The U.S. Court of Appeals for the Seventh Circuit recently reversed its prior decision and upheld an Illinois district court ruling that the federal Age Discrimination in Employment Act (ADEA) does not protect job applicants from disparate impact claims. But beware, as this seemingly apparent win for employers in Illinois, Indiana, and Wisconsin may drive employees to bring their claims under more forgiving state anti-discrimination laws, which often provide for greater damages.
Case background and decision
The plaintiff in Kleber v. CareFusion Corporation, No. 17-1206, 2019 WL 290241 (7th Cir. Jan. 25, 2019) was a 58-year-old attorney who applied for and was denied a general counsel position. The job posting sought an attorney with three to seven years of experience. CareFusion hired a 29-year-old attorney for the role. In his lawsuit, Kleber argued that CareFusion’s “cap” on experience effectively weeded out older applicants.
Initially, a three-judge Seventh Circuit panel found that the ADEA did apply to disparate impact claims by job seekers. But when the full Seventh Circuit reheard the case, it ruled 8–4 that Section 4(a)(2) of the ADEA covers only discrimination against current employees, meaning that non-employee job seekers cannot sue companies for so-called disparate impact claims alleging neutral practices that adversely affect older applicants, thus affirming the district court’s original finding. Comparing the text of various ADEA provisions, the full Seventh Circuit’s majority opinion concluded that Congress did not intend for the Act to cover applicants asserting disparate impact claims.
Importantly, the ruling does not limit an applicant’s ability to sue for intentional age discrimination, such as a potentially ageist comment by a recruiter or a job posting stating “applicants over 40 need not apply.”
The Seventh Circuit joins the Eleventh Circuit (covering Alabama, Florida, and Georgia), which issued a similar ruling in 2016.
Beware state law
While a narrowed view of the ADEA may seem like good news, employers shouldn’t rush to implement experience caps or any other requirements that may adversely affect older applicants. Such practices remain subject to potential claims brought under state law, where damages are often more plaintiff-friendly.
For example, a similar allegation of violation of the Illinois Human Rights Act would carry the potential for an award of uncapped compensatory damages (for emotional distress, pain and suffering, etc.). In the hands of a state court jury, potential damages could certainly exceed the double damages available under the ADEA.
Guidance for employers
The attention garnered by the Seventh Circuit’s decision – even though it favors employers – means plaintiffs’ lawyers and job seekers will be more attuned to practices that could adversely affect older applicants. Because powerful state law remedies remain in place for such claims, employers should review their job search and hiring practices to ensure full compliance with anti-discrimination laws – both state and federal.