EEOC Issues Final Rule on RFOA Defense to Disparate Impact Age Claims

The Equal Employment Opportunity Commission issued final regulations on March 30 interpreting the current state of the “reasonable factor other than age” or RFOA defense to disparate impact age discrimination claims. The EEOC had to revise existing Age Discrimination in Employment Act regulations after two U.S. Supreme Court decisions criticized them. In these cases, the Court recognized disparate impact ADEA claims and placed the burden on employers to prove an RFOA defense. Smith v. Jackson (2005) and Meacham v. Knolls (2008). 

Employer representatives feel that the EEOC has gone too far with its revisions and that the new regulations “impose unwarranted burdens” on employers attempting to prove an RFOA defense. The regulations now say that employers must show more than a rational basis to support the non-age factor offered. They also require non-age factors to be reasonable in both design and application. And, the regulations contain a non-exhaustive list of considerations for determining whether the employer’s challenged action was reasonable and based on factors other than age.              

The regulations go into effect April 29. Further analysis of the revised regulations and their potential impact on employers can be found in our upcoming May Bulletin. The full text of the final regulations is available here.