Court Ruling Expands Liability For Age Discrimination

December 7, 2015 at 10:06 am Leave a comment

Some things make no sense on first impression only to become more and more plausible the more you think about them.  For example,   it makes no sense that the New York Giants, a football Team,  loses more games in the last two minutes than the New York Knicks,  a basketball team.  But this aberration makes perfect sense  once you realize that the Giants defense hasn’t quite figured out how to defend against this radical innovation called the “Forward Pass.”    The joke is on those of us who bother watching all three hours of their games just to maximize our frustration as the clock counts down to the inevitable defeat.

Similarly,  I was surprised when I recently read a case from the Court of Appeals for the 11th Circuit which covers  Florida Alabama and Georgia.  In in  Villarreal v. R.J. Reynolds Tobacco Co., No. 15-10602, 2015 WL 7694939 (11th Cir. Nov. 30, 2015) it   concluded that an employer violates federal law against age discrimination by favoring job applicants with three or fewer years of experience for a sales position.  The court’s  conclusion tis contrary  to that of two  other federal circuit courts that have examined similar issues.  For those of us outside of the 11th Circuit the case is one to keep an eye on but requires no immediate changes to existing practices.  For those of you in the 11th Circuit I would call up your HR attorney if you haven’t done so already and see how the court’s decision impacts your existing practices.

The Age Discrimination in Employment Act (ADEA) bans intentional discrimination against an employee or job applicant because of their age.  The Supreme Court has  told us that this law also  bans practices that have a disparate impact on existing employees   because of their age (Smith v. City of Jackson, Miss., 544 U.S. 228, 228, 125 S. Ct. 1536, 1537, 161 L. Ed. 2d 410 (2005).    What the Supreme Court hasn’t ruled on is whether the statute’s protections against disparate impact discrimination  extend to job applicants and not just employees.  As you know  from your lending policies a disparate impact exists when a policy has the effect of discriminating against a protected class of individuals even if the  policy is based on nondiscriminatory  criteria.

This is why the 11th Circuit’s November 30th decision in  Villarreal  is worth taking a look at. As surely as Donald Trump will insult someone this week,   similar claims around the country will rely on this case to challenge what would otherwise seem like logical employment practices.

When RJR looks for certain sales representative positions  it gives its recruiters guidelines.  For the sales job at issue in this case it tells hiring managers to target candidates who are “2–3 years out of college” but to “stay away from” candidates with “8–10 years” of prior sales experience. Not surprisingly,  of the 1,024 people hired as Territory Managers from September 2007 to July 2010, only 19 were over the age of 40.

When a 49-year-old applicant wasn’t even interviewed for the job despite repeatedly applying for the position he sued claiming, among other things that RJR’s guidelines had the effect of discriminating against older applicants.  Two other federal appeals courts have already rejected similar arguments but the 11th Circuit ruled that this lawsuit could go forward.  It concluded that wasn’t clear whether or not Congress intended the ADEA’s ban on disparate impacts to extend to job applicants.  As a result, the court felt   that it had to defer to federal regulations which interpret the ADEA as extending disparate impact protections to job applicants.

This ruling has the markings of a case headed to the Supreme Court. First the federal courts disagree on an issue of tremendous practical significance.

Second, a review of the decision will allow the court to address an issue that has been repeatedly raised in discrimination lawsuits: The extent to which federal laws ban practices that have a discriminatory impact even if there was no intent to discriminate.

Finally this decision once again raises the question of how much deference federal courts should give to federal regulators when it comes to interpreting statutes.

Entry filed under: Legal Watch. Tags: , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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