Must Show Decision Was Based On Factors Other Than Age

The U.S. Supreme Court recently held that if an employer wants to defend an age discrimination claim by asserting that the decision was based on “reasonable factors other than age,” the employer has the obligation to prove this to the judge or jury hearing the case. The ruling did not come as a major surprise to most employment lawyers, but is considered to be a victory for workers. Meacham v. Knolls Atomic Power Laboratory, No. 06-1505, U.S. Supreme Court (June 19, 2008).

Factual Background

The U.S. Navy and the Department of Energy awarded contracts to Knolls Atomic Power Laboratory (KAPL) to design prototype naval nuclear reactors and to train Navy personnel to operate them. At the end of the Cold War, the demand for naval nuclear reactors slowed and KAPL was ordered to reduce its workforce.

Approximately 100 employees opted to take the company’s buyout offer – which left approximately 30 additional jobs to cut. Clifford Meacham was among those laid off in the resulting “involuntary” reduction in force (RIF). Of the 31 salaried employees who were laid off, 30 were at least 40 years old.

A group of workers, including Meacham, claimed that the factors used by KAPL to decide who to terminate had a disparate impact on older workers. After a number of legal maneuvers, the Second Circuit Court of Appeals dismissed the case, finding that the burden was on the workers to show that the decision was not based on reasonable factors other than age. The plaintiffs appealed this ruling to the U.S. Supreme Court.

Legal Analysis

The high court began by noting that the Age Discrimination in Employment Act (ADEA) specifically states that actions that might otherwise violate the law are not actionable if “the differentiation is based on reasonable factors other than age.” This is commonly referred to as the RFOA defense. The Supreme Court found that this is an “affirmative defense,” and therefore the Second Circuit’s ruling must be overturned. According to the justices, the burden was on the employer both to produce evidence that the decision was based on reasonable factors other than age and to persuade the judge or jury on this point. Thus, the case was sent back to the Second Circuit to determine whether KAPL met this obligation.

Practical Impact

This result was expected by most in the employment law community, as the Second Circuit’s finding was contrary to prior rulings on this question. Had the Court upheld the Second Circuit, it would have been significantly more difficult for workers to bring many claims under the ADEA. As it turned out, employers will have to prove that any challenged decisions were based on reasonable factors other than age. Maintaining accurate documentation of the decision- making process will often be critical in such situations.