Deep Impact – 7th Circuit Holds that Disparate Impact Claims for Job Applicants Not Covered by ADEAYou might have seen all the buzz about the Seventh Circuit’s recent decision in Kleber v. CareFusion Corporation holding that job applicants were not covered by the Age Discrimination in Employment Act (ADEA). Does that mean you can refuse to hire someone because of their age? Not surprisingly, no, it does not mean that. Let’s take a minute to look at what happened.

What’s the Difference between Impact and Treatment Claims?

The difference between disparate treatment and disparate impact claims can be very important. Disparate treatment requires evidence of intentional acts taken to discriminate against an individual. Disparate impact claims cover facially neutral employment practices that have the effect of adversely impacting a protected class of individuals. For example, a plaintiff may prove a disparate treatment age claim with evidence that an employer made overt statements such as “We want to hire a younger person.” On the other hand, a plaintiff might prove a disparate impact claim by showing statistically that the application process tends to exclude females.

The Impact on Applicants

The difference between the two types of claims played out in the Seventh Circuit last week in an opinion looking at age discrimination claims under the ADEA. Dale Kleber, an attorney, applied for an in-house position at CareFusion seeking applicants with no more than seven years of experience. Kleber was 58 years old and had experience that exceeded that requirement. CareFusion did not hire Kleber, and instead went with a 29-year-old applicant who had fewer than seven years of experience. Kleber filed a claim against CareFusion under both disparate impact and disparate treatment claims. The district court dismissed his claim for disparate impact, and Kleber voluntarily dismissed his disparate treatment claim. Kleber then appealed.

The Seventh Circuit, like the court below, looked to the specific text in the ADEA statute discussing disparate impact claims. That part of the statute, unlike protections against disparate treatment, does not provide protections for applicants for employment. Instead, the only individuals who can file claims for disparate impact based on age are those already with the status of “employee.” The statute specifically protects applicants from intentional disparate treatment age discrimination, just not from disparate impact. In this case, Kleber apparently didn’t have direct evidence that he was refused employment due to his age. Since he instead was claiming that the seven-year experience limitation had the discriminatory impact of excluding older applicants, his claim failed under the ADEA.

Does This Mean We No Longer Have to Hire Old People?

Absolutely not. Intentionally discriminating against older (over 40) applicants is still illegal. However, if your company has a facially neutral requirement that may statistically exclude older applicants, such as CareFusion’s experience cap, the Seventh Circuit says that is not subject to a challenge using an adverse impact theory. However, employers should be wary of intentionally trying to fashion employment requirements that would exclude older applicants — that might push you into the disparate treatment realm.

Does the Shutdown Shut Off FLSA Obligations to Unpaid Government Workers?The U.S. federal government shutdown has continued for more than a month, with no probable end in sight. While many government employees are furloughed, an estimated 420,000 others are deemed “essential employees” and are required to continue working without pay during the shutdown. Several essential employees have recently filed putative collective action lawsuits, claiming that the shutdown violates their wage-and-hour rights under the Fair Labor Standards Act because they are working without pay. Several of the plaintiffs are customs/border protection officers, as well as prison guards, and have been previously classified as non-exempt by the Department of Homeland Security.

Plaintiffs in these new lawsuits are likely to succeed based on precedent from several years ago. Non-exempt, essential employees brought a similar lawsuit during the 2013 government shutdown, and the court held that the government’s failure to pay these employees during the shutdown violated their rights to minimum wage and overtime pay. The court additionally awarded liquidated damages in that case.

Until the government reopens and the purse strings are untied, essential employees are going to continue to work without pay. Thus, it will be difficult for government employers to avoid allegations of wage-and-hour violations. Those employers can control, however, their responses to any employee complaints about pay (or lack thereof) so as to avoid a retaliation claim under the Fair Labor Standards Act. Government employers should proceed with caution in issuing any discipline or otherwise making employment decisions as to non-exempt essential employees until the shutdown ends and those individuals have received back pay for their work during the shutdown.

False Claims Act Suits Relied Heavily on Whistleblowers in 2018Companies that work with the federal government (think Medicare and Medicaid reimbursements, government contracts, grant funding) need to stay up to date on the False Claims Act (FCA). The FCA is one of the primary tools used by employee whistleblowers to bring actions against their employers. In 2018, whistleblowers filed 645 new FCA actions and recovered $2.88 billion for the government in settlements and judgments—of which the whistleblowers kept $301 million as their share. This past year also saw several new developments in the case law surrounding the FCA’s whistleblower retaliation provisions. To keep you informed on the status of the law, Bradley’s Government Enforcement and Investigations Practice Group is pleased to present the False Claims Act: 2018 Year in Review, our annual review of significant FCA cases, developments and trends. This year’s publication maintains the magazine-like format we introduced last year, making it an easy-to-read, printed resource as well as a convenient and searchable digital tool.