601EStreet,NW T 202-434-2277 Washington,DC20049 1-888-0UR-AARP 1-888-687-2277 TTY 1-877-434-7598 www.aarp.org May 29,2008 Stephen Llewellyn, Executive Officer Executive Secretariat Equal Employment Opportunity Commission 1801 L Street, N.W. Washington, DC 20507 Re: Notice of Proposed Rulemaking on Disparate Impact Under the Age Discrimination in Employment Act Dear Mr. Llewellyn: These comments are submitted on behalf of AARP. AARP is a nonpartisan, nonprofit membership organization of people age 50 or older dedicated to addressing the needs and interests of older Americans. AARP supports the rights of older workers and strives to preserve the legal means to enforce them. Approximately one half of AARP's nearly40 millionmembersarein theworkforce,mostof whomareprotectedby theAge Discrimination in Employment Act (ADEA), 29 U.S.c. §§ 621-634, Title VII, and other employment laws. Vigorous enforcement of these and other work place civil rights laws is of paramount importance to AARP, its working members, and the millions of other workers of all ages who rely on them to deter and remedy illegal employment discrimination. AARP supports the EEOC's use of its legislative rulemaking authority under section 9 of the ADEA, 29 U.S.C. § 628, to amend its regulations to reflect the holding in Smithv. CityofJackson,Mississippi,544U.S.228 (2005)andtofurtherclarifythe standards for disparate impact claims under the ADEA. AARP believes that the proposed regulations generally establish fair, workable and clear guidelines for employers and employees and should be adopted in final form. 1. Proposed Revision to Current Paral!raph 1625.7(d) The Commission proposes to revise the current paragraph 1625.7(d) to state that "an employment practice that has an adverse impact on individuals within the protected age group on the basis of older age is discriminatory unless the practice is justified by a 'reasonable factor other than age' (RFOA)." The Commission correctly explains that this revisioncomportswiththe SupremeCourt'sholdingin Smithv. CityofJackson, Mississippi, in which the Court stated: "It is. . . in cases involving disparate-impact claimsthat theRFOAprovisionplaysits principalroleby precludingliabilityif the Jennie Chin Hansen, President HEALTH/FINANCES/CONNECTING/GIVING/ENJOYING WilliamD.Novelli,ChiefExecutiveOfficer adverse impact was attributable to a nonage factor that was 'reasonable. '" 544 U.S. 228, 240 (2005). The Commission's proposed revision also complies with Congress' directives as expressed by the ADEA. The ADEA generally prohibits discrimination through facially neutral practices that adversely impact older workers, with the RFOA provision determining whether such discrimination is arbitrary or may be excused. The prefatory language of the RFOA provision "to take any action otherwise prohibited" designates the RFOA provision as a defensive response to a violation of the statute's prohibitions. The "factor other than" criterion of the defense indicates that the violation involves a non-age factor that causes discrimination because of age, i.e., a disparate impact claim. 2. Proposed Revision to Current Para2raph 1625.7(e) AARP agrees with the Commission's longstanding position that the RFOA provision creates an affirmative defense for which the employer bears the burden of proof. Therefore, AARP strongly supports the Commission's proposed revision to current paragraph 1625.7(e) to state that, "when the RFOA exception is raised, the employer has the burden of showing that a reasonable factor other than age exists factually." As the Commission correctly recognizes, the statutory language, as well as the placement ofthe RFOA provision with the other affirmative defenses in ADEA section 4(t)(1), 29 U.S.C. § 623(t)(1), strongly support the conclusion that the RFOA provision is also an affirmative defense. The prefatory language of the RFOA provision -"to take anyactionotherwiseprohibited"-demonstratesCongress'intentthattheRFOA provision be an affirmative defense to a violation of the statute's prohibitions. In addition, the placement ofthe RFOA provision contiguous to the ADEA's other affirmative defenses! provides further strong support for the conclusion that the RFOA provision creates an affirmative defense. Finally, requiring plaintiffs who have already "isolate[ed] and identifIied] the specific employment practice [ ]" that had a disproportionately adverse impact on older workers, Smith, 544 U.S. at 241, to carry the additional burden of proving the absence of reasonable factors other than age would be extremely detrimental to age discrimination victims, since employers could easily articulate "other factors" without being obligated to prove them. As a result, bringing a disparate impact claim would become an exercise in Congress placed the RFOA provision between the ADEA's bona fide occupational qualification (BFOQ) provision and the foreign workplace defense. Both of these provisions are undisputedly affirmative defenses. See WesternAir Lines, Inc. v. Criswell, 472 U.S. 400, 416 n.24 (1985) (describing the employer's burden in establishing the BFOQ defense) and Mahoney v. Radio Free Europe/Radio Liberty, Inc., 818 F. Supp. 1, 4 (D.D.C. 1992), rev'd on other grounds, 47 F. 3d 447 (D.C. Cir. 1995) (construing foreign employee provision as an affirmative defense). 2 futility, as it has proven to be in the years since the Smith decision, with the vast majority of courts placing the burden of proof on the plaintiffs.2 3. The Commission Should Provide Further Re2ulatorv Guidance Re2ardin2 the Meanin2 of "Reasonable Factor other than A2e." AARP urges the Commission to issue regulations which provide more guidance and information on the meaning of "reasonable factors other than age." The Supreme Court did not provide an explicit definition of "reasonable" in Smith v. City of Jackson, Mississippi, 544 U.S. 228 (2005). The term "reasonable," however, must be given effece and should not be a superficial standard readily satisfied by any explanation proffered by an employer. In Smith, the Supreme Court compared the ADEA's "reasonable factors other than age" provision with the Equal Pay Act (EPA) provision that precludes liability "ifapaydifferentialwasbased'onanyotherfactor' -reasonableorunreasonable," 544 U.S. at 239. The Court concluded, "The fact that Congress provided that employers could use only reasonable factors in defending a suit under the ADEA is therefore instructive." Id. (emphasis in original). In other words, while "the scope of disparate- impact liability under the ADEA is narrower than under Title VII," id. at 240, Congress did not intend for the "reasonable factor other than age" provision to grant employers a free pass to justify conduct that adversely impacts older workers. See Watson v. Fort WorthBank & Trust, 487 U.S. 977, 1011 (J. Blackmun, concurring) ("Allowing an employer to escape liability simply by articulating vague, inoffensive-sounding subjective criteria would disserve [the ADEA's] goal of eradicating discrimination in employment. . .Such a rule would encourage employers to abandon attempts to construct selection mechanisms subject to neutral application for the shelter of vague generalities.") (footnote omitted). AARP urges the Commission to propose regulations that state that the "reasonable" qualifier of the RFOA defense requires employers to prove that the neutral employment practice is not in any way related to age, but instead is job or performance- related. A requirement that a "reasonable factor other than age" may not be related to age complies with the Court's directive in Smith that liability under the ADEA is precluded "if the adverse impact was attributable to a nonage factor. . . ." 544 U.S. at 239 (emphasis added). For example, a requirement that employees must pass a physical examination after reaching a certain age to continue in employment should not escape liability under the ADEA as a "reasonable factor other than age" because that factor is based directly on age. EEOC v. Massachusetts, 987 F.2d 64, 73 (1st Cir. 1993). See also EEOCv.Johnson&Higgins,Inc., 91F.3d 1529,1541(2d Cir. 1996)("Theplain language of § 623(f)(1) makes it clear that an employer has a defense ifhis policy is based on reasonable factors 'other than age,' not ifthe policy is reasonably based on 2 See, e.g., Pippin v. Burlington Resources Oil and Gas Co., 440 F.3d 1186, 1200 (10th Cir. 2006); Meacham v. Knolls Atomic Power Laboratory, 461 F.3d 134, 139 (2d Cir. 2006). 3 See United States v. Menasche, 348 U.S. 528, 539-40 (1955) (describing a court's duty to give effect to every clause and word of a statute). 3 age."). Nor should a factor that includes an age component qualify as a "reasonable factor other than age." In EEOC v. Local 350, Plumbers & Pipefitters, 998 F.2d 641,648 (9th Cir. 1992), the Ninth Circuit correctly rejected c;l"reasonable factor other than age" defense to a union hiring policy that required retirees to stop receiving pension benefits, where receipt of such benefits was conditioned on age. Indeed, pension eligibility should not qualify as a "reasonable factor other than age" because it almost always includes age as an element of eligibility. See, e.g., EEOC v. City of Altoona, 723 F.2d 4, 6 (3d Cir. 1983). Second, the language of ADEA section 4(f)(1), 29 U.S.C. § 623(f)(1), requires that the "factors other than age" must be "reasonable." While neither the statute nor its legislative history provides a definition of the term "reasonable," the context of the RFOA provision suggests that the term "reasonable" imposes a requirement that the factor be related to an individual's ability to do the job. See Smith, 544 U.S. at 240 ("Congress' decision to limit the coverage of the ADEA by including the RFOA provision is consistent with the fact that age. . . not uncommonly has relevance to an individual's capacity to engage in certain types of employment.") (emphasis added). The Commission's current regulation that affirms the longstanding Department of Labor (DOL) regulations interpreting the RFOA provision, 29 C.F.R. § 1625.7(d) (2004), § 860.103(f)(I)(i) (1970), clearly and correctly sets forth ajob-related standard for determining whether factors other than age upon which an employer acted were reasonable. Reflecting the findings ofthe Wirtz Report,4which documented how employers had commonly and unjustifiably used fitness requirements to restrict the hiring of older workers, the current regulation interprets the RFOA defense to permit fitness requirements only if "such standards are reasonably necessary for the specific work to be performed and are uniformly and equally applied to all applicants for the particular job category, regardless of age." 29 e.F.R. § 860.103(f)(I)(i) (1970). The defense would not, however, justify "an employer's assumption that every employee over a certain age in a particular type of job usually becomes physically unable to perform. . . ." Both the Wirtz Report and the DOL regulations support the notion that physical fitness standards are not a "reasonable factor other than age" unless such standards are related to the employee's ability to perform the job. Construing "reasonable factor" to mean "job-related" is also recommended by the relationship between the ADEA's RFOA provision and the companion "bona fide occupational qualification" (BFOQ) defense. Immediately preceding the "reasonable factors other than age" language, Congress used the term "reasonably necessary" to describe the relationship between a "bona fide occupational qualification" and the "normal operation of the particular business." 29 U.Se. § 623(f)(1). The BFOQ defense focuses on the employee's ability to perform ajob. UAWv. Johnson Controls, Inc., 499 U.S. Dept' of Labor, The Older American Worker: Age Discrimination in Employment, Report of the Secretary of Labor to the Congress Under Section 715 of the Civil Rights Act of 1964 (1965). . 4 U.S. 187,201 (1991). Congress' use ofthe almost identical term in the next sentence following the BFOQ defense demonstrates that it intended the term "reasonable factors" to mean factors related to the job requirements or job performance. The absence ofthe term "necessary" from the RFOA language in § 623(f)(1) should be interpreted by the Commission to imply that although the employer is not compelled to use the factors it chose,s the employer's justification should be more than mere rationality, but less than absolute necessity. Accordingly, AARP urges the Commission to adopt the position it took as amicus curiae in Meacham v. Knolls Atomic Power Laboratory, that the holding in Smith "did not mean that the existence of other alternatives is irrelevant." Instead, "to the extent that a plaintiff could show that there are other equally effective ways, at comparable cost, of achieving the employer's stated goals with less disparate impact on older employees, that [sh]ould bear on the reasonableness of the employer's choice." Even the standard for the employer's response to a disparate impact claim set forth in Wards Cove Packing Co. v. Antonio, 490 U.S. 642 (1989), imposed a burden on the employer that was greater than merely articulating a legitimate, business reason. Under Wards Cove, the employer must show that "a challenged practice serves, in a significant way, the legitimate employment goals ofthe employer." Id. at 659. As the Supreme Court explained in Wards Cove: The touchstone ofthis inquiry is a reasoned view ofthe employer's justification for his use of the challenged practice. A mere insubstantial justification in this regard will not suffice, because such a low standard of review would permit discrimination to be practiced through the use of spurious, seemingly neutral employment practices. At the same time, though, there is no requirement that the challenged practice be "essential" or "indispensable" to the employer's business for it to pass muster: this degree of scrutiny would be almost impossible for most employers to meet !d. Requiring employers to justify a practice as job-related insures that the criteria relate to the individual's ability to do the job. A showing that a practice is a "reasonable factor other than age" must include a demonstration that the criteria are not arbitrary, but instead are fair and reasonable. Proofby the employer of a substantial business purpose for using the factor could establish that the decision was "fair, proper, just, moderate, [or] suitable under the circumstances." BLACKS'LAWDICTIONARY, at 1138. On the other 5 This would comport with Smith's directive that, "[u]nlike the business necessity test, which asks whether there are other ways for the employer to achieve its goals that do not result in a disparate impact on a protected class, the reasonableness inquiry includes no such requirement," 544 U.S. at 243. 5 hand, if older workers can show that a neutral practice disproportionately disadvantages them, the practice should be scrutinized under the objective standard of job-relatedness. 4. Conclusion AARP strongly supports the EEOC's proposed regulations concerning disparate impact claims under the ADEA and the Commission's intent to supplement those regulations with additional guidance as to what factors are relevant in determining whether or not a "factor other than age" is "reasonable." Accordingly, AARP urges the Commission to proceed expeditiously to analyze the comments received and to issue final regulations consistent with the purposes ofthe ADEA. If you have further questions or need additional information, please feel ftee to contact Daniel Kohrman of the AARP Foundation at 202-434-2064. Respectfully submitted, David Certner Legislative Counsel and Legislative Policy Director Government Relations and Advocacy 6