A U.S. Supreme Court ruling will make it more difficult and more expensive for employers to win age discrimination lawsuits.
In recent years, Knolls Atomic Power Laboratory has been charged with designing prototype naval nuclear reactors and with training Navy personnel to run them. The demands for naval nuclear reactors changed with the end of the Cold War, however, and for fiscal year 1996 Knolls was ordered by the federal government to reduce its work force.
Knolls had its managers score their subordinate employees on “performance,” “flexibility,” and “critical skills.” These scores, along with points for years of service, were used to determine who was laid off. Of the 31 employees let go, 30 were at least 40 years old. Several of the laid-off employees filed suit against Knolls, and they asserted a disparate-impact claim under the Age Discrimination in Employment Act of 1967 (ADEA).
To show such an impact, the employees relied on a statistical expert’s testimony that results so skewed according to age could rarely occur by chance; and that the scores for “flexibility” and “criticality,” over which managers had the most discretionary judgment, had the firmest statistical ties to the outcomes.
The jury found for employees on the disparate-impact claim, and the federal circuit of appeals initially affirmed. Knolls appeals to the U. S. Supreme Court, which sent the case back for a rehearing, on which Knolls prevailed in the lower court.
On the second appeal to the U. S. Supreme Court, however, in a 7-1 ruling, the court said that when cases are brought under the so-called “disparate impact” theory of discrimination, employers have the burden of proof of showing that there was a reasonable factor other than age to explain the disparate impact on older workers.
In an opinion authored by Justice David Souter, the court said when it is shown that an employer’s action creates a disparate impact on older workers, the ADEA creates a specific exemption from liability: was there a reasonable factor other than age to account for the disparate impact?
If so, the burden is on employer to prove the reasonable factor, under the familiar principle that “when a proviso carves an exception out of the body of a statute those who set up such exception must prove it.”
As Justice Souter put it, “there is no denying that putting employers to the work of persuading factfinders that their choices are reasonable makes it harder and costlier to defend. We have to read it the way Congress wrote it.”
Meacham v. Knolls Atomic Power Laboratory, June 19, 2008.
With permission from The Elder Law Practice of Timothy L. Takacs.