7th Circuit Holds That Experience Limits May Violate ADEA

May 7, 2018

On April 26, 2018, in Kleber v. CareFusion Corporation, the 7th U.S. Circuit Court of Appeals held that job applicants can pursue age discrimination claims under a disparate impact theory and that a practice of excluding job applicants who exceed a maximum level of experience could be unlawful. In reaching this conclusion, the 7th Circuit becomes the first federal appellate court to extend the disparate impact provisions of the Age Discrimination in Employment Act (ADEA) to job applicants and the second court in the past 15 months to find that common hiring practices may violate the ADEA.

In Kleber, the 58-year-old plaintiff applied for a senior counsel position with CareFusion. The job posting for the position stated that applicants must have “3 to 7 years (no more than 7 years) of relevant legal experience.” Despite his strong credentials and significant work experience spanning over three decades, the plaintiff was not selected for an interview. He subsequently filed a lawsuit challenging CareFusion’s seven-year experience cap as unlawful under the ADEA’s disparate impact provision.

The district court granted CareFusion’s motion to dismiss, interpreting the ADEA’s disparate impact provision to apply only to current and former employees, not to mere job applicants. The 7th Circuit, however, disagreed with the district court’s interpretation of the ADEA and reversed the dismissal of the plaintiff’s claims. In a lengthy analysis of the ADEA’s disparate impact provision, the court first pointed out that the plain language of the statute affords protection to “any individual,” not just “employees.” The 7th Circuit also looked to court interpretations of the disparate impact provisions of Title VII, which allow both employees and job applicants to bring claims. The court then turned to the consequences of the competing interpretations, finding that permitting employees but not job applicants to bring disparate impact claims would be an “arbitrary and even baffling” result. Finally, the 7th Circuit examined the underlying purposes of the ADEA, which included eliminating barriers to older employees finding jobs. All of these approaches, the court held, supported allowing the plaintiff’s disparate impact claim to proceed.

The 7th Circuit remanded the case to the district court, noting that its decision “do[es] not address possible affirmative defenses [under the ADEA], including the defense that the challenged practice was ‘based on reasonable factors other than age.’”  In other words, the decision allows CareFusion to defend its experience requirement in the trial court but potentially places the burden on CareFusion to justify the experience-level cap.

The Kleber holding directly conflicts with the 11th Circuit’s holding in Villarreal v. R.J. Reynolds Tobacco Co., which held that only current or former employees could bring disparate impact claims under the ADEA. However, it is consistent with a 2017 ruling from a federal district court in California, which held that job applicants could challenge, under a disparate impact theory, an accounting firm’s practice of recruiting exclusively from colleges and universities for entry-level positions. (See McGuireWoods’ March 2017 legal alert “Are College Recruiting Programs Age Discrimination?”) Thus, the Kleber ruling could give the green light to additional disparate impact claims challenging recruiting and hiring practices.

The Kleber ruling also creates a split between the 7th and 11th Circuits. While other circuits have yet to weigh in on whether job applicants may assert disparate impact claims under the ADEA, a deepening schism between the courts of appeal on this issue could set the stage for Supreme Court review.

The Kleber decision signals to employers both within and outside of the 7th Circuit that they should be concerned not only about whether they are intentionally discriminating against older job applicants, but about whether their hiring and recruiting practices have a negative impact on this class of applicants, regardless of the purpose or intent. The experience cap at issue in Kleber is only one example of such a practice that likely does not have a discriminatory purpose but may have a disparate impact. Because Kleber opens the door for disappointed job applicants to sue under the ADEA’s disparate impact provisions, employers should re-evaluate their hiring practices to avoid potential lawsuits.

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.