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Court Ruling Limits ADEA Protections to Employees, Not Job Applicants


The 7th U.S. Circuit Court of Appeals recently issued a ruling that restricted the scope of the Age Discrimination in Employment Act (ADEA), limiting the application of the law to employees only, not job candidates.

“This is an employer-friendly decision,” said David Morrison, a Chicago-based principal of Goldberg Kohn’s labor and employment litigation group.

Companies could have faced an uptick in lawsuits had the ruling gone the other way, he said.

That isn’t to say that job applicants cannot use the ADEA in potential lawsuits, Morrison noted. But instead of using the disparate impact argument, applicants “need to do more than just show what the impact would be.” It would instead require that applicants show that the rejection was intentional, falling under a “disparate treatment” claim.

“Federal law is one layer of many,” he said. State laws could be in place that are even stricter than the ADEA, so he suggests sticking to whichever law — state or federal — has the more stringent rule.

“This [ruling] doesn’t end the equation, it only addresses the federal law,” he said.

While the question of whether applicants are covered under the ADEA is “still up for debate in the country,” Morrison said the issue is far from settled. The 11th Circuit Court of Appeals has come to a similar conclusion as the 7th Circuit, he said, but there is another case in Northern California that has, so far, gone in favor of the applicant. Additionally, the U.S. Equal Employment Opportunity Commission agrees that the law should cover applicants.

For now, what the 7th Circuit’s ruling means is that job seekers in Illinois, Indiana and Wisconsin (the states covered by that court), as well as in Alabama, Florida and Georgia (the states in the 11th Circuit) could have a harder time bringing lawsuits under the ADEA. But Morrison does not expect the Supreme Court to jump into the fray until the appeals courts become split — for instance, if the California case reaches the 9th Circuit Court and that court comes to a different conclusion.

Morrison cautioned against employers outside of the 7th and 11th circuits’ jurisdiction from taking any action just yet.

The ruling came Jan. 23 via an en banc decision — meaning all 12 of the court’s judges were convened. It is “unusual” for all judges to issue a ruling, but Morrison said he believed the case was “seen as an important enough decision that they all agreed they should weigh in.”

The case, Kleber v. CareFusion, was brought by Dale Kleber in 2017. At the time of the filing, Kleber was a 58-year-old attorney who applied for a senior position in CareFusion’s legal department. However, CareFusion — which said in its job posting that it was looking for someone with no more than three to seven years’ experience — passed over Kleber for a less experienced and much younger candidate. Kleber’s argument was that the experience requirement discriminated against older workers, qualifying Kleber’s rejection as a “disparate impact” claim — that is, a seemingly neutral policy that, when applied, adversely impacted one specific group.

But the majority (8-4) opinion stated that the ADEA’s use of the term “any individual” referred to employees only, not applicants.

“This construction is clear from Congress’s use of language telling us that the provision covers ‘any individual’ deprived of an employment opportunity because such conduct ‘adversely affects his status as an employee’,” the majority opinion said.

Wellness Programs Face Incentive Hurdle

The U.S. Equal Employment Opportunity Commission’s (EEOC) guidelines for implementing workplace wellness incentive programs were recently dealt a blow by a federal district court, resulting in uncertainty for employers.

The case revolves around what the EEOC specifies as “voluntary,” and, according to U.S. District Judge John Bates, the rules are not well defined. As such, the EEOC was forced to cut a key part of the provision — that is, what is and what is not considered “voluntary” — and come back with a clearer focus.

Bates’ ruling, issued in August 2017, went into effect on Jan. 1. The EEOC is not expected to release new guidelines until June, though whether the commission hits its self-imposed deadline is up in the air.

The Patient Protection and Affordable Care Act (PPACA) allowed for the incentivizing of wellness programs, letting employers raise or lower an employee’s insurance premiums by as much as 30% based on the employee’s participation — or lack thereof — in said programs. In 2015, the EEOC formally announced its rules surrounding wellness incentives, deeming participation in such programs as “voluntary.”

The voluntary designation helped companies get around potential discrimination issues under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act.

It should be noted that the court did not rule against the 30% incentive, just at how that incentive would be fairly applied to employees.

Still, as of Jan. 1, employers have less of an idea on how to incentivize wellness programs without running into potential legal issues. The good news is that the entire concept of incentivizing wellness didn’t get thrown out with the bathwater. But for the time being, companies will need to be cautious about how they engage employees, making sure they find the balance between “voluntary” and mandatory.

About the Author  

Stephanie N. Rotondo is a staff writer at WorldatWork. 

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