Third Circuit Makes it Easier to Prove ADEA Disparate Impact Claims By Use of Subgroups of Older Workers

The Third Circuit Court of Appeals recently issued a precedential decision, Karlo, et al. v. Pittsburgh Glass Works, LLC, that likely will make it easier for subgroups of older workers to bring lawsuits under the Age Discrimination in Employment Act (“ADEA”), on a “disparate impact” theory of liability.  It also creates a split with the Second, Sixth and Eighth circuits, paving the way for greater uncertainty for national employers.

The Karlo Decision – Comparison of Subgroups Permitted For Disparate Impact Analysis  

The defendant Pittsburgh Glass Works, LLC instituted reductions in force that resulted in the termination of approximately 100 employees.  The plaintiffs, a group of workers all over the age of 50, brought a putative ADEA collective action, asserting, among other things, disparate impact claims.  To establish a prima facie case for disparate impact under the ADEA, a plaintiff must (1) identify a specific, facially neutral policy, and (2) proffer statistical evidence that the policy caused a significant age-based disparity. The plaintiffs alleged that they had identified a policy that disproportionately impacted a subgroup of employees older than 50.  However, because the policy favored younger members of the protected class (i.e., employees older than 40 but younger than 50), adding them into the comparison group did not show any statistical evidence of disparity.  The district court initially certified a collective action, but subsequently granted a motion to decertify and then granted summary judgment to the employer.

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