Can job applicants bring disparate impact claims under the ADEA?

Published May 19th, 2017 -  - 05.19.176


Americans are living and working longer than in previous generations.  Over the last ten years, the over 45-year-old work force has grown dramatically, from 31.7% of the country’s workforce in 1996 to 39% in 2006 and 44.3% last year.  The percentage is expected to grow even larger, as the number of American workers over the age of 65 is projected to rise sharply.

At the same time, a recent study by the Federal Reserve Bank of San Francisco seems to confirm previous studies that show that older workers in general face significant discrimination in hiring, with older female workers facing even more age discrimination than their male counterparts.  Discrimination against older employees may stem from several misinformed worries employers have about hiring older employees, including an assumed lack of flexibility or unwillingness to embrace change, likelihood of leaving employment, and the prospect of longer absences due to sickness.

Older workers may especially face discrimination applying for or working in technology companies.  From 2008 to 2015, employees or applicants at Silicon Valley’s 150 largest tech companies filed 226 complaints of age discrimination, 28% more than racial bias complaints filed against those companies and 9% more than complaints based on gender bias.  While recruiting, tech companies often cloak their prejudice in a desire select employees that can present a youthful, progressive image to customers and investors and often worry that older workers may not be willing to work long hours or stay up-to-date with technical skills.  Whether through deliberate discrimination or facially neutral recruiting tactics (such as hiring only recent graduates), these companies have established a younger workforce than other companies; whereas the median age for an American worker is 42, the median age at companies such as Apple, Google, and Facebook are 31, 30, and 29 respectively.

In 1967, Congress passed the Age Discrimination in Employment Act (ADEA) with the goal of prohibiting employment discrimination against individuals at or over the age of 40.  Specifically, section 4(a)(2) of that statute makes it unlawful for an employer “to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.”

In Smith v. City of Jackson, the Supreme Court held that the ADEA allows for disparate-impact claims similar to those that may be brought under Title VII of the Civil Rights Act.  But, are disparate-impact claims under the ADEA limited to current employees, or can they also be brought by job applicants?  A recent federal district court case out of California suggests that job applicants can bring disparate-impact claims under the ADEA.  But the Eleventh Circuit has held that they cannot.

Applicants v. Employees

Last year, the Eleventh Circuit held in Villarreal v. R.J. Reynolds Tobacco Co. that the ADEA did not give a disparate-impact cause of action to job applicants as they had no “status as employees.”  In that case, Richard Villarreal, a 49-year-old man, applied to work as a territory manager with R.J. Reynolds Tobacco Company.  The company provided a contractor with guidelines that specified the “targeted candidate” as someone “2-3 years out of college.”  The guidelines also instructed the contractor to avoid applicants “in sales for 8-10 years.”  The contractor screened out Villarreal, who later filed a complaint with the Equal Employment Opportunity Commission (EEOC).  The EEOC brought this collective action against R.J. Reynolds, claiming the company’s recruiting practice had a disparate impact under the ADEA.

In finding that job applicants could not bring disparate-impact cases under the act, the court focused on the statutory phrase “or otherwise adversely affect his status as an employee.”  According to the court’s textualist argument, Congress’ use of “or otherwise” was meant to make “depriv[ing] or tend[ing] to deprive any individual of employment opportunities” a subset of  “adversely affect[ing] [the individual’s] status as an employee.” As a result, the ADEA only protects those individuals that have a “status as an employee.”

Unlike the Eleventh Circuit, the United States District Court for the Northern District of California, in Rabin v. PricewaterhouseCoopers, recently denied the defendant’s motion for judgment on the pleadings and instead held that the ADEA allows for job-seekers to file disparate-impact claims.  In this case, Steve Rabin—a 53-year-old accountant—claims that the company’s recruitment practices have had a disparate impact on older workers.  Specifically, Rabin argues that PwC hires entry-level accountants primarily through college campus recruiters, not posting these positions on its website nor offering applicants not currently affiliated with a college or university the opportunity to apply.

The court in this case began by focusing on the text of the ADEA, noting that Congress used “any individual” to identify those covered against discrimination in section 4(a)(2) of the act but used employee in the same provision to only note people that “an employer may not ‘limit, segregate, or classify.’”

The court also relied on Judge Martin’s dissent in Villarreal.  In her dissent, Judge Martin argued that the majority improperly restricted the word “employee” to only mean current employees.  She contended that the Supreme Court (in cases such as Robinson v. Shell Oil Co.) has suggested that “the word employee lacks any temporal qualifier” and “can include people other than current employees,” including “prospective employees.”  The district court further relies on Griggs v. Duke Power Co. where the Supreme Court interpreted almost identical language in Title VII to extend protection to job applicants, and on subsequent decisions that characterize Griggs as applying to job-seekers.  Lastly, the court cites the EEOC’s consistent interpretation of the ADEA and the legislature’s remedial intent to support the holding that the ADEA does allow for applicants to file disparate-impact claims.

If the recent position in Rabin is the start of a trend of courts allowing for job applicants to bring disparate impact claims under the ADEA, the statute may have a dramatic impact on employer job postings and recruitment tools, especially in the tech industry.  Practices including college recruitment or job advertisements that specify maximum years of experience may be extremely problematic if they have a disparate impact on older job applicants.  The question of whether the ADEA allows for job applicants to bring these claims may eventually be decided by the Supreme Court, but for the time being, companies should rework recruitment processes to help limit the adverse impact these processes may have on older applicants.

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