IT JUST GOT EASIER TO MAKE AN AGE DISCRIMINATION CLAIM

On March 30, 2005, The United States Supreme Court made it easier for workers over the age of 40 to claim age discrimination, ruling that employers can be held liable even if they did not intend to discriminate. In Smith v. City of Jackson, the Court held that age discrimination plaintiffs do not have to show that their employer deliberately discriminated against them, but only that employer policies disproportionately harmed them. However, the Court also held that an employer can successfully defend such practices by showing that “reasonable” factors, such as cost-cutting, justify them.

In the Smith case, thirty older police officers and dispatchers sued over a pay performance plan they said gave substantially larger pay raises to employees with five or fewer years of service, which had an unfavorable impact on employees 40 and over. The lower courts threw out the case, reasoning that so- called “disparate impact” claims were not available under federal age discrimination law. In its ruling last week, the Supreme Court said that while the Mississippi officers could get into court to show unfavorable impact, they failed to prove their claim, because the city’s explanation that it was trying to make salaries for junior officers more competitive with similar positions elsewhere was “reasonable."

Until the Supreme Court’s ruling, most courts had thrown out such cases at an early stage, reasoning that a claim of discriminatory intent was necessary to bring a claim under the Age Discrimination in Employment Act.

Our Recommendation:

These issues tend to arise most frequently in reduction in force situations, although they can occur whenever a facially neutral policy has a disproportionate impact on workers in a protected class. When implementing a RIF or other policy, employers should take care to consider whether workers over 40 are adversely impacted to a greater extent than those under 40 and, if so, whether there is a reasonable (and easy to articulate) basis for the adverse impact. It is often helpful to have someone in the organization (or outside counsel) act as a “devil’s advocate” in these situations to test for potential problems.

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Disclaimer: The materials contained in this advisory are for informational purposes only. Nothing in this advisory should be construed as legal advice or opinion. It is important that you consult an experienced attorney concerning your particular factual situation. Do not rely solely on this information.