September 17, 2019

September 17, 2019

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September 16, 2019

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Third Circuit Decision Potentially Expands the Reach of the Age Discrimination in Employment Act

On January 10, 2017, the Third Circuit determined that a disparate impact age discrimination claim under the Age Discrimination in Employment Act (ADEA) may be brought by a subgroup of the protected class, creating a circuit split on the issue.  In the decision, Karlo v. Pittsburgh Glass Works, No. 15-3435 (3d Cir., Jan. 10, 2017), the Third Circuit found a cognizable age discrimination claim brought by former Pittsburgh Glass Works employees who claimed that their employer’s reduction in force (RIF) disproportionately impacted employees age fifty and over in favor of those in their forties.  Prior decisions had found such claims to be viable only when based on the entire protected group (age forty and over).  However, the Third Circuit’s ruling now permits the so-called “subgroup” disparate impact claims under the ADEA.

The plaintiffs consisted of workers in the employer’s manufacturing technology division who were terminated as part of a RIF and were each over fifty years old at the time of termination.  While disparate-impact claims in ADEA cases ordinarily evaluate the effect of a policy on all employees who are at least forty years of age, in this case plaintiffs identified a policy that impacted only a subgroup of that population – employees older than fifty.  On summary judgment, the district court held that the subgroup fifty-and-older disparate impact claim was not cognizable under the ADEA.  However, the Third Circuit reversed the ruling based on the plain text of the statute as interpreted by the Supreme Court.  Specifically, the panel determined that the ADEA prohibits disparate impact claims based on age, not just against individuals who are forty and older.  The Court bolstered its statutory construction with “the ADEA’s remedial purpose,” explaining that “[r]efusing to recognize subgroup claims would deny redress for significantly discriminatory policies that affect employees most in need of the ADEA’s protection.”

The Third Circuit acknowledged that several other circuit courts have issued contrary holdings (the Second, Sixth, and Eighth Circuits), but stated that these courts’ reasoning relied on policy arguments that it found unpersuasive.

Employer Tip The Karlo ruling will create a greater challenge in defending against ADEA claims.  The circuit split may also lead to Supreme Court review of the issue.  In the meantime, employers should analyze the impact of a new policy or RIF across multiple different age groups of employees to ensure that they are not potentially opening themselves up to claims under the ADEA

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About this Author

David I. Rosen, Sills Cummis Gross, Wrongful Dismissal Lawyer, Labor Arbitration Attorney

David I. Rosen has practiced labor and employment law on behalf of management clients since 1977. He handles employment litigation in the federal and state courts, before administrative agencies and through arbitration and mediation, and has broad experience with wrongful dismissal and employment discrimination claims, having successfully defended employers following jury and bench trials. His litigation experience extends to the enforcement and defense of restrictive covenants, NLRB unfair labor practice trials and appellate advocacy. Mr. Rosen also represents employers in labor...

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Galit Kierkut, Employment Litigation Attorney, Sills Cummis Gross, Social Media Matters Lawyer

Galit Kierkut concentrates her practice on employment litigation and counseling. She conducts human resources audits, performs management and employee training in all areas, including sexual harassment, social media and electronic communications use, and counsels clients regarding compliance with state and federal employment laws, including discrimination laws, the Fair Labor Standards Act (FLSA), family and medical leave, and the Worker Adjustment and Retraining Notification (WARN) Act. She also reviews and drafts employee handbooks, social media policies and employment contracts, including restrictive covenants and severance agreements. Her employment litigation practice is primarily focused on resolving claims in the areas of discrimination, sexual harassment, restrictive covenants, whistleblowing and employment contract disputes in state and federal courts and before the Department of Labor and the Equal Employment Opportunity Commission (EEOC).

Charles Kaplan, Sills Cummis Gross, Labor Employment Attorney, Affirmative Action Matters Lawyer

Charles H. Kaplan is a Member of the Sills Cummis & Gross Employment and Labor Practice Group and is resident in the Firm’s New York Office.  Mr. Kaplan represents employers in federal and state trial and appellate courts, as well as before enforcement agencies, including the U.S. Equal Employment Opportunity Commission, the National Labor Relations Board, the Office of Federal Contract Compliance Programs of the U.S. Department of Labor, the New York State Division of Human Rights, the New York State Department of Labor and the New York City Commission on Human Rights.