Appeals Court Tackles Systemic Age Discrimination in Hiring

For years, it has been widely suspected that older applicants are being screened out of competition for jobs by employers using discriminatory computer software  programs.

This is why a landmark ruling this week  by a three-judge panel of the  U.S. Court of Appeals for the Eleventh Circuit in Atlanta is an important step in the battle against epidemic and systemic age discrimination in hiring.

In a 2-to-1 decision, the panel ruled:

  • The Age Discrimination in Employment Act does not bar job applicants from filing a disparate impact claim, a type of charge that challenges a facially neutral policy that has a disproportionate impact on older workers. This paves the way for older job applicants to file collective actions alleging age discrimination in hiring, a form of class action lawsuits permissible under the ADEA.
  • A job applicant should not be barred from filing an age discrimination lawsuit by the ADEA’s 180-day statute of limitations if the  applicant had no way of knowing that s/he was the victim of age discrimination.  The appeals court said the “clock” starts ticking when the plaintiff has enough information to support a cause of action.

The case was filed by job applicant Richard Villarreal, who submitted multiple online applications to work as a sales manager for RJ Reynolds Tobacco starting in 2007 when Villarreal was 49 years of age. Villarreal did not learn until 2010 that Reynolds had adopted “resume review guidelines” that weeded out older applicants. At that point, he filed a discrimination lawsuit alleging both disparate treatment (intentional discrimination) and disparate impact discrimination. Obstacles embedded in theADEA led to the dismissal of Villarreal’s lawsuit by the lower court.

Specifically, the guidelines tell hiring managers to target candidates who are “2–3 years out of college” but to “stay away from” candidates with “8–10 years” of prior sales experience. 

The appeals court reversed the  lower court’s findings that the ADEA does not permit disparate impact claims and that Villarreal’s lawsuit was not timely under the ADEA’s  180-day statute of llmitations.

With respect to disparate impact claims, the appeals court  deferred to the U.S. Equal Employment Opportunity Commission’s interpretation of the ADEA, which is that job applicants can file disparate impact lawsuits. The appeals court panel writes, “We must defer to the EEOC’s] reading rather than venture our own guess about what the statute means.” The dispute over whether the ADEA authorizes disparate impact lawsuits by job applicants stems from the fact that  Congress amended Title VII of the Civil Rights Act in 1972 to protect “applicants for employment” but never similarly amended the ADEA.

The panel stated that Villarreal simply had too few facts to support an age discrimination claim until 2010 when a statistical analysis showed that  Reynolds had hired  1,024 people as Territory Managers from September 2007 to July 2010 but only 19 were over the age of 40.  The panel applied an equity or fairness-based principle to toll the statute of limitations until Villarreal had sufficient information to support a cause of action.The panel notes that neither the job application nor any other information available to Villarreal “described Rj Reynolds hiring process, the resume review guidelines, or the statistical disparities in the ages of successful applicants.”

Other defendants in the case are, the internet search giant, and Pinstripe, Inc., a technology consulting firm based in Charlotte, NC.

The case is Villarreal v. R.J. Reynolds Tobacco Company, Pinstripe, Inc.  Careerbuilder, LLC.  The ruling technically is only applicable to the 11th Circuit, which  has jurisdiction over federal cases originating in the states of Alabama, Florida and Georgia. According to the dissent, three other federal circuits have held that job applicants cannot file a disparate impact claim. A conflict between the circuits can only be resolved by the U.S. Supreme Court.