On March 11, 2008, the AAUP joined in an amicus brief (.pdf) filed in the U.S. Supreme Court by a coalition consisting of the AAUP, AARP, and the National Employment Lawyers Association. The amicus brief supported the appeal of the petitioners, twenty-eight former employees of Knolls Atomic Power Laboratory (KAPL).
This case arose when KAPL instituted a layoff of thirty-one employees, thirty of whom (including all twenty-eight plaintiffs) were over forty years of age. The employees sued KAPL under the Age Discrimination in Employment Act (ADEA), claiming that KAPL violated the law by creating a layoff plan that had a disproportionate effect, or “disparate impact,” on older workers. KAPL attempted to show that reasonable age-neutral criteria determined which employees would be laid off, without regard to their age. Initially, the employees’ suit was successful; the jury hearing their case found that KAPL could have achieved the same cost-saving results without disproportionately affecting older workers. KAPL appealed to the Second Circuit Court of Appeals. The Second Circuit initially denied KAPL’s appeal, but was required to re-evaluate when the case was remanded back to it by the Supreme Court to reconsider in light of new precedent.
Upon reconsideration, the Second Circuit concluded (.pdf) that if an employer in an ADEA disparate-impact case claims that it based an adverse employment decision (i.e., termination) on “reasonable factors other than age,” it is up to the disparately-impacted employees to demonstrate that their employer’s claim is pretext. Because the employees could not meet that burden, the court determined that judgment should have been awarded to KAPL and the jury’s award to the employees vacated. The employees then appealed the Second Circuit’s decision to the Supreme Court, which agreed in early 2008 to hear the appeal.
The AAUP coalition’s amicus brief argues that an employer’s “reasonable factors other than age” defense is an affirmative defense, which means that the party raising the defense is required to persuade a fact finder that it is the best explanation of the facts. Thus, if an employer asserts that its decision to terminate an employer or group of employees protected by the ADEA was based on “reasonable factors other than age,” the employer itself should bear the burden of demonstrating those facts and their relevance to the employment decision. This position is supported not only by the majority of circuit courts, but also by the demands of common sense; it is impractical to place the burden of disproving an employer’s defense on employees, particularly when the employer controls all of the evidence regarding its decision-making process and motivations. The brief notes that the Second Circuit’s decision, if adopted by the Supreme Court, would damage the protections the ADEA was designed to afford older workers by allowing employers to shield violations of the law behind the walls of a defense they can raise without having to prove.
Update: In a 7-1 decision, the Supreme Court held (.pdf) on June 19, 2008, that when an employer makes an employment decision that has a disproportionate impact on older workers, and alleges that the decision was based on “reasonable factors other than age” (RFOA), the employer bears not only the burden of production but also the burden of persuasion regarding those factors; employees are not obligated to show that such factors did not exist. (Justice Breyer was recused and Justice Thomas dissented in part.) The Court confirmed that the RFOA clause in the ADEA operates similarly to the ADEA clause permitting an employer to consider bona fide occupational qualifications (BFOQs); the BFOQ was already recognized as an affirmative defense. The Court also analogized the ADEA to the Fair Labor Standards Act (FLSA) and noted that Congress intended for the ADEA to be interpreted in line with the FLSA. “As against this interpretive background,” the majority said, “there is no hint in the text that Congress meant [the RFOA section] to march out of step with either the general or specific FLSA default rules placing the burden of proving an exemption on the party claiming it.” After reviewing additional legislative and case history, including the Older Workers Benefit Protection Act (OWBPA), the Court again said firmly, “Congress understands the phrase the same way we naturally read it, as a clear signal that a defense to what is ‘otherwise prohibited’ is an affirmative defense, entirely the responsibility of the party raising it.” The majority also laid to rest any question about the role of the business necessity defense in ADEA cases, saying that “we are now satisfied that the business necessity test should have no place in ADEA disparate-impact cases.” It rejected any argument, however, that that conclusion would “stand in the way of our holding that the RFOA exemption is an affirmative defense.”
The Court did add some reassuring words for employers, noting that ADEA plaintiffs are still required to “isolat[e] and identif[y] the specific employment practices that are allegedly responsible for any observed statistical disparities”; as in City of Jackson, an employee ADEA challenge could be rejected on the grounds that the employee had only pointed out that a pay plan was less generous to older workers and “ha[d] not identified any specific test, requirement, or practice within the pay plan that ha[d] an adverse impact on older workers.” The Court concluded that the additional burden imposed by its decision (and by the balance already set by Congress) will come “mainly in case where the reasonableness of the non-age factor is obscure for some reason, [where] the employer will have more evidence to reveal and more convincing to do in going from production to persuasion.”