Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Until the nation’s highest court finds otherwise, the 2nd U.S. Circuit Court of Appeals will continue to hold that business practices that have a disparate impact on older workers are actionable under a federal anti-discrimination law. Reaffirming 2nd Circuit precedent that is at odds with the majority of federal appellate courts, the appeals court said a showing that a layoff plan implemented by a New York company was properly brought under the Age Discrimination in Employment Act (ADEA), even though the company did not intend to discriminate. The circuit, in Meacham v. Knolls Atomic Power Laboratory, 02-7378, upheld jury verdict findings that older employees at Knolls had lost their jobs not through an intentionally discriminatory layoff plan, but through a facially neutral policy that had a discriminatory impact and that the company could have accomplished its goals by a different, non-discriminatory method. The plaintiffs’ lawyer, John B. DuCharme of Berger & DuCharme in Clifton Park, N.Y., said the suit was brought because 30 of 31 people who were laid off were over age 40. A total of 26 plaintiffs went to trial in the case, with some breaking off and settling with the company before proceedings were complete. The jury awarded 17 plaintiffs a total of $4.2 million and the trial judge awarded the plaintiffs a total of nearly $1 million in attorney fees and costs. On the appeal, Knolls Atomic Power Laboratory (KAPL), a subsidiary of Lockheed Martin Corp., argued that the statute does not allow disparate impact claims. It cited the U.S. Supreme Court case Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), which dealt with a claim of disparate treatment — which involves the proof of intentional discrimination. Writing for the three-member 2nd Circuit panel, Judge Rosemary Pooler said the Hazen Paper court held that an “employer may lawfully discriminate based on factors closely correlated with age.” “KAPL argues that this holding and dicta in Hazen Paper suggest that the Supreme Court ultimately will reject ADEA disparate impact claims,” Judge Pooler said. “While this may be so, the Hazen Paper Court directly stated that it had not resolved the viability of ADEA disparate impact claims.” Pooler noted that the Supreme Court is likely to resolve the issue next term in Smith v. City of Jackson, 351 F.3d 183, (2003), where the 5th Circuit held that the disparate impact theory of recovery is not available in age discrimination cases. In so holding, the 5th Circuit joined four other circuits — the 1st, 7th, 10th and 11th — to come down on this side of the issue. The opposite position is held by the 2nd, 8th and 9th Circuits. The 6th Circuit, according to papers filed in the Knolls appeal, has yet to resolve the issue. “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.” The arguments at the 2nd Circuit drew amicus briefs on both sides of the issue, with the U.S. Chamber of Commerce weighing in on behalf of Knoll and the plaintiffs’ position winning support from the Equal Employment Opportunity Commission (EEOC), the American Association of Retired Persons and the National Employment Lawyers Association. DuCharme said he is confident the Supreme Court will embrace the interpretation of the statute taken by the 2nd, 8th and 9th circuits when Smith is heard next year. “I don’t think the Supreme Court will say otherwise, because the EEOC put in their amicus that, under their guidelines, since the enactment of ADEA, a disparate impact theory can proceed,” he said. “The EEOC is entitled to great deference in its interpretation of a statute and the Supreme Court should follow their lead.” Judges Joseph M. McLaughlin and Dennis Jacobs joined in Pooler’s opinion. Margaret Clemens of Nixon Peabody represented Knolls.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.