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Age bias cases may be headed to Supreme Court

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The U.S. Supreme Court may eventually decide whether the Age Discrimination in Employment Act of 1967 prohibits employer policies that have a disparate impact on older job applicants, now that two circuit courts disagree on the issue.

While it is clear the ADEA protects current employees from policies that have a disparate impact on older workers, the statute does not explicitly cite job applicants, which has led to differing interpretations.

A disparate impact occurs when a policy is neutral on its face, but nevertheless has a disproportionate impact on a particular class of protected people.

“We hold that (the ADEA) protects both outside job applicants and current employees,” said the 7th U.S. Circuit Court of Appeals in Chicago in its 2-1 ruling on April 26 in Dale E. Kleber v. CareFusion Corp.

“That is the better reading of the statutory text. It is also more consistent with the purpose of the act and nearly fifty years of case law interpreting the ADEA and similar language in other employment discrimination statutes,” said the ruling.

However, in October 2016, the 11th U.S. Circuit Court of Appeals in Atlanta overturned a lower court ruling and held in an en banc ruling in Richard M. Villarreal v. R.J. Reynolds Tobacco Co., Pinstripe Inc. that the ADEA does not allow an unsuccessful job applicant to sue an employer for using a practice that has a disparate impact on other workers. The U.S. Supreme Court subsequently refused to consider an appeal of that ruling.

The more recent case was filed by Mr. Kleber, an attorney with extensive legal and business experience, whose previous employment had ended in 2011 and who had applied for a position in 2014 as “senior counsel, procedural solutions” with San Diego-based CareFusion, a medical technology firm.

“The job posting called for ‘a business person’s lawyer’ with the ability ‘to assume complex projects,’ which we must assume would be well-suited to Kleber’s skills and experiences,” said the ruling.

“The job posting, also said, however, that applicants must have ‘three to seven years (no more than seven years) of relevant legal experience.’” CareFusion did not select Mr. Kleber for an interview, and eventually hired a 29-year-old for the job, said the ruling.

Mr. Kleber, 58, filed suit, charging violation of the ADEA in U.S. District Court in Chicago, which ruled in the company’s favor. In overturning that ruling, the majority opinion extensively analyzed the statute’s wording.

The ruling said, “our reading tracks the Supreme Court’s reading of virtually identical statutory language in Title VII of the Civil Rights Act of 1964” in a 1971 ruling.

“Moreover, we have not been presented with, and could not imagine on our own, a plausible policy reason Congress might have chosen to allow disparate impact claims by current employees, including internal job applicants, while excluding outside job applicants,” said the ruling, which remanded the case to the District Court for further proceedings.

The dissenting opinion states, “I believe an ordinary reading of the language found in (the ADEA) affirms the district court’s finding. This court’s reversal is an erroneous form of statutory interpretation that requires writing in words that Congress chose not to include.”

“I think a lot of people were surprised it was not settled law at this point” that the ADEA prohibits a disparate impact, said Richard B. Cohen, a partner with Fisher/Broyles L.L.P. in New York, who represents employers.

Robin E. Shea, a partner with Constangy Brooks, Smith & Prophete L.L.P. in Winston-Salem, North Carolina, who represents employers, said, “I think the majority opinion makes perfect logical sense. I don’t really understand why disparate impact claims would be allowed for employees and not for applicants, so I’m really pretty much in agreement with the majority’s logic.”

She added, however, the dissenting opinion and the 11th Circuit, which based their rulings on the statute’s language, have “a very strong argument that, for whatever reason, Congress may have intended to exclude job applicants from disparate impact claims under the ADEA.”

Many observers say they expect the issue will be considered by the Supreme Court. “It has created a direct conflict in the interpretation of the ADEA,” said Patricia G. Barnes, a Tucson, Arizona-based solo practitioner who has written books on age discrimination.

She noted although the Supreme Court had refused to reconsider the 11th Circuit decision, now that there is a circuit split, the issue’s chances of being considered “are much more promising.”

Observers disagree, though, as to how the court is likely to rule if it does take the case. “Stripping out the political partisanship and the polarity in the country, I would think they would have the same reaction” as the majority 7th Circuit ruling that it would be covered by the ADEA, said Mr. Cohen.

However, Pablo Orozco, an associate with Nilan Johnson Lewis P.A. in Minneapolis, said, “The current composition of the court suggests the Supreme Court would agree with the 11th Circuit and disagree with the 7th Circuit.”

It is possible the Supreme Court would rule in favor of the 11th Circuit’s review based on the statutory language, but that could lead to a “quick fix” in Congress to address the issue, said Jason M. Shinn, of Shinn Legal P.L.C. in Keegan Harbor, Michigan.

Meanwhile, experts recommend that regardless of the judicial disagreement, employers avoid any impression that they discriminate against older job applicants. “It’s always been good practice not to discriminate based on age, even if some jurisdictions took longer to get to that conclusion,” said Jeffrey D. Polsky, a partner with Fox Rothschild L.L.P. in San Francisco.