What a Difference ADEA Makes: Why Disparate Impact Theory Should Not Apply to the Age Discrimination in Employment Act

Imagine you are a business owner in the 1990s.In these difficult economic times you may need to "readjust" your company's workforce in order to keep your business profitable.An effective strategy might be to replace your most expensive employees-those with the highest salaries, largest fringe benefit expenses or highest pension benefit costs-with employees who will cost less to do the same jobs.2 However, you recognize that such a decision is likely to effect your older workers more than your younger employees, because older workers are likely to have the higher salaries associated'with greater experience and seniority, and because these salaries, combined with health and lifestyle differences, make them more expensive to employ.3 You may not have any motivation to harm older workers; in fact, you may even have a proud track record of complying with all state and federal employment laws and have no intention of discriminating against older workers.4 But with a changing economy 1.Credit for this title is due to John F. Cannon, who used this phrase to title the conclusion section of his article, Statistical Analysis in ADEA Litigation, in AGE DISCRIMINATION WORKSHOP 1985: STATE AND FEDERAL LmGATION 543, 572 (PLI Litig.& Admin.Practice Course Handbook Series No. 287, 1985).2. This decision is being made daily in businesses across the country.See, e.g., Liz Spayd, As Recession Forces Layoffs, Older Workers Feel Targeted, WASH.POST, Sept. 29, 1992, at Cl ("Companies are desperate to thin the ranks.... Faced with the choice of letting go an eager, young upstart making $30,000 a year, or a worker twice as old and earning twice as much, companies are tempted to hand the older worker the pink slip.").3. As one commentator explained this situation: Seniority and longevity often influence salary and fringe benefit levels.Because these factors correlate with age, older workers can become more costly to compensate than their younger counterparts.This disparity creates significant tension during times of economic stress when employers look to maximize savings by laying off or replacing their costliest workers.The tension exists because the use of salary costs as a criterion for layoffs appears to be both economically rational yet peculiarly burdensome to the older segment of the workforce.Steven J. Kaminshine, The Cost of Older Workers, Disparate Impact, and the Age Discrimination in Employment Act, 42-FLA.L. REv.229, 232 (1990) (footnotes omitted).4. "Most companies [which are sued for age discrimination after firing numerous older workers] say their intent is not to remove older workers, but to cut costs, and they note that many younger workers also are laid off as they trim their workforces."Spayd, [Vol.74 [Vol.74