An employer defending a disparate-impact claim under the Age Discrimination in Employment Act bears the burden of producing evidence for a “reasonable factors other than age” affirmative defense, and also has the burden of persuading a fact finder of the reasonableness of the factor, the U.S. Supreme Court rules.

A defense contractor who had to select employees for layoff scored them based on three scales, “performance,” “flexibility,” and “critical skills.” The scores were summed, along with points for years of service, and the totals determined who should be let go. Of the 31 salaried employees laid off, 30 were at least 40 years old, and 28 of them sued, raising a disparate impact (discriminatory result) claim under the ADEA.

A provision of the ADEA creates an exemption for employer actions “otherwise prohibited” by the ADEA but “based on reasonable factors other than age.” The question before the Court was whether an employer facing a disparate-impact claim and planning to defend on the basis of RFOA must not only produce evidence raising the defense, but also persuade the fact finder of its merit. The Court holds that the employer must do both under the law. Meacham v. Knolls Atomic Power Laboratory.

The Equal Employment Opportunity Commission has issued a notice of proposed rulemaking to change its current regulations on disparate impact under the Age Discrimination in Employment Act. The EEOC rule currently prohibits employment practices that have a disparate impact on older individuals unless it is justified as a business necessity. A 2005 U.S. Supreme Court ruling in Smith v. City of Jackson held that the “reasonable factors other than age” (RFOA) test, rather than the business necessity test, is the appropriate standard for determining the lawfulness of an employment practice that disproportionately affects older workers. The Commission proposes to revise it rules to state that when the RFOA exception is raised, the employer has the burden of showing that a reasonable factor other than ages exists factually.

The Equal Employment Opportunity Commission has approved a rule allowing employers to coordinate company health benefits offered to retirees with Medicare or comparable state benefits, without violating the Age Discrimination in Employment Act. The rule means that employers do not have to ensure that Medicare eligible retirees are receiving the same benefits as younger retirees.

EEOC had earlier adopted an enforcement position that health insurance benefits received by Medicare-eligible retirees be the same, or cost the same, as health plan benefits received by younger retirees. The agency reversed itself after employers, labor unions, and state and local governments said this position would result in the reduction or elimination of retiree health benefits currently provided.

EEOC has issued a question and answer sheet clarifying the rule.

The Equal Employment Opportunity Commission has published its final rule explaining that the Age Discrimination in Employment Act does not prohibit employers from favoring relatively older individuals. The final rule is to conform with the U.S. Supreme Court’s decision in General Dynamics Land System, Inc. v. Cline which held that the ADEA only prohibits discrimination based on relatively older age, not discrimination based on age generally. (Hawaii employers are advised that state law prohibiting age discrimination includes younger workers.)

A manager who made frequent references to the age of an employee by telling her “In your day and age…” and asking her whether she would be better off retiring so she could “take time off to rest” may have been motivated by age discrimination when he finally terminated the employee, says the Second Circuit. The remarks made by the manager should not be considered “stray” since they were made by the person who decided to terminate the employee, the Court observes, pointing out that the manager made the age-related remarks every month or so, and even during the termination of the employee, told her that “she was well suited to work with seniors.” The Court reverses summary judgment and sends the case for a jury trial. Tomassi v. Insignia Financial Group.

A former employee who charged that she was forced out of her job because of her age can proceed to a jury trial based on circumstantial evidence, a federal district court in Illinois decides. The court points out that the complainant was nicknamed “Grandma” by her store manager; the company implemented a new business model that led to demotions and terminations for older employees; and the company held the complainant to “substantially more demanding standards because of her seniority.”

The court says that the “Grandma” nickname alone “would never be enough to bring a successful claim” under the Age Discrimination in Employment Act. “Nevertheless, in the workplace, calling someone ‘Grandma’ does suggest ageism,” the court observes. The court says that it was “suspicious” because “a business model that results in the demotion or termination of ‘more tenured’ employees is an effective artifice to push older employees out the door.” The court also points out that the company did not adequately explain why the employee was placed on more demanding performance standards because of her seniority with the company, which the court calls “a convenient euphemism for her age.” McDonald v. Best Buy

Age-related comments denigrating older workers can have an outsized negative impact on employee productivity and corporate profits, says Bob McCann, Associate Professor of Management Communication at the USC Marshall School of Business. “Our research has clearly shown links between ageist language and reported health outcomes as broad as reduced life satisfaction, lowered self-esteem, and even depression,” McCann says.

The researchers conducted a survey of age discrimination lawsuits which revealed hundreds of comments such as “the old woman,” “that old goat,” “too long on the job,” “old and tired,” and he is “an old fart” which were used against employers. Such language has become so common in age discrimination cases that some groups of ageist comment even have their own names, according to the study. “‘Young blood’ remarks are perhaps the best illustration, including such examples as: ‘We need young blood around here,’ ‘Let’s make room for some MBAs,’ or ‘Let’s bring in the young guns,’” say the researchers.

Age discrimination suits can lead to significant legal expenses; the Equal Employment Opportunity Commission recovered $51.5 million in monetary benefits for age discrimination charges in Fiscal Year 2006; and other costs from lawsuit settlements and judgments can run into the millions, according to the study.

A 43-year-old beer salesman terminated for telling a customer about his ten million dollar lawsuit against his employer was not engaging in a “protected activity” under the Age Discrimination in Employment Act, the Sixth Circuit rules.

Prior to his dismissal, the employee had filed age discrimination charges with the Tennessee Human Rights Commission and state court. He subsequently was placed on a final warning about customer complaints concerning his work. When his supervisor checked on his performance with a customer, the customer stated that the employee was “very vocal” about suing the company and “how upper management is out to get him.” Since the customer said that the employee was “always” talking about his lawsuit, the company interpreted this to be a customer complaint, and fired the employee.

The Sixth Circuit says that in order for the employee’s comments to be protected under the ADEA, he “must have referenced alleged acts of age discrimination” by the company. “An employee may not invoke the protections of the Act by making a vague charge of discrimination. Otherwise, every adverse employment decision by an employer would be subject to challenge under either state or federal civil rights legislation simply by an employee inserting a charge of discrimination,” the Court said. Fox v. Eagle Distributing Co.

A hiring manager who yawned during a promotion interview did not display discriminatory animus based on age against the employee, the First Circuit holds. The employee had alleged that he had been denied several promotions, and cited the manager’s yawning during his interview as an indication that his answers didn’t matter since the company had decided not to promote him because of his age.

“While we agree that such an act could make an interview awkward, we fail to see how an involuntary yawn evinces a hidden discriminatory animus any more than a sneeze or a cough,” the Court says. “It is well settled that the court is required to draw only reasonable inferences in plaintiff's favor. [citation omitted] Imputing an ulterior motive to a yawn is not such a reasonable inference.” Arroyo-Audifred v. Verizon Wireless Inc.