Unless you just emerged from a cryogenic chamber, it’s been hard to escape the attention being focused on the challenges that our aging workforce presents for the future of American business. For some time now, forward-thinking people have been concerned about the implications of the graying of the workforce.

Of course, in these litigious times, age-discrimination concerns are at the forefront whenever employers are recruiting, retaining, and reducing their workforce, and some recent rulings add an exclamation point to all this.

Indeed, the U.S. Supreme Court put age discrimination on the front burner during its recently concluded term by deciding five cases involving the Age Discrimination and Employment Act (ADEA), the federal statute that prohibits workplace discrimination against workers over 40 years of age. One of these cases deals with a claim of what is known as ‘unintentional age discrimination’ during a workforce reduction, and it could impact all employers.

Clifford Meacham and 30 of his co-workers became casualties of the Cold War’s end when they were laid off by defense contractor Knolls Atomic Laboratory during a company-wide reduction in force (RIF) brought about by a decline in U.S. Navy orders.

The workers were selected for layoff based on supervisory rankings of performance (their last two performance reviews), flexibility (how easily they could be retrained and their skills transferred), and critical skills (how key their skills are to Knolls’ operation). Of the 31 employees laid off, 30 were more than 40 years old. Ultimately, 28 of the laid-off workers sued Knolls, claiming that the layoff selection process violated the ADEA because it had a discriminatory impact upon older workers.

Knolls’ defense was that performance, flexibility, and critical skills are each a “reasonable factor other than age” (RFOA). A reasonable factor is one rationally related to a legitimate business goal. The ADEA contains the RFOA defense to shield employers from liability when they make employment decisions based on reasonable, non-age-related factors even if those decisions disproportionately impact older workers. This defense is particularly important to employers in RIF situations because many layoffs disproportionately impact older workers.

At the trial, an expert told the jury that the layoffs were so statistically skewed against older workers that they couldn’t be explained unless age played some factor. Knolls maintained that age played no part in its layoff decisions, and that the selection process, while somewhat subjective, was reasonable. The jury didn’t buy it, and sided with the workers. After Knolls successfully appealed, Meacham and his co-workers appealed to the Supreme Court.

The court overturned the decision for Knolls because it ruled that the burden of proving the RFOA defense was on Knolls and not the workers. It said that the ADEA requires an employer to prove that its employment decisions are both reasonable and non-age-related, rather than requiring the employee to disprove it. So the case was sent back down to the lower court to decide if Knolls had presented enough to prove that its layoff selection process was non-discriminatory against older workers.

What can employers take away from all this?

Intentional discrimination claims are generally easier to avoid than unintentional discrimination (disparate impact) claims, which is what Knolls had to defend against. To reduce the risk of unintentional age-discrimination claims, employers should:

• Train their managers to be sensitive to older-worker issues;
• Review policies (such as those involving re-employment testing, hiring, promotion, pay raises, severance, and early retirement) to make sure they have a legitimate business purpose;
• Scrutinize policies and practices for age discrimination with an attorney so that the review will be confidential;
• Make sure that the reasons for any policies or practices that impact older workers make sense so that they can be explained in court; and
• Carefully document the reasons for any action that impacts older workers so that it is clear why the action is necessary.

Tim Murphy and Tim Cavazza are attorneys with the Springfield-based firm Skoler, Abbott & Presser, P.C., and specialize in labor and employment law. The firm exclusively represents the interests of employers and management in labor and employment matters; (413) 737-4753.