EEOC Clarifies ADEA Obligations

The Equal Employment Opportunity Commission has published a notice of proposed rulemaking giving meaning to the “reasonable factors other than age” defense in the federal Age Discrimination in Employment Act.

The proposed rule follows two decisions from the U.S. Supreme Court: Smith v. Jackson, 544 U.S. 228 (2005), in which the court held that an employment practice that has a disparate impact on older workers is discriminatory unless it is justified by a reasonable factor other than age; and Meacham v. Knolls Atomic Power Lab., 128 S. Ct. 2395 (2008), which held that the employer bears the burden of proving the defense of reasonable factors other than age.

Because neither decision fully explained the meaning of “reasonable factors other than age,” the EEOC proposed rules to explain that “a reasonable factor is one that is objectively reasonable when viewed from the position of a reasonable employer under like circumstances.” Consistent with Smith, the proposed rule provides that an employer asserting the defense must show its employment practice was reasonably designed to further a legitimate business purpose and administered to achieve that purpose.

The proposed rule also explains that the defense of reasonable factors other than age is applicable where the challenged practice is not based on age. It also offers guidance for employers by providing a non-exhaustive list of factors relevant to determining whether an employment practice is “reasonable” and whether it is based on a factor “other than age” such as job performance, skill sets or the employee’s ability to perform a variety of tasks.

The EEOC’s proposed rule was published in the Federal Register on February 18, triggering a 60-day public comment period, after which the EEOC will review the comments before issuing a final rule. Text of the EEOC’s proposed rule can be accessed at www.eeoc.gov/ laws/regulations/index.cfm.

Impact: Employers are urged to review the EEOC’s proposed rules before changing or applying practices and policies that may affect an employee older than 40.

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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.