Smith v. City of Jackson, 125 S. Ct. 1536 (2005)
In Smith v. City of Jackson, the Supreme Court considered the question left open in its decision in
Hazen Paper Co. v. Biggins, and held that disparate impact theory as defined in Griggs v. Duke
Power is cognizable under the ADEA. However, a majority of the Court held that the scope of
disparate impact theory is narrower under the ADEA than under Title VII, because of the ADEA’s
“reasonable factor other than age” language, and because the 1991 Civil Rights Act’s language
does not explicitly subsume age discrimination.
In 1998, the City of Jackson, Mississippi adopted a pay plan which provided for raises to all City
employees, including its police officers. The stated purpose of the plan was to "…attract and
retain qualified people, provide incentive for performance, maintain competitiveness with other
public sector agencies and ensure equitable compensation to all employees regardless of age,
sex, race and/or disability." The plan, as implemented, granted proportionately greater
percentage raises to officers with fewer than 5 years of service than the raises granted to those
with more seniority – simply because officers who were over 40 years of age generally had more
than 5 years of service.
The Court unanimously agreed that, although the legislative history of the ADEA discloses
distinctions between the institutional arrangements which disadvantage older workers, in contrast
to systemic and individual discrimination against workers based on race, sex, color, religion or
national origin, the language of the ADEA is otherwise identical to Title VII, except that the ADEA
explicitly permits differentiation based on reasonable factors other than age (RFOA). Writing for
Justices Ginsburg, Souter and Breyer, Justice Stevens then observed that the Court’s seminal
decision in Griggs v. Duke Power had generally interpreted Title VII’s provisions to extend to the
consequences of employment practices or mechanisms – thereby allowing workers to challenge
such practices or mechanisms without a required showing of discriminatory intent. Justice
Stevens noted that, until the Court’s decision in Hazen Paper, most federal appellate courts
indeed assumed that Griggs’ disparate impact theory applied in ADEA cases, and that there was
no language in the court’s decision in Hazen
Paper precluding such an interpretation.
Justice Stevens then noted that the ADEA’s “reasonable factors other than age” language does
not imply the rejection of disparate impact theory; indeed, he explains, an employer’s reliance on
factors other than age defeats the disparate treatment case ab initio, rather than providing for an
affirmative avoidance of liability. Disparate impact claims, on the other hand, involve the
examination of facially neutral employment practices or policies that disproportionately affect the
members of a protected class (emphasis added). In such cases, the “reasonable factors other
than age” provision in the ADEA plays a definitive role by allowing the employer to avoid liability if
the adverse impact was reasonably attributable to a factor other than age. Justice Stevens
concludes that such an interpretation is supported by both the Department of Labor’s original
proposal of the statutory language, and the interpretation of the statute by the EEOC.
Part IV of the Court’s opinion, however, limits the application of disparate impact theory as
announced in the Court’s seminal decision in Griggs. First, while a majority of the Court was
willing to recognize disparate impact theory in age cases, the Court’s judgment views the
“reasonable factors other than age” language of the statute to suggest that an employee alleging
a disparate impact theory of age discrimination must “…isolate and identify the specific
employment practices that are allegedly responsible for any observed statistical disparities.”
(The employee must point to “a test, requirement or practice” that has an adverse impact on
“older” workers). The Court’s limitation on the ADEA’s reach made reference to both Congress’
failure to make clear – as it had done in the 1991 Civil Rights Act – that such limitations of Griggs
were inappropriate under Title VII, and the legislative history of the ADEA, which suggested that
discrimination against older workers was not as serious – in a social policy sense – as
discrimination against workers who needed Title VII’s protections.
Applying its interpretation of the ADEA to the instant case, the Court held that the city’s plan was
based on factors other than age. Specifically, the plan’s formula for the adjustment of salaries
was based on a survey of average pay for police officers in comparable communities in the
Southeast. That survey disclosed that the employees most out-of-line with aspirational salary
levels were those in the three lowest ranks in Jackson’s police force (regardless of age). The few
officers in the two highest ranks (all over 40 years of age) received higher dollar amount raises
under the adjustment plan, but because of their higher salaries, their raises represented a smaller
percentage of their salary than did the raise awarded to lower rank officers. Plaintiff’s only
complaint therefore is that a statistically significant number of officers over 40 years of age
received raises lower in percentage relation to their current salary than the percentage raise
awarded to younger employees (emphasis added). The plan was not however based on age, but
rather sought simply to bring employee salaries into line with regional norms, in order to attract
and retain qualified police officers. Viewed in this light, the salary decisions made under the
plan were based on reasonable factors other than age.
Justice Scalia wrote separately, observing that the Court should simply defer to the EEOC’s
interpretation of the ADEA, which would require that “…employment criteria that are age-neutral
on their face but which nevertheless have a disparate impact on members of the protected age
group must be justified as a business necessity. (Citing United States v. Mead Corp., 533 U.S.
218 (2001). Justice O’Connor dissented, observing that neither the legislative language (including
§ 4(a)(2) on which the plaintiffs relied), agency interpretation, or the Court’s past decisions
suggested any intent by Congress that disparate impact claims are cognizable under the ADEA.
Rather it is clear, Justice O’Connor suggests, that the statutory “causation” language in §§ 4(a)(1)
and (a)(2), read strictly and in para materiae, clearly restricts its reach to decisions motivated by
consideration of age, and not to decisions which merely affect older workers consequently.
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