The Third Circuit Court of Appeals recently created a circuit split when it disagreed with prior decisions from the Second, Sixth, and Eighth Circuits regarding the Age Discrimination in Employment Act of 1967 (ADEA). In Karlo v. Pittsburgh Glass Works, LLC, No. 15-3435 (January 10, 2017), the Third Circuit held that "subgroup" disparate impact claims are cognizable under the ADEA.
Pittsburgh Glass Works, LLC is an automotive glass manufacturer in Pennsylvania. During the recession, the company implemented several mass layoffs, one of which resulted in the discharge of 100 employees on March 31, 2009. The company gave broad discretion to unit directors in selecting who would be laid off; it did not provide training or guidelines for selection, nor did it document why certain employees were laid off.
Several former employees who had been discharged in the March 31, 2009 layoff brought suit against Pittsburgh Glass Works. Among other claims, they argued that the mass layoff had a disparate impact on individuals over the age of 50. The district court granted summary judgment to the company on the disparate impact claim because a "fifty-and-older disparate-impact claim is not cognizable under the ADEA." In other words, the court-like several before it-reasoned that a disparate impact claim under the ADEA needs to disproportionately affect the protected group (i.e., individuals over 40) as a whole, not just a subgroup of the protected group. The plaintiffs appealed that decision to the Third Circuit.
The Third Circuit's Decision
The Third Circuit found that the district court's determination regarding subgroups and the ADEA-that subgroup disparate impact claims were not cognizable under the law-was incorrect and that similar determinations by other circuit courts were also flawed.
The Third Circuit took the position that discrimination against a subgroup of a protected group can support an ADEA disparate impact case. In deciding this issue, the court looked to precedent from the Supreme Court of the United States. In 1996, the Supreme Court found that subgroup disparate treatment claims were cognizable under the ADEA, stating that "the fact that one person has lost out to another person in the protected class is thus irrelevant, so long as he has lost out because of his age." Since the disparate treatment and disparate impact provisions of the ADEA have the same language (i.e., "because of such individual's age"), the Third Circuit found...