Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

In Smith v. City of Jackson, 544 U.S. 228 (2005), the Supreme Court, in permitting recovery for disparate impact claims of age discrimination under the ADEA, stated that the appropriate standard for determining the legality of a practice that disproportionately affects older workers is the RFOA test, not the more stringent “business necessity” test used for other types of discrimination claims. Three years later in Meacham v. Knolls Atomic Power Laboratories, 128 S. Ct. 2395 (2008), the Supreme Court held that the employer bears the burden of production and persuasion in making a RFOA defense in an ADEA disparate impact claim. The EEOC proposes to revise current ADEA regulations under 29 CFR section 1625.7(b) to explain that whether a particular employment practice is based on RFOA “turns on the facts and circumstances of each particular situation and whether the employer acted prudently in light of those facts.” According to the EEOC, this standard is lower than the business necessity test used for Title VII discrimination claims, but higher than the Equal Pay Act’s “any other factor” test.

The EEOC explains that a “reasonable factor” is one that an employer exercising reasonable care to avoid limiting the employment opportunities of older persons would use. This analysis will require evidence that the challenged practice was both reasonably designed to further or achieve a legitimate business purpose and was administered in a way that reasonably achieves that purpose. Another factor to be taken into consideration when determining the reasonableness of an employment policy or practice is what the employer knew or should have known about the policy or practice’s impact when it took the challenged action. The proposed regulations provide a non-exhaustive list of other factors that could be relevant to the RFOA defense, including:

• 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 goals;
• 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 the employer selected the option it did.

The EEOC notes that although an employer is not required to use the least discriminatory alternative to the challenged practice, an employer’s knowledge of and failure to use an equally effective alternative that is less discriminatory will factor into the “reasonableness” assessment.

With respect to “factors other than age,” the EEOC emphasizes that the challenged practice or policy must be based on a non-age factor for the RFOA defense to apply. Certain factors that correlate with age, such as salary and seniority, are non-age factors. However, the “unchecked use of subjective criteria” that rely on age stereotypes could be deemed age-based. The proposed regulations set forth a non-exhaustive list of factors to help employers determine whether an employment practice is based on a non-age factor, including:

• The extent to which the employer gave supervisors 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 EEOC will consider comments to the above changes before issuing final regulations. Comments must be received by April 19, 2010, and contain the identification number: 3046-AA87. Written comments may be sent to Stephen Llewellyn, Executive Officer, Executive Secretariat, Equal Employment Opportunity Commission, U.S. Equal Employment Opportunity Commission, 131 M Street, N.E., Washington, DC 20507. Comments of six or fewer pages may be sent via facsimile to (202) 663-4114. Alternatively, comments may be made electronically through the federal eRulemaking Portal: http://www.regulations.gov.
 

The EEOC will also move forward with regulations regarding the equal employment provisions of the Americans With Disabilities Act Amendments Act (ADAAA).  The ADAAA, enacted in 2008, expanded the definition of “disability” under the Americans with Disabilities Act (ADA) in light of a number of Supreme Court decisions. In December 2008, the EEOC commissioners deadlocked along party lines on whether to approve former Chair Naomi Earp’s proposed regulations.  According to the EEOC’s agenda, a notice of proposed rulemaking will be issued by August of this year.

The Age Discrimination in Employment Act (ADEA) will be subject to two rules as a result of the Supreme Court’s decisions in Smith v. City of Jackson and Meacham v. Atomic Knolls Laboratory. In Smith, the Court held that an employer could defend against a disparate impact claim under the ADEA by showing that its alleged adverse employment decision was due to reasonable factors other than age. In Meacham, the Court ruled that employers bear the burden of providing this defense. The proposed regulations, therefore, address this disparate impact burden of proof under the ADEA.  Final regulations on this issue are expected by March of 2010.  In addition, the EEOC intends to publish a notice of proposed rulemaking to amend its current regulations on what constitutes “reasonable factors other than age” by August of this year.

In a more procedural vein, the EEOC intends to issue a notice of proposed rulemaking by the end of next month to make changes and corrections to the federal sector equal employment opportunity complaint process. The agency also plans to revise its race and ethnicity data collection method to make employee self-identification the preferred method for collecting such data to conform with current reporting instructions for the EEO-1 Report.