EEOC Issues FAQs on Age Discrimination Final Regulation
- Article Information
- Published on Friday, 30 March 2012 16:08
As noted in in the Employment Law Weekly article, "EEOC Issues Final Rule on Age Discrimination" posted on March 30, 2012, the EEOC has issued the final regulation on “Disparate Impact and Reasonable Factors Other than Age” (RFOA) pursuant to the Age Discrimination in Employment Act of 1967 (ADEA). The EEOC has also issued FAQs to further explain the final regulation, which include:
1. What is the purpose of the rule?
The rule responds to two Supreme Court decision in which the Court criticized one part of the Commission’s existing ADEA regulations. The Court upheld EEOC’s longstanding position that the ADEA prohibits policies and practices that have the effect of harming older individuals more than younger individuals, even if the harm was not intentional. However, it disagreed with the part of the regulations which said that, if an employee proved in court that an employment practice disproportionately harmed older workers, the employer had to justify it as a “business necessity.” The Court said that, in an ADEA disparate impact case, the employer did not have to prove business necessity; it need only prove that the practice was based on an RFOA. The Court also said that the RFOA defense is easier to prove than the business necessity defense but did not otherwise explain RFOA.
The rule does two things:
It makes the existing regulation consistent with the Supreme Court’s holding that the defense to an ADEA disparate impact claim is RFOA, and not business necessity; and it explains the meaning of the RFOA defense to employees, employers, and those who enforce and implement the ADEA.
2. Who is required to follow the rule?
The rule applies to all private employers with 20 or more employees, state and local government employers, employment agencies, and labor organizations. Although the ADEA applies to the federal government as an employer, the rule does not apply to federal employers by virtue of section 633a(f) of the ADEA.
3. Does the rule apply to all employment practices?
No. The rule applies to only a few kinds of employment practices. Specifically, it applies only to practices that are neutral on their face, that might harm older workers more than younger workers, and that apply to groups of people. For instance, it applies to tests used to screen employees or to some procedures used to identify persons to be laid off in a broad reduction-in-force (“RIF”).
4. What determines whether an employment practice is based on Reasonable Factors Other than Age?
An employment practice is based on an RFOA when it was reasonably designed and administered to achieve a legitimate business purpose in light of the circumstances, including its potential harm to older workers.
The rule emphasizes the need for an individualized consideration of the facts and circumstances surrounding the particular situation. It includes the following list of considerations relevant to assessing reasonableness:
- The extent to which the factor is related to the employer’s stated business purpose;
- The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination;The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to
negative age-based stereotypes; - The extent to which the employer assessed the adverse impact of its employment practice on older workers; and,
- The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.
5. Must employers show that they used each of the considerations listed in the EEOC’s regulation to establish the defense?
No. The considerations merely describe the most common characteristics of reasonable practices. The rule makes clear that the defense could be established absent one or more of the considerations, and that there could even be a situation in which the defense is met absent any of the considerations. Similarly, the
defense is not automatically established merely because one or more of the considerations are present. Read More.
EEOC Issues Final Rule on Age Discrimination
- Article Information
- Published on Friday, 30 March 2012 15:30
The U.S. Equal Employment Opportunity Commission (EEOC) has issued the “Final Regulation on Disparate Impact and Reasonable Factors Other than Age” (RFOA) pursuant to the Age Discrimination in Employment Act of 1967 (ADEA). The ADEA prohibits employment discrimination against employees who are 40 years of age or older. The final rule was coordinated with other federal agencies and reviewed by the Office of Management and Budget (OMB). The rule was posted for public inspection today and will be published in the Federal Register on Friday, March 30.The EEOC’s final rule clarifies that the ADEA prohibits policies and practices that have the effect of harming older individuals more than younger individuals, unless the employer can show that the policy or practice is based on a reasonable factor other than age. The rule explains the meaning of the RFOA defense to employees, employers, and courts, and makes EEOC’s regulations consistent with Supreme Court case law. The rule applies to private employers with 20 or more employees, state and local government employers, employment agencies, and labor organizations. Read More.
Minnesota State Agencies Settle EEOC Age Bias Suits for Over $574,000
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- Published on Tuesday, 22 November 2011 03:42
Three U.S. District Court judges approved consent decrees ordering the Minnesota Department of Natural Resources, the Minnesota Department of Commerce and the Minnesota Department of Public Safety to pay damages to claimants who were allegedly denied employer contributions for retiree health and dental insurance because they were older than age 55 at the time that they retired. In its age discrimination lawsuits against the three agencies, the Equal Employment Opportunity Commission (EEOC), contended that the incentive plans contained in collective bargaining agreements for certain employees violated the Age Discrimination in Employment Act (ADEA) because the incentive plan denied the premiums to persons over a certain age. In an earlier lawsuit involving the same incentive plans, U.S. District Court Judge Paul A. Magnuson held that the early retirement incentives are “facially discriminatory, and, as such, violate the ADEA.” Under the decrees, the agencies will pay those 13 people the lost premium amounts, amounting to a combined total of at least $574,195. In addition, the agencies must to offer to pay future premium costs for persons who would still be entitled to receive them but for the unlawful early retirement provision. “The law is settled: it is discriminatory for employers to maintain incentive plans that explicitly reduce benefits as persons grow older,” said the EEOC’s regional attorney in Chicago, John Hendrickson. “We commend the State of Minnesota for working with the EEOC to resolve these cases in light of the state of the law.” Read More.
Senators Introduce Bill to Overturn U.S. Supreme Court’s Decision on Age Discrimination
- Article Information
- Published on Tuesday, 20 March 2012 17:39
Iowa Senators Tom Harkin (D-IA), Chuck Grassley (R-IA) and Patrick Leahy (D-VT) have introduced legislation, the Protecting Older Workers Against Discrimination Act (POWADA) which would overturn the U.S. Supreme Court’s decision in Gross v. FBL Financial Services, Inc. In Gross, the Supreme Court held that in an age discrimination case pursuant to the Age Discrimination and Employment Act (ADEA), the plaintiff must establish by a preponderance of the evidence that age was the “but for” cause of the employer’sadverse employment action. According to Senator Harkin, “Prior to the Court’s decision in Gross, the same standard of proof applied equally to all workers, regardless of the type of invidious discrimination they faced. Ignoring these consistent standards, the Court’s decision established a far higher standard of proof for age than for discrimination based on race, sex, national origin and religion, without any rationale or justification. The Protecting Older Workers Against Discrimination Act will reverse the Court’s decision and restore the law to what it was for decades so that Jack Gross and all older workers in this country enjoy the full protections of the law.”
Senator Grassley commented that, “The decision in the Gross case has had a major impact on employment discrimination litigation across the country. It’s time we clarify the law to ensure that other people like Jack Gross aren’t put in similar situations. Older Americans have immense value to our society and our economy and they deserve the protections Congress originally intended.” POWADA would reverse the Gross decision and makes clear that when an employee shows that age discrimination was a “motivating factor” behind a decision, the burden is on the employer to show it complied with the law. POWADA is modeled on the Civil Rights Act of 1991, which codified the “motivating factor” framework for race, sex, national origin and religion discrimination claims under Title VII of the Civil Rights Act of 1964. The Act also clarifies that the "motivating factor” framework applies to all anti-discrimination and anti-retaliation laws involving race, sex, national origin, religion, age and disability – treating all workers, and all forms of discrimination, equally. The legislation would not apply retroactively. Read More.
HR Practice Pointer: Is Severance Pay Required?
- Article Information
- Published on Wednesday, 14 September 2011 03:29
There is no general statutory or common law obligation for an employer to provide severance pay to an employee. However, where it is provided by the employer, it must be administered in a non-discriminatory manner and should comply with any applicable labor agreement, employee handbook, policy manual or any other relevant employer document. In certain situations, employers may provide severance pay in exchange for a release of claims the employee may have against the employer. A properly drafted severance agreement will release the employer from claims such as wrongful termination, discrimination, harassment and/or retaliation. All such severance agreements should be reviewed (and/or drafted) by an employment law attorney. In general, severance agreements should be clearly worded, specifically identify the claims being released, be supported by adequate consideration and, as indicated above, be reviewed by counsel for the employer and employee. Civil Code section 1542 provides that a general release does not extend to claims which the creditor does not know or suspect to exist, although a severance agreement can contain a waiver of this provision. A waiver of claims regarding age discrimination contained in a severance agreement must comply with the Age Discrimination Act (ADEA) which requires, in part, that the waiver specify the rights being waived under the ADEA, that the employee was advised in writing to consult an attorney, that the employee was afforded at least 21 days in which to considered the agreement, and that the agreement provides for a seven day period following execution of the agreement in which the employee may revoke the agreement. Read more.
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