Age Discrimination Need Not Be Deliberate

April 2005

BY:  BRIAN W. WAERIG AND RICK GRIMALDI

On March 30, 2005, the Supreme Court handed down a ruling stating that plaintiffs asserting age discrimination claims under the Age Discrimination in Employment Act (ADEA) do not have to prove that their employer deliberately discriminated against them, just that the employer’s policies disproportionately harmed them. With over half of the nation’s labor force covered by the ADEA, the ruling could have a drastic impact on employment decisions.

The Case

Smith v. City of Jackson , Mississippi, et. al., No. 03-1160 (S.Ct. March 30, 2005) involved a situation in which the city of Jackson adopted a pay plan granting raises to all city employees. The articulated intent of the plan was to “attract and retain qualified people, provide incentive for performance, maintain competitiveness with other public sector agencies and ensure equitable compensation to all employees regardless of age, sex, race, and/or disability.” The plan was also motivated, at least in part, by the City’s desire to bring the starting salaries of police officers up to the regional average. Those who had less than five years tenure received proportionately greater raises when compared to their former pay than those with more seniority. While some officers over the age of 40 had less than five years of service, most older officers had more. The plaintiffs were officers over 40 who received less of an increase than younger workers.

Disparate Impact

The ruling in Smith means that employees can now bring “disparate impact” claims in age cases. Disparate impact claims involve situations where workers in a pr otected class are adversely affected by certain policies of their employers, even where the employer’s employment practices are neutral in their treatment of different groups of workers. Disparate impact claims have long been permitted under Title VII of the 1964 Civil Rights Act, which bans discrimination based on sex, religion, race, and national origin.

The Supreme Court held that while disparate impact cases are now cognizable under the ADEA, the officers in Smith did little more than point out that the pay plan at issue is relatively less generous to older workers. It is simply not enough to allege that there is a disparate impact on older workers. ADEA plaintiffs have to identify a specific test, requirement, or practice within the pay plan that has an adverse impact on older workers. The plaintiffs’ claims also failed because the city’s plan was based on reasonable factors other than age. Although, changing the face of ADEA claims in this country, the Supreme Court ultimately dismissed the officers’ case.

Future Employment Practices

The Supreme Court has made it incumbent on employers to ensure that their policies do not have an adverse impact on older workers. The Smith case dealt with a policy that appeared neutral but actually disproportionately harmed older workers. Permitting disparate impact claims in age cases may hinder employers’ ability to make necessary decisions based on age-neutral factors. The Supreme Court attempted to address these concerns in its opinion. While the decis ion does permit older workers to make disparate impact claims under the ADEA regardless of the employer’s intent, it permits an employer to cite reasonable factors, such as cost issues, to justify a practice that has an adverse impact on older workers. If you have any questions regarding the ADEA, this decision, or any other employment issues, please feel free to contact the employment group at White and Williams LLP.

About the Authors: Brian W. Waerig is an associate in the Commercial Litigation Department and can be contacted at 215-864- 6254 or waerigb@whiteandwilliams.com. Rick Grimaldi is counsel and can be contacted at 215-864-6350 or grimaldir@whiteandwilliams.com. Both are members of the firm’s Labor and Employment Law Group.