High Court Shifts Burden of Proof in Age Bias Suits

June 19, 2008 (PLANSPONSOR.com) - A U.S. Supreme Court ruling will make it harder and costlier for employers to defend themselves against age bias claims.

In a 7-1 (1) ruling, the court said that when older workers are disproportionately affected by an employment decision, the employer bears the burden of explaining whether there was a reasonable explanation other than age for the company’s action. Justice David Souter acknowledged in the majority opinion that the decision “makes it harder and costlier to defend” age discrimination lawsuits, but said, “We have to read it the way Congress wrote it,” according to the Associated Press.

The Knolls Atomic Power Laboratory in upstate New York had to reduce the number of employees in the mid-1990s following the end of the Cold War. Even after roughly 100 employees took buyouts, the lab still needed to eliminate jobs, the AP explained.

The older workers who were laid off filed a lawsuit claiming both that the company intended to discriminate on the basis of age and that the results of the layoffs were discriminatory. A jury found for the lab that there was no proof of discriminatory intent, but decided there was age discrimination in the effect of the layoffs.

The 2nd U.S. Circuit Court of Appeals ruled for Knolls in the case.

(1) Justice Stephen Breyer did not take part in the case. He owns between $100,000 and $250,000 in State Street Corp. common stock, according to the AP, citing his 2008 financial disclosure report. State Street owns more than 18% of Lockheed Martin Corp., which owns the lab.