Between 1997 and 2003 plaintiffs suing for age discrimination claimed more victories than did any other protected class, including gender and race, according to a Jury Verdict Research report.

Last spring, the U.S. Supreme Court further extended the rights of employees when it stated that a cause of action, to succeed, need not show intentionality, but rather a disparate impact on a protected class. An action of disparate impact is when a policy is discriminatory toward a group of employees, even if the policy, on its face, is not discriminatory, nor intended to be so.

In reaching a decision, the Court recognized that the Age Discrimination in Employment Act of 1967 (ADEA), which protects all workers over 40, was similar to provisions of the 1964 Civil Rights Act that, among other things, prohibits job discrimination based on race. Therefore, it was decided that the application of disparate impact should similarly apply to age discrimination.

Now, employers nationwide, despite their intent, need to review their current employment practices and policies and verify that they do not adversely affect employees over the age of 40, or any other protected group. There’s no telling what this will mean in terms of employment practices liability.

Smith v. Jackson, which ultimately ruled that disparate impact did not occur, nonetheless produced discussion and opinions that cleared the path for claims of disparate impact under certain circumstances.

While extending the reach of the ADEA made it easier for the employees to bring suit, the Court did decide that disparate impact suits based on age discrimination should have its limits. One such limit was placing the burden of proof on the employees, who must identify a specific policy or employment practice that adversely affected them.

Also, under the ADEA, if an employer shows that the given policy is based on reasonable factors other than age (RFOA) then he is not held accountable, even with a claim of disparate impact.

Smith v. Jackson involved a revised pay plan whereby the city of Jackson granted Police and Fire Department workers with less than five years tenure proportionately greater raises than employees who had been there longer. Thirty older employees filed suit claiming age discrimination, because most employees over 40 had been employed with the city for more than five years.

The City of Jackson explained that they devised the payment plan because they needed to make the salaries of those junior officers more competitive with comparable positions in the market. To accomplish that they needed to create a plan that based pay increases on seniority and position.

The Court found that the pay plan was an "unquestionably reasonable” attempt by the city to do so. The practice could just as easily have benefited the older group of workers in another environment or under different circumstances. The case was dismissed.

The dismissal, however, did not do much to appease employers. Employers, given the discussions produced in this opinion, need to be vigilant in their practices and be prepared for a mass of litigation from employees who are disparately impacted even if ultimately the claims are dismissed.

The decision will impose higher costs on employers, both legally and administratively, with little benefit to workers.

"It is alarming because they have opened the door to a whole mass of new litigation, and it’s going to be expensive…even though employers will probably win,” said Ann E. Reesman, general counsel of the Equal Employment Advisory Council.

While the Court did say that factors other than age were reasonable, they did not offer an exhaustive list. Therefore, it is up to employers to make sure that they practice due diligence in the preparation and execution of their policies. Employers should also be equipped with reasonable explanations that justify the disparate impact that these policies may cause.

"Age bias is the basis of the fourth most common type of discrimination charge the EEOC receives,” says Equal Employment Opportunity Commission spokesman, James Ryan. "What’s clear is that employers of all sizes need to be vigilant in making sure their employment policies and decisions are nondiscriminatory toward any and all demographic groups and that no group, such as 40-plus, suffers inordinately due to company actions, whether intended that way or not.”