Third Circuit Court of Appeals allows for subgroups in age-discrimination case

By Dawn Geske | Feb 5, 2017

PHILADELPHIA – A decision by the U.S. Court of Appeals for the Third District has identified subgroups as a segment of employees that cannot be discriminated against under the Age Discrimination in Employment Act (ADEA).

Under the ADEA, the court found that the claim of disparate impact by a group of employees over the age of 40 was just in the Karlo v. Pittsburgh Glass Works, LLC case. The case involves a group of employees who were terminated as a result of workforce reduction at Pittsburgh Glass Works, an automotive glass manufacture, due to declining sales. 

Those employees were all older than 50 and had formed a subgroup for a collective action lawsuit against their employer. In the suit, the plaintiffs claimed that a disparate impact had occurred to those who were terminated by the company and over the age of 40 as outlined in the ADEA.

The case was initially brought to the district court, where the defendants filed for summary judgment, which was granted. In an appeal, the court ruled in favor of the plaintiffs, allowing the claims for disparate impact, as it found the employer “caused a significantly disproportionate adverse impact on age” to the subgroup identified in the case.

“Prior to Karlo, no federal circuit court of appeals recognized that plaintiffs who sued under the disparate-impact provision of the Age Discrimination in Employment Act may assert that the policy complained of adversely affected only a 'subgroup' of those 40 and older in violation of the ADEA,” Kevin R. Miller, an associate at Genova Burns, told The Pennsylvania Record. “In Karlo, the Third Circuit stated quite clearly that if a plaintiff can show that a specific employment policy adversely affected a 'subgroup' of employees over the age of 40, it does not matter whether the policy did not adversely affect all employees over 40.”

The ruling creates a split in the circuit courts, which could lead to a more formal review by the Supreme Court. In the near term, Miller believes the case may be reheard en banc, but with Chief Judge D. Brooks Smith writing the decision, it may weigh against a rehearing.

“In the short term, the decision may lead to the defendant-employer petitioning the Third Circuit to re-hear the case en banc, meaning every judge on the Third Circuit would have a chance to weigh in,” Miller said. “The Karlo decision was only decided by a panel of three judges on the Third Circuit. However, there is less of a chance of an en banc hearing when no judge on the panel has dissented, as is the case here.”

Miller thinks it's more likely that attorneys will push courts to adopt this decision, instead of plaintiffs trying to get more favorable rulings in age discrimination cases in the Third Circuit. 

“I think the more likely result is that in cases throughout the country where this type of claim is not yet recognized, you will see a greater push by plaintiffs’ attorneys to argue that their circuits should adopt the rationale behind the Third Circuit’s decision, and they will be able to cite to the Karlo decision for support," he said.

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