On March 29, the Equal Employment Opportunity Commission (EEOC) released its final rule regarding disparate impact and Reasonable Factors Other than Age (RFOA) in proving age discrimination in the workplace.
The Age Discrimination in Employment Act, or ADEA, is enforced by the EEOC to prevent age-based discrimination towards workers age 40 and over. In addition to banning outright discrimination, the ADEA stipulates that a company’s practices must not adversely impact older workers, even if unintentionally.
Example: A company performs a reduction in force, laying off the highest-paid employees. Since the highest paid employees have likely been with the company the longest and are therefore older, this could have disparate impact on older workers.
The RFOA provision allows employers to defend themselves from these disparate impact claims by stating that the decision was based on a reasonable factor other than age, meaning the decision would serve a legitimate business purpose.
Example: A company performs a reduction in force, laying off the highest paid and least productive employees, with supervisors ranking productivity based on objective, specific criteria. Though older workers could be disparately impacted, the company could show that it acted based on RFOA since its criteria were reasonably designed to achieve the goal of accurately measuring productivity, while decreasing the potential impact on older workers.
These general guidelines may be helpful in assessing whether a decision was reasonable:
- Importance: The factor/criteria in the business decision should be important to the stated goal.
- Accuracy: The factor should produce accurate results and be fairly applied. Supervisors should be trained to apply the factor without discriminating.
- Objectivity: While subjectivity is not outlawed, supervisors should be given clear and objective criteria, particularly in areas known to have the potential for age-based stereotypes.
- Assessment: The employer should have assessed the potential adverse impact an employment practice.
- Harm: The degree of harm to employees in a protected age group should be taken into consideration, with the employer making considerable effort to reduce that harm.
For more information please visit the EEOCs guide to frequent questions and answers regarding ADEA and RFOA.