Jottings By An Employer's Lawyer

Wednesday, March 30, 2005

Supreme Court - 'Adverse Impact Lite' Theory Available Under the ADEA

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(U.S. 3/30/05)[pdf].

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.

Update: The link to the full set of opinions is now available, see above. The opinion by Justice Stephens is for himself and three other members of the Court, and is decisive only because Justice Scalia joined on the basis of deference to the EEOC. Some cynics might see this as more in the "campaign" for the Chief Justice chair. Justice O'Connor, joined by Justice Thomas and Justice Kennedy dissented finding there is no basis for disparate impact under the ADEA. The current Chief Justice did not participate in the decision. Certainly his vote would not have made a difference, but one wonders whether the weight of his opinion could have.

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