No Joke. Hiring Policies that have a Discriminatory Impact on Older Job Seekers Are Lawful
The Eleventh Circuit Court of Appeals, sitting en banc, recently affirmed a district court’s dismissal of a plaintiff’s disparate impact claim under the Age Discrimination in Employment Act (“ADEA”) because the plaintiff was a job applicant, not an employee. See Villarreal v. R.J. Reynolds Tobacco Co., 2016 U.S. App. LEXIS 18074, *27 (Oct. 5, 2016).
The plaintiff, who was over the age of 40, alleged that a prospective employer used “resume review guidelines” that had a disproportionately negative impact on applicants over the age of 40. The guidelines told hiring managers to target applicants who were a few years out of college and to avoid applicants with more than eight years of experience. As a result of these guidelines, only 19 of the 1,024 job applicants hired between September 2007 and July 2010 were over the age of 40.
Section 4(a)(1) of the ADEA focuses on the employer’s motive and applies to disparate treatment claims (i.e., intentional discrimination). It makes 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 privileges of employment, because of such individual’s age.” By contrast, Section 4(a)(2) of the ADEA focuses on conduct and applies to disparate impact claims (i.e., policies and practices that appear neutral, but which result in a disproportionate impact on protected groups). It makes it unlawful for an employer 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.”
In Villarreal, the prospective employer argued that the term “his employees” in Section 4(a)(2) referred to current employees, and that the subsequent use of the term “any individual” in that Section referred to those current employees. On the other hand, the plaintiff argued that Section 4(a)(2) precludes prospective employers from “limiting” their “employees” (e.g. hiring managers) in a way that would deprive or tend to deprive “any individual” like the plaintiff of a job because of his age.
On November 30, 2015, the Eleventh Circuit Court of Appeals in a 2-1 decision found both readings plausible. Given the ambiguity in the statutory language, the Eleventh Circuit deferred to the reasonable interpretation of the Equal Employment Opportunity Commission (“EEOC”). According to the EEOC, Section 4(a)(2) protects both current employees and job applicants. The Eleventh Circuit reversed the district court’s decision, but the prospective employer successfully petitioned for a rehearing en banc. The second time around, the Eleventh Circuit refused to defer to the EEOC and found that the statutory language in Section 4(a)(2) was not ambiguous. The Eleventh Circuit held that Section 4(a)(2) clearly protects employees, not job applicants, and affirmed the district court’s dismissal of the plaintiff’s failure to hire disparate impact claim.
The implications of this decisions are deeply troubling for Plaintiffs’ employment lawyers and all of those individuals within the protected class (which will include everyone at some point). In light of this decision, there is no recourse against companies with hiring policies and practices that have the effect of eliminating job seekers over the age of 40 disproportionately.