Smith v. City of Jackson

The City of Jackson, Mississippi, implemented a pay plan in 1998 to bring salaries of police officers and dispatchers to market levels. The plan gave proportionally larger raises to employees with less than five years of service, which disproportionately benefited younger workers. A group of older employees, including police officers and dispatchers, sued under the ADEA, alleging both disparate treatment (intentional discrimination) and disparate impact (neutral policy with adverse effect on older workers). The district court granted summary judgment for the city, and the Fifth Circuit affirmed, holding that the ADEA did not recognize disparate-impact claims. The Supreme Court granted certiorari to resolve a circuit split on the issue.¹

Justice John Paul Stevens wrote the plurality opinion, joined by Justices Souter, Ginsburg, and Breyer. The Court held that the ADEA's text, which prohibits discrimination "because of" age, and its legislative history, including the 1967 Senate report, indicated that Congress intended to authorize disparate-impact claims. However, the Court distinguished the ADEA from Title VII by noting that the ADEA includes an explicit exception for actions based on a "reasonable factor other than age" (RFOA). This means that employers can defend against disparate-impact claims by showing that the challenged practice is based on a reasonable non-age factor. The Court also emphasized that the ADEA's scope is narrower than Title VII's, as it allows for more flexible employer defenses. Justice Sandra Day O'Connor concurred in part and dissented in part, arguing that the ADEA does not support disparate-impact claims at all, but she agreed with the majority's conclusion that the city's plan was justified under the RFOA exception. Chief Justice Rehnquist and Justices Kennedy and Thomas joined O'Connor's opinion. The Court ultimately remanded the case, but the plaintiffs' claims failed because the city's pay plan was based on a reasonable factor (market-based pay) and the impact was not severe enough.²

Smith v. City of Jackson resolved a long-standing circuit split and established that disparate-impact claims are cognizable under the ADEA, but with a critical limitation: the RFOA defense provides a broad shield for employers. This decision contrasts with the later case of Ricci v. DeStefano (2009), which addressed disparate impact under Title VII in the context of intentional discrimination. The ruling also influenced the Equal Employment Opportunity Commission's (EEOC) regulations, which require employers to prove that a practice is based on a reasonable factor other than age. The case has been cited in numerous lower court decisions, and it remains a cornerstone of age discrimination law, particularly in cases involving reductions in force, pay structures, and other neutral policies that may adversely affect older workers.³

A lesser-known aspect is that the plaintiffs in Smith were not just police officers but also police dispatchers, and the pay plan was designed to address retention issues for entry-level positions. Another nuance is that the Court's plurality opinion drew on the ADEA's legislative history, including a 1967 Senate report that explicitly mentioned "disparate impact" as a concern, which was a key factor in the statutory interpretation. Additionally, the case is notable for the unusual alignment of Justices, with O'Connor's partial concurrence creating a 5-3 split (Justice O'Connor concurred in the judgment but not the reasoning). The decision also clarified that the ADEA's "reasonable factor other than age" defense is an affirmative defense, meaning the employer bears the burden of proof. This has practical implications for employers, who must document the rationale for policies that may have a disparate impact on older workers.⁴

Disparate impact

A legal theory that a neutral policy or practice has a disproportionately adverse effect on a protected group, even without intent to discriminate.

Reasonable factor other than age (RFOA)

An affirmative defense under the ADEA that allows employers to justify practices that have a disparate impact on older workers if the practice is based on a reasonable non-age factor.

ADEA

The Age Discrimination in Employment Act of 1967, a U.S. federal law that prohibits age discrimination against employees aged 40 and older.