December 9, 2011: Changes to Reasonable Factor Other Than Age Defense in ADEA Claims on Horizon

The Age Discrimination in Employment Act (ADEA) permits individuals to bring claims of disparate impact. An employer may be found liable for discrimination based on its use of policies and practices that appear to be neutral but have a disproportionate adverse effect on a protected class. These kinds of claims are often triggered by reductions in force.

One of the defenses to a disparate impact claim filed under the ADEA is the “reasonable factor other than age” defense (RFOA). If a selection process has a disparate impact based on age, the employer must show that the process chosen and the business decisions made were reasonable.

In February of 2010, the EEOC proposed a redefinition of the RFOA defense to include a set of criteria for establishing the “reasonable factor other than age”. In May of 2010, EEOC Chair Jacqueline A. Berrien testified before a U.S. Senate Committee that the proposed amendments were needed to counteract “a recent spate of case law restricting the rights of age discrimination plaintiffs.”

Two weeks ago, the EEOC voted 3-2 in favor of a draft final rule defining the parameters of the RFOA defense. The rule will now be sent to the Office of Management and Budget for review, and upon approval, published in the Federal Register as a final rule. The general consensus is that the new rule may make it more difficult for an employer to assert an affirmative defense in response to a disparate impact claim filed under ADEA.

In this installment, we talk about the “reasonable factors other than age” defense, the EEOC’s draft rule defining the parameters of that defense, and what this new rule could mean for employers.