Seventh Circuit Holds External Job Applicants Cannot Pursue Disparate Impact Claims Under the Age Discrimination in Employment Act
In a major decision sure to provoke controversy and legislative attempts to overrule it, the en banc Seventh Circuit, by a vote of 8 to 4, has held in Kleber v. CareFusion Corp., (No. 17-1206, Jan 23, 2019), that Section 4(a)(2) of the federal Age Discrimination In Employment Act (“ADEA”) does not provide rejected external applicants with a cause of action.
The case was brought by Dale Kleber, a 58-year-old applicant who applied for a position at CareFusion. The job description allegedly “required applicants to have ‘3 to 7 years (no more than 7 years)’” of relevant experience.
The Court focused closely on the text on §4(a)(2) which makes it unlawful for an employer:
to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.
29 U.S.C. §623(a)(2).
The majority noted that by its express terms, §4(a)(2) “proscribes certain conduct by employer(s) and limits its protection to employees.” The majority finds the ADEA protections of the Section apply only to those with “status as an employee.” The majority also notes that Congress amended Title VII of the Civil Rights Act of 1964 in 1972 expressly to cover “applicants for employment” but never passed legislation expressly to cover applicants in §4(a)(2) of the ADEA.
The decision of the Seventh Circuit applies only to federal courts in Illinois, Indiana, and Wisconsin. But as an en banc decision (a decision by all the active judges of the Court) it may be given some greater consideration by other courts. Employers facing ADEA hiring discrimination claims by non-employee applicants may want to consider a motion to dismiss or for judgment on the pleadings relying on Kleber or to assert the defense in appropriate EEOC proceedings.
It is by no means certain, however, that other courts will reach the same conclusion as the Seventh Circuit. It is also likely that EEOC will not follow this decision outside the Seventh Circuit. And as noted at the outset, a legislative effort to reverse the result of Kleber by amending §4(a)(2) expressly to cover applicants is highly likely. Such a proposal might well pass in the House of Representatives. Its fate in the Senate, however, would be more problematic. In addition, whether President Trump would sign such a bill if it did pass, is open to conjecture.
In addition, employers should be aware that they certainly may face the same applicant age discrimination claims by outside applicants premised on state and local human rights laws. Such state and local laws generally do not have limiting language like that upon which the Seventh Circuit based its decision in Kleber. Moreover, while employers often prefer federal to state courts, Kleber may encourage age discrimination plaintiffs who are applicants simply to sue under state law in state courts.
Despite Kleber, employers should still take care not to provide outside applicants with a basis for asserting age discrimination in hiring claims under state or local laws with broader language covering such applicants or in federal courts that choose not to follow Kleber. This is especially true as there is already putative class litigation challenging employers and social media platforms and hiring sites that allegedly target or limit notices of particular job openings to those in certain age bands. Consulting with employment counsel about such candidate sourcing activities and the effects of Kleber may be prudent at this point in time.