The federal Age Discrimination in Employment Act (ADEA) prohibits age discrimination against employees and applicants who are at least 40 years old. It also prohibits employers from adopting facially neutral policies or practices that have a disproportionately negative effect on older workers. This type of "disparate impact" claim often comes up when employers come up with criteria to decide who will be laid off, for example.
The ADEA gives employers a defense to disparate impact claims: An employer can escape liability if it can prove that the policy or practice that created the disparate impact was based on a reasonable factor other than age (RFOA). In 2008, the Supreme Court decided that the RFOA is an affirmative defense, which means the employer must prove it at trial. But this left open the question of exactly what qualifies as an RFOA, including which factors are "reasonable" for an employer to consider when making job decisions and how much responsibility an employer has to try to reduce the negative impact on older workers.
The EEOC has recently issued final regulations that attempt to answer these questions. Among other things, the regulations define an RFOA as a "non-age" factor that is objectively reasonable when viewed from the position of a prudent employer mindful of its obligations under the ADEA. The employer must show both that the employment practice it used was reasonably designed to achieve a legitimate business purpose, and that the employer applied the factor in a way that reasonably achieves that purpose.
The regulations make clear that a court must consider all of the relevant facts and circumstances in deciding whether an employer has adequately proven an RFOA. Among the things a court can consider when deciding whether an employer's practice or policy counts as an RFOA are: