Labor & Employment Law Daily ADEA’s disparate impact provision protects job applicants
Tuesday, May 1, 2018

ADEA’s disparate impact provision protects job applicants

By Brandi O. Brown, J.D.

Concluding that the ADEA’s disparate impact provision protects outside job applicants and not only current employees, the Seventh Circuit has ruled that a 58-year-old job applicant may pursue a disparate impact claim based on a job posting with a “seven-year experience cap.” The appeals court said its reading of the statute is the better reading of the statutory text and more in keeping with the ADEA’s purpose, as well as 50 years of case law interpreting the ADEA and other employment discrimination statutes. It also “tracks” with the Supreme Court’s reading, in Griggs v. Duke Power Co., of nearly identical language of Title VII, which has been held to protect job seekers. “Moreover, we have not been presented with, and could not imagine on our own, a plausible policy reason why Congress might have chosen to allow disparate impact claims by current employees, including internal job applicants, while excluding outside job applicants,” the appeals court explained, reversing the district court’s judgment and remanding the case (Kleber v. CareFusion Corp., April 26, 2018, Hamilton, D.).

Disparate impact claim. A 58-year-old attorney with significant legal and business experience applied for a senior counsel position with CareFusion Corporation, a healthcare products company. In its job posting, the employer said it was seeking “a business person’s lawyer” and listed as a qualification, “3 to 7 years (no more than 7 years) of relevant legal experience.” The attorney did not get an interview. The employer hired a 29-year-old applicant.

After filing a charge of age discrimination with the EEOC, the attorney filed suit, contending that the seven-year limitation in the job announcement was intended to weed out older applicants. The employer moved to dismiss his claims, including a disparate impact claim under 29 U.S.C. sec. 623(a)(2). The district court granted the motion, holding that the ADEA provision did not cover outside job applicants. The attorney appealed.

“Status as an employee.” Section 623(a)(2) prohibits an employer from acting “to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age[.]” In Smith v. City of Jackson, a Supreme Court plurality held that sec. 623(a)(2) prohibits practices that have a disparate impact on older workers. Thus, the question here was whether it also protects outside job applicants from such practices. While the provision might not explicitly refer to job applicants or hiring decisions, “its broad language easily reaches employment practices that hurt older job applicants as well as current employees,” the appeals court found.

Although the employer emphasized the use of the phrase “or otherwise adversely affect his status as an employee,” the court was unconvinced that this language acted to limit the protections to “people who already possess ‘status as an employee’ with the defendant-employer.” Such a reading would make it appear that Congress, which meant to outlaw those practices depriving older workers of opportunities for employment, instead “deliberately chose to leave a wide array of discriminatory hiring practices untouched.”

If the employer was correct that the paragraph applied only to current employees, the consequences would be “arbitrary and even baffling” for jilted applicants. Internal applicants who were turned down for having too much experience would be able to sue, while outside applicants would not, the court noted. Additional “arbitrary line-drawing” would be required if one of the applicants was employed at the time of application by a sister subsidiary of the employer. Would he or she have “status as an employee” so that she could assert a disparate impact claim? What about recently laid-off employees? The court saw “no arguable policy reason to exclude any of these applicants from the disparate impact protection of paragraph (a)(2).” And the employer offered no reason why Congress might have chosen to allow such arbitrary line-drawing to occur.

ADEA’s purpose. Indeed, the court noted, there could be “no doubt” that Congress enacted the statute to address those employment practices that make it more difficult for older workers “to find jobs.” When drafting the statute, Congress had been “especially” concerned with the difficulties faced by older workers in attempting to “regain employment” after being displaced—that is, when they were “applying for jobs.” Indeed, the DOL’s 1965 Wirtz Report—the catalyst for the ADEA—found that hiring age limits were being applied based on unfounded stereotypes and assumptions. That document was prepared in response to a request by Congress for suggested legislation. “The Wirtz Report and the ADEA are as much about the unfairness of the hiring market for unemployed older workers as about anything else,” the court explained. The employer offered “essentially nothing to support the improvable view” that the ADEA’s disparate impact protections were intended to apply only to those already employed.

Title VII, Smith, and Griggs. Furthermore, the parallels between Title VII and the ADEA support the view that the disparate impact provision is applicable to outside job applicants. The text of the paragraph “tracks very closely” to a corresponding provision in Title VII. Although Title VII’s provision explicitly refers to job applicants, this reference was added in 1972, after Griggs was decided, as “merely declaratory of present laws.” In Griggs the Supreme Court recognized disparate impact claims for practices affecting outside job applicants as well as internal applicants. The employer contended that adding that language to Title VII but not to the ADEA was a silent endorsement of a narrower interpretation of the ADEA, but the court noted that the ADEA was never mentioned, either in the text of the 1972 amendment or in the conference report describing it.

The employer also argued that an earlier Seventh Circuit decision, EEOC v. Francis W. Parker School, which had “categorically rejected all disparate impact claims under the ADEA,” survived Smith, at least to the extent that outside job applicants were involved. The appeals court was unconvinced. As to to this case, Smith was controlling and under Smith, the “key question” was whether the case was “comparable to Griggs” and thus, whether recovery was possible. Griggs was controlling.

Finally, the court rejected the argument that differences in statutory language in other sections of the ADEA, some of which referred to an “applicant” or “applicants” for employment, signaled a meaningful distinction. “We need some basis beyond simple word-matching to believe that these particular differences in language were intended to distinguish the ADEA’s disparate impact provision from these other provisions,” the court wrote.

Dissent. Judge Bauer dissented, stating his belief that the “ordinary reading of the language” of section 623(a)(2) affirms the lower court’s findings and that Congress had intentionally excluded job applicants from the provision.

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