On March 29 The U.S. Equal Employment Opportunity Commission (EEOC) issued the "Final Regulation on Disparate Impact and Reasonable Factors Other than Age" (RFOA) under the Age Discrimination in Employment Act of 1967 (ADEA). The final rule clarifies the EEOC's position that the ADEA prohibits policies and practices that have the effect of harming older individuals more than younger individuals, unless the employer can show that the policy or practice is based on a reasonable factor other than age.
The rule responds to two Supreme Court decisions in which the Court criticized one part of the EEOC's existing ADEA regulations. The Court upheld EEOC’s longstanding position that the ADEA prohibits policies and practices that have the effect of harming older individuals more than younger individuals, even if the harm was not intentional. However, it disagreed with the part of the regulations that said that, if an employee proved in court that an employment practice disproportionately harmed older workers, the employer had to justify it as a “business necessity.” The Court said that, in an ADEA disparate impact case, the employer did not have to prove business necessity; it need only prove that the practice was based on an RFOA. The Court also said that the RFOA defense is easier to prove than the business necessity defense but did not otherwise explain RFOA.
In issuing the new rule, the EEOC tried to make its regulations consistent with the Supreme Court’s holding that the defense to an ADEA disparate impact claim is RFOA, and not business necessity. For a more-detailed explanation of the regulations, check out the EEOC's Questions and Answers on EEOC Final Rule on Disparate Impact and “Reasonable Factors Other Than Age” Under the Age Discrimination in Employment Act of 1967.