The United States Court of Appeals for the Third Circuit recently issued a decision that created a circuit split on an issue involving disparate impact (unintentional discrimination) claims under the Age Discrimination Employment Act (ADEA). The ADEA protects employees who are at least 40 years of age from discrimination in the workplace. See: Karlo v. Pittsburgh Glass Works, LLC, No. 15-3435 (3d Cir. Jan. 10, 2017)
In Karlo, the employer laid off approximately 100 workers due to a decline in business. The former employees, all of whom were age 50 or older, claimed that their employer’s reduction in force discriminated against them as compared to younger workers who were also over age 40. The trial court dismissed the worker’s claims concluding a claim under the ADEA on behalf of a “subgroup” was not viable.
The Appellate Court did not agree with the dismissal and instead overturned the trial court’s decision. In doing so, Chief Judge Smith explained that the plain language of the ADEA prohibits any action which has a significantly disproportionate adverse impact based on the age of employees, not merely disparate impact based on “forty-and-older identity.” In other words, simply because the employee 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 ruling, which does not comply with similar decisions in the 2nd, 6th and 8th Circuits, raises the potential for Supreme Court review.
What guidance does the Karlo case provide or offer to employers in Pennsylvania, New Jersey and Delaware?
- Employers should review their policies to confirm that they are in compliance with the ADEA and do not unintentionally discriminate against employees who are in “subgroups” over forty years old.
- Before carrying out a substantial reduction in force, an employer should consult an attorney to consider the impact of the proposed workforce changes on ADEA-protected employees, including those “subgroups” within the protected group of workers.
- Employers should recognize that just treating workers over 40 the same as those under 40 is not enough to ensure compliance with the ADEA. Employers must treat older employees, those 50 and older, who are also protected by the ADEA, with the same fairness as those younger protected employees.