A second federal appellate circuit has ruled that the Age Discrimination in Employment Act (the ADEA) does not apply to job applicants’ claims that a policy or practice has a disparate impact on older individuals. In so holding, the Seventh Circuit Court of Appeals, covering Illinois, Indiana, and Wisconsin, joins the Eleventh Circuit, covering Florida, Georgia, and Alabama.

However, while employers in those states may now successfully argue that job applicants’ disparate impact claims cannot be brought under the ADEA, the same is not necessarily true of state laws. It is possible that more plaintiffs will now simply pursue such claims in state court.

The Seventh Circuit case involved Dale Kleber, a 58-year-old attorney who applied for a job in CareFusion Corporation’s legal department. The job description specified that applicants should have three to seven (and not more than seven) years of experience. Kleber was not interviewed or hired for the position, and CareFusion ultimately hired a 29-year-old individual for the position, who met, but did not exceed, the prescribed experience.

Kleber sued under the ADEA, initially pursuing both disparate treatment and disparate impact claims. It has long been understood that disparate treatment claims involve intentional discrimination and that ADEA applies to claims of intentional discrimination for employees and applicants alike. In contrast, disparate impact claims do not require proof of intentional discrimination. Instead, they require a showing that a facially neutral employment practice has a disproportionately adverse impact on a protected group, such as individuals over 40 years of age.

The trial court granted CareFusion’s motion to dismiss Kleber’s disparate impact claim, finding that the relevant provision of the ADEA does not protect job applicants. Kleber voluntarily dismissed his disparate treatment claim and appealed the ruling on his disparate impact claim. In April 2018, a split panel of appellate judges reversed the trial court and found that the ADEA does cover disparate impact claims for applicants. However, the court granted en banc review, where eight of ten appellate judges agreed with the trial court, confirming that the ADEA does not apply to job applicants’ disparate impact claims.

The majority found that the specific language used in the relevant provision (which makes it unlawful for an “employer to limit, segregate or classify his employees in any way which would deprive or would tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age”) only applies to employees. In reaching this conclusion, the majority looked at the surrounding provisions, which explicitly reference the hiring process and therefore include job applicants, and found the provision about disparate impact claims does not include any such reference. Finding the absence notable, the majority stated it “is implausible that Congress intended no such distinction in [the relevant disparate impact provision], however, and instead used the term employee to cover both employees and applicants.” Two judges – Judges Easterbrook and Wood – dissented. Judge Easterbrook noted that “normally one word used in adjacent paragraphs means a single thing.”

The Seventh Circuit’s majority ruling is consistent with a 2016 decision from the Eleventh Circuit, the only other court of appeal to address the issue. The U.S. Supreme Court declined to hear an appeal of the Eleventh Circuit’s decision. Accordingly, if the Seventh Circuit decision is appealed, it seems unlikely that the Supreme Court would hear it.

Notwithstanding this decision, wise employers will still consider their recruiting practices carefully. If you have questions about this new Seventh Circuit decision and its impact on your company, contact your Akerman L&E lawyer.