EEOC Issues Rule Amending Its ADEA Regulation

Final rule discusses the regulation's RFOA defense and its impact on disparate treatment and disparate impact claims.

On March 30, the EEOC issued a final rule amending its Age Discrimination in Employment Act (ADEA) regulation, 29 C.F.R. § 1625.7, regarding the "reasonable factor other than age" (RFOA) defense and its application to disparate treatment and disparate impact claims under the ADEA. 62 Fed. Reg. 19,080 (Mar. 30, 2012). The amended regulation confirms that (1) the plaintiff bears the burden of "isolating and identifying the specific employment practice" that allegedly causes any observed statistical disparities, and (2) the employer bears the burdens of production and persuasion to demonstrate the RFOA defense. 29 C.F.R. § 1625.7(c), (d). The regulation also attempts to clarify what constitutes a "reasonable factor other than age," and provides a nonexhaustive list of considerations that are relevant in determining whether a practice is based on a reasonable factor other than age. 29 C.F.R. § 1625.7(e).

Although the regulation contains provisions that will assist employers in defending ADEA actions, the text of the regulation and its preamble contain ambiguities that may make the RFOA defense more difficult to prove and that are likely to increase the amount and cost of ADEA disparate treatment litigation. At a minimum, the preamble serves as forewarning that the EEOC interprets the statute in a manner that will likely significantly impact employers' policies and practices.

Potential Issues Raised by the Final Rule and Its Preamble

As an initial matter, consistent with Supreme Court precedent, the regulation confirms that the plaintiff bears the burden of "isolating and identifying the specific employment practice" that causes the alleged disparate impact. As the Supreme Court has stated, this "is not a trivial burden" and, if applied correctly, it should serve to limit disparate impact litigation. However, there is nothing in the regulation beyond this acknowledgement of binding caselaw that "clarifies" the RFOA defense. Rather, there are a number of ambiguities in the regulation and its preamble that plaintiffs' lawyers may attempt to exploit in an effort to reach a jury on whether factors are "reasonable."

First, the regulation defines a "reasonable factor" as one that is "objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances." On...