The most significant labor case on this year's Supreme Court docket was handed down this morning, with a somewhat muddled result. In its primary holding the Supreme Court reverses the 5th Circuit's absolute rejection of an adverse impact theory under the Age Discrimination Act. Justice Stephen's opinion for the Court is at Smith v. City of Jackson
However, not all disparate impact theories are created equal, and the ADEA version is in fact less than an adverse impact theory under Title VII. The Court identified two reasons for that difference, first the presence of a clause in the ADEA not found in Title VII that permits an employer to act on an otherwise impermissible basis "where the differentiation is based on reasonable factors other than age." In addition to the RFOA clause, as the Supreme Court named it, the fact that the ADEA was not covered in the amendments to Title VII in 1991 following the Supreme Court's decision in Ward Cove
, means that it is the pre-1991 version of Title VII's adverse impact theory that is applicable to the ADEA.
All of that is a considerable mush of legal arguments that will take some time for the lower courts (and me) to absorb, but while we do have adverse impact under the ADEA, it is fair to call it "adverse impact lite". Not terribly palatable to employers, but certainly more so than the full weighted version which could have been forthcoming.
Does it make a difference? Well it did to the employees suing the City of Jackson as the Supreme Court concluded that they had not stated a case of adverse impact under the newly announced theory and thus affirmed the holding of the 5th Circuit, although not its reasoning.