On November 16, 2011, the Equal Employment Opportunity Commission ("EEOC") approved, by a 3-2 vote, draft final regulations that provide guidance on the meaning of "the reasonable factor other than age" defense under the Age Discrimination in Employment Act ("ADEA"). These proposed regulations advance the purpose of the ADEA by forcing employers to think twice about whether their policies have an arbitrarily discriminatory effect on older workers.
The EEOC proposed the regulations in response to two Supreme Court cases, Smith v. City of Jackson, 544 U.S. 228 (2005) and Meacham v. Knolls Atomic Power Laboratory, 554 U.S. 84 (2008), which held that the ADEA permits recovery for disparate impact claims of discrimination, but that an employer may defend against the claims if it carries its burden of production and persuasion on showing that the challenged action was attributable to reasonable factors other than age ("RFOA"). These cases, however, did not provide guidance as to what qualifies as reasonable under the RFOA defense.
The EEOC's proposed regulations fill the gap left by the Supreme Court cases and give teeth to the reasonableness requirement. Looking to tort law to define reasonableness, the proposed regulations require that to establish the defense, the employer must show that "the employment practice was both reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose." Definition of "RFOA" Under the ADEA, 75 Fed. Reg. 7212, 7218 (proposed Feb. 18, 2010) (to be codified at 29 C.F.R. § 1625.7). The proposed regulations set forth a non-exhaustive list of factors relevant to assessing reasonableness.
The EEOC also appropriately cautioned employers against permitting age-based stereotypes from creeping into excessively subjective decision-making, by setting forth a non-exhaustive list of factors relevant to determining whether a reason advanced by an employer is "other than age." As the EEOC explained, employers should particularly avoid giving unchecked discretion to rate employees on criteria that are susceptible to age-based stereotyping, such as flexibility, willingness to learn, or technological skills.