Third Circuit Rules "Subgroup" Disparate Impact Claims Are Cognizable Under The ADEA

The U.S. Court of Appeals for the Third Circuit recently became the first appellate court to find that so-called "subgroup" disparate impact claims are cognizable under the Age Discrimination in Employment Act (ADEA), which prohibits age discrimination against individuals age 40 and older.¹ In Karlo v. Pittsburgh Glass Works, the Third Circuit ruled that the plaintiffs stated a disparate impact claim where a reduction-in-force (RIF) disproportionately impacted employees over 50 years old. According to the court, plaintiffs can demonstrate a disparate impact by comparing subgroups of older employees within the protected class (such as those over 50 years old) with employees both outside of the protected class and younger employees within the protected class (such as those between 40 and 50 years old). Karlo has created a split in the circuits, with the Second, Sixth, and Eighth Circuits previously rejecting the use of subgroup comparisons.