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

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.

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.