I turned off the blog while I was away from the office, but could not resist a word or two about the Supreme Court’s recent decisions, which carry on the continuing dialog of what kind of statute the ADEA is meant to be.
Kentucky Retirement Systems v. EEOC, No. 06-1037 (U.S. June 19, 2008), addresses a steady line of cases in which retirement or disability benefits are curtailed for employees above a certain age limit. These cases do not weave tidily into the warp of ordinary age cases, in which older employees lose something like a job or a title. They instead concern a calculation based on several factors (including age) that disadvantages a notch group of the protected class. They read, unfortunately, as older employees wanting something more than they are entitled to under a benefit plan on the ory that a subgroup of relatively younger employees got something more. If the protected group under the ADEA is conceived of as purely chronological age, then the EEOC ought to prevail. But nothing under the ADEA has ever been that simple.
Here, the state provided normal retirement benefits to its public safety employees who either worked (1) for 20 years, or (2) for 5 years and reached age of 55. It also offered more generous retirement benefits for employees who become disabled, regardless of age, by imputing years of service necessary to reach normal retirement. This formula meant that employees who reached age 55, and therefore eligible for ordinary retirement, could not benefit from disability retirement. The en banc Sixth Circuit took this last fact to compel entry of judgment for the EEOC.
Justice Breyer writing for himself and an unlikely set of cohorts (Chief Justice Roberts, and Justices Stevens, Souter and Thomas) holds that the case falls within the four corners of Hazen Paper Co. v. Biggins, 507 U. S. 604 (1993). Where the benefit decision was motivated by another factor, such as pension eligibility (as in Hazen Paper) — even if the factor correlates with age — the Court holds that a disparate treatment claim does not lie:
“Thus we must decide whether a plan that (1) lawfully makes age in part a condition of pension eligibility, and (2) treats workers differently in light of their pension status, (3) automatically discriminates because of age. The Government argues ‘yes.’ But, following Hazen Paper’s approach, we come to a different conclusion. In particular, the following circumstances, taken together, convince us that, in this particular instance, differences in treatment were not ‘actually motivated’ by age.”
First, the Court holds that — following Hazen Paper — “age and pension status remain ‘analytically distinct’ concepts.” Second, the Court finds that the case does not fall within the Hazen Paper “special case” exception of pension status standing as “proxy for age.” “Furthermore,” as the majority held, “Congress has otherwise approved of programs that calculate permanent disability benefits using a formula that expressly takes account of age [citing SSDI and federal employee benefits].”
The Court observes:
“The manner in which Kentucky calculates disability retirement benefits is in every important respect but one identical to the manner in which Kentucky calculates normal retirement benefits. The one significant difference consists of the fact that the Plan imputes addition al years of service to disabled individuals. But the Plan imputes only those years needed to bring the disabled worker’s years of service to 20 or to the number of years that the individual would have worked had he worked to age 55. The disability rules clearly track Kentucky’s normal retirement rules.”
Indeed, the majority holds, there are some calculations under which relatively older employees receive richer benefits.
And the majority revives the idea from its prior rejection of the reverse-age discrimination theory that the adverse decision ought to reflect negatively on age, not abstractly as in this case. “Kentucky’s system does not rely on any of the sorts of stereotypical assumptions that the ADEA sought to eradicate. It does not rest on any stereotype about the work capacity of ‘older’ workers relative to ‘younger’ workers. See, e.g., General Dynamics Land Systems, Inc. v. Cline, 540 U. S. 581, 590 (2004) . . . .”
Meanwhile, the dissenting justices (grouped around Justice Kennedy’s opinion) regard age as chronological rather than a social construct: “When an employer makes age a factor in an employee benefit plan in a formal, facial, deliberate, and explicit manner, to the detriment of older employees, this is a violation of the Act. Disparate treatment on the basis of age is prohibited unless some exertion or defense provided in the Act applies.”
Meacham v. Knolls Atomic Power Laboratory, No. 06-1505 (U.S. June 19, 2008), returns us to an issue unaddressed in the plurality decision in Smith v. City of Jackson, 544 U. S. 228 (2005), and twenty years prior in Western Air Lines, Inc. v. Criswell, 472 U. S. 400, 408, n. 10 (1985): who bears the burden of proof on the “reasonable factor other than age” (RFOA) defense under 29 U.S.C. § 623(f)(1). The answer, in a near-unanimous decision of the Court authored by Justice Souter, is “the employer” (with Justice Breyer recused, a concurrence filed by Justice Scalia based solely on Chevron deference, and Justice Thomas partially dissenting to register his continued disapproval of Smith). Disclosure: I co-authored an amicus in this case with AARP’s Laurie McCann on behalf of AARP, NEL and AAUW.
This marks Meacham‘s second trip to the Supreme Court. The first, after the Second Circuit affirmed a judgment for the employees on a disparate impact theory, resulted in a granted-vacated-remanded order in the wake of Smith. Thereafter, the Second Circuit panel — in a 2-1 decision — reversed the plaintiffs’ victory on the ground that the employees (here, challenging a subjectively-grounded RIF) failed to prove that the criteria applied did not constitute a RFOA.
Laying this case aside Kentucky Retirement Systems, we find that the protected group is chronological age (under a disparate impact theory, at any rate). Because the RIF fell disproportionately harder on individuals in the protected group, the employer is put to the burden of establishing another reason for the disparity. The Court observes that RFOA nests in a subsection with other, recognized affirmative defenses (such as BFOQ):
“With these principles and prior cases in mind, we find it impossible to look at the text and structure of the ADE and imagine that the RFOA clause works differently from the BFOQ clause next to it. Both exempt otherwise illegal conduct by reference to a further item of proof, thereby creating a defense for which the burden of persuasion falls on the ‘one who claims its benefits,’ Morton Salt Co., supra, at 44–45, the ‘party seeking relief,’ Schaffer, supra, at 57–58, and here, ‘the employer,’ Corning Glass Works, supra, at 196.”
The majority (not including Justice Scalia) relies on the language of the ADE and does not resort to applying the EEOC’s regulations, which (in fn. 9) it rejects as equivocal. On the other hand, it resorts to post-enactment amendment of the statute (in the Older Workers Benefit Protection Act) as addition al evidence that Congress meant the RFOA burden of proof to fall on the employer. Also with this opinion, six justices (probably seven, had Justice Breyer participated) affirm the vitality of City of Jackson, a plurality decision that seemed possibly on tenterhooks when cert was granted in this case:
“Thus, in City of Jackson, we made it clear that in the typical disparate-impact case, the employer’s practice is ‘without respect to age’ and its adverse impact (though ‘because of age’) is ‘attributable to a nonage factor’; so action based on a ‘factor other than age” is the very premise for disparate-impact liability in the first place, not a negation of it or a defense to it. The RFOA defense in a disparate-impact case, then, is not focused on the asserted fact that a non-age factor was at work; we assume it was. The focus of the defense is that the factor relied upon was a ‘reasonable’ one for the employer to be using. Reasonableness is a justification categorically distinct from the factual condition ‘because of age’ and not necessarily correlated with it in any particular way: a reasonable factor may lean more heavily on older workers, as against younger ones, and an unreasonable factor might do just the opposite.”
Even more surprisingly, the majority drifts away from a hard application of Wards Cove Packing Co. v. Atonio, 490 U. S. 642 (1989), suggesting that some aspects of the prior decision (particularly in describing the employee’s prima facie case) may not translate in the ADEA context.
Finally, the Court dealt a blow to management’s favorite backstop argument that the cost of defense will damage employers trying to comply with the law: “[T]here is no denying that putting employers to the work of persuading fact finders that their choices are reasonable makes it harder and costlier to defend than if employers merely bore the burden of production; nor do we doubt that this will sometimes affect the way employers do business with their employees. But at the end of the day, amici’s concerns have to be directed at Congress, which set the balance where it is, by both creating the RFOA exemption and writing it in the orthodox format of an affirmative defense. We have to read it the way Congress wrote it.”
In closing, these two decisions place Justice Alito’s vote on the side of the employee in every non-unanimous employment discrimination case this term (in contrast to Justices Thomas and Scalia, who’ve tacked sharply against employees this term).