On Feb. 17, 2017, in Rabin v. PricewaterhouseCoopers LLP, the U.S. District Court for the Northern District of California ruled that job applicants could maintain a disparate impact claim under the Age Discrimination in Employment Act (ADEA) challenging the practice of recruiting entry-level workers mostly through a program available only to recent college graduates.
In Rabin, the class action complaint filed by a 53-year-old certified public accountant alleges that PricewaterhouseCoopers (PwC) has a “stunningly low” number of older workers in entry-level and low- to mid-level positions. The suit challenges various PwC practices, including PwC’s campus-track recruitment program, and alleges that the only way to apply for entry-level positions is through the program, which requires affiliation with a college. The complaint also alleges that, outside of its campus-track program, PwC rarely posts openings for entry-level positions and does not offer another way for prospective applicants who are not affiliated with a college to apply for entry-level positions.
The claim is similar to a Georgia case which the 11th U.S. Circuit Court of Appeals decided en banc in October 2016, Villarreal v. R.J. Reynolds Tobacco, Co. In Villarreal, the plaintiff, a 49-year-old who had applied online for a territory manager position at R.J. Reynolds, alleged that the company engaged in age discrimination by using screening guidelines describing the “targeted candidate” as someone “2-3 years out of college” who “adjusts easily to changes,” and suggesting to avoid “applicants in sales for 8-10 years.” The 11th Circuit affirmed the dismissal of the plaintiff’s claim, holding that job applicants could not bring disparate impact claims. The court held that the plain language of Section 4(a)(2) of the ADEA gives only employees, and not applicants, the right to bring such claims.
Rejecting the 11th Circuit’s ruling, the District Court in Rabin found that the text of Section 4(a)(2) of the ADEA, its legislative history, Supreme Court precedent and the Equal Employment Opportunity Commission’s interpretation of the ADEA all support the conclusion that job applicants can bring disparate impact claims. Most critically, the court read the plain language of the ADEA differently than the 11th Circuit did, pointing out that the statute “uses the phrase ‘any individual,’ rather than ‘employee’ to identify those people section 4(a)(2) protects.” The Rabin court concluded that this choice of language was “deliberate” and evidenced an intent for the ADEA to apply to job applicants.
Meanwhile, the plaintiff in Villareal has filed a petition for a writ of certiorari requesting that the Supreme Court review the 11th Circuit’s ruling, specifically its finding that the ADEA does not apply to job applicants. Reversal of this holding could lead to R.J. Reynolds’ hiring practices being subject to scrutiny under either a disparate treatment or disparate impact theory.
The ruling in Rabin signals that Villareal may not be the last word on whether job applicants may bring disparate impact claims under the ADEA. It also suggests the likelihood of increased scrutiny on employers’ entry-level recruiting and hiring practices, specifically college and university recruiting programs. Employers who obtain most of their entry-level employees from college campuses should consider creating alternate pathways to these jobs that will increase age diversity.
For further information or questions about these developments, please contact the authors, your McGuireWoods contact, or a member of the firm’s labor and employment group.