It is often assumed that all discrimination claims are created equal, that all protected classes of individuals are entitled to the same freedoms against unlawful discrimination. This has never in fact been the case. When Congress passed Title VII of the Civil Rights Act of 1964, it considered and ultimately rejected amendments that would have included older workers among the classes protected from employment discrimination. Even among those classifications that are protected under Title VII – race, color, religion, gender and national origin – the courts have afforded different levels of protection. Our long legacy of racial discrimination was, of course, the driving force behind the passage of the Civil Rights Act, and the courts have historically brought higher levels of scrutiny to bear upon racially discriminatory employment practices than upon discrimination based on other classifications, such as gender.
Older workers, on the other hand, were entitled to no protections as such until Congress enacted the Age Discrimination in Employment Act (ADEA) in 1967, rendering it unlawful for an employer with 20 or more employees “to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee because of such individual’s age….” The protections of the ADEA are accorded to all workers over the age of 40 years. At the state level, the Pennsylvania Human Relations Act (PHRA), which applies to all Pennsylvania employers employing four or more employees, extends similar protections to workers 40 years of age or older.
But the ADEA has never entitled older workers to the same strict scrutiny of employer conduct which the courts apply in their evaluation of racial, religious and ethnic discrimination claims. This is because, unlike race and other classifications protected by Title VII, age sometimes is relevant to a worker’s ability to perform some jobs.
It is unavoidable that as an employee ages, there are some physical tasks and skills that the employee will be less able to perform. It was in recognition of these realities that Congress specifically limited the protections of the ADEA by precluding employer liability for age discrimination if the adverse effects of an employment policy or practice are based upon a “reasonable factor other than age,” or RFOA.
While the language of the ADEA is in many respects similar to that of Title VII, the parallels end with the ADEA’s RFOA limitation. There is no similar liability limitation in Title VII. Thus, a Title VII claim of racial discrimination can be based either upon proof that an employer intended to discriminate or that an employer’s policies had an adverse “disparate impact” upon a protected class even in the absence of any direct evidence of discriminatory intent. However, in order for an older worker to prove age discrimination under the ADEA, most courts have required that the employee offer direct evidence of discriminatory intent. Until now.
On March 30, 2005, in the case of Smith v. City of Jackson, Mississippi, 125 S. Ct. 1536 (2005), the United States Supreme Court finally recognized that the ADEA permits an employee to prevail upon an age discrimination claim by proving disparate impact, even without direct evidence of discriminatory intent. Smith v. City of Jackson is significant in that it eliminates, at least in theory, the employee’s burden of proving that an employer intended to single out an employee due to age.
Proving discriminatory intent is no small task. While it is now a rare employer who harbors discriminatory motivations, it is a rarer employer still who has not learned to keep any bigoted ideas to himself. Thus, without direct evidence of the employer’s intent, there is no evidence on which an aggrieved older worker can proceed.
Which brings us to Smith v. City of Jackson. In that case, the city granted raises to all of its police and public safety officers. Officers with less than five years’ service received proportionately greater raises than those with more seniority. Unsurprisingly, most officers over 40 had more than five years of experience, and as a result, officers over 40 received proportionately smaller raises than officers under 40.
While the typical headlines in the press accounts of Smith v. City of Jackson correctly reported that the Supreme Court had allowed disparate impact claims in age discrimination cases, the Court’s actual ruling was that the aggrieved older officers of the City of Jackson had failed to adequately state a disparate impact claim under the facts presented. The Court found that the City’s revision of its pay plan was designed to bring its salaries into line with the regional average, and therefore concluded that the City’s actions were based on reasonable factors other than age (RFOA).
Justice Stevens, speaking for a plurality of four members of the Court, wrote that the Plaintiffs “have done little more than point out that the pay plan at issue is relatively less generous to older workers than to younger workers. They have not identified any specific test, requirement or practice within the pay plan that has an adverse impact on older workers…. It is not enough to simply allege that there is a disparate impact on workers, or point to a generalized policy that leads to such an impact.” Justice Stevens concluded that the employee is responsible for isolating and identifying the specific employment practices responsible for the observed statistical disparities.
While the Court’s reasoning may strike some as being more elliptical than instructive, the bottom line appears to be that disparate impact alone is not sufficient to establish age discrimination unless the stated rationale for the practice or policy is reasonable, thereby suggesting that older workers were in fact singled out for unequal treatment based on their age. Where the disparate impact is clearly based upon a RFOA, a plaintiff will not be permitted to use that disparate impact to convert an innocent employment policy into an actionable claim simply because that policy creates a statistical imbalance. Even if there may have been other ways for the employer to have pursued the same objective without such a harsh impact on older workers, the employer will be able to avoid liability if it can show that its practice or policy was a reasonable effort to pursue a goal not based on age.
The Smith v. City of Jackson decision was an effort to strike a balance between the interests of employers and older workers. Only as the federal trial courts and the federal courts of appeals begin to apply Smith v. City of Jackson to future cases will we see whether the decision significantly advances the rights of older employees or significantly burdens the legitimate interests of employers. Clearly, the Supreme Court has made clear that employers can cite any number of “reasonable” factors – ranging from diminishing job performance to salary and cost-cutting measures – as adequate explanations for practices that inadvertently penalize older workers, so long as those practices are not unreasonable, and therefore merely a pretext for age discrimination. The legal community will have to wait and see how the lower federal courts now address situations such as company policies against hiring employees with more than x years of experience or a job requirement that new hires be computer-literate, even for jobs that do not require the use of computers.
One thing that is clear from the Supreme Court’s decision in Smith v. City of Jackson is that it is now more important than ever for employers to regularly gather and maintain employment information to identify any disparate impact the employer’s policies may have so that potential legal exposure can be reduced if not fully avoided. Employers should consider their employment policies and practices and determine whether they are age neutral. Employers should also consider implementing programs to attract and retain workers aged 40 and over. By incorporating such considerations into employment and retention policies, employers should have little to fear from the case of Smith v. City of Jackson.
If you require legal representation for an employment matter, the attorneys of Wolf, Baldwin & Associates, P.C. have the experience to represent you through court or arbitration. Click here now to contact us and to schedule an appointment. We will be happy to advise you about your employment rights under Pennsylvania law.