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

The Committee also approved by voice vote an amendment offered by Rep. Jack Kingston (R-GA) that would prohibit any funds from being used to implement, administer, or enforce the new ADEA rule, which, Kingston claimed, makes it more difficult for employers to defend themselves against age discrimination lawsuits. The text of the amendment reads as follows:

None of the funds made available by this Act may be used to implement, administer, or enforce the final regulations on ‘‘Disparate Impact and Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act’’ published by the Equal Employment Opportunity Commission in the Federal Register on March 30, 2012 (77 Fed. Reg. 19080 et seq.).

Meanwhile, the Senate Appropriations approved its own EEOC funding measure last week. The Senate appropriations bill would provide the EEOC with more money ($373.7 million) than that offered in the House, and does not contain a similar amendment effectively blocking the ADEA rule’s implementation. However the Senate version does include report language expressing the Committee’s concern about EEOC’s plans to issue new guidance on the use of criminal and credit background checks in the employment context that” may limit the ability of conscientious employers to hire with confidence and create conflict with Federal and State laws.” The Senate Report “urges EEOC to use litigation resources more wisely by operating within the bounds of the law, and directs that stakeholders be engaged in discussion about the intended changes to background check guidance, and that new guidance on the use of criminal background checks and credit checks be circulated for public input at least 6 months before adoption.” The EEOC approved new guidance on criminal background checks on April 25. 

If the House version is ultimately approved, both chambers’ bills will need to be reconciled.

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Generally, the rule explains that an employment practice that adversely affects individuals within the protected age group on the basis of older age is discriminatory unless the practice is justified by a RFOA. The individual challenging the allegedly unlawful employment practice bears the burden of isolating and identifying the specific employment practice responsible for the adverse impact. The rule clarifies that this affirmative defense is unavailable in disparate treatment cases.

In presenting an RFOA defense, the employer bears the burdens of production and persuasion. This differs slightly from the proposed rule, which stated that the employer had the burden of showing that a RFOA “exists factually.” According to the Commission, that phrase was removed to avoid confusion.

Like the proposed rule, the final rule emphasizes that the RFOA determination is a fact-specific inquiry. Under the final rule, a “reasonable factor other than age” is a non-age factor that is objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances. According to the Commission, the phrase “non-age factor” recognizes that “other than age” is an express part of the statutory RFOA defense. The proposed rule provided non-exhaustive lists of factors relevant to whether an employment practice is reasonable and whether a factor is “other than age.” The final rule revises the list of factors relevant to whether an employment practice is reasonable and whether a factor is “other than age” into a single, non-exhaustive description of considerations relevant to the RFOA defense. According to the Commission, these factors are “not required elements or duties, but considerations that are manifestly relevant to determining whether an employer demonstrates the RFOA defense.” These considerations include:

(i) The extent to which the factor is related to the employer’s stated business purpose;
(ii) The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination;
(iii) The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes;
(iv) The extent to which the employer assessed the adverse impact of its employment practice on older workers; and
(v) The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.

As for what constitutes a “prudent employer,” the Commission explains that such an employer is “mindful” of its ADEA responsibilities and:

should know that the law prohibits the use of neutral practices that disproportionately affect older workers and are not based on reasonable factors other than age. A reasonable factor other than age is one that an employer exercising reasonable care would use to avoid limiting the opportunities of older workers, in light of all the surrounding facts and circumstances.

RFOA v. Business Necessity Standard

Just how onerous a test would be applied to the RFOA defense has been a matter of concern for the business community, as the standard set forth in the proposed rule appeared to be unclear and inconsistent with the Supreme Court direction that the “business necessity” standard would not apply in ADEA disparate impact cases. In the final rule, the EEOC states that it “continues to believe that the RFOA defense is more stringent than a rational-basis or non-arbitrary standard.”

An employer seeking to use the RFOA defense must make more than a mere showing that its action was not irrational or not arbitrary.

To address concerns that the proposed rule implied that an employer would have to consider and use the least discriminatory alternative to the contested practice, the EEOC responds that the final rule omits the factor that discussed the availability of options to the employer. That said, the EEOC has taken the position that the deletion of this factor “does not mean that the availability of measures to reduce harm is irrelevant to reasonableness.” For example, the EEOC states that there might be some circumstances where a less discriminatory alternative is obvious, and therefore the employer’s failure to use this alternative would be taken into consideration in making the reasonableness assessment.

Although the final rule did make changes to the proposal, it still appears that employers will find it more difficult to defend against disparate impact age discrimination claims. The provisions of this rule take effect 30 days after it is published in the Federal Register, which is scheduled for March 30.

For more information on this rule, see Littler's ASAP: The EEOC Misses the Mark with New Rule on the ADEA's Reasonable Factors Other Than Age Defense by Edward Ellis and Amy Wentz.

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In the first case (Smith v. City of Jackson) decided in 2005, the Supreme Court held that disparate impact claims are cognizable under the ADEA, and 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, 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. To that end, the EEOC sought to revise the current ADEA regulations to clarify the RFOA standard and issued a proposed rule on February 18, 2010. 

Those voting in favor of sending the rule to the OMB were EEOC Chair Jacqueline Berrien and Commissioners Stuart Ishimaru and Chai Feldblum. The two Republican members of the Commission – Constance Barker and Victoria Lipnic – voted against the draft final rule. More information on the final rule will be provided when published. While details about the rule are not yet available, the party-line vote indicates that the new rule may make it more difficult for an employer to assert an affirmative defense in an ADEA disparate impact case.

Hiring Disabled Veterans

The second portion of the public meeting focused on various obstacles disabled veterans face when re-entering the workforce. A number of representatives from government agencies, the private sector, and advocacy groups discussed the unique hiring barriers these job applicants encounter.

George M. Parker with the Department of Labor’s Veterans Employment and Training Service (DOL VETS) outlined the disability provisions under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Parker noted that this statute’s disability provisions

are broader because the statute does not define “disability”, per se. The Department has interpreted the term to mean any injury or disease (to include psychological conditions) that would substantially interfere with an individual’s ability to perform the functions of his or her job. Accordingly, if a returning service member requires assistive devices or other technology to perform his or her job, the employer is required to make reasonable efforts to provide such assistance.

Claudia Gordon, Special Assistant to the Director of the Office of Federal Contract Compliance Programs (OFCCP), discussed her division’s enforcement of the affirmative action provisions of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). In April 2011, the OFCCP issued a proposed rule that would strengthen a federal contractor and subcontractor’s affirmative action requirements under VEVRAA. Among other things, the proposal describes specific actions a contractor must take to satisfy its obligations, increases the contractor’s data collection obligations, and requires the contractor to establish hiring benchmarks to assist in measuring the effectiveness of its affirmative action efforts. During the public meeting, Gordon said the agency expects to issue a final rule on these affirmative action requirements next year.

In addition, the OFCCP is in the process of drafting a rule that would “strengthen the regulations implementing Section 503 of the Rehabilitation Act of 1973 in order to improve employment opportunities for people with disabilities.” That rule is currently under development.

As for enforcement initiatives, Gordon’s written testimony notes that the agency has added 200 new compliance officers since the beginning of the Obama Administration, and “has shifted its enforcement activities to hold contractors accountable for their employment practices.” To that end, a new OFCCP protocol requires regional compliance officers “to increase on-site reviews which are necessary to improve verification efforts and increase contractor accountability.” Her testimony states that the OFCCP’s investigative procedures “include verification that the employer is listing job openings with an appropriate employment service delivery system so that veterans may be given priority in referral.” According to Gordon, over the past two years 20-30% of OFCCP reviews have uncovered VEVRAA violations.

Speaking on behalf of the U.S. Chamber of Commerce, Vivian Eng Bendewald, Program Manager for the Injured Veterans Employment Initiatives, stated that: “Employer needs are tied to finite resources – some more finite than others. Thus, in creating employment opportunities for the [wounded, ill and injured (WI&I)] there is no algorithm to define best practices due to the diversity of the WI&I population as well as the needs and business abilities of a given employer.” Eng Bendewald also noted that in March 2011 the CoC partnered with the DOL VETS to launch the Hiring Our Heroes (HOH) Veterans Employment Initiative “to improve local public-private sector coordination in communities where veterans and their families live, or return to after military service.”

A complete list of panelists and links to their testimony can be found here.