EEOC Issues Final Rule on the “Reasonable Factor Other Than Age” Defense to Disparate Impact Age Discrimination Claims Brought Under The ADEA

The EEOC recently issued a final rule amending the regulation (29 C.F.R. § 1625.7) governing the “reasonable factor other than age” (RFOA) defense in “disparate impact” cases brought under the Age Discrimination in Employment Act of 1967.

The defense only applies in “disparate impact” cases and – in line with Supreme Court precedent – not to claims “conditioned on an age-based intent to discriminate” (such as where the employment practice at issue “uses age as a limiting criterion”).

An employer who raises the RFOA defense bears the burden of persuasion and production to demonstrate it.  The following (non-dispositive and exemplary) considerations are relevant to whether a practice is based on a RFOA:

(i) The extent to which the factor is related to the employer’s stated business purpose;

(ii) The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination;

(iii) The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes;

(iv) The extent to which the employer assessed the adverse impact of its employment practice on older workers; and

(v) The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.

29 C.F.R. § 1625.7(e)(2).

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