On January 20, 2017, the Third Circuit Court of Appeals decided Karlo v. Pittsburgh Glass Works, LLC, a case involving a claim of disparate impact under the Age Discrimination in Employment Act (“ADEA”), which protects employees age 40 and older. Disparate impact claims require a showing that a facially neutral policy has a disparate impact on a protected class. They do not require any showing of intent to discriminate. The court held that such claims can be brought when a policy disparately affects only employees at the higher end of the age-protected group, even if it does not disparately affect employees closer to age 40.
The plaintiffs in Karlo claimed that employees over age 50 were disparately affected by a reduction in force (“RIF”) at the employer. The employer argued that, looking at statistics for all employees in the protected class, there was no disparate impact. The court, however, found that the claim was viable. The court stated that “a disparate-impact claim may proceed when a plaintiff offers evidence that a specific, facially neutral employment practice caused a significantly disproportionate adverse impact based on age,” even if it involves only a subgroup of older employees. Accordingly, employers should keep this in mind when making decisions or enacting policies that may affect older workers.
Also of interest in this case is what the court stated about reductions in force (“RIFs”). When outlining what steps the employer failed to take during the RIF, the court in effect set forth some guidelines employers should consider when contemplating a RIF. These measures included:
- Having specific written guidelines which managers must use when making RIF decesions
- Training managers on the guidelines and on how to implement the RIF
- Conducting disparate impact analyses
- Reviewing the employees tentatively selected for RIF with counsel
- Documenting why particular employees were selected for inclusion in the RIF
These are minimal requirements. When implementing a RIF, you should consult counsel, who can help you develop the RIF parameters and requirements and can help ensure that all legal requirements are met. For example, if a RIF involves terminating at least two employees and you are requesting a waiver of age discrimination claims, the Older Workers Benefit Protection Act has specific requirements that must be met.
If you have any questions or concerns about this update, or any other employment or labor law questions, please contact S. Whitney Rahman at firstname.lastname@example.org or (717) 509-7237.
**This update is provided for informational purposes only and
should not be construed as legal advice or as creating an
attorney-client relationship where one does not already exist**