Jottings By An Employer's Lawyer

Tuesday, August 24, 2004

If the Supreme Court Accepts Disparate Impact Under the ADEA -- Read Your Future

One of the most important employment decisions facing the Supreme Court in some time will be decided next term when the court reviews the 5th Circuit's holding that there is no disparate impact cause of action under the ADEA. See my earlier posting about Smith v. City of Jackson, 351 F.3d 183 (5th Cir. 2003) (cert granted) here. Fortunately for the three judge panel in yesterday's decision, Meacham v. KAPL, Inc. (2nd Cir. 8/23/04) [pdf], they were able to avoid having their papers graded by the Supreme Court on this issue by relying on stare decisis, citing the inability of a panel to change course from existing circuit precedent of another panel absent an intervening decision by the court in banc (the preferred spelling in the 2nd Circuit) or the Supreme Court.

KAPL successfully defended against a disparate treatment argument as the jury found there was no intent to discriminate on the basis of age. But finding themselves bound by prior circuit precedent that an ADEA disparate impact claim is viable, the Court affirmed the district court verdict that the employer's complex attempt to legally carry out a reduction in force failed.

Every employer or employer's counsel who doubts the importance of the upcoming Supreme Court decision should read this case for the types of issues that will have to be faced if Smith v. City of Jackson is not affirmed. Here, the court was probably less troubled than it might otherwise have been, since despite an apparently rigorous screening process, with several layers of review, 30 of the 31 employees selected for involuntary layoff were over 40.

But anyone who has participated in a similar exercise should empathize with the HR and legal personnel whose actions are now being second (and no doubt third and fourth) guessed by the plaintiffs' lawyers, judges and anyone else who is thinking how easy it would have been to avoid this problem. Easier seen in hindsight than at the time. And if disparate impact exists under the ADEA, then many will have the chance to see for themselves just how "easy" it is.

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