The federal Age Discrimination in Employment Act (ADEA) prohibits two kinds of discrimination: discrimination based on the status of being 40 years or older (disparate treatment) and discrimination based on application of a practice, criteria or classification which, while age-neutral on its face, disproportionately affects individuals who are 40+ years old (disparate impact). It is clear that both applicants and employees can bring disparate treatment claims under the ADEA. It is also now clear that, at least for employers located in the U.S. Court of Appeals for the Seventh Circuit (which includes Wisconsin, Indiana and Illinois), only employees—not applicants—can bring disparate impact claims. Kleber v. CareFusion Corporation[JM1] , No. 17-1206 (7th Cir. Jan. 23, 2019) (en banc).
In Kleber, defendant CareFusion sought applicants for an in-house counsel position who had between three and seven years of experience. Plaintiff Dale Kleber, who was 58 and had more than seven years of experience, applied for the job. When he lost out to a 29-year-old applicant, he brought a disparate impact claim under the ADEA, alleging that the selection criteria disproportionately affected individuals 40+ years old. A panel of the Seventh Circuit agreed with Kleber, holding that the ADEA did permit disparate impact claims by applicants. The full Seventh Circuit then reheard the case and a majority ruled that, to the contrary, the statute does not permit such claims. The court rested its conclusion on the plain language of the statute. Its holding is consistent with that of the only other circuit to address the issue. See Villarreal v. R.J. Reynolds Tobacco Co., 839 F.3d 958 (11th Cir. 2016).
The court’s ruling in Kleber is useful to employers facing a disparate impact claim brought in federal court by a job applicant. It does not, however, give employers free reign in designing criteria, classification and standards for job applicants. Many states, such as Wisconsin, do permit applicants who are 40+ years old to bring disparate impact age bias claims under state law. Employers should check the laws in their state(s) when developing hiring criteria.