by Emmanuel V.R. Boulukos
Ice Miller LLP is an IMA Member
On January 23, 2019, the Seventh Circuit Court of Appeals
(the federal circuit covering Indiana, Illinois, and Wisconsin) issued a
decision limiting the type of age discrimination claims that may be brought by
applicants for employment. In Kleber v. CareFusion Corp., the court
of appeals held that applicants for employment (as opposed to current or former
employees) may not maintain “disparate impact” claims under the Age
Discrimination in Employment Act (ADEA).
Notably, while Kleber represents a significant narrowing of
the ADEA’s protections for applicants, it does nothold that
applicants have no protections under ADEA (as suggested by several major news
outlets), and it does not mean that employers within the Seventh Circuit are
insulated from ADEA claims by applicants.
Disparate Impact vs. Disparate Treatment
In order to understand the ruling’s bottom line, it is important to distinguish
between “disparate treatment” ADEA claims (which are unaffected by
the Kleber ruling) and the “disparate impact” claim
at issue in this case.
Generally speaking, a “disparate treatment” claim under ADEA (or
other similar federal employment discrimination statutes such as Title VII of
the Civil Rights Act of 1964) alleges that an applicant, employee, or former
employee (who is at least 40 years old) was subjected to intentional
discrimination on the basis of his or her age. Disparate treatment claims may
be proven through “direct” or “circumstantial” evidence of
age discrimination—for example, a negative comment about older workers during a
job interview or evidence that a less-qualified and substantially younger
applicant was hired over a more qualified older applicant. As noted by the
court of appeals in Kleber, there is no question that the ADEA
allows applicants to bring disparate treatment claims.
In contrast to disparate treatment, a disparate impact claim—such as the one at
issue in Kleber—alleges that an employment policy or practice,
which appears neutral on its face, disproportionately favors individuals
outside of the protected classification. Typically, disparate impact claims
rely on statistical evidence.
Kleber’s Disparate Impact Claim
In Kleber, the 58-year-old plaintiff alleged that the employer,
CareFusion, violated the ADEA by limiting the pool of applicants for an
in-house counsel position to workers with fewer than seven years of experience.
Because Kleber had more than seven years of experience, he was passed over in
favor of a 29-year-old applicant.
Kleber’s claim was dismissed by the trial court for failure to
state a claim under the ADEA. After a three-judge panel of the Seventh Circuit
initially reversed the trial court in Kleber’s favor, the case was re-heard by
all 12 judges on the circuit. In an 8-4 decision based on a lengthy analysis of
the statutory text, the full court of appeals changed course and upheld the
trial court’s dismissal. In doing so, the Seventh Circuit reached the same
result that the Eleventh Circuit Court of Appeals (the only other federal court
of appeals to address the issue directly) reached in a 2017 case.
Employer Takeaways
Although the U.S. Supreme Court declined to hear an appeal of the Eleventh
Circuit case, it is certainly possible that the Court may eventually address
the issue. Alternatively, Congress could amend the statute to mirror other
federal discrimination laws that explicitly allow applicants to bring disparate
impact claims.
In the meantime, employers that may be tempted to adopt “neutral”
hiring practices or policies that are likely to have a disparate impact on
older applicants should think twice.
Among other things, to the extent that a position is open to both outside
applicants and current employees, a practice that might be
lawful as applied to outside applicants may be illegal when applied to current
employees, who do have the right to bring disparate impact claims under the
ADEA. Additionally, many states and municipalities have employment
discrimination laws that prohibit age discrimination. State and local courts or
agencies could interpret these laws to allow for age-related disparate impact
claims. Further, individual applicants may still be able to bring a
disparate treatment claim if they can show they were passed over for a younger
individual with the same or fewer qualifications. Finally, even if there is no
risk of legal liability, the reputational damage to an organization that
results from being branded as ageist could be more far more harmful (and
costly) than a single EEOC charge or lawsuit alone.
In sum, make sure your hiring practices only take into account qualifications
that are relevant to the position and, as always, continue to hire the most
qualified candidate, regardless of their age.
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