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Karlo v. Pittsburgh Glass Works, LLC, Age Discrimination in Employment

In a major decision, the U.S. Court of Appeals for the Third Circuit has held in Karlo v. Pittsburgh Glass Works, LLC, that the Age Discrimination in Employment Act does not permit the victim of a discriminatory policy to be told he has not been wronged because other persons aged 40 or older were preferred. In short, an employer cannot adopt policies that have a profound disparate impact on workers over age 50 or 55, so long as younger individuals within the protected class received sufficiently favorable treatment.

Thus, "the fact that one person in the protected class has lost out to another person in the protected class is...irrelevant, so long as he has lost out because of his age.

This ruling, will significantly impact older employees who are eliminated in employment reductions that disfavor them but do not similarly disfavor all workers over 40. In essence, the ADEA prohibits disparate impact based on age, not merely membership in a protected class of individuals who are over the age of 40.

In the Third Circuit, Karlo was represented by Samuel J. Cordes of Samuel J. Cordes & Associates who argued the case in November 2016. A link to Cordes' oral argument is attached.

The Karlo case means that although the ADEA prohibits age discrimination against all workers 40 and older, an ADEA disparate impact claim can be based on the effects of an employment practice on, for example, workers 50 and older and need not be based on the effects on all workers 40 and older. This is significant because the same employment practice can have an adverse effect on older workers in the protected group but not on younger workers in the protected group.

In an ADEA disparate impact claim, the plaintiff is required to show that a practice adopted by the defendant employer resulted in an adverse impact based on age. The Karlo plaintiffs challenged a reduction in force that resulted in the termination of about 100 employees in more than 40 locations. Unit directors had broad discretion as to whom to select for termination, but they did not receive training on how to implement the RIF.

Critical to the Karlo court's analysis is the fact that the ADEA only prohibits discrimination based on old age, meaning that someone must have been treated worse than a younger individual. Although the ADEA protects all workers 40 and over, it does not, for example, prohibit treating a 60-year-old better than a 45-year-old. Because the ADEA only prohibits older-than discrimination, age is a continuous variable rather than a categorical variable like race or sex. Thus, in an ADEA disparate impact claim, the issue is whether an employment practice generally treats individuals worse as they get older whereas in a disparate impact claim under Title VII of the Civil Rights Act of 1964 the issue is whether an employment practice generally treats individuals belonging to one protected group, such as African Americans, worse than workers belonging to another protected group, such as whites.

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