Kelber v. CareFusion Corp., No. 17‐1206 (7th Cir. Apr. 26, 2018)

| Apr 27, 2018 | Daily Developments in EEO Law |

The Seventh Circuit creates a split with the Eleventh Circuit, holding that job applicants may bring claims for disparate impact under the ADEA under 29 U.S.C. § 623(a)(2). The panel majority allows a challenge to an employer’s classification of an in-house Senior Counsel position as “3 to 7 years (no more than 7 years) of relevant legal experience.”

Kelber v. CareFusion Corp., No. 17‐1206 (7th Cir. Apr. 26, 2018): Though the Supreme Court has confirmed that the ADEA does permit disparate impact (i.e., non-intentional policies that nevertheless have the effect of screening out protected-class employees), Smith v. City of Jackson, 544 U.S. 228 (2005), it is unsettled whether such claims may be brought in the context of hiring.

Kelber was a 58-year-old attorney when he “applied for a position as ‘Senior Counsel, Procedural Solutions’ with defendant CareFusion, a healthcare products company. He qualified for the position in all respects except for the level of experience. The company classified the position as limited to lawyers with “3 to 7 years (no more than 7 years) of relevant legal experience.”

When he did not get the position, Kelber filed an EEOC charge and lawsuit alleging that the “no more than 7 years” classification had a disparate impact on employees 40 and over, in violation of the ADEA. The distrait court dismissed the complaint, holding that job applicants were not “employees” for the purpose of § 623(a)(2). That section prohibits employers from enacting policies “to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.”

The panel majority, with Judge Bauer dissenting, reverses. (A poll of the active judges to rehear the matter en banc fails on a tie vote, 4-4.) While author Judge Hamilton notes the considerable “length of this opinion, resulting from the unusually deep layers of arguments about this language,” the opinion boils the analysis down to two key points:

1. To impose “minimum or maximum experience requirements” does limit or classify the job, in a way that “would deprive or tend to deprive any individual of employment opportunities.”

2. To give the term “status as an employee” significance, the panel majority notes that “[d]eciding whether a person becomes an employee or not has the most dramatic possible effect on such status.

The balance of the opinion supports this plain statutory construction with legislative history, an examination of the statute’s purpose, the bizarre results stemming from a narrower construction of the language, and additional policy arguments that bolster the plain meaning.

The panel majority notes that the Eleventh Circuit recently reached the opposite legal conclusion Villarreal v. R.J. Reynolds Tobacco Co., 839 F.3d 958 (11th Cir. 2016) (en banc), but credits that decision to a misinterpretation of the key Supreme Court authority, Griggs v. Duke Power Co., 401 U.S. 424 (1971), that interpreted the parallel language in Title VII. (The panel majority finds that the Eleventh Circuit erroneously interpreted Griggs as limited only to “promotion and transfer policies.”)

Judge Bauer, dissenting, bases his analysis singularly on the absence of applicants from

“Given Congress’s omission of ‘applicants for employment” in § 4(a)(2), yet unquestionable inclusion of job applicants in several other places throughout the ADEA, including the section directly preceding § 4(a)(2), I must conclude that Congress intentionally excluded ‘applicants for employment’ in § 4(a)(2) of the ADEA.”

The right answer (I think) lies in focusing on the substance of the act – the conduct that the statute expressly prohibits – instead of the arid question of whether the plaintiff is covered by the ADEA. The conduct prohibited is classifying or limiting employees, and is just what the employer did here: defining the position at issue to a 3-7 year experience level. Subject to the affirmative defense of “reasonable factor other than age” (on which the employer bears the burden of proof, Meacham v. Knolls Atomic Power Lab., 554 U.S. 84 (2008)), this classification combined with proof that it had a disparate age impact, is enough to state a claim.

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