by Art Gutman Ph.D., Professor, Florida Institute of Technology
The proposed rules (or simply “Rules”) were published on 2/18/10, as reported in an Alert on 3/2/10. The Rules may be viewed at http://edocket.access.gpo.gov/2010/2010-3126.htm. The vote to finalize the Rules is scheduled for 11/16/11, the call for which is at http://www.eeoc.gov/eeoc/newsroom/release/11-9-11.cfm.
The Rules themselves were written in response to Supreme Court rulings in Smith v. City of Jackson (2005) and Meacham v. Knolls Atomic Power Lab (KAPL) (2008). In Smith, a 5-4 Supreme Court majority ruled that: (1) that adverse impact is a valid ADEA claim and (2) the Factors Other Than Age (RFOA) defense (a lighter defense than job-relatedness in Title VII) is the appropriate defense in ADEA cases. In Meacham, a unanimous Supreme Court ruled that RFOA is an affirmative defense, meaning it requires proof (rather than a simple “articulation” or “explanation”). The Smith and Meacham rulings are discussed in detail by Gutman & Dunleavy (2008) (at http://www.siop.org/tip/Oct08/11gutman.aspx).
The crux of the RFOA defense as noted in the Rules is that the “reasonable factor” must be proven “factually”, or one that is objectively reasonable when viewed from the position of a reasonable employer under like circumstances.” The Rules provide the following six examples of factors relevant for determining reasonableness:
- whether the employment practice and the manner of its implementation are common business practices;
- the extent to which the factor is related to the employer’s stated business goal;
- the extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);
- the extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
- the severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected, and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps;
It is important to note that this list is not exhaustive. Among them, though, employers should take notice of the last factor, which included preventative/corrective steps to minimize the severity of harm. This looks like a statement warning employers to consider alternatives with less adverse impact, a factor that is relevant in Title VII defenses, but not in statutory defenses such as RFOA. In my opinion, this may be an overstep that is likely to be tested in court.
The Rules also provide the following three examples of factors relevant for determining the meaning of other than age:
- the extent to which the employer gave supervisors unchecked discretion to assess employees subjectively;
- the extent to which supervisors were asked to evaluate employees based on factors known to be subject to age-based stereotypes; and
- the extent to which supervisors were given guidance or training about how to apply the factors and avoid discrimination.
Each of these is critical. However, employers should particular attention to age-based stereotypes. For example, in Meacham, the employer argued that “flexibility of skills” was one of two RFOAs (the other being criticality of skills). The rules, on the other hand, suggest that “flexibility” may fall under the definition of an age-based stereotype. Indeed, the rules provide the following example of how flexibility should be proven if it is used as an RFOA. Accordingly:
For example, an employee's flexibility may be assessed through concrete examples of behavior such as accepting or resisting new assignments, seeking or refusing training, and being open or opposed to new ways of doing things. Similarly, the steps the employer took to apply the factor fairly and accurately affect the determination of whether the factor was reasonable. For example, the extent to which the employer provided decision makers with training or other guidance on how to implement the practice may be relevant to whether the practice was administered in a reasonable way.
The bottom line is that even though the RFOA defense is easier to pass than its Title VII counterpart (that the cause of adverse impact is job related and consistent with business necessity), the actual RFOA defense as proposed in the Rules is likely to be stiffer than previously anticipated by legal experts.