• EEOC Issues Final Rule on the “Reasonable Factor Other Than Age” Defense To ADEA Claims
  • April 26, 2012
  • Law Firm: Ganfer Shore LLP - New York Office
  • A new EEOC rule, to which most courts will accord the force of law, clarifies the defense of “reasonable factors other than age” (“RFOA”) in disparate-impact age-discrimination cases. The rule will take effect on April 30, 2012. The rule is published at 77 Fed. Reg. 19095 (Mar. 30, 2012).

    A “disparate-impact” ADEA claim is one that challenges a facially neutral employment policy that nonetheless is alleged to have a significant, disproportionately adverse impact on older workers. Under the long-recognized RFOA defense, employers could defend against such claims simply by showing that the employment practice was based on a “reasonable factor other than age.”

    The EEOC’s new rule fundamentally alters the requirements for asserting the RFOA defense. It provides that:

    • The person challenging the employment practice has the burden of isolating and identifying the specific employment practice responsible for the adverse impact. For example, a plaintiff cannot rely on the mere fact that fewer older employees are hired, but must now isolate the practice that allegedly causes the disparity.
    • Once a specific employment practice is identified and a disparate impact is demonstrated, the employer has the burden of proving the RFOA defense, by showing that it is “objectively reasonable” when viewed from the perspective of a “prudent employer mindful of its responsibilities under the ADEA.” Relevant factors in the analysis include:

    (i) the extent to which the practice is related to the employer's stated business purpose;

    (ii) whether the employer applied the factor fairly and accurately, including whether supervisors were provided with training on applying it;

    (iii) the extent to which the employer limited supervisors’ ability to assess employees subjectively rather than objectively;

    (iv) whether the employer assessed the adverse impact of the practice on older workers; and

    (v) the level of harm to older workers and any steps the employer took to reduce it.

    • The employer bears the initial burden of producing evidence establishing the reasonable factor other than age, as well as the ultimate burden of persuading the fact-finder that the RFOA defense applies.

    In sum, the new rule requires that employers relying on an RFOA defense must do more than just show the employment practice was not irrational or arbitrary, though they need not show that it was essential to the business as they would in order to establish a “business necessity” defense. The challenge confronting employers under the new rule will be in determining what latitude they have based upon an RFOA defense that falls short of the level of business necessity.