EEOC Publishes Final Regulations on What is a "Reasonable Factor Other than Age" under ADEA

The U.S. Equal Employment Opportunity Commission (EEOC) has amended its age discrimination regulations to clarify that the federal Age Discrimination in Employment Act (ADEA) prohibits policies and practices that have the effect of harming older individuals more than younger individuals, unless the employer can show that the policy or practice is based on a reasonable factor other than age ("RFOA"), in particular to explain the meaning of RFOA in relation to Supreme Court decisions.

In the final regulations, the EEOC concludes that the individual challenging an employment practice as having an age-based adverse impact is responsible for isolating and identifying the specific employment practice responsible for the adverse impact. In turn, as explained in EEOC questions and answers about the regulations, an employer would be required to prove the RFOA defense only after an employee has identified a specific employment policy or practice, and established that the practice harmed older workers substantially more than younger workers.

The rule emphasizes the need for an individualized consideration of the facts and circumstances surrounding the particular situation. It includes the following list of considerations relevant to assessing reasonableness:

• The extent to which the factor is related to the employer’s stated business purpose;
• The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination;
• The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes;
• The extent to which the employer assessed the adverse impact of its employment practice on older workers; and
• The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.

Source: Equal Employment Opportunity Commission Press Release (March 29, 2012)

EEOC Hears Testimony on Impact of Recession and Age Discrimination on Older Worrkers

The U.S. Equal Employment Opportunity Commission (EEOC) held a meeting at which various experts testified that age discrimination is causing the nation’s older workers to have a difficult time maintaining and finding new employment, a problem exacerbated by the downturn in the economy. The hearing was conducted at a time in which the number and percentage of age discrimination charges filed with the EEOC have grown, rising from 16,548 charges--21.8% of all charges--filed in fiscal year 2006, to 22,778--24.4% of all charges--in fiscal year 2009.

In the leadoff testimony, Dr. William Spriggs, Assistant Secretary for Policy, U.S. Department of Labor, testified that the rate of unemployment for people age 55 and over "rose from a pre-recession low of 3.0 percent (November 2007) to reach 7.3% in August, 2010, making the past 22 months the longest spell of high unemployment workers in this age group have experienced in 60 years." Older workers also spend far more time searching for work and are jobless for far longer periods of time compared to workers under 55.

In addition, the EEOC heard testimony on legal issues from Mary Anne Sedey, Partner, Sedey Harper P.C., Michael Foreman, Clinical Professor, Pennsylvania State University, Dickinson School of Law, and R. Scott Oswald, Principal, The Employment Law Group. This was followed by testimony on employer best practices from Deborah Russell, Director, Workforce Issues, American Association of Retired Persons and Cornelia Gamlem, President, GEMS Group and Society for Human Resource Management. Among other things, Gamlem highlighted strategies to create discrimination-free workplaces that recognize the value of older workers; programs, such as flexible work arrangements, that enable employees to work longer if they choose to do so; and ways to implement reductions-in-force to avoid inadvertent age-based discrimination.

"Hard working men and women should never be harassed at work or forced out of their jobs on account of their age,” said EEOC Chair Jacqueline A. Berrien. “The testimony we heard today also sheds light on some of the unique challenges faced by older job seekers and will be invaluable as the Commission works to strengthen its enforcement of the Age Discrimination in Employment Act."

"The treatment of older workers is a matter of grave concern for the Commission,” said EEOC Commissioner Stuart J. Ishimaru. “We must be vigilant that employers do not use the current economy as an excuse for discrimination against older workers.'

Source: U.S. Equal Employment Opportunity Commission Press Release (November 17, 2010)

EEOC Rules that ADEA Is No Barrier to Employers Coordinating Health Plans with Medicare

The U.S. Equal Employment Opportunity Commission (EEOC) has published a final rule allowing employers that provide retiree health benefits to continue the longstanding practice of coordinating those benefits with Medicare (or comparable state health benefits) without violating the Age Discrimination in Employment Act (ADEA).

Following a period of litigation arising from a 2000 federal circuit court decision that the ADEA requires that the health insurance benefits received by Medicare-eligible retirees be the same, or cost the employer the same, as the health insurance benefits received by younger retirees, the regulation now provides an exemption for ADEA coverage for the common and longstanding employer practice of "coordinating" those benefits with Medicare by supplementing the government healthcare or by offering retirees a "bridge" benefit to cover health expenses after employees retire until they become Medicare-eligible.

“Implementation of this rule is welcome news for America’s retirees, whether young or old,” said Commission Chair Naomi C. Earp. “By this action, the EEOC seeks to preserve and protect employer-provided retiree health benefits which are increasingly less available and less generous. Millions of retirees rely on their former employer to provide health benefits, and this rule will help employers continue to voluntarily provide and maintain these critically important benefits in accordance with the law.”

Source: Equal Employment Opportunity Commission Press Release (December 26, 2007)

Other Sources: Des Moines Register "Don't make it harder to give health benefits to retirees" (January 2, 2008); AARP News Release (December 27, 2007)

EEOC Issues Proposed Regulaton Permitting Employers To Favor Older Individuals

The U.S. Equal Employment Opportunity Commission (EEOC) has issued a proposed regulation under the Age Discrimination in Employment Act (ADEA) to reflect a Supreme Court decision interpreting the ADEA as permitting employers to favor older individuals because of age. Under a prior regulation, overturned by the Court in 2004, the EEOC prohibited any age-based preference between persons age 40 or over, regardless of whether the treatment favors older or younger persons.

However, the Supreme Court rejected claims that favoritism toward older workers violated the ADEA and concluded Congress only intended "to protect a relatively old worker from discrimination that works to the advantage of the relatively young." Accordingly, if adopted after notice and comment, the final EEOC regulation will state:

Favoring an older individual over a younger individual because of age is not unlawful discrimination under the Act, even if the younger individual is at least 40 years old.

In addition, the EEOC regulations will be revised with respect to advertising to provide that "employers may post help wanted notices or advertisements expressing a reference for older individuals with terms such as over age 60, retirees, or supplement your pension."

Source: Federal Register Notice of proposed rulemaking (August 11, 2006)

Seventh Circuit Allows EEOC To Proceed with Age Bias Claims Against Law Firm

The U.S. Court of Appeals for the 7th Circuit has ruled that the U.S. Equal Employment Opportunity Commission (EEOC) has authority to obtain monetary relief for partners expelled from the law firm of Sidley Austin because of their age. In EEOC v. Sidley Austin, 7th Cir. No. 06-8002, the court held that the EEOC may obtain monetary relief in the case as well as injunctions and that, despite Sidley Austin's claims, there was no bar because the EEOC's "enforcement authority is not derivative of the legal rights of individuals even when it is seeking to make them whole."

Source: News Release U.S. EEOC (February 17, 2006)