At the same time, the law also provides that it "shall not be unlawful for an employer…to take any action otherwise prohibited where the differentiation is based on reasonable factors other than age."

The question the court dealt with is whether an employee alleging disparate impact under the ADEA bears the burden of persuasion on the "reasonable factors other than age" defense.

That was the basis of the decision by the 2nd U.S. Circuit Court of Appeals in reversing a jury verdict in favor of the plaintiffs, despite the fact the decision conflicts with the decisions of other circuits as well as a regulation of the Equal Employment Opportunity Commission.

The employees sued the laboratory, based in upstate New York, when only one of the 31 employees laid off was under 40 years old. At the same time, 60 percent of the work force was over 40. The laboratory is owned by Lockheed Martin Corp.

The lawyer for the laid-off employees, as well as a lawyer for the U.S. Solicitor General, in oral arguments cited a provision in the ADEA by Congress saying that employers could justify laying off one employee as opposed to another based on "reasonable factors other than age" as justification of their position that the employer had the burden of proof in these cases.

Specifically, the lawyers told the justices, through this provision Congress was offering employers a defense, but one which they would have to prove.

"And the question for the employer is just to show that its business practices–it's own business practice–is reasonable, is supported by some reasonable factor other than age," said Daryl Josefer, an assistant U.S. solicitor general in supporting the employees.

"And it ought not be hard for an employer, especially considering that the reasonableness standard is not very daunting, to explain why its own business practice is reasonable."

And, he added, "If an employer can't even persuade someone that its own business practice is reasonable, then the odds are that there is a problem."

Kevin Russell, the lawyer for the employees with Howe & Russell in Bethesda, Md., made a similar point.

But Chief Justice John Roberts disagreed, saying that "doesn't seem a very compelling case. The chief justice cited pretrial discovery in the case, which gave lawyers for the employees the chance to question company officials about their rationale in deciding whom to lay off.

"It doesn't seem to me that the fact that the employer possesses the information, given the very liberal discovery we have, is much of a factor," Justice Roberts said.

Seth Waxman, a former Solicitor General and now a lawyer at Wilmer Cutler Pickering Hale and Dorr in Washington, D.C., said in supporting the 2nd Circuit decision that the court should keep in mind the difference between age discrimination and other kinds of workplace discrimination.

He said he thought the 2nd Circuit decision was correct, "not just because that harmonizes this court's prior discrimination cases, and not just because three seems to be more elegant than the four steps that the petitioners want or the two steps that the government wants, but because it makes sense."

He said policies that have a differential impact on the basis of race or sex can rarely be justified as reasonable. On the other hand, Mr. Waxman said, age "often does correlate with reasonable employment factors."

Therefore, he said, "the presumption actually is quite weak" that a challenged policy amounts to improper age discrimination, and it made sense for plaintiffs to have to prove that there was no legitimate justification.

Justice Ruth Bader Ginsburg disagreed, saying, "The way you phrased the first part, it sounded to me like you were going back to the interpretation that this court rejected–that is, under the Age Discrimination Act there is only differential treatment, not neutral factor with a differential impact."