Labor & Employment Law

U.S. Supreme Court Clarifies Test for "Disparate Impact" Age Discrimination in Meachum v. Knolls Atomic Power

It is not enough for employers to avoid deliberate discrimination against members of protected groups when selecting employees for layoff.  In addition, they must avoid inadvertently using any selection criteria that tend to have a "disparate impact" on a particular group.  

In Meachum v. Knolls Atomic Power Lab., the U.S. Supreme Court made it harder for employers to disprove this type of discrimination claim -- which is sometimes referred to as "negligent" or "unintended" discrimination.  As the Court explained, under the federal Age Discrimination in Employment Act (ADEA), it is the employer's burden to affirmatively prove that any statistical disparate impact against older workers is actually the result of a "reasonable factor" not tied to age.  

Disparate impact cases usually turn on conflicting expert analysis of the statistical data.  Having to carry the burden of persuading a jury on these complicated issues will thus tend to place employers at a significant disadvantage.   For example, in the trial court, the plaintiffs were able to prevail by showing that the employer's performance rankings included scores for "flexibility" and "criticality" and that older workers did significantly worse on these criteria.

To show a disparate impact, the workers relied on a statistical expert's testimony to the effect that results so skewed according to age could rarely occur by chance; and that the scores for “flexibility” and “criticality,” over which managers had the most discretionary judgment, had the firmest statistical ties to the outcomes.

The lesson for employers is to always check the outcomes of layoff criteria before implementing the terminations.  A significant over-representation of any one group is a red flag that should result in a re-evaluation of the criteria. 

Full post as published by California Labor & Employment Defense Blog on September 19, 2008 (boomark / email).