7th Circuit Affirms Summary Judgment on ADEA Disparate Impact Claim

On October 11, 2018, the 7th Circuit affirmed an order of the district court that granted the employer-defendant's motion for summary judgment on a disparate-impact claim under the Age Discrimination in Employment Act ("ADEA").  Dayton v. Oakton Community College, et al., No. 18-1668 (7th Cir. 10/11/2018).  The ADEA prohibits an employer from taking adverse job actions against employees who are forty years old or older because of their age.  To prevail on a disparate-impact claim, a plaintiff must demonstrate that a specific, facially neutral employment practice caused a significantly disproportionate adverse impact based on age.  Unlike disparate treatment claims, disparate-impact claims do not require proof of discriminatory motive.

If a plaintiff establishes a prima facie case for a disparate-impact claim, the employer-defendant may avoid liability by showing that the policy was based on a reasonable factor other than age ("RFOA").  To establish this affirmative defense, the defendant must demonstrate that the disparate impact was reasonably designed to further or achieve a legitimate business purpose, and that it was 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.  Court are not required to consider whether there were alternative ways the employer could have achieved its goals without causing a disparate impact on the protected age class.  The district court found that the defendant's decision to not employ any annuitants who had retired under the State University Retirement System ("SURS") was likely sufficient to establish a prima facie case for disparate impact under the ADEA.  However, the district court also determined that a reasonable jury would be compelled to conclude that the defendant's decision was based on an RFOA.  The burdens of proof and persuasion are on the employer with respect to the RFOA.  But employers are not required to defend their selection of one policy over a narrower policy; therefore, there is no requirement that the defendant prove that its policy did not not have a disparate impact on older employees.  An employment policy may have a disparate impact on older workers as long as the employer shows that the policy was based on an RFOA, which, in this case, was the defendant's policy decision that, for a number of reasons, it would be fiscally irresponsible for the defendant to continue to employ SURS annuitants.