Are hiring practices targeting college students discrimination under the ADEA?
While it is established law that the Age Discrimination in Employment Act (“ADEA”) allows employees to bring both disparate treatment and disparate impact claims, it has been less clear when it comes to non-employees. In fact, in 2016 the Eleventh Circuit ruled in Villareal v. R.J. Reynolds Tobacco Co. that the ADEA does not authorize disparate impact claims by non-employees.1
However, on February 17, 2017, in Rabin v. Pricewaterhouse Coopers LLP the United States District Court for the Eastern District of California held that non-employee, job applicants could proceed with their disparate impact claims brought under the ADEA.2 The Plaintiffs in Rabin allege that a global accounting and auditing firm used hiring practices and policies for entry-level positions that gave preference to younger applicants and resulted in the disproportionate employment of younger employees.3 The Complaint further alleges that these hiring practices include recruiting through universities and maintaining a mandatory retirement policy that requires partners of the firm to retire by age 60.4 Plaintiffs assert that the firm’s hiring practices focused on attracting younger workers through their promotional materials, which featured only pictures of younger employees, stated that the majority of their workforce is made up of millennials, and described perks geared towards younger employees, such as student loan repayment assistance.5 The Complaint also alleges that as a result of these hiring practices and policies, the firm had a disproportionately younger workforce, with the average age of the firm’s employees being 27 years old.6
The Eastern District of California in Rabin declined to follow the Eleventh Circuit precedent and instead held that job applicants may bring disparate impact claims under the ADEA.7 In a thorough opinion, the Court reasoned that the ADEA’s statutory language and legislative history, as well as Supreme Court precedent, supported the holding that non-employees, including job applicants, may bring disparate impact claims.8 The Court also deferred to the Equal Employment Opportunity Commission’s (“EEOC”) current age discrimination regulations, which state that “[a]ny employment practice that adversely affects individuals within the protected age group on the basis of older age is discriminatory unless the practice is justified by a reasonable factor other than age.”9
This ruling creates a legal divide in federal courts, as in certain jurisdictions, non-employees and applicants may bring ADEA disparate impact claims against an employer and will not be required to allege that the employer intentionally discriminated against them or denied them a position because of their age. This is a tough decision for businesses, as it raises questions as to whether a company is exposing itself to an ADEA disparate impact case by using phrases such as “Recent Graduates Wanted” or “Looking for High School Graduates” in job postings; advertising a youthful workforce in recruiting materials; exclusively recruiting through university programs; making any reference to “Millennials” in any recruiting or job posting documents; or promoting employee perks geared only to attract younger employees, such as student loan repayment assistance or daycare options for young children.
Regardless, due to the division between federal courts in different circuits, this issue may be addressed more definitively in the not so distant future, as a petition for writ of certiorari was recently filed with the United States Supreme Court in the Eleventh Circuit’s Villareal v. R.J. Reynolds Tobacco Co. case.