Hunton Employment & Labor Perspectives

In late January 2019, the Seventh Circuit Court of Appeals ruled that the Age Discrimination in Employment Act (“ADEA”) does not allow outside job applicants to bring disparate impact claims.  The plaintiff in the case, Dale Kleber, an attorney, is now asking the Supreme Court to review that decision.

Facts and Procedural History

In March of 2014, Kleber applied for an in-house Senior Counsel position with Carefusion Corporation.  Carefusion rejected his application because Kleber did not meet the requirement that candidates have “3 to 7 years (no more than 7 years) of relevant legal experience.”  Kleber, 58 years old at the time, had more than 7 years of relevant legal experience.  Of 108 applications, Carefusion interviewed ten candidates, all of whom had fewer than seven years of experience.  The individual hired for the position was twenty-nine years old.

Kleber sued Carefusion under the ADEA, alleging in part that the seven year experience cap had a disparate impact upon workers protected by the ADEA (those age 40 or older).  The district court dismissed Kleber’s disparate impact claim, holding that the ADEA only allowed existing employees, not outside applicants, to bring such claims.  Kleber appealed that holding to the Seventh Circuit Court of Appeals.

In a 2-1 opinion, the Seventh Circuit initially reversed the district court ruling, holding that the disparate impact provision of the ADEA does protect outside applicants.  Carefusion, however, petitioned the court for a rehearing en banc.  On January 23, 2019, the en banc court issued an 8-4 decision holding that Kleber could not, in fact, bring a disparate impact claim as an outside applicant, thereby leaving the district court ruling intact.

Seventh Circuit En Banc Opinion

The en banc opinion focused on the statutory text and construction of the disparate impact provision.  The disparate impact section of the ADEA, 29 U.S.C. § 623(a)(2), makes 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.

Interpreting this section, the majority concluded, “this language plainly demonstrates that the requisite impact must befall an individual with status as an employee.”  Accordingly, Kleber could not sustain a disparate impact claim because, as an outside applicant, he had “no status as an employee.”  Of note, three years prior, the Eleventh Circuit Court of Appeals drew the same conclusion when faced with similar facts in the case of Villareal v. R.J. Reynolds Tobacco Co., 839 F.3d 958 (11th Cir. 2016).

Petition For Certiorari

In late April, Kleber asked the Supreme Court to review the Seventh Circuit opinion.  In his Petition for Certiorari, Kleber’s primary argument is that the Supreme Court, in Griggs v. Duke Power Co., 401 U.S. 424 (1971), held that Title VII’s disparate impact section, which, at the time, was identical to the current ADEA language, extended to both employees and job applicants.  The Seventh Circuit had dismissed this argument, reasoning that Griggs did not explicitly extend the protection to outside applicants.  The Seventh Circuit also found persuasive that Congress amended Title VII one year after Griggs to expressly include “applicants for employment,” suggesting that the statute did not cover such applicants prior to Griggs.  Kleber claims that the Title VII amendment merely codified existing law at the time.

It remains to be seen whether the Supreme Court will grant certiorari.  On the one hand, the case involves an alleged misapplication of prior Supreme Court precedent (Griggs), suggesting the Court may grant certiorari to provide clarity.  On the other hand, there is no circuit split; both the Seventh and Eleventh Circuits have issued consistent rulings, and the Supreme Court denied certiorari in June 2017 when the plaintiff in Villareal asked the justices to review the Eleventh Circuit’s opinion.

Takeaway

For now, employers, particularly those within the Seventh and Eleventh Circuits, have sufficient precedent to ask courts to dismiss outside job applicants’ ADEA disparate impact claims.  It should be noted, however, that disparate impact claims could remain viable under state and local anti-discrimination statutes because those statutes do not always track ADEA case law.  And there are growing calls for Congress to amend the ADEA to explicitly include job applicants within the scope of individuals protected, as Congress did with Title VII in 1972.