The Equal Employment Opportunity Commission (EEOC) recently released a final rule amending its regulations concerning reasonable factors other than age (RFOA) under the Age Discrimination in Employment Act (ADEA).  Here’s what employers need to know about the new regulations:
The RFOA Defense:  The ADEA provides that it is not unlawful for an employer to take an action otherwise prohibited by the ADEA if the action is based on “reasonable factors other than age.”  See 29 U.S.C. § 623(f)(1).  The RFOA defense is not available for employment practices that use age as a limiting criterion, nor is it available against claims for disparate treatment discrimination – it only applies to claims alleging disparate impact discrimination.
What is a “Reasonable Factor Other Than Age”?  The EEOC’s new regulations define a “reasonable factor other than age” as a “non-age factor that is objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances.”
How Does An Employer Prove the RFOA Defense?  The EEOC’s new regulations state that, in order to use the RFOA defense, an employer must show that the employment practice was both:  (1) reasonably designed to further or achieve a legitimate business purpose; and (2) administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known, to the employer.
What Considerations Are Relevant to the RFOA Defense?  The EEOC’s new regulations provide that the following factors should be considered when determining whether the RFOA defense applies:

  1. The extent to which the factor is related to the employer’s stated business purpose;
  2. The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination;
  3. The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes;
  4. The extent to which the employer assessed the adverse impact of its employment practice on older workers; and
  5. The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.

Takeaway:  Many of the considerations identified in the EEOC’s new regulations for the RFOA defense relate to steps that an employer should take before a claim of age discrimination is asserted.  Employers that apply standards that arguably have a disparate impact based on age should carefully review their policies and practices to ensure that they comply with the EEOC’s new regulations concerning the RFOA defense.