Older workers don't necessarily have to prove an employer intentionally favored younger employees in order to sue under a federal age discrimination law.
In an important ruling expanding the scope of the Age Discrimination in Employment Act (ADEA), the US Supreme Court on Wednesday said workplace policies that disadvantage older workers - even if not directly caused by age bias - can be a form of illegal age discrimination.
Despite that decision, the justices ruled against a group of 30 members of the Jackson, Miss., police force who had filed an age discrimination suit based on a city pay plan that granted more lucrative benefits to younger workers than older ones.
The high court said that while so-called "disparate impact" claims are permitted under the ADEA, the Jackson police officers had not demonstrated enough of a claim to survive dismissal.
Justice John Paul Stevens wrote the majority opinion, which was joined in full by Justices David Souter, Ruth Bader Ginsburg, and Stephen Breyer. Justice Antonin Scalia provided the key fifth vote on the disparate-impact issue, but said he reached the same result by deferring to a government agency's interpretation that the ADEA permits disparate-impact claims.
Justice Sandra Day O'Connor dissented on the disparate-impact issue, joined by Justices Anthony Kennedy and Clarence Thomas. Chief Justice William Rehnquist did not participate.
The 1967 ADEA protects all workers aged 40 and older. Roughly half of America's civilian workforce is over 40, and the proportion of older workers is growing. Wednesday's ruling in Smith v. City of Jackson puts employers on notice that it may not be enough to avoid policies and practices that use age as a proxy in employment decisions.
In addition to outlawing discriminatory treatment, the ADEA also bars certain actions that result in a discriminatory impact on protected individuals aged 40 and older, the majority justices said. But the majority was careful to limit the potential scope of that holding, saying that a plaintiff must show more than mere disparate impact to prevail.
The ruling comes as a result of a 2001 lawsuit challenging an effort by the City of Jackson to bring its salaries up to regional standards. In carrying out the salary plan, officers and police dispatchers with five or fewer years of tenure received proportionately greater raises than employees with more than five years experience.
Most of those with five or more years of experience were over 40 years of age and thus covered by the age discrimination law. They sued under the ADEA, claiming that giving younger workers disproportionately higher raises than older workers is a form of age discrimination.
Lawyers for the city and police department countered that the ADEA prohibits only acts of intentional age discrimination - not every instance where policies may disadvantage members of the protected class of workers.
The majority justices disagreed, but ultimately ruled in favor of the city. The court said the older employees had not done enough to prove their case and that the city's salary plan was based on reasonable factors other than age.
"Petitioners have done little more than point out that the pay plan at issue is relatively less generous to older workers than to younger workers," Justice Stevens writes. "They have not identified any specific test, requirement, or practice within the pay plan that has an adverse impact on older workers." He says: "It is not enough to simply allege that there is a disparate impact on workers, or point to a generalized policy that leads to such an impact."
The court says employees must be able to isolate and identify the specific employment practices that are allegedly responsible for any observed statistical disparities.
Stevens says unless specific employment practices are isolated and identified by older workers, it could result in employers being held liable for innocent causes that lead to statistical imbalances. He says it was reasonable for the City of Jackson to rely on seniority and position to determine raises.
In her dissent, Justice O'Connor says there is nothing in the wording of the law or the intent of Congress at the time the law was passed to suggest the ADEA permits disparate-impact claims.
She says comparisons with Title VII of the Civil Rights Act are misleading. The Supreme Court ruled in 1971 in a case called Griggs v. Duke Power Co. that the similarly worded Title VII authorizes disparate-impact lawsuits.
"This argument would be a great deal more convincing had Griggs been decided before the ADEA was enacted," O'Connor writes. "Griggs was decided four years after the ADEA's enactment."
A federal judge and a federal appeals court panel ruled City of Jackson case that mere disparate impact was not enough to sustain a lawsuit under the ADEA. There must be evidence of intentional discrimination based on age, they ruled.
The issue has resulted in a sharp split among the nation's federal judges in recent years. Appeals courts based in New York, St. Louis, and San Francisco have held that disparate-impact claims may be brought under the ADEA. Appeals courts based in Boston, New Orleans, Chicago, Denver, and Atlanta have ruled that such claims are not covered.