Third Circuit Rules Workers Age 50+ Can Be Considered Subgroup in Testing for Discrimination

New Jersey’s Third Circuit recently held in Karlo v. Pittsburgh Glass Works, LLC, No. 15-3435, 2017 WL 83385 (3d Cir. Jan. 10, 2017), that workers in their 50s may be recognized as a “subgroup” of employees protected by the Age Discrimination in Employment Act (“ADEA”) if an employer’s policies inadvertently disfavor them relative to their co-workers who are over age 40 and, therefore also protected employees under this law.

The plaintiffs in Karlo were all over age 50 and had worked in defendant’s Manufacturing Technology division until they were terminated in 2009 as part of a reduction in force. Plaintiffs then brought a collective action under the ADEA, asserting disparate treatment, disparate impact, and retaliation as to two of the plaintiffs. The district court granted the employer’s motion for summary judgment on the disparate impact claim, holding that a disparate impact claim for the “fifty-and-older” subgroup relative to their younger yet age-protected co-workers was not permitted under the ADEA because the law does not permit subgroup claims. The court also found that plaintiffs lacked evidence to support their claim.

The Third Circuit reversed the district court’s ruling on summary judgment and held that the plaintiffs could pursue their claims. According to the court in Karlo, plaintiffs are permitted to use subgroup comparisons and similar evidence to demonstrate the significantly disproportionate adverse impact necessary for a disparate impact claim under the ADEA. The appeals court emphasized that the ADEA prohibits age discrimination as a whole, not just discrimination against employees ages 40-and-over. Thus, the court found that the plaintiffs are permitted to bring claims alleging that they were treated less favorably than their younger counterparts, even where their younger co-workers included employees within the ADEA’s protected class.

This decision represents a departure on this issue from several other circuit courts that have previously not allowed such “subgroup” claims. The United States Supreme Court may need to resolve this split. As always, we will update this blog should the Court consider this issue in the future.