ADEA’s Reach Expanded to Job Applicants

Supreme Court may ultimately resolve split among appeals courts

Allen Smith, J.D. By Allen Smith, J.D. May 10, 2018
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​For years the Equal Employment Opportunity Commission (EEOC) has advised that the Age Discrimination in Employment Act (ADEA) applies to job applicants in disparate impact cases, but a 2016 appeals court decision ruled otherwise. Now, another appeals court has reached the same conclusion as the EEOC's, creating a split the Supreme Court may have to resolve.

In Kleber v. CareFusion Corp., the 7th U.S. Circuit Court of Appeals ruled on April 26 that the law prohibits employment practices that have a disproportionately adverse impact on older applicants, although the ADEA's disparate impact provision refers just to employees. Relying on this statutory language, the 11th U.S. Circuit Court of Appeals held in the 2016 Villarreal v. R.J. Reynolds Tobacco Co. decision that the ADEA does not make disparate impact claims available to applicants.

The employer in the 7th Circuit case said its seven-year experience cap for an attorney position was necessary, as someone with more experience would be dissatisfied with less-complex duties. Without ruling on the merits of this defense, the appeals court addressed the company's claim that the ADEA doesn't make disparate claims available to applicants. The court determined it would be illogical for the ADEA to allow disparate impact claims by current employees, including internal job applicants, while excluding outside applicants.

"The court ruling should be a wake-up call for companies and HR professionals to examine what recruiting or hiring practices can easily result in disparate impact claims," said Monica Velazquez, an attorney with Clark Hill in Collin County, Texas. While the 7th Circuit decision applies to employers in Illinois, Indiana and Wisconsin, "the trend is likely headed toward protection of older job applicants," she said.

Dawn Knepper, an attorney with Buchalter in Orange County, Calif., predicted that the ruling will result in more age discrimination claims.

Litigation in Other Circuits

Last year, a California district court ruled in Rabin v. PricewaterhouseCoopers LLP that applicants may bring ADEA disparate impact claims. The case involved a claim that the company relied on campus recruiting too much. The court decided that the word "employee" includes prospective employees. It also noted that the EEOC's "decades-old interpretation" is that applicants may bring disparate impact claims. The ADEA's legislative history shows that Congress was concerned not just with age discrimination within the workplace but with barriers to older workers finding employment, the court wrote.

However, in its reply to the complaint, PricewaterhouseCoopers (PwC) stated that four appeals courts and three Supreme Court justices (Sandra Day O'Connor, Anthony Kennedy and Clarence Thomas) said the ADEA does not permit disparate impact claims by applicants. However, one of the appeals court decisions was an old 7th Circuit decision. The plaintiffs claimed that the others no longer were good law in light of subsequent rulings.

PwC also maintained that the policy arguments about why the ADEA should permit disparate impact claims by job applicants should be made to Congress, rather than to a court rewriting the plain language of the statute.

Emily Nicklin, an attorney with Kirkland and Ellis in Chicago representing PwC, said that the company's hiring practices are merit-based and have nothing to do with age. "Like many large employers, PwC recruits at the nation's colleges and universities, an approach that is widely recognized to be both efficient and effective. There are many ways to apply for a job at PwC, not just through the campus-hiring process. We have applicants of all ages and experience levels."

Knepper noted that the Rabin case is pending before the 9th Circuit.

[SHRM members-only toolkit: Employing Older Workers]

Velazquez said that a Texas district court declined earlier this year to dismiss an ADEA disparate impact claim in Champlin v. Manpower Inc. The plaintiff allegedly received an e-mail from an employment agency saying, "We are not looking for anyone with overspecialization or Helpdesk/1st level support candidates or candidates with more than 10-12 years of experience. This is a pretty young, eager group, so culturally 1-5 years['] experience is the best fit."

Robin Shea, an attorney with Constangy, Brooks, Smith & Prophete in Winston-Salem, N.C., said that a cap on experience might not violate the ADEA, even if disparate impact cases are allowed under the ADEA. An employer may have legitimate reasons for the cap, such as retention.

Manpower did not respond to a request for comment.

Examples of Disparate Impact Claims

Velazquez cautioned, however, that limitations relating to age are likely to result in challenges.
She said that employers can face disparate impact claims due to such acts as:

  • Posting jobs for recent college graduates or stating, "Class of 2016-2018 preferred."
  • Advertising jobs to only certain demographics, such as in targeted ads on Facebook.
  • Asking interview questions such as, "What's your favorite rock band?" or "Who's your favorite video game character?"

"The message that older, more-experienced workers need not apply can take subtle, yet powerful, forms," she said. She added that state laws may explicitly permit older applicants to bring disparate impact claims. This is the case under the Texas Commission on Human Rights Act.

Shea noted that other hiring policies that might have a disparate impact on older workers include rejecting applicants whose prior salaries are too high in states that still allow employers to ask for salary history. Demands for "digital natives" also might result in disparate impact claims, she said.

Potential Supreme Court Review

As for whether disparate impact claims are allowed, Dawn Collins, an attorney with Barnes & Thornburg in Los Angeles, said, "This split between the 7th Circuit and the 11th Circuit tees up a potential review by the U.S. Supreme Court." She added, "Until the issue is reconciled by the Supreme Court, employers and employees are faced with ambiguity in this area."

 

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