Over the last week or so, various blogs have discussed a proposed rule released by the EEOC which discusses and defines what is meant by the "reasonable factor other than age" (RFOA) defense under the Age Discrimination in Employment Act (ADEA).
Not familiar with it? The Employer Law Report sums it up nicely here:
In Smith v. City of Jackson and Meacham v. Knolls Atomic Power Company, the Supreme Court held that the RFOA defense acts as a complete bar to disparate impact liability where an employer demonstrates that its facially neutral policy or practice, which had a disparate impact on older workers, was based on a reasonable factor other than the plaintiff’s age. Although the RFOA defense operates similarly to Title VII’s business necessity defense, this defense under the ADEA has traditionally been more “employer-friendly” because it preserves an employer’s right to make reasonable business decisions while protecting older workers from facially neutral employment criteria that arbitrarily limit their employment opportunities without requiring a showing of business necessity.
Here the EEOC has proposed a "prudent" employer standard with several (non-exhaustive) factors to figure out if the employer’s decision makes sense.
Public comment is open until April 19, 2010.
The World of Work blog suggests that:
an employer who is considering a change in employment practices — such as a layoff, change in employment qualifications, etc. — should examine the impact of the change to determine whether it may create an adverse impact based on age. If it appears that it may, the employer should then apply the EEOC’s six factors to see if it can adequately defend the change as based on reasonable factors other than age. If the change does not appear to pass each of the EEOC’s six factors, the employer may want to consider altering the change to reduce the impact or abandoning it altogether.
That seems like a sensible solution for now. But there’s also the tried and true view as well: If your layoff is going to have a disparate impact on older workers, you better have a really good reason for your decision. Otherwise, take a look at the underlying data again.