In my experience people who are not in HR are often surprised to find out that the age limit in age discrimination is 40 years of age. The reaction is often “That is not that old!” When asked what age they thought was old and should be afforded some protection the answer is generally 55 or 60. There have been situations where cases made distinctions between how under-50 employees were treated versus over-50 employees. This most recent case made a distinction between an over 40 but under 50 group and an over 50 group.
The case of Karlo v. Pittsburgh Glass Works, LLC, according to the attorneys of McGuire Woods LLP, involved “disparate impact” claims by subgroups of older workers when younger (but still over the age of 40) workers had not been negatively impacted. According to the case the ADEA (Age Discrimination in Employment Act) allows for claims of disparate impact. The attorneys write that “The district court ruled that this ‘subgroup’ theory is valid under the ADEA, and conditionally certified a collective action of employees who were at least 50 years old at the time their employment was terminated in the RIF.”
Back and forth
The case got transferred to another judge who said the first judge’s decision was incorrect and he disallowed the subgroup of over-50 workers. The attorneys for the subgroup appealed the ruling and the Third Circuit reversed the judge and allowed the case to proceed. The result of this case is that the court is saying the ADEA is not designed to protect a class of people, all those over the age of 40, but is designed to protect individual employees over the age of 40.
According to McGuire Woods LLP:
“This ruling, if correct, has significant impact for employers evaluating the potential disparate impact of reductions in force and other job actions, as well as policies, testing and job qualifications that may have a disparate impact. Rather than merely statistically comparing employees over 40 to employees under 40, an employer now potentially must also compare various subgroups within the over-40 group.”
That means doing your statistical test for age discrimination, the four-fifths test, you now have to be cognizant of the sub-groups in you group of selected individuals. You have to look at whether your selection process only selected workers over the age of 50, or 60 or even 70. You may no longer be protected just by making sure you have sufficient representation in the 40 to 50 age group.
The lawyers are not sure how narrow this subgroup may be but they are waiting to see what other circuits do with this decision and whether this may end up as a Supreme Court case. Time will tell.