Disparate Impact Does Not Protect Job Applicants

Disparate Impact Does Not Protect Job Applicants

On October 5, 2016, the Eleventh Circuit held in Villarreal v. R.J. Reynolds Tobacco Co., that an unsuccessful job applicant cannot sue a prospective employer under the Age Discrimination in Employment Act (ADEA) for a disparate impact claim.  In so holding, the Eleventh Circuit reverses its November 30, 2015 decision holding the opposite.

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The ADEA generally protects employees aged 40 and older from discrimination in employment on the basis of their age.  A job applicant who is denied employment because of a practice that is discriminatory on its face, can sue under the ADEA under a disparate treatment claim, by proving that the employer acted with the intent of discriminating against the job applicant.  However, Villarreal now forecloses the possibility that an applicant can state an ADEA claim against a practice that, while not discriminatory on its face, has the effect of disproportionately discriminating against persons aged 40 and older.

The 49-year-old plaintiff in Villarreal applied online with R.J. Reynolds for the position of a territory manager and was screened out by a recruiting contractor under R.J. Reynolds’ guidelines which provided that a “targeted candidate” was someone only “2-3 years out of college” and to “stay away from” an applicant who had been “in sales for 8-10 years.”  After receiving no response to his first application, the plaintiff applied five more times over the next two years and was rejected each time.  The plaintiff filed a collective action on behalf of all job applicants aged 40 and older who were rejected for the position of territory manager.  R.J. Reynolds moved to dismiss plaintiff’s disparate impact claim on the basis that it was not statutorily authorized under the ADEA.  The district court dismissed the claim, finding that the ADEA only authorized disparate impact claims by employees, not applicants.

Section 4(a)(2) of the ADEA authorizes disparate impact claims by making it “unlawful for an employer….to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.”  The Eleventh Circuit found that this language was unambiguous in protecting an individual only if he had the status of an employee.  The court further noted that, unlike Section 4(a)(2), other provisions of the Act expressly referred to “applicant(s) for employment” or prohibited the practice of “fail(ing) or refus(ing) to hire” on the basis of age.  No language referring to applicants or the hiring process appears in Section 4(a)(2).  In finding the statute unambiguous, the Eleventh Circuit refused to defer to the Equal Employment Opportunity Commission’s (EEOC) interpretation of the Act, construing Section 4(a)(2) as allowing disparate impact claims to applicants.

The Eleventh Circuit’s decision is significant.  Just last year, it held that Section 4(a)(2) was ambiguous and deferred to the EEOC’s interpretation in finding that applicants could state disparate impact claims under the ADEA.   That ruling created a split among circuit courts.

The Villarreal decision relieves employers of some of the burden and expense of defending against disparate impact claims, which often involve broad discovery and costly statistical evidence to prove impact without the need of establishing a discriminatory motive.  However, it remains true that job applicants can still assert disparate treatment claims under the ADEA.   Employers are encouraged to periodically review their employment policies to make sure that the policies are facially neutral and applied uniformly.

Contributor:  Daniel C. Zamora, Attorney at Law  |  Weintraub Tobin