PHILADELPHIA – A Jan. 10 ruling entered by the U.S. Court of Appeals for the Third Circuit may set a precedent that requires employers to do their legal homework before deciding just which employee groups to target during a reduction in force.
The case centers around a lawsuit filed by a group of former Pittsburgh Glass Works employees who were terminated as part of a reduction in force in 2009. All of the plaintiffs were older than 50 years old when they were fired.
In their complaint, the former employees alleged that they should be protected under the Age Discrimination in Employment Act, which was written to cover employees who are at least 40 years old.
The former Pittsburgh Glass employees initially took their employment discrimination claims to the Equal Employment Opportunity Commission. According to the Third Circuit ruling, the plaintiffs’ claims were dismissed by the EEOC, so they filed the lawsuit.
The Third Circuit said the question that arose in the Pittsburgh Glass case was whether a disparate-impact claim applies “where a subgroup of employees at the upper end of that range – in this case, employees aged 50 and older – were alleged to have been disfavored relative to younger employees.”
“The ADEA prohibits disparate impacts based on age, not 40-and-older identity,” the Third Circuit said in its opinion.
In addition, the Third Circuit’s opinion said “a rule that disallowed subgroups would ignore genuine statistical disparities that could otherwise be actionable through application of the plain text of the statute.”
Jeremy Farrell of Tucker Arensberg wrote that other federal appellate courts held in the past that ADEA claims like the ones filed by the Pittsburgh Glass employees “could not stand under the law.”
“The Third Circuit disagreed,” Farrell wrote. “It held that a subgroup of employees at the upper end of the age range protected by the ADEA could bring a claim where they were allegedly disfavored relative to younger employees (even where the favored employees are also within the ADEA protected class).”
The Third Circuit ruling remands the Pittsburgh Glass case back to the district court for trial.Farrell said in his jdsupra.com article that the Third Circuit ruling will impact employers who are facing similar circumstances.
According to Farrell’s piece on the case, “companies, particularly those in the area covered by the Third Circuit, should review their policies to confirm they do not unintentionally and disproportionately impact employees who are in subgroups over 40 years old and should consult a lawyer before carrying out a significant RIF that could affect a certain group older workers.”