On June 19, 2008, the U.S. Supreme Court also decided that where an action has an adverse impact on older workers, employers bear the burden of proving that such action was based on a “reasonable factor other than age” (“RFOA”). Meacham v. Knolls Atomic Power Laboratory, 128 S.Ct. 2395. In the Meacham case, Knolls laid off 31 employees, 30 of whom were at least 40 years old. Twenty-eight of the employees sued asserting both disparatetreatment (discriminatory intent) and disparate-impact (discriminatory result) claims under the ADEA. The jury found for the plaintiffs on the disparate-impact claim, but not the disparate-treatment claim.

In defending against the disparate-impact claim, Knolls responded that it picked the employees for discharge by scoring based on performance, flexibility and critical skills, without regard to age. Meacham’s statistical expert testified that results so skewed according to age (97% were 40 or older) could rarely occur by chance and that the scores for flexibility and criticality (over which the managers had the most discretionary judgment) had the firmest statistical ties to the outcomes.

In the Supreme Court’s 2005 decision, Smith v. City of Jackson, the Supreme Court had held that under the ADEA, if a plaintiff showed that a specific employer practice placed a disproportionate burden on older workers, the employer could avoid liability by showing the practice was based on a reasonable factor other than age. However, the Court had left open which of the parties has the burden of proof on the RFOA issue. With the decision in Meacham, the Supreme Court has established that it is employer’s burden of proving the RFOA, which is essentially an affirmative defense to an ADEA claim that a decision or practice that may appear to be neutral has an illegal impact on older workers.

Nancy Sasamoto observes that this decision will make it more difficult and expensive for employers to defend against disparate-impact age discrimination cases. It is all the more important for employers to carefully review with legal counsel the process and factors used in reducing its workforce