Contributed by Allison Chaplick
If you feel like a tribute in the arena every time the Equal Employment Opportunity Commission changes the game’s rules on you, you are not alone. The best way to survive is to read and then add this blog to your quiver of arrows in understanding how the EEOC’s final rule amending the Age Discrimination in Employment Act applies to your decision making.
In February, I let you know that the EEOC issued a draft final rule to amend certain ADEA regulations, including that the EEOC’s new regulations recognized the reasonable factors other than age (RFOA) affirmative defense instead of the business necessity affirmative defense.
Well, guess what? The EEOC revised its final rule to clarify that the proposed final rule was never intended to place “significant burdens by requiring employers to meet all factors relevant to the RFOA determination.” Read the new rule here. Instead, the RFOA factors “are not required elements or duties, but considerations that are manifestly relevant to determining whether an employer demonstrates the RFOA defense.”
The final rule also clarifies that the “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. If this sounds like the application of torts law to you, you get a silver parachute from your sponsors! The final rule refers to tort law for guidance to determine what constitutes a “reasonable” factor other than age—what the employer knew about the harm and what it did to correct it. Be aware that this “reasonable” standard test reflects a higher standard of proof, and thus the EEOC has effectively rejected the “rational-basis” test.
But, there is good news: under the final rule, an employer does not need to perform a validity study to establish a RFOA defense to an employment test (e.g., a physical fitness test). However, the final rule does emphasize the importance of defining a test’s employment criterion carefully and educating managers and supervisors on how to apply it fairly.
So, put the odds in your favor and good luck!
Contributed by Allison Chaplick
The Equal Employment Opportunity Commission just issued its January 2012 Status Report on Retrospective Regulatory Review. One of the items targeted for final review by the Office of Management and Budget (OMB) is the EEOC’s draft final rule to amend certain ADEA regulations.
The relevant regulations currently interpret the ADEA as prohibiting an employment practice that has a disparate impact on employees in the protected age group unless the practice is justified by a business necessity. However, the EEOC proposes to revise paragraph 1625.7(d) to state that an employment practice that has a disparate impact on individuals within the protected age group is discriminatory unless the practice is justified by a “reasonable factor other than age” (RFOA). Revisions to paragraph 1625.7(e) may also include that the employer has the burden of showing that a reasonable factor other than age exists factually. The OMB anticipates completing its review of this draft final rule by March of 2012.
So, why is the EEOC doing this? The answer is simple: to comply with the U.S. Supreme Court’s ruling in Smith v. City of Jackson, 544 U.S. 228 (2005) and to conform to Meacham v. Knoll Atomic Laboratory, 128 S.Ct. 2395 (2008). Smith arose out of the city of Jackson’s decision to grant raises to police officers and dispatchers who had less than five years of tenure in an effort to make these positions’ starting salaries comparable with the regional average. Accordingly, those police officers with less than five years of seniority received proportionately greater raises than those police officers with more seniority, many of whom were over the age of 40.
The Smith court agreed with the EEOC’s regulations that disparate impact claims were cognizable under the ADEA, but held that the proper defense for such a claim was not “business necessity” but RFOA. The Smith court remained silent as to whether the employee or employer had the burden of proof on the RFOA defense, but took up this issue in Meacham.
In Meacham, the employer was forced to make a reduction in force. To determine which employees should be laid off, the company instructed its managers to score their subordinates on “performance,” “flexibility,” and “critical skills” along with points for years of service. Following this review, thirty of the thirty-one employees laid off were over the age of 40. The Meacham court held that an employer defending a disparate impact claim under the ADEA bears the burden of production and persuasion for the RFOA affirmative defense.