It has been a busy year for the U.S. Equal Employment Opportunity Commission (“EEOC”). So far in 2012, the EEOC has issued regulations or policy guidance with respect to the “reasonable factors other than age” defense under the Age Discrimination in Employment Act (“ADEA”) and discrimination against transgendered employees or job applicants under Title VII of the Civil Rights Act of 1964 (“Title VII”). The EEOC also issued guidance limiting an employer’s ability to consider a job applicant’s arrest or conviction records in making employment decisions.

The EEOC Clarifies the “Reasonable Factors Other Than Age” Defense

The EEOC issued a final rule concerning disparate impact claims and the “reasonable factors other than age” defense under the ADEA. Intended to implement recent Supreme Court decisions interpreting the ADEA, the regulations went into effect on April 30, 2012.

The new regulations define “reasonable factors other than age” as a “non-age factor that is objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances.” Thus, an employer bears the burden of proving that the employment practice at issue is “both reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known, to the employer.” This standard is less onerous than the “job related /consistent with business necessity” defense that applies in cases brought under Title VII.

The regulations also provide a non-exhaustive list of considerations for determining whether an employment practice is based on a reasonable factor. The considerations include the extent to which : (1) the factor is related to the employer’s stated business purpose; (2) the employer applies the factor fairly and accurately, including whether managers and supervisors were trained how to apply the factor and avoid discrimination; (3) the employer limited its supervisors’ discretion to assess employees subjectively, particularly if the criteria are known to be subject to negative age-based stereotypes; (4) the extent to which the employer assessed the adverse impact of its employment practice on older workers; and( 5) the degree of harm to individuals within the protected age group, including both the extent of injury and the number of people adversely affected, and the extent of the employer’s action to reduce the harm. The new regulations are available at: https://tinyurl.com/74y4zyr.

Title VII Protects Transgendered Employees and Job Applicants

In April 2012, the EEOC ruled in a case involving a public-sector employee that transgendered employees and job applicants are protected from “sex” discrimination under Title VII. The complainant, a male in the process of changing his gender to female, applied for a job with the Bureau of Alcohol, Tobacco, Firearms and Explosives. After disclosing his transgender status, the Bureau rejected the application.

The complainant filed a discrimination complaint with the Bureau, which denied her claim. He then sought review the EEOC, under the procedures applicable to federal employees. After initially denying the claim, The EEOC held that the complainant could seek relief under Title VII. The EEOC relied on the seminal United States Supreme Court case of Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). The Supreme Court held that Title VII prohibits discrimination on the basis of gender – sex stereotypes – and not just biological sex. Thus, employers cannot discriminate against employees or job applicants who express their biological gender in a “non-stereotypical” fashion or have transitioned (or are in the process of transitioning) from one sex to another.

The EEOC’s ruling paves the way for transgendered employees and applicants to file workplace discrimination claims with the EEOC, significantly expanding the EEOC’s jurisdiction over sex discrimination claims. This decision is particularly significant in states that do not have laws protecting against “gender identity” discrimination. The EEOC’s decision may be viewed at: https://tinyurl.com/7ngx2ht.

Use of Arrest and Conviction Records in Employment Decisions

As we wrote in our June 18, 2012, column, “EEOC Issues New Guidance Regarding Criminal Records,” the EEOC issued guidance on the use of arrest and conviction records in making employment decisions. An employer’s reliance on criminal conviction records must be narrowly tailored to meet the qualifications of the position. An employer should conduct an individualized assessment to determine if the records warrant disqualification. Additionally, arrest records, standing alone, should not be used to disqualify an applicant. However, the EEOC recognized that certain exceptions will apply, such as certain federal jobs in which relevant statutes or regulations prohibit individuals with criminal records from being hired.

The EEOC’s guidance can be found at: https://tinyurl.com/75tb3vg.

Best Employment Practices

The EEOC is actively revising its interpretations of federal anti-discrimination laws. Federal and state courts and agencies often rely on the EEOC’s views. Therefore, it is important to stay current on the EEOC’s enforcement guidance and proposed regulations.

Particularly in the area of gay and transgender rights, employment law is quickly changing. Employers should consider revising policies and practices that may run afoul of these legal developments. Additionally, employers must modify hiring practices to ensure compliance with increased government scrutiny of employers’ hiring criteria, such as criminal background, credit, and other seemingly neutral and historically acceptable criteria.