Sometimes employment policies don’t hold all employees to the same standards (says the blogger on an employment blog). But it’s hard to discern when a policy is unfairly favoring groups within groups of people. And where does it end? Groups within groups, within groups, can turn out to be the something from Alice in Wonderland. But turning back to reality, the 3rd Circuit Court of Appeals recently addressed this question relative to the Age Discrimination in Employment Act (ADEA).
The ADEA protects employees from discrimination who are 40 and above. The question that surfaces is whether an age discrimination, disparate impact, claim is cognizable when a subgroup of people allege that they are disfavored relative to others also covered by the ADEA. The Third Circuit Court of Appeals answered this question in the affirmative.
In the case Karlo v. Pittsburgh Glass Works, LLC, the Plaintiffs were 50 and above and they were released as a result of a company-wide RIF (Reduction In Force). But the problem was that similar employees in their 40s were not similarly discharged. The Court of Appeals focused on the wording of the ADEA in their ruling, saying that the statute prohibits the adverse consequences of a neutral employment policy when such consequences are based on age rather than on a worker being 40 or older. The ruling clashes with rulings of the 2nd, 6th, and 8th Circuits, where these claims are not allowed.
Judge Smith, in the 3rd Circuit’s opinion, said “[a] rule that disallowed subgroups would ignore genuine statistical disparities that could otherwise be actionable through application of the plain text of the statute.” The Equal Employment Opportunities also says that being replaced by someone who is in their 40’s does not disqualify a Plaintiff from a cognizable claim.
One of the downsides of the ruling can be that employers won’t know how to downsize their companies. Employers that would like to perform tests to ensure fairness and compliances with the law will be required to perform models on more groups of differing employees, and it may be impossible to attain a perfect answer. The 3rd Circuit opines on the idea that if subgroups are not to be included, the modeling “would ignore significant age based disparities.”
Employers need to remember that not all workers over the age of 40 can be lumped into the same category, especially when taking company-wide actions like downsizing and hiring. There are many ways that statistical analysis may help, or hurt, employers, so it helps to know how to minimize any potential violations.
