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":
- Whether the employment practice and the manner of its implementation are common business practices;
- The extent to which the factor is related to the employer’s stated business goal;
- 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);
- The extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
- 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
- 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.