### EQUAL EMPLOYMENT OPPORTUNITY COMMISSION (EEOC)

Statement of Regulatory and Deregulatory Priorities

The mission of the Equal Employment Opport unity Commission (EEOC, Commission, or agency) is to ensure equality of opportunity in employment by vi gorously enforcing seven Federal statutes. These statutes are: Title VII of the Civil Rights Act of 1964, as amended (prohibits employment discrimination on the basis of race, color, sex, religion, or national origin); the Equal Pay Act of 1963, as amended (makes it illegal to pay unequal wages to men and women performing substantially equal work at the same establishment, unless the difference is attributable to a bona fide seniority, merit, or incentive system, or to a factor other than sex); the Age Discrimination in Employment Act of 1967 (ADEA) as amended (prohibits employment discrimination based on age of 40 or older); titles I and V of the Americans with Disabilities Act, as amended, and sections 501 and 505 of the Rehab ilitation Act, as amended (prohibits employment discrimination based on disability); title II of the Genetic Information Nondiscrimination Act (GINA) (prohibits employment discrimination based on genetic information and limits acquisition and disclosure of genetic information); and section 304 of the Government Employee Rights Act of 1991 (protects certain previously exempt State and local government employees from employment discrimination on the basis of race, color, religion, sex, national origin, age, disability, or genetic information).

The item in this Regulatory Plan is entit led “Disparate Impact and Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act.” This item previously appeared as two separate items titled “Disparate Impact Burden of Proof Under the Age Discrimination in Employment Act” (RIN 3046- AA76) and “Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act” (RIN 3046-AA87). These two items have been merged, and a final rule will be issued addressing the issues covered in both (appearing under RIN 3046-AA76).

Prior to the Supreme Court’s decision in Smith v. City of Jackson , 544 U.S. 228 (2005), Commission regulations interpreted the ADEA to require empl oyers to prove that actions that had an age-based

### disparate impact were justified as a business necessity. Although the Court, in Smith , agreed with the EEOC that disparate impact claims were recognizable under the ADEA, it held that the defense was not business necessity but reasonable factors other than age (RFOA). The Smith Court did not specify whether the employer or employee bore the burden of proof on the RFOA defense.

On March 31, 2008, the Commission issued a Notice of Proposed Rulemaking (NPRM) to conform Commission ADEA regulations to Smith , also taking the position that the employer bore the burden of proving the defense. Because current EEOC regulati ons do not define the meaning of “RFOA,” the NPRM asked whether regulations should provide more in formation on the meaning of “reasonable factors other than age” and, if so, what the regulations shoul d say. 73 FR 16807 (March 31, 2008). Subsequently, the Supreme Court held in Meacham v. Knolls Atomic Laboratory , 554 U.S. 84, 128 S. Ct. 2395 (2008), that employers have the RFOA burdens of production and per suasion. After consideration of the public comments, and in light of the Supreme Court decisions, the Commission issued a second NPRM on February 18, 2010, to address the scope of the RFOA defense. A final rule will be issued addressing the topics covered in both NPRMs and conforming to both Smith and Meacham . The rule will not have a significant impact on small businesses because, among other reasons, their employment actions generally will not affect individuals in numbers sufficient to raise questions of disparate impact.

This item is highlighted in EEOC’s Plan for Re trospective Review of Significant Regulations, developed pursuant to Executive Order 13563.

Consistent with section 4(c) of Executive Order 12866, this statement was reviewed and approved by the Chair of the Agency. The statement has not been reviewed or approved by the other members of the

Commission.

Retrospective Review of Existing Regulations

Pursuant to section 6 of Executive Order13563 “Improving Regulation and Regulatory Review” (Jan.

### 18, 2011), the following Regulatory Identifier Number s (RINs) have been identified as associated with retrospective review and analysis in the EEOC’s final re trospective review of regulations plan. Some of these entries on this list may be completed actions, which do not appear in The Regulatory Plan. However, more information can be found about these completed rulemakings in past publications of the Unified Agenda on Reginfo.gov. These rulemakings can also be found on Regulations.gov. The final agency plans can be found at: http://www.eeoc.gov/l aws/regulations/retro_review_plan_final.cfm.

RIN: 3046-AA76

DISPARATE IMPACT AND REASONABLE FACTORS OTHER THAN AGE UNDER THE AGE

DISCRIMINATION IN EMPLOYMENT ACT This rulemaking is not expected to alter burdens on small businesses.

RIN: 3046-AA73

FEDERAL SECTOR EQUAL EMPLOYMENT OPPORTUNITY COMPLAINT PROCESSING This rulemaking does not apply to small businesses. It applies only to the Federal Government.The 1 Actions Described in the Regulatory Plan

Title Regulation Identifier Number Rulemaking Stage Disparate Impact and Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act 3046-AA76 Final Rule Stage

Equal Employment Opportunity Commission ( EEOC ) RIN: 3046-AA76

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Title: Disparate Impact and Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act Abstract: Prior to the Supreme Court's decision in Smith v. City of Jackson, 544 U.S. 228 (2005), Commission regulations interpreted the ADEA to require employers to prove that actions that had an age-based disparate impact were justified as a business necessity. Although the Court, in Smith, agreed with the EEOC that disparate impact claims were cognizable under the ADEA, it held that the defense was not business necessity but reasonable factors other than age (RFOA). The Smith Court did not specify whether the employer or employee bore the burden of proof on the RFOA defense. On March 31, 2008, the Commission issued a Notice of Proposed Rulemaking (NPRM) to conform Commission ADEA regulations to Smith, also taking the position that the employer bore the burden of proving the defense. Because current EEOC regulations do not define the meaning of "RFOA," the NPRM also asked whether regulations should provide more information on the meaning of "reasonable factors other than age" and, if so, what the regulations should say. 73 FR 16807 (March 31, 2008). Subsequently, the Supreme Court held in Meacham v. Knolls Atomic Laboratory, 554 U.S. 84, 128 S. Ct. 2395 (2008), that employers have the RFOA burdens of production and persuasion. After consideration of the public comments, and in light of the Supreme Court decisions, the Commission issued a second NPRM on February 18, 2010 to address the scope of the RFOA defense. A final rule will be issued addressing the issues covered in both NPRMs and conforming to both Smith and Meacham. The RIN associated with the NPRM titled "Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act" (RIN 3046-AA87) has been merged with this item (RIN 3046-AA76), which will be the RIN used to identify the final rule.

Priority: Other Significant Agenda Stage of Rulemaking: Final Rule Major: No Unfunded Mandates: No CFR Citation: 29 CFR 1625.7(d) (To search for a specific CFR, visit the Code of Federal Regulations ) Legal Authority: 29 USC 628 Legal Deadline: None

Regulatory Plan: Statement of Need: Current EEOC regulations interpret the ADEA as prohibiting an employment practice that has a disparate impact on individuals within the protected age group unless it is justified as a business necessity. The Supreme Court's holding in Smith v. City of Jackson validated the Commission's position that disparate impact analysis applies in ADEA cases. The holding, however, differed from the Commission's position that the business necessity test was the appropriate standard for determining the lawfulness of a practice that had an age-based disparate impact. The EEOC is revising its regulation to reflect the Smith decision. Moreover, as noted above, a related item (RIN #3046-AA87) entitled "Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act" has been merged with this item. In this final rule, the EEOC is also revising its regulations to address the scope of the RFOA defense. Legal Basis: The ADEA authorizes the EEOC "to issue such rules and regulations it may consider necessary or appropriate for carrying out this chapter ...." 29 U.S.C. section 628.

Alternatives: The Commission has considered all alternatives proposed by the public comments.

Costs and Benefits: Based on the information currently available, the EEOC does not anticipate that the rule will have significant economic effects. The purpose of the rule is to help explain the implications of recent Supreme Court decisions and the type of conduct that would support an RFOA defense in court. It therefore does not directly require any action on the part of covered entities. The regulation makes clear that the employer's burden is to prove the RFOA, rather than the more stringent business necessity, defense. Further, the rule instructs covered entities what to do if they want to ensure that their practices are based on reasonable factors other than age. The rule does not expand the coverage of the ADEA to additional employers or employees, and does not include reporting, recordkeeping, or other requirements for compliance. Costs would result primarily from voluntary modifications to covered entities' business practices made to protect against disparate-impact liability.Modifications may include performing disparate impact analyses of business practices before they are adopted, providing guidance to decisionmakers on how to implement the practice, and evaluating other options to mitigate harm. The costs will be minimal, because these actions are required, for purposes of establishing the RFOA defense, only to the extent that a reasonable employer would perform them under the circumstances. Many covered entities already routinely perform them. To the extent that the regulation motivates employers to take additional actions, free resources minimize the cost of doing so. This revision, informed by the comments of stakeholders, will be beneficial to courts, employers, and employees seeking to interpret, understand, and comply with the ADEA.

Risks: The rule does not affect risks to public health, safety, or the environment. Timetable: Action Date FR Cite NPRM 03/31/2008 73 FR 16807 NPRM Comment Period End 05/30/2008 Final Action 12/00/2011

Additional Information: Includes Retrospective Review under E.O. 13563.

Regulatory Flexibility Analysis Required: No Government Levels Affected: Federal; Local; State; Tribal Small Entities Affected: Business; Governmental Jurisdictions; Organizations Federalism: No Energy Affected: No Related RINs: Related to 3046 -AA87 Agency Contact: Dianna B. Johnston Senior Attorney Advisor, Office of Legal Counsel Equal Employment Opportunity Commission 131 M Street NE Washington , DC 20507 Phone: 202 663 -4657 FAX: 202 663 -4679 E-Mail: dianna.johnston@eeoc.gov Agency Contact: Lyn McDermott Senior Attorney Advisor, Office of Legal Counsel Equal Employment Opportunity Commission 131 M Street NE Washington , DC 20507 Phone: 202 663 -4663 FAX: 202 663 -4679 E-Mail: lyn.mcdermott@eeoc.gov