On March 30, 2012, the Equal Employment Opportunity Commission (EEOC) issued a final rule amending its regulations with respect to the Age Discrimination in Employment Act (ADEA). The amendment was made to conform to two U.S. Supreme Court decisions that recognized ADEA disparate impact claims and put the burden on employers to prove a “reasonable factors other than age” defense. Smith v. Jackson (2005), 544 US 228; Meacham v. Knolls Atomic Power Lab. (2008), 554 US 84. To successfully assert the defense under the final rule, “an employer must show that the employment practice was both reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known, to the employer.” The rule will take effect 30 days after publication in the Federal Register and is available here: http://hr.cch.com/eld/EEOC-FinalRule-ADEA.pdf
The rule provides a nonexhaustive list of considerations relevant to determining whether a challenged employment practice is reasonable and based on factors other than age:
- The extent to which the factor is related to the employer’s stated business purpose;
- The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination;
- The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes;
- The extent to which the employer assessed the adverse impact of its employment practice on older workers; and
- The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.
While the EEOC said the rule was not intended to “impose unwarranted burdens” on employers, critics of the rule argue that it will force employers to second guess every decision affecting older workers.