The U.S. Supreme Court's 2004 Term: Disparate Impact Claims under the Age Discrimination in Employment Act

Labor Law Journal, Winter 2005 | Go to article overview
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The U.S. Supreme Court's 2004 Term: Disparate Impact Claims under the Age Discrimination in Employment Act


The following individuals shared their views with CCH on the Supreme Court's decision in Smith v. City of Jackson:*

Charles B. Craver, Freda H. Alverson Professor of Law, George Washington University Law School;

Henry H. Drummonds, Professor of Law, NorthwesternSchool of Law at Lewis and Clark College, Portland, Oregon; and

Laurie McCann, Staff Attorney, American Association of Retired Persons Foundation Litigation.

Throughout the year, CCH asked recognized experts in the field of labor and employment law to discuss decisions of the U.S. Supreme Court in the labor and employment arena. CCH welcomes the opportunity to share their observations with readers of the Labor Law Journal.

SMITH v CITY OF JACKSON

Older workers are no longer limited to proving that they were intentionally discriminated against on the basis of their age. In a suit brought by police officers alleging that the police department's revision of its pay plan adversely affected officers over the age of 40, the Supreme Court ruled, in Smith v. City of Jackson,1 that older workers may bring disparate impact claims under the Age Discrimination in Employment Act (ADEA).2 The Fifth Circuit3 erred in holding that the disparate impact theory of liability is categorically unavailable under the ADEA, the Court held. However, the police officers' disparate impact claim failed because the officers failed to identify a specific test or requirement within the pay plan that had an adverse impact on older officers. Moreover, the Court observed, it was clear that the plan was based on reasonable factors other than age.

The Court's vote was split five to three. Justice Stevens wrote the opinion. Justice O'Connor, joined by Justices Kennedy and Thomas, concurred in the ultimate judgment on the ground that disparate impact claims are not cognizable under the ADEA. Agreeing with the Court's reasoning, Justice Scalia would have found it a basis for deferral to the EEOC's regulations under Chevron USA, Inc. v. Natural Resources Defense Council, Inc.4 rather than an independent determination of the disparate impact question. Justice Rehnquist did not participate in the Court's decision.

Reactions. The decision took many by surprise. The dictum in Hazen Paper Co. v. Biggins,5 noting that disparate treatment "captures the essence of what Congress sought to prohibit in the ADEA," caused some lower courts to decide that the disparate impact construct was not available under the ADEA, law Professor Charles Craver noted.

According to law Professor Henry Drummonds, there were good arguments both ways. "What the five-judge majority has done is actually synthesize the two arguments into a consistent position. It is noteworthy that the argument opened by the Chief Justice in 1980 in his dissent from a denial of certiorari in Geller v. Markham6 and then picked up and noted by the Court in Hazen Paper, has now been finally rejected," he added. "And Justice Scalia provided the fifth vote making the Chief Justice's inability to participate a moot point." Had Justice Scalia decided to vote with the three dissenters, however, Craver believes Justice Rehnquist would have provided the crucial fifth vote to find no disparate impact approach under the ADEA.

Noting that Hazen Paper was purely a disparate treatment case that, technically, should not impact interpretation of a disparate impact case, Laurie McCann, author of the American Association of Retired Persons' (AARP) amicus brief in Smith, worries nevertheless that Hazen Paper will ultimately impact how the courts interpret the Smith decision. "Hazen Paper has done so much damage to older workers' ability to prove discrimination by making it lawful to use cost, or years of service, or proximity to eligibility for early retirement as reasons for decisions that discriminate against older workers." She fears that courts' interpretations of Hazen Paper will eventually bleed over to influence their interpretation of what is "reasonable" in defense of a disparate impact claim.

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