Opinion ID: 167100
Heading Depth: 3
Heading Rank: 2

Heading: Disparate impact claims under ADEA

Text: 76 A claim of disparate impact, unlike a claim of disparate treatment, does not require a finding of intentional discrimination. Ortega v. Safeway Stores, Inc., 943 F.2d 1230, 1242 (10th Cir.1991). To the contrary, the entire necessary premise of the disparate impact approach is that some employment practices, adopted without a deliberately discriminatory motive, may in operation be functionally equivalent to intentional discrimination. Id. (internal quotations and citations omitted); accord Faulkner v. Super Valu Stores, Inc., 3 F.3d 1419, 1428 (10th Cir.1993). 77 Although the Supreme Court in Smith recognized that the ADEA does authorize recovery in `disparate-impact' cases, the Court clarified that the scope of disparate-impact liability under ADEA is narrower than under Title VII. 125 S.Ct. at 1540, 1544. Indeed, the Court held that while the Civil Rights Act of 1991 expanded an employer's exposure to liability on a disparate impact theory in Title VII, these 1991 amendments did not affect ADEA or speak to the subject of age discrimination. Id. at 1545. Therefore, the Court's narrower pre-1991 interpretation of disparate impact liability, as articulated in Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989), remains applicable to the ADEA. Smith, 125 S.Ct. at 1545. 78 This Wards Cove framework requires that [t]o establish a prima facie case of disparate impact discrimination, plaintiffs must show that a specific identifiable employment practice or policy caused a significant disparate impact on a protected group. Ortega, 943 F.2d at 1242; see also Wards Cove, 490 U.S. at 655-56, 109 S.Ct. 2115. Thus, an employee must point to both a significant disparate impact and to a particular policy or practice that caused the disparity. 79 Moreover, 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. Rather, the employee is `responsible for isolating and identifying the specific employment practices that are allegedly responsible for any observed statistical disparities.' Smith, 125 S.Ct. at 1545 (quoting Wards Cove, 490 U.S. at 656, 109 S.Ct. 2115) (emphasis original). 80 In the pre-1991 disparate impact claims under Title VII, once a plaintiff successfully asserted a prima facie case of disparate impact discrimination, the burden of production shifted to the employer to produce evidence of business necessity for the challenged practice. Ortega, 943 F.2d at 1243 (quotation omitted). Once such evidence was produced, the plaintiff had the ultimate burden of persuading the factfinder that other tests or selection devices, without a similarly undesirable discriminatory effect, would also serve the employer's legitimate [business] interests and be equally effective in achieving those goals. Id. at 1244 (quotations omitted). 81 However, the ADEA test for disparate impact departs from the Wards Cove analysis in this regard. As the Smith Court explained, ADEA is also unique from Title VII in that ADEA contains language that significantly narrows its coverage by permitting any `otherwise prohibited' action `where the differentiation is based on reasonable factors other than age.' Smith, 125 S.Ct. at 1540-41 (quoting 81 Stat. 603, see 29 U.S.C. § 623(f)(1)). This exception from otherwise prohibited actions is satisfied by reasonable factors other than age rather than requiring a business necessity, and that significantly limits an employer's potential liability for disparate impact under ADEA. This exception, known as the RFOA exception, reads as follows: 82 It shall not be unlawful for an employer, employment agency, or labor organization to take any action otherwise prohibited ... where age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business, or where the differentiation is based on reasonable factors other than age.  83 29 U.S.C. § 623(f)(1) (emphasis added). 84 Thus, after an employee establishes a prima facie case of disparate impact age discrimination under the ADEA, the burden of production shifts to the employer to assert that its neutral policy is based on a reasonable factor other than age. Indeed, [u]nlike the business necessity test [under Title VII], which asks whether there are other ways for the employer to achieve its goals that do not result in a disparate impact on a protected class, the reasonableness inquiry includes no such requirement. Smith, 125 S.Ct. at 1546. Instead, to prevail on an ADEA disparate impact claim, an employee must ultimately persuade the factfinder that the employer's asserted basis for the neutral policy is unreasonable. See id. The test is not whether there were other more narrowly tailored ways for the employer to achieve its legitimate business goals. See Embrico v. U.S. Steel Corp., 404 F.Supp.2d 802, 830 (E.D.Pa.2005) (in dicta; applying Smith ). Instead, the employee must show that the method selected was unreasonable. 85 Turning again to the Smith case as illustration, the Court there explained that even if the officers had established a prima facie case, they could not have prevailed because it is also clear from the record that the City's plan was based on reasonable factors other than age. Smith, 125 S.Ct. at 1545. The disparate impact attributable to the City's pay plan was a result of: 86 [T]he City's decision to give raises based on seniority and position. Reliance on seniority and rank is unquestionably reasonable given the City's goal of raising employees' salaries to match those in surrounding communities. In sum, we hold that the City's decision to grant a larger raise to lower echelon employees for the purpose of bringing salaries in line with that of surrounding police forces was a decision based on a `reasonable factor other than age' that responded to the City's legitimate goal of retaining police officers. 87 Id. at 1546.