The Age Discrimination in Employment Act (“ADEA”) prohibits age discrimination in employment, but limits those entitled to its protections to individuals who are at least 40 years of age. In Karlo, et al. v. Pittsburgh Glass Works, LLC, Case No. 15-3435 (3rd Cir. 2016), the Third Circuit Court of Appeals, which covers Pennsylvania, New Jersey and Delaware, held the ADEA permits a “subgroup” of individuals who are aged 50 or older to bring a discrimination claim alleging they were treated differently than younger employees. In short, the Court relied on the fact that the ADEA protects individuals based on their age, not on the fact they are aged 40 or older. The Court’s ruling is significant as it is contrary to the decisions of several other Circuit Courts of Appeal, which have not permitted such a cause of action.
In Karlo, the employer laid off approximately 100 workers due to a decline in business, seven of whom were the plaintiffs in the lawsuit. The plaintiffs filed a collective action alleging the reduction in force violated the ADEA because they were treated differently due to their age. The plaintiffs were a “subgroup” of those protected by the ADEA – namely, those who were at least 50 years of age. The district court granted summary judgment to the employer on the plaintiffs’ ADEA disparate impact claims, concluding a claim under the ADEA on behalf of a “subgroup” was not cognizable.
In overturning the district court’s decision, the 3rd Circuit noted that the plaintiffs’ theory differed from those typically advanced in ADEA disparate impact case. Specifically, while most claims of disparate impact analyze the effect of a facially neutral policy on all employees aged 40 or over, the plaintiffs’ claim here was based on the impact of the policy – or the decision on who to select for the layoff – on those aged 50 or older. The plaintiffs sought to limit the size of the group because including workers in the group who were between the ages of 40 and 49 lessened the statistical evidence of a disparity.
The court examined the language of the disparate impact section of the ADEA which makes it unlawful for an employer “to adversely affect [an employee’s] status . . . because of such individual’s age.” The court found this language particularly relevant because the focus in an ADEA case should be on the individual’s age, not his/her status as being aged 40 or older. In so holding, the court relied on the U.S. Supreme Court’s decision in O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308 (1996), which concluded a terminated 56-year old plaintiff could bring an age discrimination disparate treatment claim even though his replacement was over 40. In other words, simply because the individual who was treated more favorably is within the protected age group does not mean the older worker who was treated less favorably was not treated differently because of his/her age. The 3rd Circuit found no reason to distinguish between disparate treatment claims and disparate impact claims when the language of the ADEA uses the term “because of such individual’s age” in both sections.
What does the Karlo case mean for employers? Perhaps most significant is that employers in the 3rd Circuit will not be able to rely on the defense that younger, yet still protected, individuals suffered similar adverse treatment than older workers. Instead, the focus will be on how the individual plaintiff(s) was treated and whether that individual(s) suffered a disparate impact that can be attributed to his/her age. Even if the employer presents evidence that other protected age-group individuals suffered the same fate as the plaintiff(s), if the plaintiff(s) were older, they constitute a “subgroup” entitled to present their case to a judge or jury.
Employers in at least three other circuits – 2nd (NY, CT, NH VT), 6th (MI, OH, KY, TN) and 8th (MO, AK, IA, MN, NE, SD, ND) – for now may continue to rely on cases that have refused to follow the path cleared by the 3rd Circuit and rely upon evidence that the facially-neutral policy had a similar impact on younger, but still protected-age individuals.
The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years, and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.