U.S. Supreme Court Declined to Hear Appeal Challenging Whether External Job Applicants Can Claim “Disparate Impact” Under ADEA

Q.  I heard that job postings which impose a maximum experience requirement for external applicants may not violate certain provisions of the ADEA, at least in certain Circuits. Is that true?

A.  The United States Supreme Court recently declined to review an en banc Seventh Circuit decision in Kleber v. CareFusion Corporation, which ruled that the Age Discrimination in Employment Act (“ADEA”) does not apply to external job applicants who allege that a neutral hiring policy adversely impacted older workers.

Dale Kleber, then 58 years old, applied for an in-house Senior Counsel position in CareFusion’s legal department. The job description provided that applicants must have “3 to 7 years (no more than 7 years) of relevant legal experience.” At the time, Kleber had accrued more than seven years of relevant experience. The company ultimately did not offer Kleber the job and instead hired a 29-year-old applicant who met but did not exceed the job description’s experience requirement. Kleber filed a lawsuit against CareFusion under the ADEA, which prohibits discrimination against those age 40 or older. One of his main arguments was that, although the company’s maximum experience requirement may have appeared neutral on its face, such requirement had a disparate impact on him as an older attorney.

The Seventh Circuit held that the disparate impact provision of the ADEA only applies to “employees,” and not outside job applicants seeking employment such as Kleber. Section 4(a)(2) of the ADEA, which applies to disparate impact claims, makes it unlawful for an employer “to limit, segregate or classify employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.” The court found that the plain language of this provision only protects those who have a “status as an employee,” and that Kleber did not have such status, since he was an outside applicant. The court also contrasted the disparate impact section with other portions of the ADEA which expressly cover both employees and job applicants, such as the provision which guides disparate treatment claims (i.e. a company intentionally refusing to hire an applicant because of his or her age). A final issue that the Seventh Circuit addressed was whether the ADEA’s text was similar enough to the text of Title VII that it should follow the same interpretation, as Title VII permits applicants to bring disparate impact claims. The court found that the two statutes are distinguishable.

Given the Supreme Court’s decision declining review, the Seventh Circuit’s ruling continues to remain enforceable and provides employers, at least in Indiana, Illinois and Wisconsin, with a sufficient defense to external applicants’ disparate impact claims under the ADEA. The Eleventh Circuit, which covers Alabama, Florida and Georgia, also has ruled in a manner consistent with the Seventh Circuit, refusing to extend the ADEA’s language on disparate impact to outside applicants. No other Circuit has addressed this issue yet.

One note: While employers may be able to successfully escape ADEA disparate impact claims from outside applicants, state and local anti-discrimination laws may extend to protections for outside applicants. In addition, the decisions of the Seventh and Eleventh Circuits have no effect on ADEA disparate impact claims brought by internal applicants already employed within the company. Furthermore, both internal and external job applicants remain protected under the disparate treatment sections of the ADEA. The Seventh and Eleventh Circuit decisions are therefore limited in nature, and employers across the country should continue to regularly monitor their job postings and hiring practices to comply with federal and state anti-discrimination laws.

–Jonathan Gilman

 

Pittsburgh Extends Paid Sick Leave to Employees, Differing from Philadelphia Law in Key Ways

Q.  My company has offices in Philadelphia and Pittsburgh. Is Pittsburgh’s new paid sick leave law the same as Philadelphia’s paid sick leave law?

A.  Effective March 15, 2020, Pittsburgh will be joining Philadelphia and several other jurisdictions in requiring employers to provide sick leave to its employees. While these laws share the same intent, there are several notable differences in terms of compliance. For companies like yours that operate in both cities, the distinctions between the two laws may necessitate separate policies for employees based on their location.

For example, Pittsburgh’s “Paid Sick Days Act” (PSDA) requires employers to provide each “covered employee” with at least one hour of paid sick time for every 35 hours worked within the City’s geographic boundaries. By contrast, Philadelphia’s “Promoting Healthy Families and Workplaces Act” (PHFW) allows for employees to earn sick leave at the rate of one hour for every 40 hours worked.

Using identical language, both the PHFW and the PSDA provide sick time for “an employee’s mental or physical illness, injury or health condition; an employee’s need for medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition; an employee’s need for preventive medical care,” or to provide care for a family member with those same needs.

However, the two laws differ in other ways. Specifically, the PHFW provides additional coverage for absences taken by victims of domestic abuse, sexual assault or stalking, provided the leave is used for medical care, counseling, relocation, or to receive legal services following incidents of domestic or sexual violence. By contrast, the PSDA allows employees to use sick time in the event of a closure of the employee’s place of business by order of a public health official, or to provide for childcare in the event of school closings.

Under either law, the number of employees employed by your company will determine which provisions are applicable. The PHFW requires Philadelphia employers with 10 or more employees to provide paid sick leave, while employers with fewer than 10 employees may provide unpaid sick leave. Under the Pittsburgh law, employers with 15 or more employees must provide paid sick leave. Note that the PSDA allows employers with fewer than 15 employees to provide unpaid sick leave, but only for the first year. Beginning on March 15, 2021, even employers with fewer than 15 employees must provide paid sick leave.  However, the PSDA’s 15-employee threshold affects the accrual cap for paid sick leave. Employers with 15 or more employees must provide up to 40 hours of paid sick leave per calendar year. while employers below the threshold may cap the amount of accrued sick time at 24 hours per year.

The Acts also differ regarding who is considered to be covered employee. In Philadelphia, employees must work within the geographical boundaries of the city for at least 40 hours in a year to be eligible for sick leave. In Pittsburgh, however, employees become eligible for paid sick leave after working 35 hours in the city’s geographic boundaries. Notably, under the PSDA, employers with employees working outside the boundaries of Pittsburgh must count those employees to determine the number of employees. Thus, a Pittsburgh employer with 9 employees working in Pittsburgh and 6 employees working in Philadelphia would meet the 15-employee threshold under the PSDA. While the PHFW does not count employees working outside Philadelphia with regard to its 10-employee threshold, any “chain establishment,” defined as an entity operating “under the same trade name” at 15 or more locations, will be required to provide paid sick leave, regardless of the number of employees working in Philadelphia.

Both Acts exclude independent contractors, seasonal workers and public employees. The PHFW also excludes adjunct professors, employees hired for a term of less than six months, interns, pool employees and employees covered by a collective bargaining agreement. The Pittsburgh law excludes only members of construction unions working under a collective bargaining agreement.

Both laws allow employees to carry over earned, unused sick time to the following year, up to the annual accrual cap. However, to avoid the administrative headaches of calculating unused sick time each year, employers may “front load” employee sick time by providing the required annual allotment at the beginning of each year. Employees are not entitled to a payout for accrued, unused sick time after leaving their employment under either Act.

Conclusion

The distinctions between the Philadelphia and Pittsburgh laws provide just one example of the difficulties faced by national companies in creating one paid sick leave policy that will be compliant across jurisdictions.  Employers seeking one universal policy will have to comply with the most generous of the relevant laws.  To the extent that employers choose to have different sick leave policies in place for each jurisdiction, these companies must keep track of hours worked by employees who regularly work in more than one jurisdiction to determine whether one or more paid sick leave laws apply.

Tracey E. Diamond and Rogers Stevens

Third Circuit Upholds Philadelphia’s Salary History Ban

Q.  Are employers allowed to ask employees about their salary history in Philadelphia?

A.  The U.S. Court of Appeals for the Third Circuit has ruled that a Philadelphia city ordinance that prohibits Philadelphia employers from asking applicants about their current or past pay rates is constitutional. In April 2018, a Philadelphia federal court judge held that the ban was unconstitutional because it violated the free speech clause of the First Amendment. However, this month, the Third Circuit vacated the lower court ruling and held that the ban is constitutional. As a result, Philadelphia employers must immediately begin complying with Philadelphia’s salary history ban.

For more information, click here.

–Leigh H. McMonigle and Lee E. Tankle

U.S. Supreme Court Declined to Hear Appeal Challenging Whether External Job Applicants Can Claim “Disparate Impact” Under ADEA

Q.  I heard that job postings which impose a maximum experience requirement for external applicants may not violate certain provisions of the ADEA, at least in certain Circuits. Is that true?

A.  The United States Supreme Court recently declined to review an en banc Seventh Circuit decision in Kleber v. CareFusion Corporation, which ruled that the Age Discrimination in Employment Act (“ADEA”) does not apply to external job applicants who allege that a neutral hiring policy adversely impacted older workers.

Dale Kleber, then 58 years old, applied for an in-house Senior Counsel position in CareFusion’s legal department. The job description provided that applicants must have “3 to 7 years (no more than 7 years) of relevant legal experience.” At the time, Kleber had accrued more than seven years of relevant experience. The company ultimately did not offer Kleber the job and instead hired a 29-year-old applicant who met but did not exceed the job description’s experience requirement. Kleber filed a lawsuit against CareFusion under the ADEA, which prohibits discrimination against those age 40 or older. One of his main arguments was that, although the company’s maximum experience requirement may have appeared neutral on its face, such requirement had a disparate impact on him as an older attorney.

The Seventh Circuit held that the disparate impact provision of the ADEA only applies to “employees,” and not outside job applicants seeking employment such as Kleber. Section 4(a)(2) of the ADEA, which applies to disparate impact claims, makes it unlawful for an employer “to limit, segregate or classify employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.” The court found that the plain language of this provision only protects those who have a “status as an employee,” and that Kleber did not have such status, since he was an outside applicant. The court also contrasted the disparate impact section with other portions of the ADEA which expressly cover both employees and job applicants, such as the provision which guides disparate treatment claims (i.e. a company intentionally refusing to hire an applicant because of his or her age). A final issue that the Seventh Circuit addressed was whether the ADEA’s text was similar enough to the text of Title VII that it should follow the same interpretation, as Title VII permits applicants to bring disparate impact claims. The court found that the two statutes are distinguishable.

Given the Supreme Court’s decision declining review, the Seventh Circuit’s ruling continues to remain enforceable and provides employers, at least in Indiana, Illinois and Wisconsin, with a sufficient defense to external applicants’ disparate impact claims under the ADEA. The Eleventh Circuit, which covers Alabama, Florida and Georgia, also has ruled in a manner consistent with the Seventh Circuit, refusing to extend the ADEA’s language on disparate impact to outside applicants. No other Circuit has addressed this issue yet.

One note: While employers may be able to successfully escape ADEA disparate impact claims from outside applicants, state and local anti-discrimination laws may extend to protections for outside applicants. In addition, the decisions of the Seventh and Eleventh Circuits have no effect on ADEA disparate impact claims brought by internal applicants already employed within the company. Furthermore, both internal and external job applicants remain protected under the disparate treatment sections of the ADEA. The Seventh and Eleventh Circuit decisions are therefore limited in nature, and employers across the country should continue to regularly monitor their job postings and hiring practices to comply with federal and state anti-discrimination laws.

Jonathan Gilman

 

Slate of N.J. Laws Require Severance Pay in Mass Layoffs and Increased Penalties for Worker Misclassification

Q.  Are there new laws that New Jersey employers needs to be aware of?

A.  January 2020 was a busy month for New Jersey’s executive branch. Governor Phil Murphy signed into law at least five workplace-related bills, one of which revised the New Jersey mini-WARN Act, one granting state regulators authority to issue stop-work orders for workplace violations, and three affecting worker misclassification.

To read further, click here.

Tracey E. Diamond and Lee E. Tankle