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