The ADEA,Disparate Impact Claims,and Compensation Adjustments

Abstract

In 2001, 30 police officers and public safety dispatchers for Jackson, Mississippi, filed suit against the city, alleging they had been discriminated against because of age by the city's new performance pay plan. The city claimed its new performance pay plan was enacted to attract new police officers and to make the city's pay for all officers more competitive with comparable markets. Among their allegations, the officers claim that the city violated the Age Discrimination in Employment Act (ADEA) because officers aged 40 and older received proportionately smaller pay increases. The question before the U.S. Supreme Court was whether an employer's neutral policy or practice can constitute a violation of the ADEA if it causes a disparate impact on older workers. The Supreme Court held that neutral employment practices causing a disparate impact on older workers might constitute a violation of the ADEA. However, the Court held that plaintiffs alleging such a claim not only have to show a statistical disparity disfavoring older workers but must also specifically identify the particular practice within the employer's decision-making process that caused the statistical disparity. Employers can defend such claims by showing the practice in question is based on a “reasonable” factor other than age. Although the Supreme Court found that the officers could bring a disparate impact claim under the ADEA, the Court held that the officers' claim failed. In dismissing the disparate impact claim, the Court said that the officers had failed to identify a specific practice within the new pay plan that caused the alleged age discrimination. The Court further held that the city's purpose behind the pay plan-making officers' compensation competitive with comparable jurisdictions-was “reasonable.”