*By Jason Rossiter
The U.S. Supreme Court recently ruled that an employer implementing a
reduction in force (“RIF”) must rely on a “reasonable” factor in
selecting employees for termination when defending against a claim of
age discrimination. The Court held that an employer relying on a
statutory exception to liability in a lawsuit brought pursuant to the
Age Discrimination in Employment Act (“ADEA”) bears both the burden of
production and persuasion when arguing that employment practices that
have a disparate impact on older workers are based on “reasonable
factors other than age.” In Meacham v. Knolls Atomic Power Laboratory,
the Court resolved split authority among lower appellate courts that
were divided on whether the employer has the burden of persuasion, in
addition to the burden of production, with respect to the reasonableness
of the exception.
In Meacham, the employer instituted a RIF, identifying
affected employees based on its managers’ assessments of individual
employees’ performance, flexibility, and critical skills. Subsequent to
the RIF, 28 employees filed suit against the employer alleging that
this criteria resulted in illegal disparate impact under the ADEA. 27
of the 28 employees were 40 years of age or older, the statutory minimum
for protection under the statute.
The jury found in favor of the plaintiffs on their disparate
impact claim. On remand, the Second Circuit reversed, finding that the
employees failed to carry their burden of showing that the factors used
by the employer were unreasonable. The Supreme Court reversed, holding
that the employer had the burden of persuasion with respect to the
“reasonableness” of the factors it used to select the employees affected
by the RIF, and that the Second Circuit Court erred by placing the
burden on the employees.
The Court based its decision on its reading of the ADEA and
interpretation that the “reasonable factors other than age” exception is
an affirmative defense, placing the burden of persuasion on the
employer/defendant. The Court looked to previous decisions which held
that similar exceptions provided by the statute, such as “where age is a
bona fide occupational qualification,” was likewise an affirmative
defense subject to the employer’s burden.
The Court concluded by noting that, while an employer will
likely have to provide more convincing evidence that it selected
employees for the RIF by “reasonable factors other than age,” an
employee must still “isolate and identify the specific employment
practices that are allegedly responsible for any observed statistical
disparities.” The Court reasoned that “[i]dentifying a specific
practice is not a trivial burden,” and this requirement should allay
concerns by employers that its decision will encourage frivolous
litigation.
Clearly, the Court’s decision requires that employers develop
and prove reasonable criteria in the event of future age discrimination
litigation in the wake of a RIF.
*Jason Rossiter has extensive experience
representing employers in litigating and arbitrating workplace disputes
in Ohio, California and throughout the country. For more information
about age discrimination or any other employment-related tort, please
contact Zashin & Rich at 216.696.4441.
