Ruling by Third Circuit Holds That the ADEA Permits “Subgroup” Disparate Impact Lawsuits

In a decision at odds with rulings by every other federal appeals court to have addressed the issue, not to mention in defiance of common sense, the U.S. Court of Appeals for the Third Circuit has held that “subgroup” disparate impact claims are cognizable under the Age Discrimination in Employment Act (ADEA).

The decision by the Third Circuit in Karlo v. Pittsburgh Glass Works, LLC (3d Cir. Jan. 10, 2017), oddly reasons that subgroup disparate impact claims are cognizable because the ADEA prohibits discrimination based on age generally, not just 40-and-older status.  Thus, under the court’s rationale, an ADEA-protected subgroup of workers age 50 and older can sue for age discrimination when a facially neutral employment action, such as a reduction in force (RIF), negatively impacts the subgroup relative to younger employees, even if the younger employees are also in the protected “age 40-and-above” group.

The Third Circuit’s ruling conflicts with prior rulings by the Second, Sixth, and Eighth Circuits.  It also disregards arguments made by NT Lakis lawyers in a friend-of-the-court brief which contended that allowing ADEA disparate impact subgroup claims will force employers to take on the untenable task of considering the effect of an employment decision on every possible subgroup of older workers, as well as invite statistical manipulation by plaintiffs in cases where there is no disparate impact against older workers as a whole.

The Third Circuit’s ruling in Karlo is available here.

Members of the Equal Employment Advisory Council (EEAC) can read more here.