EEOC Issues Final Regulations for RFOA Defense Under ADEA


Last week, we reported that several senators had introduced new amendments to the Age Discrimination in Employment Act ("ADEA") to make it easier for plaintiffs in age discrimination cases to prove their claims.  U.S. Senators aren't the only ones busy refining federal age discrimination laws - on March 30, 2012, the Equal Employment Opportunity Commission (EEOC) published its final rule on the “reasonable factors other than age” (RFOA) defense under the ADEA.  Acting in response to two U.S. Supreme Court cases, Smith v. City of Jackson in 2005 and Meacham v. Knolls Atomic Power Laboratories in 2008, the rule bring the EEOC regulations in line with Supreme Court precedent and clarifies the scope of the RFOA defense

In Smith, the Supreme Court held that disparate impact claims are cognizable under the ADEA.  The Court further held that a practice having a disparate impact on older workers need only be justified by “reasonable” factors other than age; an employer need not satisfy the more rigorous “business necessity” defense applicable to Title VII claims.  In Meacham, the Court held that the employer bears the burden of production and persuasion on the RFOA defense.   

The regulation points out that the EEOC believes that “reasonable” factors other than age reflects a higher standard than a simple “rational basis” standard.  According to the EEOC, equating the RFOA defense with a rational-basis standard would improperly conflate ADEA disparate-treatment and disparate-impact standards of proof: “If an employer attempting to establish the RFOA defense were only required to show that it had acted rationally, then the employer would merely be required to show that it had not engaged in intentional age discrimination.”

The rule provides a non-exhaustive list of factors to be considered in determining whether an employment practice is based on RFOA:

  • The extent to which the factor is related to the employer’s stated business purpose;
  • The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training bout how to apply the factor and avoid discrimination;
  • The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes;
  • The extent to which the employer assessed the adverse impact of its employment practice on older workers; and
  • The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.

The final rule makes clear that the EEOC will take a very dim view of an employer’s RFOA defense where supervisors are given broad discretion to make subjective decisions.  Accordingly, prudent employers will take steps to ensure that decisions are made consistent with business purpose, that supervisors are properly trained, and that supervisors exercise their discretion in a way that does not violate the ADEA.

For more information, visit EEOC’s Questions and Answers page.  The rule will take effect on April 30, 2012.


EEOC Proposes New Age Discrimination Regulations

Today the Equal Employment Opportunity Commission (EEOC) releases new regulations that will define employers' "reasonable factors other than age" or "RFOA" defense under the Age Discrimination in Employment Act (ADEA).  The new regulations would reflect two Supreme Court cases interpreting the RFOA defense: Smith v. City of Jackson (2005) and Meacham v. Knolls Atomic Power Laboratories (2008).  Click here to read the EEOC's Proposed ADEA Regulations.

The Supreme Court held in Smith that employment practices having a disparate adverse impact on workers age 40 and older may violate the ADEA.  The Court in Meacham then ruled that when a plaintiff proves such an adverse impact, employers have the burden of proving that the practice that caused the adverse impact was based on reasonable factors other than age.”  Since Smith and Meacham, however, there have not been any interpretive regulations under the ADEA to guide employers on the RFOA defense. 

The proposed rule defines a "reasonable factor other than age" as "one that is objectively reasonable when viewed from the position of a reasonable employer (i.e., a prudent employer mindful of its responsibilities under the ADEA) under like circumstances.  To establish the RFOA defense under the new rules, an employer must show that the employment practice was both (1) reasonably designed to further or achieve a legitimate business purpose and (2) administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known, to the employer.  The rule also provides a non-exhaustive list of six factors relevant to determining whether an employment practice is "reasonable":

  1. Whether the employment practice and the manner of its implementation are common business practices;
  2. The extent to which the factor is related to the employer’s stated business goal;
  3. The extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);
  4. The extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
  5. The severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected, and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and
  6. Whether other options were available and the reasons the employer selected the option it did.

The EEOC's proposal also explains that the RFOA defense turns on the facts and circumstances of each particular situation and whether the employer acted prudently in light of those facts.

An employer who is considering a change in employment practices -- such as a layoff, change in employment qualifications, etc. -- should examine the impact of the change to determine whether it may create an adverse impact based on age.  If it appears that it may, the employer should then apply the EEOC's six factors to see if it can adequately defend the change as based on reasonable factors other than age.  If the change does not appear to pass each of the EEOC's six factors, the employer may want to consider altering the change to reduce the impact or abandoning it altogether. 

Supreme Court Tightens Standards for Age Discrimination Plaintiffs

Yesterday the United States Supreme Court ruled 5-4 that trial courts may not use a "mixed motive" framework in federal age discrimination cases.  Rather, plaintiffs in age discrimination cases must prove that "but for" their age, they would not have been discriminated against.  Click here to read the Court's decision in Gross v. FBL Financial Services

Under a 1991 amendment to Title VII  of the Civil Rights Act of 1964, plaintiffs may prove race, sex, religion or national origin discrimination by proving either they would not have been discriminated against "but for" their employer's unlawful motive, or if their employer had a "mixed motive," meaning that the employer had some lawful motives to take an adverse action against the employee, but also some unlawful motives.  In "mixed motive" cases, employers can avoid some (but not all) liability by proving that it would have taken the same action against the employee even absent the unlawful motive.  Prior to Gross, several circuit courts (including the Ninth Circuit Court of Appeals) had applied the "mixed motive" framework in cases under the Age Discrimination in Employment Act or the Americans with Disabilities Act, even though those statutes do not incorporate a"mixed motive" framework. 

Gross is ultimately a technical case mostly of interest to employment litigators.  Gross will make it incrementally more difficult for plaintiffs to prevail in age discrimination and some other federal discrimination cases.  Employers do not need to change their current policies and practices in light of Gross - rather, employers should continue not to discriminate on the basis of age, sex or any other characteristic protected by federal, state or local law.  (Well, duh!)

No Discrimination in Firing Employee Who Used Spit to Remove Expiration Dates

Another slow news day, another fun case:  the Texas Court of Appeals affirmed summary judgment in favor of Frito Lay, Inc. and against a former route sales representative who was fired for using his saliva to remove the "best before" dates from expired products.  Click here to read the decision in Cantu v. Frito Lay, Inc. 

When one of Frito Lay's customers caught Cantu using his spit to remove expiration dates, it banned him from entering any of its many stores; Frito Lay then terminated him, following its policy to terminate any employee who is banned from a customers' premises.  Cantu sued Frito Lay claiming age and sex discrimination, because Frito Lay did not also fire a younger female sales rep who was also banned from the same customer's stores. 

Well, it turned out not to be so simple.  The younger female employee was banned from only one store because she was gossiping about that store's manager, who happened to be her relative; further, that manager intervened and asked that she not be reprimanded.  Cantu, on the other hand, was barred from all of the customer's stores, and as the court noted, had “wiped bags of Frito-Lay chips with his saliva, conduct that is qualitatively different and distinct from the imprudent sharing of personal information.”

Is there a lesson to be learned here?  We can think of two.  First, don't use spit to remove expiration dates.  Really.  Second, when disciplining employees, make sure that you apply consistent standards to similar behaviors.  Cantu lost because the younger female employee was not similarly situated, as she had engaged in much less egregious misconduct.  Had she also been caught smearing her spit on the merchandise, the case may have turned out differently. 

Age Discrimination Claims on the Rise

According to the Wall Street Journal, discrimination filings with the Equal Employment Opportunity Commission (EEOC) went up 15 percent in 2008 compared to 2007, and age discrimination suits in particular showed a dramatic 29 percent increase over the previous year.  Click here to read the WSJ Article

The conventional wisdom is that discrimination claims go up in a down economy -- more people lose their jobs through layoffs or heightened performance standards, and a certain percentage of those affected will file discrimination claims.  That doesn't necessarily explain the spike in certain types of claims, however, such as the recent increase in age discrimination claims. 

So why the spike in claims? It could be as simple as an aging workforce, but we suspect more is at work.  In a troubled economy, many employers focus their layoffs on more highly-compensated employees, and that can have a greater impact on older workers (while specifically targeting older workers for layoff is unlawful, it may be lawful to select higher-paid workers).  Also, older workers have a harder time finding replacement employment, and that might lead them to file claims against their former employers rather than move on.

These are challenging times for employers, and now more than ever it pays to be careful when conducting layoffs and terminations. 

Feisty, Spry and Grandmotherly: Ageist Terms to Avoid?

What do terms like "feisty," "spry," "elderly" and "grandmotherly" have in common?  Yes, they are commonly used to refer to older people; but they can be used to express derogatory stereotypes about someone because of age. 

An article in today's New York Times, "Goodbye Spry Codgers, So Long Feisty Crones," reports that two groups, the International Longevity Center in New York City and the Aging Services of California, have put together a stylebook to guide media professionals through the minefield of politically correct and politically incorrect ways of identifying and portraying the elderly.  Among the potentially unwelcome terms identified are “senior citizen," “golden years," “feisty,” “spry,” “feeble,” “eccentric,” “senile” and “grandmotherly.” Likewise, it can be viewed as patronizing to call someone “80 years young.”  As for what's on our coffee mug? Don't even go there. 

Is this another example of "political correctness" run amok, and can we just ignore it?  Probably not.  As previously reported here in the Stoel Rives World of Employment, ageist remarks like "grandma" can form the basis of an age discrimination lawsuit.  Employers should be careful about how age-related terms are used in the workplace.  It is unlikely that using a term like "senior citizen" by itself will lead to a lawsuit, but using it in the context of a performance review or a termination meeting might. 

Supreme Court to Hear Mixed-Motive Age Discrimination Case

Last week, the United States Supreme Court agreed to review Gross v. FBL Financial Services, Inc., a case involving whether a plaintiff alleging a claim under the Age Discrimination in Employment Act must present "direct evidence" of discrimination to be entitled to a mixed-motive jury instruction. 

A mixed-motive case in one where the evidence shows that an impermissible factor - such as age - was considered in making an employment decision even if the employer also based the decision on other permissible factors.  In Gross, the plaintiff prevailed after a jury trial in which the jury was instructed that it was sufficient that the plaintiff proved age was a "motivating factor" in his employer's decision to terminate his employment.  (A "motivating factor" is considered an eaiser burden of proof than "direct evidence").  The Eighth Circuit Court of Appeals reversed, holding that the "motivating factor" standard applies only to cases brought under Title VII of the Civil Rights Act of 1964 (i.e., sex, race, national origin and religious discrimination claims) and that Gross needed to prove his case with direct evidence to be entitled to a mixed-motive instruction.

Do employers need to be concerned about this case?  Not really.  This is one of those cases that means more for us lawyers than it does for our clients.  If the Court rules for Gross, it will make certain types of age discrimination marginally easier for plaintiffs, but this will not change an employer's obligation to base employment decision only on permissible factors, such as performance, and not on impermissible factors, such as age. 

Calling Store Manager "Grandma" Evidence of Age Bias

Here's a shocker out of Illinois:  a federal district court held that a retail chain's store manager calling a department head "Grandma" was evidence of age discrimination.  In McDonald v. Best Buy Co., the plaintiff alleged she was demoted and forced out of her job because of her age in violation of the Age Discrimination in Employment Act (ADEA).  The defendant argued she was demoted because of her inability to effectively manage her subordinates. 

The case hinged to a large degree on the fact that the plaintiff's supervisor often referred to her as "Grandma," which the plaintiff argued was evidence of age discrimination.  The defendant countered that because it is technically possible for a person under age 40 (and not protected by the ADEA) to be a grandmother, "Grandma" is not an age-related nickname.  The court noted that while calling someone "Grandma" does not by itself violate the ADEA, it is certainly an age-related comment and does provide evidence of an ageist motive.

Here's the lesson for employers:  be careful of "cute" nicknames that could be discriminatory.  There are endless cases where nicknames like "Grandma," "Honey," "Baby" and the like supported claims of discrimination.  Calling an employee "Grandma" might sound endearing at the time, but in the context of a lawsuit, it will likely sound discriminatory.