Layoff Plan That Impacts Older Workers a Violation of ADEA

August 26, 2004 ( - A layoff plan that had a discriminatory impact on older workers is a violation of the Age Discrimination in Employment Act (ADEA).

>The US 2 nd Circuit Court of Appeals found that even though a New York company did not intend to discriminate when it announced layoffs, the facially neutral policy had a discriminatory impact and that the company could have accomplished its goals by a different, non-discriminatory method. With the ruling, the appellate court upheld jury verdict findings that the layoffs amounted to age discrimination, according to a New York Law Journal report.

>The plaintiffs contend Knolls Atomic Power Laboratory (KAPL), a subsidiary of Lockheed Martin Corp violated the ADEA when it laid off 31 people, 30 of which were over the age of 40.   Overall, 26 of the 30 laid off workers went to trial.   Seventeen affected workers were awarded a total of $4.2 million in damages plus nearly $1 million in attorney fees and costs.

KAPL appealed the trial court’s decisions, arguing ADEA does not allow   disparate impact claims, citing the US Supreme Court’s decision in Hazen Paper Co. v. Biggins.   Biggins dealt with a claim of disparate treatment, which involves the proof of intentional discrimination.

In the 2 nd Circuits’ opinion, Judge Rosemary Pooler said while Hazen Paper held an “employer may lawfully discriminate based on factors closely correlated with age,” the Supreme Court ruled “ that it had not resolved the viability of ADEA disparate impact claims.”

“The Supreme Court’s express statement contradicts any claim that Hazen Paper expressly or implicitly overruled our prior precedent. And the Supreme Court’s dicta do not outweigh prior circuit authority,” Pooler said. “Of course, decisions of other circuits do not expressly or implicitly overrule our prior cases. Therefore we reject KAPL’s contention that disparate impact claims are not permissible under the ADEA.”

Pooler noted that the Supreme Court is likely to resolve the issue next term in Smith v. City of Jackson , where the 5th Circuit held that the disparate impact theory of recovery is not available in age discrimination cases.

The current case is Meacham v. Knolls Atomic Power Laboratory , 02-7378.