Can older workers file disparate impact claims under the Age Discrimination in Employment Act (ADEA)? On March 30, 2005, the U.S. Supreme Court answered in the affirmative.
The case involved police officers in the city of Jackson, MS. The city had adopted a pay plan granting raises to all city employees in order to attract and retain qualified people and maintain competitiveness. In order to bring starting salaries up to the regional average, the plan provided higher raises to police officers and dispatchers with less than five years of seniority than to those with more seniority.
A group of older officers filed suit, claiming that the policy, although facially neutral, had a disparate impact on their age group, since the majority of those with more seniority were over the age of 40. While disparate impact claims have long been allowed under Title VII, many lower courts have long ruled that they were not allowed under the ADEA.
The Supreme Court put an end to that debate by ruling that employers can be held liable for disparate impact under the Age Discrimination in Employment Act. Unlike disparate treatment claims, the theory of disparate impact does not require employees to prove intent on the employer's part.
The Court didn't just potentially open up employers to more legal claims. It also explained how employers can defend against such a claim. The Court determined that the scope of disparate impact liability under the ADEA is narrower than under Title VII. Under the Age Discrimination in Employment Act, employers can avoid liability if they can show that an otherwise prohibited action was based on "reasonable factors other than age," a defense that is not available under Title VII.
The Court also put an end to the police officers' case by ruling that the city did base its pay plan on reasonable factors other than age: seniority and position. The Court said those are "unquestionably reasonable" factors, given the city's goal to attract and retain qualified people and compete with other public sector agencies. (Smith, et al. v. City of Jackson, Mississippi, et al.)