EEOC Defines Reasonable Factors other than Age

The proposed rule explains that whether a particular employment practice is based on reasonable factors other than age turns on the facts and circumstances of each particular situation and whether the employer acted prudently in light of those facts.

The rule defines RFOA as one that is objectively reasonable when viewed from the position of a reasonable employer under like circumstances, and that would be used in a like manner by a prudent employer mindful of its responsibilities under the ADEA. In addition, the EEOC said a reasonable factor is one that an employer exercising reasonable care to avoid limiting the employment opportunities of older persons would use.

The proposed rule sets forth a list of conditions relevant to determining whether a factor is “reasonable” and “other than age,” including:

• The RFOA defense requires evidence that the challenged practice was reasonably designed to further or achieve a legitimate business purpose and was reasonably administered to achieve that purpose.
• In addition to the employment practice’s design, the way in which it is administered affects its reasonableness. For example, for purposes of the RFOA defense, it may be reasonable to consider factors such as job performance, skill sets, and flexibility when deciding whom to discharge during a reduction in force. Use of such factors is reasonable under the ADEA if the employer has made reasonable efforts to administer its employment practice accurately and fairly and has assessed the age-based impact of the practice and taken steps to ameliorate unnecessary and avoidable harm. The EEOC said steps such as training its managers to avoid age-based stereotyping, identifying specific knowledge or skills the employer wants to retain, and providing guidance on how to measure flexibility are evidence of reasonableness.
• The determination of reasonableness also requires consideration of what the employer knew or should have known about the practice’s impact when it took the challenged action.
• The extent to which the employer took steps to define the factor and the steps the employer took to apply the factor fairly and accurately affect the determination of whether the factor was reasonable.
• The extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps, also is relevant to the issue of reasonableness. On the other hand, if the harm is severe, the determination of reasonableness includes consideration of whether the employer knew or should have known of measures that would reduce or eliminate the harm and the extent of the burden that implementing such measures would place on the employer.
• Finally, the determination of reasonableness includes consideration of whether other options were available and the reasons the employer selected the option it did. The proposed rule does not require an employer to adopt a practice that has the least impact on members of the protected group.

On March 31, 2008, the EEOC published a Notice of Proposed Rulemaking proposing to amend its regulations to reflect the Supreme Court’s decision in Smith v. City of Jackson to state that an employment practice that has an adverse impact on individuals on the basis of older age is discriminatory unless the practice is justified by a “reasonable factor other than age.” The EEOC also proposed that the individual challenging the allegedly unlawful employment practice bears the burden of isolating and identifying the specific employment practice responsible for the adverse impact, and that when the RFOA exception is raised, the employer has the burden of showing that a reasonable factor other than age exists factually.

Comments on that proposed rule led the agency to issue a proposed definition for “reasonable factor other than age.”

The EEOC is requesting comments on its definition by or before April 19, 2010.

The proposed rule is here and is published in the February 18 edition of the Federal Register.