In response to two Supreme Court decisions, the Equal Employment Opportunity Commission (EEOC) has issued a final rule amending its current Age Discrimination in Employment Act (ADEA) regulations. According to the EEOC, the rule does two things:
- It makes the existing regulations consistent with the Supreme Court’s holding that the defense to an ADEA disparate impact claim is “reasonable factor other than age” (RFOA), and not business necessity
- It explains the meaning of the RFOA defense to employees, employers and those who enforce and implement the ADEA. The new rule becomes effective on April 30.
The two Supreme Court cases that prompted the new rule are Smith v. City of Jackson, 544 U.S. 228 (2005) and Meacham v. Knolls Atomic Power Laboratory, 554 U.S. 84 (2008). In Smith, the court held that individuals can pursue disparate impact claims under the ADEA. This decision confirmed the EEOC’s “longstanding position that the ADEA prohibits policies and practices that have the effect of harming older individuals more than younger individuals, even if the harm was not intentional.”
According to the rule, determining whether a practice is based on reasonable factors other than age is a fact-specific inquiry. In order to successfully assert a RFOA defense, the employer must establish that the practice at issue “was both reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known, to the employer."
The rule includes a non-exhaustive list of considerations that are relevant to assessing the reasonableness of an employer’s policy or practice: