Critical Thinking Application 10- C Legal or Illegal Compensation Plan?
Case: The City of Tampa, Florida, approved a revised pay plan granting raises to all city employees in the police and fire departments. The stated purpose of the plan was to “ attract and retain qualified people, provide incentives for perfor-mance, maintain competitiveness with other public sector agencies and ensure equitable compensation to all employ-ees regardless of age, sex, race and/ or disability.” A revision of the plan, which was motivated, at least in part, by the City’s desire to bring the starting salaries of police officers up to the regional average, granted raises to all police officers and police dispatchers. Under the provi-sions of the plan, officers and dispatchers with fewer than 5 years’ tenure received proportionately greater raises than employees who had more than 5 years’ tenure. Although some officers over the age of 40 had less than 5 years of service, most of the older officers had more. Within the police department there were five basic jobs included: police officer, master police officer, police sergeant, police lieutenant, and deputy police chief. The police officer is the entry level, or lowest ranked position in the hierarchy. Each of these positions was divided into a series of steps and half- steps. The salary for each job was based on a compensation survey conducted in comparable communities in the Southeast. As is typical in most organi-zations, the majority of personnel were in the three lowest ranks, and in each of the ranks there were officers both under and over the age of 40. Each employee was assigned to a position within the range that was equal to the lowest step that would give him or her a minimum 2 percent raise. The few officers in the two highest ranks were all over 40. All of the officers received increases in their pay. Criteria for granting increases were applied consistently and without regard to the age of the employee. The officers in the two highest ranked jobs received raises that were higher in dollar amount than the more junior positions. However, because the base salaries for these positions were higher, the relative percentage increase was smaller. Thirty police officers and public safety dispatchers over the age of 40 filed suit pursuant to the Age Discrimi-nation in Employment Act ( ADEA). They were mem-bers of the class complaining of the “ disparate impact” of the award. The plaintiffs’ evidence established two principal facts: First, almost two- thirds ( 66.2 percent) of the officers under 40 received raises of more than 10 percent while less than half ( 45.3 percent) of those over 40 did. Second, the average percentage increase for the entire class of officers with less than 5 years of tenure was higher than the per-centage for those with more seniority. Because older of-ficers tended to occupy more senior positions, on average they received statistically significant, smaller increases when measured as a percentage of their salary. The City’s explanation for the differential was the need to raise the salaries of junior officers to make them competitive with comparable positions in the market.
Question: Can the older workers use “ disparate impact” theory in their age discrimination claim? Justify your answer. Based on the preceding facts, is the City of Tampa guilty of unlawful discrimination against older workers? Explain your answer. If “ disparate impact” theory is allowed in ADEA cases, who has the burden of proof once “ prima facie” evidence is presented, and what is that burden? What case law backs up your position? What is your view of the methods they used to adjust pay rates?