On February 18, 2010, the EEOC published a proposed rule defining the employer’s "reasonable factors other than age" (RFOA) defense to a claim of disparate impact age discrimination.  A disparate impact theory of age discrimination argues that while the policy or practice challenged does not directly discriminate on the basis of age; it affects older workers in greater numbers.  When a plaintiff can show that an age-neutral employment policy or practice has an adverse impact on workers 40 and over, the burden shifts to the employer to show that the challenged policy or practice is based on RFOA.

The proposed rule defines a RFOA as "one that is objectively reasonable when viewed from the position of a reasonable employer (i.e., a prudent employer mindful of its responsibilities under the ADEA) under like circumstances."  The proposed rule goes on to provide that "to establish the RFOA defense, an employer must show that the employment practice was both reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known to the employer."

The proposed rule identifies the following non-exhaustive list of factors that may be relevant when examining whether an employment policy or practice is based on a reasonable factor other than age:  

  • Whether the employment practice and the manner of its implementation are common business practices;
  • The extent to which the factor is related to the employer’s stated business goal;
  • The extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);
  • The extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
  • The severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the number of persons adversely affected, and the extent to which he employer took preventive or corrective steps to minimize the severity of harm, in light of the burden of undertaking such steps; and
  • Whether other options were available and the reasons the employer selected its chosen option.

An employer is not required to adopt an employment practice that has the least severe impact on the older workers; however, the availability of other options is one factor relevant in determining whether the practice was reasonable. Of course, the RFOA defense only applies to those employment practices that are facially age-neutral.  The proposed rule explains that its analysis will most often apply when the practice is based on an objective non-age factor and the only question is the reasonableness of the factor.  However, in considering whether the practice is based on a "factor other than age", the EEOC suggests analyzing:

  • The extent to which the employer gave supervisors unchecked discretion to assess employees subjectively;
  • The extent to which supervisors were asked to evaluate employees based on factors known to be subject to age-based stereotypes; and
  • The extent to which supervisors were given guidance or training about how to apply the factors and avoid discrimination.

Following a sixty (60) day public comment period, the EEOC will review comments and potentially make revisions to the proposed rule before publishing a final rule that would go into effect ninety (90) days after publication.   A copy of the proposed rule and the EEOC’s preamble can be accessed here.