Legal

Consider ADEA When Planning Staff Cutbacks

By Mark Kobata

May. 23, 2017

“Disparate impact” claims under the Age Discrimination in Employment Act arise when an employer’s seemingly neutral employment policy has a disproportionate impact on workers over 40. Karlo v. Pittsburgh Glass Works involved a reduction in force.

The employer did not run a statistical analysis to ensure that cutbacks did not disproportionately affect workers over 40. When plaintiffs sued, claiming a disparate impact from the reduction in force, the plaintiffs’ own statistics demonstrated that the reduction in force did not adversely affect workers over 40. Plaintiffs nevertheless maintained their disparate impact claim.

Plaintiffs claimed that their statistics showed that while the reduction in force did not have a disparate impact on workers over 40, workers over 50 were disproportionately targeted. The trial court ruled for the defendant, finding that the ADEA did not apply to a policy that was neutral as to workers over 40, even if the policy might have a statistically significant disparate impact on workers over 50.

The 3rd Circuit Court reversed, holding that the ADEA by its plain meaning would forbid a facially neutral policy that did not disfavor employees over 40, but that did disfavor employees over 50. Karlo, et al. v. Pittsburgh Glass Works LLC, 15-3435 (3rd Cir. 2017).

Impact: Employers considering implementing policies that impact a large number of employees like a reduction in force must evaluate the impact of those policies not just as to workers over 40, but as to any recognizable subgroup of workers over 40.

Mark Kobata and Marty Denis are partners at the law firm Barlow, Kobata and Denis, which has offices in Beverly Hills, California, and Chicago. Comment below or email editors@workforce.com.

Mark Kobata and Marty Denis are partners at the law firm Barlow, Kobata and Denis, which has offices in Beverly Hills, California, and Chicago.

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