Final Rule Clarifies Meaning of “Reasonable Factors Other than Age” under the Age Discrimination in Employment Act
The U.S. Equal Employment Opportunity Commission (EEOC) has issued a final rule regarding “Disparate Impact and Reasonable Factors Other than Age” (RFOA) under the Age Discrimination in Employment Act of 1967 (ADEA).
The purpose of the ADEA is to promote the employment of older persons based on their ability, rather than age, and prohibits employment discrimination against people who are 40 years of age or older. The ADEA also addresses concerns that older workers are barred from employment by some common employment practices that are not intended to exclude older workers, but that have the effect of doing so and are unrelated to job performance.
The ADEA applies to private employers with 20 or more employees, state and local government employers, employment agencies, and labor organizations.
The final rule clarifies that the ADEA prohibits policies and practices that have the effect of harming older individuals more than younger individuals, unless the employer can show that the policy or practice is based on an RFOA. The rule explains the meaning of the RFOA defense and makes the EEOC’s regulations consistent with Supreme Court case law.
An employment practice is based on an RFOA when it was reasonably designed and administered to achieve a legitimate business purpose in light of the circumstances, including its potential harm to older workers. The rule emphasizes the need for an individualized consideration of the facts and circumstances surrounding the particular situation. It includes the following list of considerations relevant to assessing reasonableness:
- The extent to which the factor is related to the employer’s stated business purpose;
- 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;
- 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;
- The extent to which the employer assessed the adverse impact of its employment practice on older workers; and
- 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.
The final rule is effective April 30, 2012.