By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
The US Court of Appeals for the Seventh Circuit decided in Kleber v. CareFusion Corporation last Wednesday that disparate impact liability under the Age Discrimination in Employment Act (ADEA) applies only to current employees and does not include job applicants.
The case was brought by Dale Kleber, an attorney, who applied for a senior position in CareFusion’s legal department. The job description required applicants to have “3 to 7 years (no more than 7 years) of relevant legal experience.”
Kleber was 58 at the time he applied and had more than seven years of pertinent experience. CareFusion hired a 29-year-old applicant who met but did not exceed the experience requirement.
Kleber filed suit, pursuing claims for both disparate treatment and disparate impact under the ADEA. The Chicago Tribune notes in Hinsdale man loses appeal in age discrimination case that challenged experience caps in job ads that “Kleber had out of work and job hunting for three years” when he applied for the CareFusion job.
Let’s start with some basics, as the US Equal Employment Opportunity Commission (EEOC) set out in a brief primer on basic US age discrimination law entitled Questions and Answers on EEOC Final Rule on Disparate Impact and “Reasonable Factors Other Than Age” Under the Age Discrimination in Employment Act of 1967. The EEOC began with a brief description of the purpose of the ADEA:
The purpose of the ADEA is to prohibit employment discrimination against people who are 40 years of age or older. Congress enacted the ADEA in 1967 because of its concern that older workers were disadvantaged in retaining and regaining employment. The ADEA also addressed concerns that older workers were barred from employment by some common employment practices that were not intended to exclude older workers, but that had the effect of doing so and were unrelated to job performance.
It was with these concerns in mind that Congress created a system that included liability for both disparate treatment and disparate impact. What’s the difference between these two concepts?
According to the EEOC:
[The ADEA] prohibits discrimination against workers because of their older age with respect to any aspect of employment. In addition to prohibiting intentional discrimination against older workers (known as “disparate treatment”), the ADEA prohibits practices that, although facially neutral with regard to age, have the effect of harming older workers more than younger workers (known as “disparate impact”), unless the employer can show that the practice is based on an [Reasonable Factor Other Than Age (RFAO)]
The crux: it’s much easier for a plaintiff to prove disparate impact, because s/he needn’t show that the employer intended to discriminate. Of course, many if not most employers are savvy enough not to be explicit about their intentions to discriminate against older people as they don’t wish to get sued.
District, Panel, and Full Seventh Circuit Decisions
The district court dismissed Kleber’s disparate impact claim, on the grounds that the text of the statute- (§ 4(a)(2))- did not extend to outside job applicants. Kleber then voluntarily dismissed his separate claim for disparate treatment liability to appeal the dismissal of his disparate impact claim. No doubt he was aware – either because he was an attorney, or because of the legal advice received – that it is much more difficult to prevail on a disparate treatment claim, which would require that he establish CareFusion’s intent to discriminate.
Or at least that was true before this decision was rendered.
Unfortunately, the seventh circuit has now held that the disparate impact section of the ADEA does not extend to job applicants. .Judge Michael Scudder, a Trump appointee, wrote the majority 8-4 opinion, which reverses an earlier 2-1 panel ruling last April in Kleber’s favor that had initially overruled the district court’s dismissal of Kleber’s disparate impact claim.
The majority ruled:
By its terms, § 4(a)(2) proscribes certain conduct by employers and limits its protection to employees. The prohibited conduct entails an employer acting in any way to limit, segregate, or classify its employees based on age. The language of § 4(a)(2) then goes on to make clear that its proscriptions apply only if an employer’s actions have a particular impact— “depriv[ing] or tend[ing] to deprive any individual of em- ployment opportunities or otherwise adversely affect[ing] his status as an employee.” This language plainly demonstrates that the requisite impact must befall an individual with “status as an employee.” Put most simply, the reach of § 4(a)(2) does not extend to applicants for employment, as common dictionary definitions confirm that an applicant has no “status as an employee.” (citation omitted)[opinion, pp. 3-4]
By contrast, in the disparate treatment part of the statute (§ 4(a)(1)):
Congress made it unlawful for an employer “to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privi- leges of employment, because of such individual’s age.”[opinion, p.6]
The court compared the disparate treatment section – § 4(a)(1) – directly with the disparate impact section – § 4(a)(2):
Yet a side-by-side comparison of § 4(a)(1) with § 4(a)(2) shows that the language in the former plainly covering appli-cants is conspicuously absent from the latter. Section 4(a)(2) says nothing about an employer’s decision “to fail or refuse to hire … any individual” and instead speaks only in terms of an employer’s actions that “adversely affect his status as an employee.” We cannot conclude this difference means nothing: “when ‘Congress includes particular language in one section of a statute but omits it in another’—let alone in the very next provision—the Court presumes that Congress intended a difference in meaning.” (citations omitted)[opinion, pp. 6-7]
The majority’s conclusion:
In the end, the plain language of § 4(a)(2) leaves room for only one interpretation: Congress authorized only employees to bring disparate impact claims.[opinion, p.8]
Greying of the Workforce
Older people account for a growing percentage of the workforce, as Reuters reports in Age bias law does not cover job applicants: U.S. appeals court:
People 55 or older comprised 22.4 percent of U.S. workers in 2016, up from 11.9 percent in 1996, and may account for close to one-fourth of the labor force by 2022, according to the Bureau of Labor Statistics.
The greying of the workforce is “thanks to better health in older age and insufficient savings that require people to keeping working longer,” according to the Chicago Tribune. Yet:
numerous hiring practices are under fire for negatively impacting older applicants. In addition to experience caps, lawsuits have challenged the exclusive use of on-campus recruiting to fill positions and algorithms that target job ads to show only in certain people’s social media feeds.
Unless Congress amends the ADEA to include job applicants, older people will continue to face barriers to getting jobs.
The Chicago Tribune reports:
The [EEOC], which receives about 20,000 age discrimination charges every year, issued a report in June citing surveys that found 3 in 4 older workers believe their age is an obstacle in getting a job. Yet hiring discrimination is difficult to prove and often goes unreported. Only 3 percent have made a formal complaint. Allowing older applicants to challenge policies that have an unintentionally discriminatory impact would offer another tool for fighting age discrimination, Ray Peeler, associate legal counsel at the EEOC, has said.
How will these disparate impact claims now fare?
The Bottom Line
FordHarrison, a firm specialising in human relations law, noted in Seventh Circuit Limits Job Applicants’ Age Discrimination Claims:
The decision narrowly applies to disparate impact claims of age discrimination under the ADEA. It is important to remember that job applicants are protected under the disparate treatment portion of the statute. There is no split among the federal appeals courts on this issue, making it an unlikely candidate for Supreme Court review, but the four judges in dissent read the statute as being vague and susceptible to an interpretation that includes job applicants.
Their conclusion: “a decision finding disparate impact liability for job applicants under the ADEA is unlikely in the near future.”
Alas, for reasons of space, I will not consider the extensive dissent. My purpose in writing this post is to discuss the majority decision, not to opine on which side made the better arguments.