Opinion ID: 167100
Heading Depth: 2
Heading Rank: 4

Heading: Disparate impact theory of age discrimination

Text: 72 After briefing in this appeal, the Supreme Court decided Smith v. City of Jackson, 544 U.S. 228, 125 S.Ct. 1536, 161 L.Ed.2d 410 (2005), which overrules our prior opinion in Ellis v. United Airlines, Inc., 73 F.3d 999, 1007 (10th Cir.1996). Smith definitively holds that disparate impact theories of age discrimination are cognizable under ADEA. 544 U.S. at ___, 125 S.Ct. at 1540. 13
73 Pippin's complaint did not originally assert a federal disparate impact theory. Nonetheless, Pippin did assert a federal disparate impact claim in a footnote to his summary judgment response brief. This footnote arose in the context of Pippin's assertion that the pattern of terminations of over-forty engineers combined with Burlington's decision to hire a group of new engineers under the age of forty showed that the RIF was pretextual. That footnote reads in its entirety: Not only is the explanation given contrary to reason, and thus probative of disparate treatment, this RIF had a disparate impact on those over 40. Plaintiff recognizes that the disparate impact argument has been rejected in the Tenth Circuit, Ellis v. United Airlines, Inc., 73 F.3d 999, 1006 (10th Cir.1996), but points to the argument and authorities cited in the brief of Petitioner in Adams v. Florida Power Corporation, which justify presentation of this issue in this case. Though certiorari was granted in that case, it was fully briefed, and oral argument was held, [534 U.S. 1054], 122 S.Ct. 643, [151 L.Ed.2d 561 (2001)] certiorari was dismissed as improvidently granted, [535 U.S. 228], 122 S.Ct. 1290, [___ L.Ed.2d ____] (2002). Plaintiff here asserts that disparate impact claims are viable under [ADEA], and that he has presented evidence which establishes the viability of his claim under that theory. 74 Burlington never objected to the assertion of this new claim below, and on appeal Burlington acknowledges that we may consider the disparate impact theory because  Smith changed the law in this Circuit while the appeal was pending. Gray v. Phillips Petroleum Co., 971 F.2d 591, 592 n. 3 (10th Cir.1992); Anixter v. Home-Stake Prod. Co., 77 F.3d 1215, 1222, 1231-32 (10th Cir.1996). We agree, and will consider the claim. 75 Pippin asks that we reverse and remand for consideration of the applicability of that claim in this case. However, it is not our usual practice to give litigants the proverbial second bite at the apple. Pippin claims here that he asserted the claim below, and he stated before the district court that he presented evidence which establishes the viability of his claim under that theory. Even on appeal Pippin concedes that the factual predicate was laid for his disparate impact claim and he asserts no specific additional facts or evidence that he could submit on the RFOA defense that is not already in the record before us. Pippin's request for remand was not to present more evidence but merely to allow the district court to consider the applicability of the claim. However, as a matter of law, our review of the district court's grant of summary judgment is de novo and, just as the Supreme Court did for the litigants in Smith, we are fully capable of reviewing the substance of Pippin's assertions as they now stand.
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.
88 In this case, Pippin has failed to establish evidence supporting a prima facie case of disparate impact. Pippin notes that the RIF itself, or how the RIF was applied, resulted in the termination of more over-forty workers than under-forty employees. However, absent any evidence of the comparables—i.e., the age of Burlington's other employees or even the age of the other employees in the San Juan Division—this statistic has little significance. See Sloat v. Rapid City Area Sch. Dist. No. 51-4, 393 F.Supp.2d 922, 935 (D.S.D.2005) (granting employer summary judgment where employee had failed to allege prima facie claim of disparate treatment under the ADEA because he failed to allege any statistics showing a disparate impact). 89 But, even if Pippin established a prima facie case, Burlington was entitled to summary judgment pursuant to the RFOA defense. Pippin claims the specific policy that led to a disparate impact on those employees over the age of forty was a policy of determining which employees to let go during the RIF based on prior job performance and skill set. Pippin couples that policy with Burlington's policy of honoring its prior commitment to hire several new employees fresh out of school to assert that Burlington's policies were not reasonable. 90 However, as a matter of law, these were not unreasonable policies. Certainly, relying on prior performance ratings and the determination of which employees have the skills most useful to the company going forward are reasonable criteria for any company to use in deciding which employees to keep and which to let go in a RIF. See Embrico, 404 F.Supp.2d at 829 (in dicta, noting that employer's reliance on employee's technical background to select employees for retention was reasonable). 91 Further, a decision by Burlington to honor its prior commitment to new hires in order to protect its hiring reputation at the schools involved is reasonable, as is the decision to keep new hires who have not yet been evaluated. 92 All of these decisions were based on reasonable factors other than age. Corporate restructuring, performance-based evaluations, retention decisions based on needed skills, and recruiting concerns are all reasonable business considerations. Pippin has not presented any evidence sufficient to withstand summary judgment to the contrary. Indeed, Pippin has cast no doubt on the reasonableness of these concerns at all. See Embrico, 404 F.Supp.2d at 830 (noting, in dicta, that employer would be entitled to summary judgment because employee was unable to contradict employer's evidence that its policy of relying on employees' technical background to determine which employees to retain was reasonable). Accordingly, we affirm the district court. Pippin has not set forth a valid disparate impact claim.