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EEOC Publishes Final Rule on Reasonable Factors Other Than Age (RFOA)

Posted in CHRO & EEOC, Discrimination & Harassment, Laws and Regulations

Today, the EEOC has published its final rule clarifying a portion of the Age Discrimination in Employment Act (ADEA).  You can download the rule here and a FAQ from the EEOC here.   The rule comes as a partial response to a 2008 U.S. Supreme Court decision that analyzed the issue. 

The rule has some significance for employers who have policies or take action that may have a disparate impact on older workers. In plain english, disparate impact essentially means an age-neutral rule that affects older workers more than younger workers; disparate treatment means a rule or action that treats older workers differently.

The easiest example to think of is suppose a police department has a physical fitness test so that officers can pursue and apprehend suspects; that practice may have a disparate impact on older workers . 

So what did the final rule clarify? According to the EEOC:

The final rule clarifies that the 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. The rule explains the meaning of the RFOA defense to employees, employers, and courts, and makes EEOC’s regulations consistent with Supreme Court case law. The rule applies to private employers with 20 or more employees, state and local government employers, employment agencies, and labor organizations. The final rule strikes the appropriate balance between protecting older workers from discriminatory, unreasonable business decisions and preserving an employer’s ability to make reasonable business decisions.

Um, well, that isn’t exactly clear. So, let’s try some more plain English.  The ADEA has a defense that an employer can use in disparate impact claims called “Reasonable Factors Other Than Age” defense or “RFOA”, for short.  An employer can use these factors in some instances, even though they may otherwise have a disparate impact on older workers.

So, what did the rule really clarify?  The rule added several items to think about in assessing “reasonableness”.  They are:

  • 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.

There’s obviously more to the rule than I can state in a blog post; if you’re an employer who has relied on this rule in the past, this will certainly be something to investigate further.

But for many employers, the new rule will not change much.  Many employers try to avoid taking any action to run afoul of age discrimination rules at all; this rule shouldn’t change that practice.

For more quick analysis of this rule, check out The Employer Handbook’s post this morning.