Supreme Court Places Burden On Employer
to Prove Reasonableness
*By Britt J. Rossiter

The U.S. Supreme Court recently ruled that an employer implementing a reduction in force (“RIF”) must rely on a “reasonable” factor in selecting employees for termination when defending against a claim of age discrimination. The Court held that an employer relying on a statutory exception to liability in a lawsuit brought pursuant to the Age Discrimination in Employment Act (“ADEA”) bears both the burden of production and persuasion when arguing that employment practices that have a disparate impact on older workers are based on “reasonable factors other than age.” In Meacham v. Knolls Atomic Power Laboratory, the Court resolved split authority among lower appellate courts that were divided on whether the employer has the burden of persuasion, in addition to the burden of production, with respect to the reasonableness of the exception.

In Meacham, the employer instituted a RIF, identifying affected employees based on its managers’ assessments of individual employees’ performance, flexibility, and critical skills. Subsequent to the RIF, 28 employees filed suit against the employer alleging that this criteria resulted in illegal disparate impact under the ADEA. 27 of the 28 employees were 40 years of age or older, the statutory minimum for protection under the statute.

The jury found in favor of the plaintiffs on their disparate impact claim. On remand, the Second Circuit reversed, finding that the employees failed to carry their burden of showing that the factors used by the employer were unreasonable. The Supreme Court reversed, holding that the employer had the burden of persuasion with respect to the “reasonableness” of the factors it used to select the employees affected by the RIF, and that the Second Circuit Court erred by placing the burden on the employees.

The Court based its decision on its reading of the ADEA and interpretation that the “reasonable factors other than age” exception is an affirmative defense, placing the burden of persuasion on the employer/defendant. The Court looked to previous decisions which held that similar exceptions provided by the statute, such as “where age is a bona fide occupational qualification,” was likewise an affirmative defense subject to the employer’s burden.

The Court concluded by noting that, while an employer will likely have to provide more convincing evidence that it selected employees for the RIF by “reasonable factors other than age,” an employee must still “isolate and identify the specific employment practices that are allegedly responsible for any observed statistical disparities.” The Court reasoned that “[i]dentifying a specific practice is not a trivial burden,” and this requirement should allay concerns by employers that its decision will encourage frivolous litigation.

Clearly, the Court’s decision requires that employers develop and prove reasonable criteria in the event of future age discrimination litigation in the wake of a RIF.

*Britt J. Rossiter has extensive experience representing employers in litigating and arbitrating workplace disputes in Ohio, California and throughout the country. For more information about age discrimination or any other employment-related tort, please contact Britt at 216.696.4441 or bjr@zrlaw.com.

This newsletter is not intended as a substitute for professional legal advice and its receipt does not constitute an attorney-client relationship. If you have any questions concerning any of these articles or any other employment law issues, please contact Stephen S. Zashin at 216.696.4441.
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