Please ensure Javascript is enabled for purposes of website accessibility
Home / News / Employers face uphill battle as surge of age bias lawsuits predicted

Employers face uphill battle as surge of age bias lawsuits predicted

Business groups and employment defense attorneys are worried employee lawsuits will be much harder to fight in the wake of a recent U.S. Supreme Court ruling that employers bear the burden of production and proof in disparate impact age discrimination cases.
The court ruled that under the Age Discrimination in Employment Act employers bear the burden of proving that “reasonable factors other than age” were the basis for an adverse employment decision (Meacham v. Knolls Atomic Power Laboratory, No. 06-1505).
The ruling “will make it that much easier for employees to be successful in discrimination cases, while forcing employers to do much more work to defend themselves against baseless ADEA claims,” said Karen Harned, executive director of the Small Business Legal Center of the National Federation of Independent Business.
The case stemmed from a reduction in force implemented by Knolls Atomic Power Laboratory that led to the layoffs of 31 employees. The RIF was allegedly based on factors that included “performance, flexibility and critical skills.”
Of the 31 employees who were let go, 30 were over the age of 40. Those employees brought a disparate impact claim under the ADEA and were ultimately awarded $6 million by a jury.
The employer appealed, and the 2nd Circuit reversed, saying the plaintiffs had the burden of showing that reasonable factors other than age were not the basis for the employer’s decision.
Finding that the evidence presented by the parties resulted in a virtual tie, the 2nd Circuit ruled the plaintiffs had failed to meet their burden.

Affirmative defense

But the Supreme Court vacated that decision, determining that it was the employer’s responsibility to show its decision was based on a reasonable factor other than age.
Justice David Souter, writing for the majority, said that the “reasonable factor” inquiry was an affirmative defense for an employer.
As such, “the burden of persuasion falls on the one who claims its benefits,” Souter wrote.
The court looked to precedent in other ADEA affirmative defense cases and to Congress’s enactment of the Older Workers Benefit Protection Act, which was drafted, in part, to clarify that employers bear of the burden of proving affirmative defenses under the ADEA.
Souter reasoned that “Congress understands the phrase [in the ADEA] the same way we naturally read it, as a clear signal that a defense to what is ‘otherwise prohibited’ is an affirmative defense, entirely the responsibility of the party raising it.”
Plaintiffs’ attorneys hailed the decision.
David Certner, chief legal counsel for AARP, said in a statement, “the Meacham ruling is vital to the creation and maintenance of a workplace that is fair and free of age bias.”

Disparate impact worries

William Hannum, a Massachusetts employment defense attorney, said he expected this outcome.
“In terms of how the court typically handles the burden of persuasion and proof on affirmative defenses, they went with the standard approach,” said Hannum. “When you look just at the issue of affirmative defenses, and who bears the burden of proof, this decision was not surprising.”
But it still makes these bias claims tougher to navigate, he said.
“Some disparate impact cases are pretty tricky. Trying to explain all the factors involved to a jury [is] a really steep hill to climb,” Hannum said. “I’m not sure they should be allowed in the first place.”
This sentiment was echoed by Justice Clarence Thomas, the only justice to dissent in the case.
In his brief opinion dissenting in part, Thomas wrote: “I continue to believe that disparate-impact claims are not cognizable under the [ADEA]. Moreover I disagree with the court’s statement that the ‘reasonable factors other than age’ exception [is] principally relevant in disparate impact cases.”
Thomas did agree that the exception creates an affirmative defense in disparate treatment claims, but said he would have affirmed the judgment of the 2nd Circuit because this was a disparate impact case.
Hannum suggested that Congress could take action.
“We’ve got to balance the scales here somehow,” he said. “I don’t think the law was intended to make it this difficult to defend disparate impact cases, and it can be very difficult. It may be something that needs to be addressed by Congress.”
Others worried that that the tough economy and the need for employers to respond could result in a surge of lawsuits.
“The decision ties the hands of employers to respond to market changes without fearing that any real change in their business plan will prompt a baseless ADEA lawsuit,” Harned said.