On March 29, 2012, the Equal Employment Opportunity Commission (“EEOC”) issued its final rule to amend its Age Discrimination in Employment Act (“ADEA”) regulations concerning disparate-impact claims and the reasonable factors other than age (“RFOA”) defense (available at www.federalregister.gov/articles/2012/03/30/2012-5896/disparate-impact-and-reasonable-factors-other-than-age-under-the-age-discrimination-in-employment#p-6).

The EEOC initially issued proposed regulations in response to Smith v. City of Jackson, 544 U.S. 228 (2005), in which the Supreme Court held that the appropriate test for determining the lawfulness of a practice that disproportionately affects older individuals is the RFOA test, rather than the business-necessity test. After revisions based on comments on two sets of proposed rules, the EEOC’s rule is now final. The rule states that “[a] reasonable factor other than age is 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.”

The regulations offer a non-exhaustive list of factors that are relevant to the establishment of a RFOA defense. The regulations also note that the presence of one or more of the enumerated factors does not automatically establish the defense, nor does their absence preclude the defense. The listed factors are:

(i) The extent to which the factor is related to the employer’s stated business purpose;

(ii) 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;

(iii) 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;

(iv) The extent to which the employer assessed the adverse impact of its employment practice on older workers; and

(v) 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.