Court backs older workers in bias case

WASHINGTON — The Supreme Court gave the nation's older workers stronger protections against age bias Thursday, ruling that employers who are sued must prove their layoff policies are reasonable and do not have an unfair impact on employees because of their age.

The 7-1 decision puts private companies and public agencies on notice that they must defend the criteria they use for layoffs if the cutbacks disproportionately affect older workers.

For example, when employers see a need to reduce the work force, they sometimes rate their workers in deciding who is to be let go. Usually, the ratings focus on specific skills and can include subjective criteria such as "flexibility" or "creativity."

In the past, the Supreme Court has said older workers can sue for age discrimination when layoffs hit older workers hardest. But until Thursday, it was unclear whether the workers who were suing had to prove the criteria used by the company were unfair, or instead whether the company had to prove they were reasonable.

The justices decided on the latter.

"The burden is properly placed on the employer," said Justice David H. Souter. "There is no denying (this) makes it harder and costlier to defend" against such lawsuits, he added. Advocates for older workers, including AARP, hailed the decision. They said it would strengthen the rights of laid-off workers to challenge supposedly "neutral" corporate policies that fall heavily on the older employees.

Several business groups predicted it would lead to more lawsuits, and management lawyers called the ruling a significant change in the law.

The burden "is now squarely on the shoulders of employers," said Sheryl J. Willert, a lawyer in Seattle. She cautioned employers who rely on subjective factors for deciding on layoffs: "It is more imperative than ever that employers engage in very clear evaluation and analysis and remove as much subjectivity as possible from business decisions."

When Congress outlawed age discrimination in 1967, choosing age 40 as the triggering point, it added a provision that said employers may use job qualifications that differentiate among workers "based on reasonable factors other than age."

Unlike race or gender, age is often a relevant factor in certain jobs. No one has contended that major league baseball players are victims of illegal age discrimination because few of them are over age 40.

While employers can rely on job criteria that may have an adverse effect on older employees, the court's ruling makes clear they will have to show they are justified. The court's opinion did not spell out what is meant by a "reasonable factor other than age."

Lawyers said, however, that shifting the burden of proof is likely to tip the balance in favor of the employees in some cases.

In Thursday's decision, the high court revived a lawsuit by Clifford Meacham and 27 older employers at a government-funded Knolls Atomic Power Laboratory in New York state who were laid off more than a decade ago. When the lab lost a contract, it was forced to reduce its work force. Employees were rated on criteria such as "performance", "flexibility" and "critical skills." In the end, 31 employees were laid off, of whom 30 were over age 40.

A jury ruled for employees in the Knolls' case and said the layoff policy had an unfair impact on older worker. The plaintiffs were awarded $6 million in damages.

Last year, the U.S. court of appeals in New York reversed the jury's verdict and said the employees had not proven the layoff standards used by Knolls were unreasonable. The Supreme Court in turn reversed that decision in Meacham v. Knolls.

Only Justice Clarence Thomas dissented. He maintained the court was wrong to say the anti-age-bias law extends to cases challenging layoffs as having an unfair effect on older workers.

Justice Stephen G. Breyer took no part in the decision, since he owned stock in one of the affected companies.

While the case before the court focused on layoffs, the ruling applies to other job actions, including demotions, promotions or salary adjustments.

The decision does not forbid employers from using performance standards that might work against older employees. For example, the National School Boards Association said schools today need teachers who are comfortable with new technologies and can speak a language other than English. And younger teachers, on average, are more likely to have some of these skills compared to older teachers, the group said.

Thursday's opinion makes clear schools and other employers can rely on such criteria, but they also have to defend them as reasonably related to the work and not a pretext for age bias.

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