Georgia County Government - October 2008 - (Page 49)

CountiesandtheLaw U.S. Supreme Court Places Greater Burden on Employers Defending Age Claims By Benton J. Mathis, Jr. and Kelly E. Morrison Freeman, Mathis & Gary, LLP he U.S. Supreme Court recently held in Meacham v. Knolls Atomic Power Laboratory, 128 S.Ct. 2395, 2406 (2008), that an employer seeking to defend a disparate impact claim under the Age Discrimination in Employment Act (ADEA) with the defense that its decision was based upon a Reasonable Factor Other Than Age (RFOA) has the burden of proving that the factors used in making the decision were reasonable. This ruling carries significant implications for employers, exposing them to greater risk of liability under the ADEA when decisions are made to reorganize or reduce their workforces. T Facts of the Case and Procedural History Meacham arose from a common employment scenario—a reduction in force (RIF) due to poor economic conditions. Knolls Atomic Power Laboratory, a designer of systems used in nuclearpowered warships by the U.S. Navy, was forced to cut its budget in the mid-1990s, due to significantly lower demand for its services. When an initial round of voluntary job reductions failed to trim the workforce by the targeted percentage, the company implemented an “involuntary reduction in force” program. The RIF program used a matrix method to rank employees using objective factors such as years of service, as well as subjective factors such as performance, flexibility and critical thinking skills. Knolls Atomic then selected the employees with the lowest scores and eliminated their jobs. Interestingly, before doing so, the company conducted a disparate impact analysis, considering the factors of race and gender, but not age. As a result, 30 of the 31 employees laid off were over the age of 40, and thus protected by the ADEA. Twenty-eight of those 30 workers eventually fi led suit against Knolls Atomic, claiming both disparate treatment and disparate impact in violation of the ADEA. A jury found for the plaintiffs on the disparate impact claim, awarding them nearly $6 million in damages. Initially, the verdict was affirmed by the Second Circuit Court of Appeals, which found that, even though Knolls Atomic proffered a legitimate business reason for its RIF, the plaintiffs nevertheless could prevail by showing “business necessity,” meaning that Knolls could have utilized an alternative method of designing an RIF with more objective criteria. Knolls then sought certiorari from the U.S. Supreme Court. While that petition was pending, the Supreme Court decided Smith v. City of Jackson, which The ADEA generally prohibits employers from taking any action against employees 40 or older that 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.’ addressed disparate impact cases under the ADEA. As a result, the Supreme Court vacated the verdict in Meacham and remanded the case. On remand, the Second Circuit reversed it holding, finding that the employer need not prove its decision was motivated by business necessity. Instead, under Smith, the employees bore the burden of proving that the factors used by the employer in making their decision were not reasonable. The plaintiffs then petitioned the Supreme Court for certiorari on the ground that the circuits were split regarding which party bore the burden of persuasion on the reasonableness element. The Second Circuit in Meacham assigned the burden to the employees to demonstrate that the factors other than age were unreasonable, but the Ninth Circuit had ruled that the employer bore the burden of proving the reasonableness of the factors used in its decision. The Supreme Court granted certiorari and resolved this split in circuits in favor of the employees. Disparate Impact Claims Under the ADEA The ADEA generally prohibits employers from taking any action against employees 40 or older that 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.” However, the ADEA specifically includes an exception providing that an employer may take action which would otherwise be prohibited due to its disparate impact on older workers, as long as that action COUNTIES AND LAW continued on page 50 OCTOBER 2008 49

Table of Contents for the Digital Edition of Georgia County Government - October 2008

Georgia County Government - October 2008
President's Message
County Matters
South Georgia's Agricultural Heartland Welcomes Economic Diversity, High-Tech Research
What Do You Know About the State's 2008 Constitutional Amendments?
Union County's New Hope Clinic
Counties and the Law: U.S. Supreme Court Increases Burden on Defending Age Claims
Cyber Security Awareness
Are Animal Control Costs Out of Control?
Dave Wills Joins ACCG Staff
Executive DRIVE is the Pinnacle of Gwinnett's Leadership Institute
Preventative Medical Program Succeeds in Chatham County
DCA's Planning & Quality Growth Office Reveals New Regional Planning Approach
Implementation of Georgia's Security & Immigration Compliance Act
The Roundabout: Glynn County's Newest Approach to Traffic Management
Governor Urges Preparation for Digital TV Transition
The Institute for Georgia Environmental Leadership
Wharton Named Program Director for Georgia Centers for Innovation
Army Ranger Turned Police Officer Attends CDP Training
ACCG Staff Attends National Conference of State Legislatures Summit
ACCG Editor, Forsyth County PIO Garner NACIO Awards
GDEcD News: Tourism Grants; Scan-Tech to Expand
Benefit News: GEBCorp Marks Eight Years of Retirement Benefits
Georgia's Courthouses and the American Renaissance
Extension News: Georgia 4-H Impacts Student Achievement, Leadership
Research Center: Best Methods for Creating Ordinances in Your County
CCAP Corner: Walter F. Rosso, Cusseta-Chattahoochee County
NACo News: Association Sponsors 'Green' Competitions
Beth Bradley Joins ACCG Staff
County Parade
Index of Advertising

Georgia County Government - October 2008