

(6.) Mullin v. Raytheon Co., 164 F.3d 696 (1st Cir. 1999); DiBiase v. SmithKline Beecham Corp., 48 F.3d 719, 732 (3d Cir. 1995); Lyon v. Ohio Educ. Ass'n. Prof'l Staff Union, 53 F.3d 135, 140 (6th Cir. 1995); Casteel v. Executive Bd. Int'l Bhd. of Teamsters, Local 703, 272 F.3d 463, 467 (7th Cir. 2001); Ellis v. United Airlines, Inc., 73 F.3d 999, 1007 (10th Cir. 1996).

(7.) 507 U.S. 604.

(8.) Id. at 610.

(9.) Id.

(10.) Id. at 611.

(11.) 164 F.3d 696, 700-01.

(12.) 29 U.S.C. [section] 623(t)(1) (2002).

(13.) Mullin, 164 F.3d 696, 702.

(14.) 29 U.S.C. [section] 206(d)(1)(4) (2002).

(15.) Washington County, Ore. v. Gunther, 452 U.S. 161, 170-71 (1981).

(16.) 29 U.S.C. [section] 206(d)(1)(4).

(17.) Ellis v. United Airlines, 73 F.3d 999, 1008 (10th Cir. 1996).

(18.) Brendan Sweeney, Comment: `Downsizing' the Age Discrimination in Employment Act: The Availability of Disparate Impact Liability, 41 VILL. L. REV. 1527 (1996).

(19.) 469 U.S. 111, 120 (1978).

(20.) 255 F.3d 1322, 1326-27 (Barkett, J., concurring).

(21.) 401 U.S. 424, 431 (1971).

(22.) 255 F.3d 1322, 1328 (Barkett, J., concurring).

(23.) 29 C.F.R. [section] 1625.7 (2000).

(24.) 507 U.S. 604, 610.

(25.) Id. at 611.

(26.) 255 F.3d 1322, 1329.

Erwin Chemerinsky is Sydney M. Irmas Professor of Public Interest Law, Legal Ethics, and Political Science at the University of Southern California in Los Angeles. He thanks Jennifer Taylor for her excellent research assistance.