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The U.S. Supreme Court’s 2004-2005 term had few employment cases, although Justice Sandra Day O’Connor, who announced her retirement this term, once again played a crucial role in important employment and civil rights matters decided by the court. O’Connor authored the court’s opinion in a case that recognized a private cause of action for claims of retaliation under Title IX and authored the lengthy dissent from the court’s opinion recognizing disparate impact claims for plaintiffs in age discrimination cases. O’Connor’s position as the swing vote has often placed her at the center of many of the court’s most important and controversial labor and employment cases, and her departure raises significant questions as to the direction such cases will take in the future. The most anticipated employment case of the term was Smith v. City of Jackson, 125 S. Ct. 1536 (2005), in which the court considered whether disparate impact claims may be brought under the Age Discrimination in Employment Act (ADEA). Relying on the text of the statute, its legislative history and its implementing regulations, the court held that disparate impact claims are cognizable under the ADEA. The decision may prove to be only a pyrrhic victory for plaintiffs, however, as the court’s opinion narrowed the applicability of the disparate-impact theory for age claims to such a degree that its effectiveness for future plaintiffs is questionable. In Smith, police and public safety officers brought suit against the city, alleging that its revision of the employee pay plan, granting raises to officers to bring their salaries up to a regional average, violated the ADEA because older officers received raises that represented a lower percentage of their salaries. A group of older officers alleged that, because of their age, they were adversely affected by the plan, which provided proportionately greater raises to officers with less seniority. The district court’s grant of summary judgment on behalf of the city was affirmed by the 5th U.S. Circuit Court of Appeals, which ruled that disparate-impact claims are categorically unavailable under the ADEA. The Supreme Court rejected the 5th Circuit’s analysis but affirmed the judgment. In a plurality opinion authored by Justice John Paul Stevens, the court first noted that the ADEA contains identical language to Title VII of the Civil Rights Act of 1964, which, the court ruled in Griggs v. Duke Power Co., 401 U.S. 424 (1971), allows for disparate-impact claims. The text of the ADEA also contains a provision that narrows its coverage by allowing any “otherwise prohibited” action “where the differentiation is based in reasonable factors other than age” (RFOA). This provision, the court opined, would have no effect if the ADEA only prevented intentional discrimination because an employment action based on a factor other than age is not “otherwise prohibited” by the ADEA. Finally, the court gave deference to the interpretation of the Department of Labor, which initially drafted the ADEA, and the Equal Employment Opportunity Commission (EEOC), the agency charged with implementing the statute, authorizing disparate-impact liability. Although the court recognized disparate impact as a basis for liability under the ADEA, it also substantially limited the scope of disparate impact based on the RFOA provision and the Civil Rights Act of 1991. The court reasoned that in limiting the coverage of the ADEA with the RFOA provision, Congress recognized that, unlike race or other protected classifications, age may have relevance to an individual’s capacity to engage in certain types of employment. Thus, for purposes of claims of age discrimination, certain employment criteria may be reasonable despite their adverse impact on older workers.
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