In the April 12, 2010 edition of Legal News: Employment Law Update, we analyzed a proposed EEOC rule addressing the “reasonable factors other than age” (RFOA) defense to age discrimination claims. This proposed rule has now been issued as a final regulation and is currently in effect.The new regulation does two things. First, it codifies the RFOA defense for age discrimination claims. The Age Discrimination in Employment Act prohibits (1) intentional discrimination against employees who are 40 years of age or older (known as “disparate treatment”); and (2) practices that, although facially neutral with regard to age, have the effect of disproportionately harming workers 40 years of age or older (known as “disparate impact”). Previously, the EEOC had taken the position that an employer must establish that a challenged practice was consistent with “business necessity” to justify a disparate impact on older workers. However, two U.S. Supreme Court decisions held that an employer need only prove that the challenged practice was based on an RFOA — a standard easier for employers to meet than the business necessity standard. An employment practice is based on an RFOA if it was reasonably designed and administered to achieve a legitimate business goal. The new rule incorporates the RFOA defense.
Second, the new rule lists several considerations relevant to assessing the reasonableness of the factors other than age, including:
The EEOC has issued a “Questions and Answers” guidance document providing more detailed explanations of how an employer can establish an RFOA for a challenged employment practice under on each of these individual considerations. Based on these explanations, an employer should consider taking the following steps to increase the likelihood that the employer could successfully assert an RFOA:
In addition, although the guidance document emphasized that documentation of these efforts is not required to establish an RFOA, it would be a good practice for employers to maintain records of their efforts in case the need to defend a particular employment practice arises.