For a number of years, federal courts have agreed that plaintiffs in disparate treatment age discrimination claims may demonstrate bias based on the employer favoring younger workers who still fall into the protected category. In other words, a 60-year old can sue for age discrimination alleging that the employer favored a 50-year old employee over him. Earlier this month in Karlo v. Pittsburgh Glass Works, LLC, the Third Circuit Court of Appeals ignored decisions by multiple other federal appellate courts by allowing statistical evidence of such bias to be used as proof in a disparate impact age discrimination case.

Disparate impact actions differ from disparate treatment because they do not claim that the employer intentionally acted against the plaintiffs. Instead, the plaintiffs typically use statistical information to demonstrate an unintended bias. In this case, the plaintiffs contended that a layoff affected 50-plus employees greater than those in their 40s. The Third Circuit agreed with this approach despite decisions from three other federal circuits excluding disparate impact claims on this basis.

Employers’ main concern is that by allowing use of these age bands, plaintiffs will be able to manipulate statistics to show bias between two groups of employees over 40. This reasoning would also require employers conducting reductions in force to compare the impact of their decisions not just between younger and older employees, but also among multiple groups of their older workers.

Given the circuit split, the U.S. Supreme Court may agree to review this decision. Employers with operations in the Third Circuit should take this decision into account when planning or conducting layoffs.