• The United States Supreme Court Allows Disparate Impact Claims Under the ADEA
  • April 28, 2005
  • Law Firm: Dinsmore & Shohl LLP - Cincinnati Office
  • In resolving a split in the federal courts of appeals, on March 30, 2005, the United States Supreme Court decided 5-3 that employees may sue their employers under the Age Discrimination in Employment Act (ADEA) for actions that have a disparate impact on older workers. The Supreme Court in Smith v. Jackson, Miss., U.S., No. 03-1160, ruled that protected age employees do not have to prove employer intent, but instead that policies disproportionately harm them. Nevertheless, the Court found that the Plaintiffs in Smith, had not set forth a valid disparate impact claim.

    On October 1, 1998, the city of Jackson Mississippi adopted a pay plan granting raises to all city employees to attract and retain the most qualified employees and to remain competitive with other public sector agencies. In May 1999, all police officers and police dispatchers were granted raises based on seniority. Those officers and dispatchers who had less than five years of tenure received greater raises by percentage than those with more seniority. A group of police officers age 40 and over filed suit under the ADEA claiming that the City discriminated against them because of their age both by deliberately discriminating against them (the "disparate treatment" claim) and that the new plan had an adverse affect on them (the "disparate impact" claim). After the District Court granted summary judgment to the City on both claims, the Court of Appeals for the Fifth Circuit held 2-1 that disparate impact claims are categorically unavailable under the ADEA. The Supreme Court granted review in March 2004.

    The suit raised the question whether the disparate impact theory of recovery announced in Griggs v. Duke Power Co., 401 U.S. 24 (1971), for cases brought under Title VII of the Civil Rights Act of 1964 is cognizable under the ADEA. In Griggs, the Supreme Court found that Title VII did not require a showing of discriminatory intent. The Supreme Court in Smith followed the precedent established in Griggs, and held that the ADEA provision allowing employers to take otherwise prohibitive action "where the differentiation is based on reasonable factors other than age" supports the conclusion that disparate impact claims are available under this statute.

    However, the Supreme Court found that unlike Title VII, the ADEA significantly narrows its coverage by permitting any otherwise prohibitive action where the differentiation is based on reasonable factors other than age. The Supreme Court found that the "two textual differences between the ADEA and Title VII make it clear that even though both statutes authorize recovery on a disparate impact theory the scope of disparate impact liability under ADEA is narrower than under Title VII."

    This case gives reason to review policies that may disproportionately impact employees in the protected age group.