The de facto death of disparate impact in most age discrimination cases

The United States Equal Employment Opportunity Commission (“EEOC”) recently promulgated regulations, 29 U.S.C. §§ 1625.1, et seq., concerning an affirmative defense that employers may use to defeat disparate impact discrimination claims brought under the Age Discrimination in Employment Act (“ADEA”). The EEOC promulgated those regulations largely in response to Meachem v. Knolls Atomic Power Lab., 554 U.S. 84 (2008) and Smith v. City of Jackson, 544 U.S. 228 (2005), and those regulations likely mean it will be more difficult to pursue age discrimination claims going forward.

To understand why these new regulations generally favor employers over employees, the disparate impact doctrine should be put into context. Disparate impact, which is also known as discriminatory effect, is a legal theory recognized by the United States Supreme Court decades ago in cases like Griggs v. Duke Power Co., 401 U.S. 424 (1971) to account for the reality that certain policies or practices – although seemingly neutral – have a negative impact along lines of race, sex, and other prohibited considerations. Some defense lawyers have misleadingly, but effectively, argued that the disparate impact doctrine purportedly allows plaintiffs to win cases without proving actual discrimination. In truth, however, the disparate impact doctrine is based on the insight that, when the negative impact of a “neutral” policy or practice is statistically so clear based on race, sex, or another prohibited factor, then discriminatory intent can be reasonably inferred.

As the political and related judicial climate has become increasingly skeptical about the existence of discrimination, the analytical underpinnings of the disparate impact doctrine have been undercut or disregarded outright in some cases. Indeed, the United States Supreme Court held in Alexander v. Sandoval, 532 U.S. 275 (2001) that discrimination claims can no longer be pursued under a disparate impact theory in cases filed under Title VI, which applies to discrimination claims regarding federally funded programs. There also is movement afoot to reach the same result in cases pursued under Title VII, which applies to employment discrimination claims, and to Title VIII, which applies to housing discrimination claims.

Under the EEOC’s new regulations, 29 C.F.R. § 1625.7(c), an employer can defeat claims of disparate impact discrimination under the ADEA if the employer can provide a “reasonable factor other than age” for its decision. This is a lower standard than the “business necessity” requirement that employer’s had to satisfy before the EEOC adopted the new regulations. In other words, employers used to have to prove that their conduct was compelled by business necessity in order to defeat a claim of disparate impact discrimination. Now, an employer need only offer a “reasonable factor other than age” to explain its conduct. Given how the courts have applied other affirmative defenses available to employers, perhaps most notably the affirmative defense established under Faragher v. Boca Raton, 524 U.S. 775 (1998) and Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998) in sex harassment cases, we should expect that employers will have much success articulating a sufficient “reasonable factor other than age” to explain their conduct.

In the shadow of the EEOC’s new regulations, the best hope for plaintiff counsel and the employees they represent may be to show that the “reasonable factor” is an after-the-fact justification or otherwise not a credible excuse and, in any event, a question for the jury as to whether the factor is “reasonable” under the circumstances.