Paul Mickey, a partner and employment practices specialist at Steptoe & Johnson here in Washington, said he is advising that, as a result of this decision, "it is vital for an employer taking steps that may disproportionately affect older workers–such as implementing a reduction-in-force–to be prepared to support its actions with solid analysis and documentation, so as to meet its burden of persuading the judge or jury that it was motivated by good business justifications and not by age bias."

In comments made before the decision, Robert Sargent, executive vice president of MercatorPro, the management profession liability division of Mercator Risk Services, said "an adverse decision in this case will impact how employers should plan for and execute downsizing programs."

But, he said, even an unfavorable ruling should have only a minimal effect for those employers who are careful in limiting their exposure.

"The impact on the employment practices liability insurance market," said Mr. Sargent, "should be negligible for those employers which practice thorough employment risk management."

He noted, "The employment practices liability insurance market is currently competitive, and a moderate change in one aspect of employment exposure should not have any significant impact on underwriting or rating."

The case that was decided involved Knolls Atomic Power Laboratory, a government-owned naval research facility. The justices, by 7-1, said employers defending themselves in certain age discrimination cases must provide convincing evidence that factors other than age were the basis for their decisions involving a worker.

At the Knolls research facility there were involuntary layoffs in 1996 that were based on number of years on the job, performance and skills.

Justice David H. Souter said the "text and structure of the reasonable factors other than age" affirmative defense under the ADEA showed that Congress meant to create an "affirmative defense for which the burden of persuasion falls on the employer."

He said earlier court precedents made clear that a disparate-impact claim under the ADEA must isolate and identify "the specific employment practices that are allegedly responsible for any observed statistical disparities."

Justice Souter said, "This is not a trivial burden, and it ought to allay some of the concern that recognizing an employer's burden of persuasion on an RFOA [reasonable factor other than age] defense will encourage strike suits or nudge plaintiffs with marginal cases into court; but in the end, such concerns have to be directed at Congress, which set the balance by both creating the RFOA exemption and writing it in the orthodox format of an affirmative defense."