Filed: Jul. 05, 2001
Latest Update: Feb. 21, 2020
Summary: PUBLISH IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ELEVENTH CIRCUIT _ JULY 05, 2001 THOMAS K. KAHN CLERK No. 99-15306 _ D. C. Docket No. 95-00123 CV OC-10A WANDA L. ADAMS, LEO L. FLOYD, et al., Plaintiffs, Counter-defendants, Appellants, versus FLORIDA POWER CORP., FLORIDA PROGRESS CORPORATION, Defendants, Counter-claimants, Appellees. _ Appeal from the United States District Court for the Middle District of Florida _ (July 5, 2001) Before BIRCH, B
Summary: PUBLISH IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ELEVENTH CIRCUIT _ JULY 05, 2001 THOMAS K. KAHN CLERK No. 99-15306 _ D. C. Docket No. 95-00123 CV OC-10A WANDA L. ADAMS, LEO L. FLOYD, et al., Plaintiffs, Counter-defendants, Appellants, versus FLORIDA POWER CORP., FLORIDA PROGRESS CORPORATION, Defendants, Counter-claimants, Appellees. _ Appeal from the United States District Court for the Middle District of Florida _ (July 5, 2001) Before BIRCH, BA..
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PUBLISH
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
_______________ JULY 05, 2001
THOMAS K. KAHN
CLERK
No. 99-15306
_______________
D. C. Docket No. 95-00123 CV OC-10A
WANDA L. ADAMS, LEO L. FLOYD, et al.,
Plaintiffs, Counter-defendants,
Appellants,
versus
FLORIDA POWER CORP.,
FLORIDA PROGRESS CORPORATION,
Defendants, Counter-claimants,
Appellees.
______________________________
Appeal from the United States District Court
for the Middle District of Florida
______________________________
(July 5, 2001)
Before BIRCH, BARKETT and MAGILL*, Circuit Judges.
BIRCH, Circuit Judge:
*
Honorable Frank J. Magill, U.S. Circuit Judge for the Eighth Circuit, sitting by
designation.
This case presents an issue of first impression in our circuit regarding
whether a disparate impact theory of liability is available to plaintiffs suing for age
discrimination under the Age Discrimination in Employment Act of 1967
(“ADEA”), 29 U.S.C. § 621 et seq. The district court ruled as a matter of law that
disparate impact claims cannot be brought under the ADEA. Because the question
presents a controlling issue of law in the case, and the judge opined that there were
substantial grounds for disagreement over his decision, he certified the question to
us pursuant to 28 U.S.C. § 1292(b).1 We exercise our discretion to take the case
and AFFIRM.
I. BACKGROUND
Florida Power Corporation (“FPC”) operated as a publicly-regulated electric
utility monopoly until 1992, when Congress opened the industry to competition
through the Energy Policy Act of 1992, 106 Stat. 2776 (1992). Florida Progress
Corporation is its parent corporation. Wanda Adams and several other plaintiffs
(the “Adams class”) were terminated by FPC between 1992 and 1996, during a
series of reorganizations the company states were necessary to maintain its
1
Our sister, in her concurring opinion, concludes that we overreach by deciding the
question of whether disparate impact claims are cognizable under ADEA as a matter of law. She
would find that the plaintiffs failed to adequately allege a disparate impact claim. This position
is inconsistent with the posture of the case. The district court expressly made no findings of fact
on the sufficiency of the allegations in the plaintiffs’ complaint. Indeed, because the district
court certified only the question of law to us, a “pronouncement in the abstract” is required.
2
competitiveness in the newly deregulated market. Members of the Adams class
sued FPC and its parent corporation claiming, inter alia, that FPC discriminated
against them because of their age, in violation of the ADEA.
In 1996, the district court conditionally certified a class of former FPC
employees claiming age discrimination. In August 1999, the district court
decertified the class and ruled as a matter of law that a disparate impact theory of
liability is not available to plaintiffs bringing suit under the ADEA.2 Because there
is some conflict among the circuits and we had not yet ruled on the availability of
disparate impact claims under the ADEA, the district court certified the question to
us pursuant to 28 U.S.C. § 1292(b).3 The court was careful to note that he made no
findings of fact or assessment of whether the Adams class could produce evidence
sufficient to state a claim for disparate impact. Accordingly, the sole question
2
The court also found that the plaintiffs’ disparate treatment claims were not sufficiently
similar to support proceeding as a class. Accordingly, the court held that the Adams class
members would each have to pursue their individual remedies separately.
3
The district court’s Order of Certification states the following:
[W]hether I am right or wrong in ruling that the disparate impact theory of
liability is unavailable to these Plaintiffs is a critical issue that ought to be
resolved with finality before the Court can reasonably proceed with the
management of this litigation toward trial . . . The controlling question of law is
whether the “disparate impact” theory or method of proving liability is applicable
to claims brought under the [ADEA].
R3-312, at 2-3 (internal citations omitted).
3
before us is whether, as a matter of law, disparate impact claims may be brought
under the ADEA.
II. DISCUSSION
We review the district court’s interpretation of a statute de novo. United
States v. Prosperi,
201 F.3d 1335, 1342 (11th Cir. 2000). As with any question of
statutory interpretation, we begin by examining the text to determine whether its
meaning is clear. “In construing a statute we must begin, and often should end as
well, with the language of the statute itself.” Merritt v. Dillard Paper Co.,
120 F.3d
1181, 1185 (11th Cir. 1997). “Where the language Congress chose to express its
intent is clear and unambiguous, that is as far as we go to ascertain its intent
because we must presume that Congress said what it meant and meant what it
said.” United States v. Steele,
147 F.3d 1316, 1318 (11th Cir. 1998) (en banc),
cert. denied,
528 U.S. 933,
120 S. Ct. 335 (1999).
The language of the ADEA closely parallels that of Title VII. See Lorillard
v. Pons,
434 U.S. 575, 584,
98 S. Ct. 866, 872 (1978) (noting that “the prohibitions
of the ADEA were derived in haec verba from Title VII.”) In fact, the sections
forbidding discrimination are almost identical. Compare 29 U.S.C. § 623(a)(1)
(ADEA) with 42 U.S.C. § 2000e-2(a)(1) (Title VII). The Supreme Court has held
that Title VII supports a cause of action for employment discrimination based on a
4
disparate impact theory.4 See Griggs v. Duke Power Co.,
401 U.S. 424, 431, 91 S.
Ct. 849, 853 (1971).
Several circuits have relied on the holding in Griggs to find that, because the
language of the ADEA parallels Title VII, disparate impact claims also should be
allowed under the ADEA. See Geller v. Markham,
635 F.2d 1027, 1032 (2d Cir.
1980); Smith v. City of Des Moines,
99 F.3d 1466, 1469-70 (8th Cir. 1996);
E.E.O.C. v. Bordens, Inc.,
724 F.2d 1390, 1394-95 (9th Cir. 1984). In a case
involving liquidated damages under the ADEA, the Supreme Court explicitly left
open the question of “whether a disparate impact theory of liability is available
under the ADEA.” Hazen Paper Co. v. Biggins,
507 U.S. 604, 610,
113 S. Ct.
1701, 1706 (1993). The Second, Eighth, and Ninth Circuits have read Hazen
literally and continue to allow disparate impact claims. See Criley v. Delta
Airlines, Inc.,
119 F.3d 102, 105 (2d Cir. 1997) (per curiam); Lewis v. Aerospace
Cmty. Credit Union,
114 F.3d 745, 750 (8th Cir. 1997); Frank v. United Airlines,
Inc.,
216 F.3d 845, 856 (9th Cir. 2000); E.E.O.C. v. Local 350,
998 F.2d 641, 648
n.2 (9th Cir. 1993).
4
A disparate impact claim is one that “involve[s] employment practices that are facially
neutral in their treatment of different groups but that in fact fall more harshly on one group than
another and cannot be justified by business necessity.” Hazen Paper Co. v. Biggins,
507 U.S.
604, 609,
113 S. Ct. 1701, 1705 (1993) (quoting Teamsters v. United States,
431 U.S. 324, 335-
36 n. 15,
97 S. Ct. 1843, 1855 n. 15 (1977)).
5
In contrast, the First, Third, Sixth, Seventh, and Tenth Circuits have
questioned the viability of disparate impact claims under the ADEA post-Hazen.5
See Mullin v. Raytheon Co.,
164 F.3d 696, 700-01 (1st Cir.), cert. denied,
528 U.S.
811,
120 S. Ct. 44 (1999); E.E.O.C. v. Francis W. Parker School,
41 F.3d 1073,
1076-77 (7th Cir. 1994); Ellis v. United Airlines, Inc.,
73 F.3d 999, 1006-07 (10th
Cir. 1996); DiBiase v. Smithkline Beecham Corp.,
48 F.3d 719, 732 (3d Cir.
1995); Lyon v. Ohio Educ. Ass’n and Prof’l Staff Union,
53 F.3d 135, 139 n.5 (6th
Cir. 1995). These cases rely on language in Hazen and other factors that suggest
that disparate impact claims are not viable under the ADEA.
First, courts that question the viability of a disparate impact claim under the
ADEA note that the text of the ADEA differs from Title VII in an important
respect. Section 623(f)(1) of the ADEA explicitly provides that an employer may
“take any action otherwise prohibited . . . where the differentiation is based on
reasonable factors other than age.” 29 U.S.C. § 623(f)(1). The First Circuit has
reasoned that
if the exception contained in section 623(f)(1) is not understood to
preclude disparate impact liability, it becomes nothing more than a
bromide to the effect that “only age discrimination is age
discrimination.” Such a circular construction would fly in the teeth of
the well-settled canon [of statutory construction].
5
The Fourth, Fifth, and D.C. Circuits have not addressed this issue.
6
Mullin, 164 F.3d at 702.
In addition, the language of § 623(f)(1) is similar to language found in the
Equal Pay Act. Section 206(d)(1) of the Equal Pay Act provides that wage
discrimination on the basis of gender is prohibited, unless the wage “differential
[is] based on any other factor other than sex.” 29 U.S.C. § 206(d)(1)(iv). “The
Supreme Court [has] interpreted section 206(d)(1) of the Equal Pay Act to preclude
disparate impact claims.”
Ellis, 73 F.3d at 1008 (citing County of Washington,
Ore. v. Gunther,
452 U.S. 161, 170-71,
101 S. Ct. 2242, 2248-49 (1981));
Mullin,
164 F.3d at 702 (drawing same comparison).6 The text of the ADEA is sufficiently
distinguishable from Title VII as to raise doubts about extending the disparate
impact theory of liability to ADEA cases.
Turning to the legislative history, the Mullin and Ellis courts note that the
ADEA was enacted after the Secretary of Labor issued a report on age
discrimination.
Mullin, 164 F.3d at 702-03;
Ellis, 73 F.3d at 1008. The report,
6
We note that the ADEA requires that the “other factor” be a reasonable one, while the
Equal Pay Act finds “any other factor” acceptable. Compare 29 U.S.C. § 623(f)(1) with 29
U.S.C. § 206(d)(1)(iv). It could be argued that this difference distinguishes the ADEA from the
Equal Pay Act, and supports the inference that the reasonableness requirement refers to the
business necessity justification that, in Title VII cases, can be used to defend an employment
qualification that has a disparate impact on employees in the protected class. In light of the
differences between the ADEA and Title VII discussed herein, we decline to draw such an
inference.
7
entitled The Older American Worker: Age Discrimination in Employment (1965),
recommended that Congress ban arbitrary discrimination, such as disparate
treatment based on stereotypical perceptions of the elderly, but that factors
affecting older workers, such as policies with disparate impact, be addressed in
alternative ways.
Ellis, 73 F.3d at 1008. Thus, the history of the ADEA differs
from the legislative history of Title VII, which the Supreme Court in Griggs relied
on to find a cause of action for disparate impact. See
Griggs, 401 U.S. at 432, 91
S. Ct. at 854 (discussing the history of amendments to the bill and noting that for
Title VII, Congress specifically “placed on the employer the burden of showing
that any given requirement must have a manifest relationship to the employment in
question.”).
Finally, while the Hazen Court left open the question of whether a disparate
impact claim can be brought under the ADEA, language in the opinion suggests
that it cannot. First, the Court noted that “[d]isparate treatment . . . captures the
essence of what Congress sought to prohibit in the ADEA.”
Hazen, 507 U.S. at
610, 113 S. Ct. at 1706. In addition, the Court reiterated that, in making
employment decisions, the use of factors correlated with age, such as pension
status, did not rely on “inaccurate and stigmatizing stereotypes” and was
acceptable.
Id. at 611, 113 S. Ct. at 1706-07. That position is inconsistent with the
8
viability of a disparate impact theory of liability, which requires no demonstration
of intent, but relies instead on the very correlation between the factor used and the
age of those employees harmed by the employment decision to prove liability.
III. CONCLUSION
The Second, Eighth, and Ninth Circuits allow disparate impact claims under
the ADEA. The First, Third, Sixth, Seventh, and Tenth do not. We find the
reasoning of the Tenth Circuit in Ellis and the First Circuit in Mullin persuasive.
Accordingly, we find that disparate impact claims may not be brought under the
ADEA, and AFFIRM.
9
BARKETT, Circuit Judge, specially concurring:
I would affirm the district court’s ruling in this case, but for reasons other
than the one relied upon by the district court.1 I do not believe the complaint here
pleads a disparate impact claim sufficient to qualify for class certification. Thus,
because I find that plaintiffs have sufficiently alleged only that they suffered
disparate treatment, and the district court’s denial of certification on the disparate
treatment claim is not at issue on this appeal, I believe it is unnecessary and
premature to address the question of whether disparate impact claims are
cognizable under the ADEA. I think it especially unwise because this question
does not lend itself to a pronouncement in the abstract.
The decision as to whether a disparate impact claim is available in an age
discrimination case should be made on a case specific basis rather than on an
overreliance on decontextualized language from the Supreme Court’s decision in
Hazen Paper Co. v. Biggins,
507 U.S. 604 (1993). The purposes of the ADEA, the
Supreme Court’s treatment of the issue in Hazen Paper, and consideration of the
various views of our sister courts, lead me to conclude that disparate impact can be
1
We may affirm the district court’s decision for reasons different than those stated by
the district court. See Sec. & Exch. Comm’n v. Chenery Corp.,
318 U.S. 80, 88 (1943) (stating
that the decision of the lower court must be affirmed if the result is correct even though the lower
court relied upon a wrong ground or gave a wrong reason); see also Turlington v. Atlanta Gas
Light Co.,
135 F.3d 1428, 1434 (11th Cir. 1998).
10
pled and proved in an appropriate case under the ADEA, and that it cannot be said
as a matter of law that this theory of recovery can never be used in an age
discrimination case.
First of all, the purpose of the ADEA, like the purpose of Title VII and the
ADA, is to eradicate employment discrimination based on the stigmatizing
stereotypes of age, race, gender or disability. Disparate impact claims provide an
avenue for members of protected classes to prove that discrimination occurred in
the workplace when proof of motive is difficult or unavailable. Beginning with
Griggs v. Duke Power Co.,
401 U.S. 424, 431 (1971), the Supreme Court
recognized that although discriminatory intent could be hidden, even from the
decisionmaker himself, its effects in the workplace could not. Thus, Title VII
“proscribes not only overt discrimination but also practices that are fair in form,
but discriminatory in operation.”
Id. at 431. Accordingly, the Supreme Court
interpreted Title VII to permit a member of a protected group to challenge facially
neutral employment practices that perpetuate inequality by disproportionately
burdening a protected class.
However, pleading a disparate impact case only gets you into the
courthouse. An employer in every statutory context can defend a disparate impact
11
case by citing a legitimate business necessity for the neutral policy at issue.2 Thus,
in those cases where it can be shown that the decision causing the disparate impact
was based on business necessity, the claim will be defeated.3 Disparate impact is
not an easy theory to plead and prove in any context. I believe that it is probably a
more difficult claim to make under the ADEA than in a race or gender context
because the impact of neutral policies which fall disproportionately on class
members protected by the ADEA can be proven to be related to legitimate business
reasons in more instances than those which might impact other protected groups.
See Hazen
Paper, 507 U.S. at 610-11.
The majority, however, concludes that disparate impact claims are simply
not viable because Section 623(f)(1) of the ADEA specifically exempts a decision
based on factors other than age, notwithstanding its similarity to Title VII. 29
2
Title VII requires an employer to demonstrate that the challenged practice is a job
related business necessity. 42 U.S.C. § 2000e-2(k)(1)(A)(i). The ADA defines discrimination as
including the use of “selection criteria that screen out or tend to screen out an individual with a
disability or a class of individuals with disabilities” unless such criteria are “shown to be
job-related for the position in question and [are] consistent with business necessity.” 42 U.S.C. §
12112(b)(6).
3
See, e.g., Belk v. Southwestern Bell Telephone Co.,
194 F.3d 946, 951 (8th Cir. 1999)
(employer in ADA suit could raise business necessity defense to plaintiff’s claim that employer’s
physical performance test has a disparate impact); Davis v. City of Dallas,
777 F.2d 203, 208
(5th Cir. 1985) (finding that city’s requirement that applicants for police officer must have
completed 45 semester hours of college credit with at least C average at accredited college or
university, must not have history of recent or excessive marijuana use, and must not have been
convicted of more than three hazardous traffic violations in preceding 12 months, were job
related).
12
U.S.C. § 623(f)(1). But, as noted, in every statutory discrimination case, a decision
based upon legitimate business necessity will never support a claim for liability.
Griggs itself recognized and repeatedly emphasized that disparate impact is a basis
for relief only if the practice in question is not founded on “business necessity,” or
lacks “a manifest relationship to the employment.”
Id. at 431. Section 623(f)(1) of
the ADEA adds nothing new. Therefore, Section 623(f)(1) of the ADEA should
not be interpreted as anything more than a statutory description of the business
necessity defense.
In fact, the EEOC interpretive guidelines, which are entitled to judicial
deference,4 suggest that the “reasonable factors” defense in the ADEA works in
tandem with the business necessity defense in the disparate impact analysis. These
guidelines indicate that an employer may raise a “reasonable factors” defense to
justify employment practices that “have an adverse impact on individuals within
the protected age group.” See 29 C.F.R. § 1625.7(d) (1999).5 In light of the
4
Edwards v. Shalala,
64 F.3d 601, 606 (11th Cir. 1995) (“‘An agency’s interpretation of
an ambiguous provision within a statute it is authorized to implement is entitled to judicial
deference.’”) (quoting Jones v. Runyon,
32 F.3d 1454, 1457-58 (10th Cir. 1994)); see also
Pauley v. BethEnergy Mines, Inc.,
501 U.S. 680, 696-98 (1991); Chevron USA, Inc v. Natural
Resources Defense Council,467 U.S. 837, 866 (1984).
5
EEOC guidelines interpret the “reasonable factor other than age” defense as limited
only to factors justifiable as a “business necessity”:
(d) When an employment practice, including a test, is claimed as a
basis for different treatment of employees or applicants for
13
parallels between the substantive provisions of the ADEA and Title VII, and in
light of the fact that Congress has amended the ADEA several times but has never
explicitly excluded disparate impact claims,6 a reasonable interpretation of Section
employment on the grounds that it is a “factor other than” age, and
such a practice has an adverse impact on individuals within the
protected age group, it can only be justified as a business
necessity. Tests which are asserted as “reasonable factors other
than age” will be scrutinized in accordance with the standards set
forth at Part 1607 of this Title.
(e) When the exception of “a reasonable factor other than age” is
raised against an individual claim of discriminatory treatment, the
employer bears the burden of showing that the “reasonable factor
other than age” exists factually.
(f) A differentiation based on the average cost of employing older
employees as a group is unlawful except with respect to employee
benefit plants which qualify for the section 4(f) (2) exception to
the Act.
29 C.F.R. § 1625.7 (2000).
6
After the Griggs decision, several courts extended disparate impact analysis to the
ADEA. See, e.g., Leftwich v. Harris-Stowe State College,
702 F.2d 686, 690 (8th Cir. 1983);
Geller v. Markham,
635 F.2d 1027 (2nd Cir. 1980); United Independent Flight Officers, Inc. v.
United Air Lines, Inc.,
572 F. Supp. 1494, 1505 (N.D. Ill. 1983). Congress has amended the
ADEA several times since Griggs. See e.g., Age Discrimination in Employment Amendments of
1986, Pub. L. No. 99-592, 100 Stat. 3342 (1986); Omnibus Budget Reconciliation Act of 1986,
Pub. L. No. 99-509, § 9201, 100 Stat. 1874, 1973-75 (1986); Consolidated Omnibus Budget
Reconciliation Act of 1985, Pub. L. No. 99-272, § 9201(b), 100 Stat. 82, 171 (1986); Older
Americans Act Amendments of 1984, Pub. L. No. 98-459, § 802, 98 Stat. 1792 (1984). None of
the amendments have limited or prohibited disparate impact analysis. See also EEOC v.
Governor Mifflin Sch. Dist.,
623 F. Supp. 734, 740-41 (E.D.Pa 1985) (analyzing amendments to
the ADEA and finding no prohibition against disparate impact claims). “Congress is presumed
to be aware of an administrative or judicial interpretation of a statute and to adopt that
interpretation when it re-enacts a statute without change.” Lorillard v. Pons,
434 U.S. 575, 580
(1978).
14
623(f)(1) is that it codifies the business necessity exception to disparate impact
claims.
I am unpersuaded by the majority’s conclusion that the the Supreme Court’s
determination that a similar provision in the Equal Pay Act (“EPA”) precludes
disparate impact claims. See County of Washington, Ore. v. Gunther,
452 U.S.
161, 170-71 (1981). There are several problems with analogizing from the EPA to
the ADEA. First, this case concerns the substantive provisions of the ADEA,
which have been recognized to share common substantive provisions as Title VII,
and not the remedial provisions of the ADEA which are similar to the remedial
provisions of the EPA. Wallace v. Dunn Construction Co.,
62 F.3d 374, 378 (11th
Cir. 1995). Second, Section 206(d)(1) of the EPA permits discrepancies in wages
paid to male and female workers for “any other factors other than sex.” 29 U.S.C.
§ 206(d)(1)(iv). The EPA thus merely requires the employer to provide a neutral
explanation for any disparity in pay. The EPA’s broad defense for employers
ensures that the Act targets only intentional purposeful discrimination.7 In
7
See
Gunther, 452 U.S. at 170 (noting that in comparison to Title VII, which permits
disparate impact claims, the Equal Pay Act “was designed differently, to confine the application
of the Act to wage differentials attributable to sex discrimination . . . . Equal Pay Act litigation,
therefore, has been structured to permit employers to defend against charges of discrimination
where their pay differentials are based on a bona fide use of ‘other factors other than sex.’”);
Varner v. Illinois State University,
226 F.3d 927, 934 (7th Cir. 2000) (“By providing a broad
exemption from liability under the Equal Pay Act for any employer who can provide a neutral
explanation for a disparity in pay, Congress has effectively targeted employers who intentionally
15
contrast, under section 623(f)(1) of the ADEA, the employer must demonstrate the
reasonableness of the neutral factor. The ADEA’s narrow limitation of liability
ensures that the Act reaches all arbitrary age discrimination.
Furthermore, I disagree with the majority’s interpretation of Hazen Paper as
precluding disparate impact claims under the ADEA. The Court in Hazen Paper
took great care to say explicitly that that decision should not be read to address a
disparate impact case: “[W]e have never decided whether a disparate impact
theory of liability is available under the ADEA, and we need not do so here.”
Hazen
Paper, 570 U.S. at 610. In Hazen Paper, the neutral policy at issue was the
termination of an employee who was close to vesting under his pension plan. As
the Court recognized, the policy could have affected “older” and “younger”
workers alike. The crucial fact underlying the Supreme Court’s decision in Hazen
Paper was that Hazen Paper decided to fire the plaintiff on the basis of his pension
status which, under the company’s policy, was based on years of service, not age.
The Court explained that “an employee’s age is analytically distinct from his years
of service.”
Id. at 611.
An employee who is younger than 40, and therefore
outside the class of older workers as defined by the
ADEA, see 29 U.S.C. § 631(a), may have worked for a
discriminate against women.”).
16
particular employer his entire career, while an older
worker may have been newly hired. Because age and
years of service are analytically distinct, an employer can
take account of one while ignoring the other, and thus it
is incorrect to say that a decision based on years of
service is necessarily “age based.”
Id. Accordingly, the claimant could not prevail when he was fired on this basis,
even though he was 62 years old. The Court held that the motivation to avoid the
vesting of pension benefits was insufficient to state a disparate treatment claim
under the ADEA because the evidence did not show that Hazen Paper’s decision
was based on the plaintiff’s age.
Id. (“When the employer’s decision is wholly
motivated by factors other than age, the problem of inaccurate and stigmatizing
stereotypes disappears. This is true even if the motivating factor is correlated with
age, as pension status typically is.”). However, the Court also made clear that:
We do not preclude the possibility that an employer who
targets employees with a particular pension status on the
assumption that these employees are likely to be older
thereby engages in age discrimination. Pension status
may be a proxy for age, not in the sense that the ADEA
makes the two factors equivalent, but in the sense that the
employer may suppose a correlation between the two
factors and act accordingly.
Id. at 612-13 (citation omitted). Thus, the Court did not rule out the possibility that
an employer’s purported reliance on an age-proxy could reflect the type of
17
“inaccurate and denigrating generalization about age” that the ADEA was designed
to prohibit.
Id. at 612. For example, there is nothing in Hazen Paper that addresses
a disparate impact challenge to an employer’s insurance policy which might
provide coverage for health problems affecting young employees, but exclude
coverage for health problems affecting older employees (for example, a policy
which covered braces but not dentures, or a policy generally covering progressive,
neurodegenerative diseases except for Alzheimer’s disease). See also Arnett v.
California Public Employees Retirement System,
179 F.3d 690 (9th Cir.1999),
vacated and remanded on other grounds,
528 U.S. 1111 (2000) (plaintiffs’ claim
that employer’s disability benefits program which discriminated on the basis of
potential years of service, rather than actual years of service, adversely affected
older workers stated a valid claim of disparate impact under the ADEA).
Furthermore, the Court explicitly stated that it did not consider a situation in which
the employee’s pension status is based on age, rather than years of service:
[W]e do not consider the special case where an employee
is about to vest in pension benefits as a result of his age,
rather than years of service and the employer fires the
employee in order to prevent vesting.
Hazen
Paper, 570 U.S. at 613 (citation omitted).
18
Finally, the majority is of the view that the legislative history of the ADEA
suggests it was not enacted to address disparate impact claims, citing the report
commissioned from the Secretary of Labor, The Older American Worker: Age
Discrimination in Employment (1965). The report recommended that Congress
prohibit “arbitrary discrimination,” but that factors which “affect older workers” be
addressed through programmatic measures to improve opportunities for older
workers.
Id. at 21-25. That report differentiated between what it termed “arbitrary
discrimination” based on age and problems resulting from factors that “affect older
workers more strongly, as a group, than they do younger employees.”
Id. at 5, 11.
The majority concludes that this precludes disparate impact claims because these
are claims that only address “factors that affect older workers more strongly,” not
arbitrary discrimination. But this begs the question. The very question disparate
impact analysis seeks to answer is whether the challenged policy that
disproportionately impacts older workers is derived from a reasonable business
judgment or whether the policy is the result of arbitrary discrimination. Claimants
should have the opportunity to prove it when it is the latter.
19