Employers can breathe a collective sigh of relief in light of the recent en banc holding of the 7th U.S. Circuit Court of Appeals in Kleber v. CareFusion Corporation. In Kleber, the full 7th Circuit vacated a 2018 panel decision and held that job applicants cannot pursue age discrimination claims under a disparate impact theory. The 7th Circuit joins the 11th Circuit as the only federal appellate courts to have ruled on this issue, with both courts now adopting an employer-friendly interpretation regarding the disparate impact provision of the Age Discrimination in Employment Act (ADEA).
In Kleber, the employer had advertised an open senior counsel position, seeking candidates with “3 to 7 years (no more than 7 years) of relevant legal experience.” The 58-year-old plaintiff filed suit after not being selected for an interview, despite having strong credentials and significant work experience spanning more than three decades. Specifically, the plaintiff challenged CareFusion’s seven-year experience cap as unlawful under the ADEA’s disparate impact provision.
The district court granted CareFusion’s motion to dismiss on the disparate impact claim and explained that the ADEA’s disparate impact provision applies only to employees, not job applicants. A three-judge panel of the 7th Circuit, however, reversed the district court’s decision and allowed the plaintiff’s disparate impact claim to proceed, holding that a practice of excluding job applicants who exceed a maximum level of experience could be unlawful under the ADEA’s disparate impact provision. (See McGuireWoods’ May 2018 legal alert “7th Circuit Holds That Experience Limits May Violate ADEA.”)
Sitting en banc, the 7th Circuit disagreed with the three-judge panel and affirmed, in an 8-4 decision, the district court’s dismissal of the ADEA disparate impact claim. In its analysis, the 7th Circuit pointed out that the plain language of the ADEA’s disparate impact provision affords protections only to “employees,” not “job applicants.” The 7th Circuit also looked to the language of other provisions in the ADEA, as well as the disparate impact provision under Title VII, which includes both “employees” and “job applicants” within the scope of protection. Since the text of the ADEA’s disparate impact provision covers only “employees,” not “job applicants,” the 7th Circuit concluded that Congress intended the ADEA’s disparate impact provision to apply only to employees, not to mere job applicants.
The recent Kleber decision is consistent with the 11th Circuit’s holding in Villarreal v. R.J. Reynolds Tobacco Co., which held that only current or former employees could bring disparate impact claims under the ADEA. These two circuits are the only federal appellate courts to have weighed in on the issue, and the Kleber decision reconciles their views. However, a California trial court in 2017 recognized a disparate impact theory for job applicants and held that applicants could challenge an accounting firm’s practice of recruiting exclusively from colleges and universities for entry-level positions. (See McGuireWoods’ March 2017 legal alert “Are College Recruiting Programs Age Discrimination?”).
The Kleber decision signals to employers that common hiring and recruiting practices such as experience requirements are not susceptible to legal challenge merely for having a negative impact on older job applicants. Since disparate impact claims are no longer viable, disappointed job seekers can pursue claims only of disparate treatment under the ADEA and thus must establish discriminatory intent in order to prevail. Outside the 7th Circuit and 11th Circuit, however, the question of whether job applicants may pursue disparate impact claims remains open, and hiring and recruiting practices that negatively impact older applicants could be found unlawful.