()

The U.S. Court of Appeals for the Third Circuit said that employers can be taken to court for policies that meant to protect employees 40 or older that inadvertently hurt those in other age subgroups, such as those in their 50s.

The court ruled Tuesday that subgroups’ disparate impact claims are recognized under the Age Discrimination in Employment Act in a case brought by former Pittsburgh Glass Works employees in their 50s who filed an age discrimination class action.

The workers in Karlo v. Pittsburgh Glass Works claimed to have identified a practice at the glassworks that disproportionately impacted employees 50 and over in favor of those in their 40s. The disparate impact claims was denied by the district court, but the Third Circuit reversed the ruling and held that their claims were valid under the ADEA.

Chief Judge D. Brooks Smith wrote in the court’s opinion the ADEA made provisions to address policies that are “fair in form, but discriminatory in operation,” such as in an instance where employees in their 50s can be replaced with employees in their 40s, who while younger are protected by the ADEA. He pointed to the 1996 U.S. Supreme Court case of O’Connor v. Consolidated Coin Caterers to show that the ADEA prohibits age discrimination as a whole, not just 40-and-over discrimination.

Cited in Brooks’ opinion, the high court said the act “does not ban discrimination against employees because they are aged 40 or older; it bans discrimination against employees because of their age, but limits the protected class to those who are 40 or older. The fact that one person in the protected class has lost out to another person in the protected class is thus irrelevant, so long as he has lost out because of his age.”

In keeping with the high court’s reasoning, Brooks said, “We conclude that the Supreme Court’s analysis in O’Connor answers the question now before us. A specific, facially neutral policy that significantly disfavors employees over 50 years old supports a claim of disparate impact. … Although the employer’s policy might favor younger members of the 40-and-over cohort, that is an ‘utterly irrelevant factor’ in evaluating whether a company’s oldest employees were disproportionately affected because of their age.”

The class members’ attorney, Samuel J. Cordes of Samuel J. Cordes & Associates in Pittsburgh, said the Third Circuit’s ruling created a circuit split on the contentious issue of disparate impact with at least three other courts.

“Before the Third Circuit [ruling], every other circuit said the other thing,” Cordes said. He added that it remains to be seen whether that ruling will be challenged in the Supreme Court.

“I don’t know whether the Supreme Court takes it or not, but I don’t think the statutory interpretation Judge Smith did provides a lot of fodder for the Supreme Court,” Cordes said.

David S. Becker of Freeborn & Peters in Chicago represented PGW and said he was unsure as to whether he was authorized to comment.

P.J. D’Annunzio can be contacted at ­215-557-2315 or pdannunzio@alm.com. Follow him on Twitter @PJDannunzioTLI.

The U.S. Court of Appeals for the Third Circuit said that employers can be taken to court for policies that meant to protect employees 40 or older that inadvertently hurt those in other age subgroups, such as those in their 50s.

The court ruled Tuesday that subgroups’ disparate impact claims are recognized under the Age Discrimination in Employment Act in a case brought by former Pittsburgh Glass Works employees in their 50s who filed an age discrimination class action.

The workers in Karlo v. Pittsburgh Glass Works claimed to have identified a practice at the glassworks that disproportionately impacted employees 50 and over in favor of those in their 40s. The disparate impact claims was denied by the district court, but the Third Circuit reversed the ruling and held that their claims were valid under the ADEA.

Chief Judge D. Brooks Smith wrote in the court’s opinion the ADEA made provisions to address policies that are “fair in form, but discriminatory in operation,” such as in an instance where employees in their 50s can be replaced with employees in their 40s, who while younger are protected by the ADEA. He pointed to the 1996 U.S. Supreme Court case of O’Connor v. Consolidated Coin Caterers to show that the ADEA prohibits age discrimination as a whole, not just 40-and-over discrimination.

Cited in Brooks’ opinion, the high court said the act “does not ban discrimination against employees because they are aged 40 or older; it bans discrimination against employees because of their age, but limits the protected class to those who are 40 or older. The fact that one person in the protected class has lost out to another person in the protected class is thus irrelevant, so long as he has lost out because of his age.”

In keeping with the high court’s reasoning, Brooks said, “We conclude that the Supreme Court’s analysis in O’Connor answers the question now before us. A specific, facially neutral policy that significantly disfavors employees over 50 years old supports a claim of disparate impact. … Although the employer’s policy might favor younger members of the 40-and-over cohort, that is an ‘utterly irrelevant factor’ in evaluating whether a company’s oldest employees were disproportionately affected because of their age.”

The class members’ attorney, Samuel J. Cordes of Samuel J. Cordes & Associates in Pittsburgh, said the Third Circuit’s ruling created a circuit split on the contentious issue of disparate impact with at least three other courts.

“Before the Third Circuit [ruling], every other circuit said the other thing,” Cordes said. He added that it remains to be seen whether that ruling will be challenged in the Supreme Court.

“I don’t know whether the Supreme Court takes it or not, but I don’t think the statutory interpretation Judge Smith did provides a lot of fodder for the Supreme Court,” Cordes said.

David S. Becker of Freeborn & Peters in Chicago represented PGW and said he was unsure as to whether he was authorized to comment.

P.J. D’Annunzio can be contacted at ­215-557-2315 or pdannunzio@alm.com. Follow him on Twitter @PJDannunzioTLI.