Rudolph Karlo v. Pittsburgh Glass Works LLC
849 F.3d 61, 96 Fed. R. Serv. 3d 985, 2017 WL 83385 (2017)
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Rule of Law:
A disparate-impact claim under the Age Discrimination in Employment Act (ADEA) is cognizable when a facially neutral employment policy disproportionately harms a 'subgroup' of older employees within the larger protected class of individuals aged 40 and over. The ADEA prohibits discrimination based on an individual's age, not merely their membership in the 40-and-older class.
Facts:
- Defendant Pittsburgh Glass Works, LLC (PGW) manufactures automotive glass and its business began to falter in 2008 due to a downturn in the automobile industry.
- In response to deteriorating sales, PGW engaged in several reductions in force (RIFs).
- On March 31, 2009, PGW conducted a RIF that terminated the employment of approximately one hundred salaried employees.
- PGW gave individual unit directors broad discretion in selecting employees for termination and did not provide them with any written guidelines, training, or disparate-impact analysis.
- Plaintiffs Rudolph A. Karlo and several colleagues worked in PGW's Manufacturing Technology division.
- Their supervisor terminated all of them as part of the March 2009 RIF.
- Each of the named plaintiffs was over fifty years old at the time of termination.
Procedural Posture:
- In January 2010, Rudolph A. Karlo and other former employees (Plaintiffs) filed charges of employment discrimination with the Equal Employment Opportunity Commission (EEOC).
- After receiving a Notice of Rights, Plaintiffs filed a putative ADEA collective action against Pittsburgh Glass Works, LLC (PGW) in the U.S. District Court for the Western District of Pennsylvania, alleging disparate impact and disparate treatment.
- The District Court initially granted Plaintiffs' motion for conditional certification of a collective action comprised of terminated employees aged 50 and older.
- Subsequently, the District Court granted PGW's motion to decertify the collective action, finding the plaintiffs were not similarly situated.
- The District Court then granted PGW's motion to exclude the testimony of Plaintiffs' statistics expert, Dr. Michael Campion.
- Following the expert's exclusion, the District Court granted summary judgment for PGW on the disparate-impact claim, ruling that fifty-and-older subgroup claims are not legally cognizable and that Plaintiffs lacked supporting evidence.
- Plaintiffs appealed the summary judgment order, the expert exclusion, and the decertification order to the United States Court of Appeals for the Third Circuit.
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Issue:
Does the Age Discrimination in Employment Act (ADEA) permit a disparate-impact claim based on a facially neutral policy that disproportionately harms a subgroup of older employees (e.g., those 50 and over) relative to younger employees, when those younger employees are also within the ADEA's protected class (40 and over)?
Opinions:
Majority - Smith, Chief Judge
Yes. A disparate-impact claim under the ADEA may proceed when a plaintiff offers evidence that a specific, facially neutral employment practice caused a significantly disproportionate adverse impact based on age, even if that impact is only apparent within a subgroup of the 40-and-over protected class. The court's reasoning is grounded in the plain text of the ADEA, which prohibits discrimination 'because of such individual’s age,' not because of their membership in the 40-and-older category. Relying on Supreme Court precedent in O'Connor v. Consolidated Coin Caterers Corp., the court determined that the ADEA proscribes discrimination based on age itself, making it irrelevant whether the favored employees are also within the protected class. Further, citing Connecticut v. Teal, the court rejected a 'bottom-line' defense, affirming that the statute protects individual employees from discrimination, and favorable outcomes for the protected class as a whole cannot justify discrimination against individuals within it. The court concluded that since age is a continuous variable, unlike categorical traits like race, limiting statistical analysis to the entire 40-and-over group could mask genuine, actionable disparities affecting the oldest workers.
Analysis:
This decision establishes an important precedent within the Third Circuit and creates a circuit split by diverging from the Second, Sixth, and Eighth Circuits, which had rejected subgroup disparate-impact claims. By recognizing these claims, the court significantly strengthens protections for older workers at the upper end of the ADEA's protected age range. The ruling clarifies that the focus of an ADEA disparate-impact claim is on discrimination based on the continuous variable of age, not simply membership in the 40-and-over class. This will likely encourage more sophisticated statistical analyses in future ADEA litigation and require employers to more carefully scrutinize their policies for potential adverse effects on specific age cohorts.
