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Joanna L. Grossman

The Supreme Court Curtails Federal Protection Against Age Discrimination


Thursday, June 25, 2009

Last week, the Supreme Court issued a 5-4 ruling that will make it more difficult for some older workers to succeed in proving age discrimination by their employers.

In Gross v. FBL Financial Services, Inc., the Court held that employees suing under the Age Discrimination in Employment Act (ADEA), unlike those suing for race or sex discrimination under Title VII, cannot make use of the "mixed-motive" theory that makes it easier to prove discrimination when there is evidence of both legitimate and illegitimate motives for an adverse employment action.

In so ruling, the Court has unnecessarily – and based on weak reasoning – narrowed federal protection against age discrimination.

The Plaintiff's Case and the ADEA

The plaintiff in the case was Jack Gross, a 54-year-old man who had worked at FBL Financial Group (FBL) for more than thirty years when he was reassigned in 2003 from his position as "claims administration director" to the position of "claims project coordinator." At the same time, many of Gross's job responsibilities were transferred away to a new position, which was given to another employee who was in her early forties.

Gross filed an ADEA lawsuit in federal court, claiming that he had been demoted because of his advancing age. (The federal ADEA was enacted in 1967 -- as a parallel statute to Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination on the basis of race, color, national origin, religion, and sex. The ADEA prohibits employers from discriminating against workers who are 40 and over on the basis of their age.)

At trial, the jury was instructed that it should rule for the plaintiff if he had proved that Gross's "age was a motivating factor" – that is, if it "played a part or a role" – in the company's decision to demote him.

The jury was also instructed that it should rule for the defendant-employer if the company had proved by a preponderance of the evidence (that is, proved that it was more likely than not to be true) that FBL "would have demoted [Gross] regardless of age."

The jury returned a verdict for the plaintiff and awarded him almost $50,000 in lost compensation.

On appeal, FBL challenged the propriety of the jury instruction. Specifically, FBL contended that the instruction did not correctly allocate the burden of proving discrimination in a so-called "mixed motive" case – one in which the employer's decision may have been motivated by both legitimate and illegitimate considerations.

As explained below, however, the Supreme Court went far beyond this dispute, ruling that the "mixed motive" proof structure cannot be used at all in ADEA cases.

The Basic Burden-Shifting Framework In Discrimination Cases

To understand Gross, it's important to know the basics of how plaintiffs "prove" discrimination under federal law. In 1973, in McDonnell Douglas Corp. v. Green, the Supreme Court outlined the basic "pretext" model proof structure, which uses a series of stages to smoke out evidence of discrimination that violates Title VII, the main federal anti-discrimination statute.

First, the plaintiff must make out a "prima facie" case, proving some very basic facts necessary to support an inference of discrimination. A man who claims he was fired because of age, for example, must show that he is old enough to qualify for protection under the ADEA and that a younger worker was given the job, or that the employer continued to seek other applicants after rejecting him.

The employer then has a burden of production, which means it must articulate a legitimate, non-discriminatory reason for the challenged employment action. The hypothetical defendant might claim, for example, that it passed over the older applicant because the younger one had better educational credentials. The employer can survive this stage without persuading the factfinder that this was real reason for its decision, as long as it simply explains what the purported reason was.

Finally, the plaintiff has the opportunity to disprove the employer's articulated reason. For instance, the plaintiff might show that the company had hired other employees with his level of education. Alternatively, he could offer other evidence to show that the offered reason is a pretext for discrimination, such as a pattern of preferring younger applicants.

At the end of the case, the jury is instructed that it may find for the plaintiff if she has either disproved the employer's articulated reason oroffered other evidence that the reason given is pretextual. The plaintiff retains the burden of proof throughout the case, but the jury is instructed that acceptable proof to satisfy that burden can take one of several forms.

This proof structure is useful in the typical employment discrimination case in which there is no "smoking gun." The pretext model minimizes that problem by forcing the employer to explain its actions. In this way, it narrows the litigation so that it revolves around an actual reason that is offered by the employer, rather than forcing the plaintiff to disprove all conceivable, legitimate justifications for the employment action.

Burden-Shifting In Mixed-Motive Cases: Price Waterhouse and the 1991
Civil Rights Act

The McDonnell Douglas model, useful as it is, has limits -- and a mixed-motive case soon arose to test them. In Price Waterhouse v. Hopkins, a firm denied partnership to a female candidate. There was some evidence that the decision was made both on the basis of her sex (an obviously illegitimate motive) and on the basis of her behavior at work (a legitimate motive).

The pretext model breaks down in this type of case. Consider how that model would apply: After the employee satisfies the prima facie case, the employer would then satisfy its burden of production, coming forth with its legitimate reason for not making Hopkins partner: Her behavior. Then, the burden would be on Hopkins to disprove that reason, or to show that it was a pretext. If she couldn't, she would lose -- even if she could show that there were other, illegitimate reasons for the denial. Thus, an employer could admittedly take a discriminatory factor into account in making a decision, but still escape liability.

That anomaly inspired the Supreme Court, in Price Waterhouse, to devise an alternative proof structure for mixed-motive cases. In a splintered opinion, four Justices, a plurality of the Court, stated that when an employee alleges that both legitimate and illegitimate considerations influenced a decision, he must prove that discrimination was a "motivating factor" for the decision, before the burden shifts to the employer to show that it would have taken the same action even without the illegitimate consideration. If both parties met their burdens, the employer would avoid liability, because it would have made the very same decision even barring the presence of the discriminatory factor.

Meanwhile, Justice O'Connor – the crucial fifth Justice -- concurred, but wrote separately that the burden should shift only if the employee presents "direct evidence" that discrimination was a "substantial motivating factor" for the decision. Because her vote was necessary to make a majority, her narrower articulation of the test was treated as the official standard. (Justice White also concurred with O'Connor's tougher standard, agreeing that the illegitimate factor must be a "substantial motivating factor.")

How the Civil Rights Act of 1991 Altered the Legal Landscape

In the Civil Rights Act of 1991 (CRA), however, Congress codified the mixed-motive proof structure and made it easier for plaintiffs to prevail. Those amendments made clear that discrimination with mixed motives is still discrimination: Discrimination, it established, occurs whenever a prohibited characteristic was "a motivating factor for any employment practice, even though other factors also motivated the practice."

Congress also made clear in the CRA that an employer can be held liable even if it successfully proves it would have taken the same action without the discriminatory motive. In such a case, the plaintiff cannot collect damages – since he would have suffered the same employment outcome even without discrimination – but he or she can obtain injunctive relief and attorneys' fees, both potentially valuable remedies.

A lingering question after the CRA's enactment was whether Justice O'Connor's mention of "direct evidence" was a separate requirement in mixed-motive cases. (Direct evidence is evidence that shows "a specific link between the alleged discriminatory animus and the challenged decision"; circumstantial evidence, in contrast, requires at least one inference to reach an ultimate fact.) She was the only one to use the phrase, and Congress did not acknowledge it in the statutory revision.

The Supreme Court in Desert Palace, Inc. v. Costa (which I have written about in a previous column) ruled that the CRA had obviated any "direct evidence" requirement – if one had ever existed – by codifying the proof structure without mentioning it.

Mixed-Motive Evidence and the ADEA

Let's return now to the question I initially posed – and to the question that was actually answered by the Court in Gross. Both questions turn on a basic conundrum: Should proof structures developed in Title VII cases be applicable to ADEA cases, particularly to the extent they were amended by a provision that amended only Title VII, and not the ADEA?

When the Supreme Court agreed to hear Gross, the question posed was whether an age discrimination plaintiff needed to present "direct evidence" in order to rely on the mixed-motive proof structure. The Court's ruling in Desert Palacewas not obviously applicable, since it relied primarily on the interpretation of the CRA, which did not amend the ADEA.

The U.S. Court of Appeals for the Eighth Circuit reversed the jury's verdict in favor of Gross, ruling that the jury should not have been given a mixed-motive instruction unless Gross had presented "direct evidence" showing that FBL took his age into account when deciding to demote him.

On review, however, the Supreme Court declined to reach that issue at all. It ruled, instead, that the entire mixed-motive proof structure is inapplicable to ADEA claims, parting ways with all of the federal appellate courts that have considered this issue.

In a series of obvious missteps, the Court thus narrowed the protection for employees who suffer age discrimination at work.

The Ruling in Gross v. FBL Financial Services, Inc.

Justice Clarence Thomas's majority opinion takes issue, right at the outset, with the notion that Title VII and the ADEA should be construed in a similar fashion, referring to them as "materially different with respect to the relevant burden of persuasion."

The Court correctly points out, as explained above, that the CRA only amended Title VII. But that tells us nothing about whether the Court's initial interpretation of Title VII in Price Waterhouse should apply to the ADEA, which, after all uses the same language to define an unlawful employment practice. Title VII prohibits employment decisions made "because of" sex, race, ethnicity, and so on. The ADEA prohibits employment decisions made "because of" age. Yet, the majority construes the same phrase in two nearly identical statutes to mean different things.

In Price Waterhouse, as the reader will recall, the Court ruled that a decision is made "because of sex" (or another prohibited characteristic) when it is taken wholly or partly "because of" that prohibited characteristic, as long as the illegitimate consideration was a "substantial motivating factor" for the decision.

In contrast, in Gross, the majority takes a completely contrary view: that the words "because of" describe "but-for" causation. In other words, the action is not illegal discrimination unless it would not have been taken "but for" consideration of the prohibited factor. Age, in that view, must be the reason the employer decided to act, not one factor among two or more.

The Gross majority relies most centrally on dictionary definitions of "because of" (the opinion cites three different dictionaries!). In so doing, it ignores completely the many precedents suggesting that similarly-worded and similarly-purposed statutes should be construed in pari materia – that is, in essentially the same way.

The majority also rejects the argument that Price Waterhouse controls its interpretation of the ADEA, despite the important points on which Title VII And the ADEA have been treated as coextensive. (Smith v. Jackson, which I discussed in a prior column, stands strongly for this proposition.) And the Gross opinion ends with a rambling critique based on the "difficulty" that judges have in crafting mixed-motive instructions – when all the Court had to do was to give some guidance to the lower courts, to obviate this difficulty.

In the end, the bottom line is this: The Court simply throws the mixed-motive proof structure out the window for age discrimination cases.

The Dissenting Opinion in Gross

In a dissenting opinion joined by Justices Souter, Ginsburg and Breyer, Justice Stevens points out the many oddities of the majority opinion. First, Stevens criticizes the majority for answering a question that was not asked, briefed, or essential to the resolution of the case. Among other problems, this reaching-out means that the agency charged with implementing the ADEA did not have the chance to weigh in on the proper interpretation of the statute – an odd state of circumstances since when agencies do weigh in, the Court often accords deference to their views. Here, there was no chance for those views to be voiced.

Second, the dissent exposes the majority's cramped and unusual interpretation of the statutory language, the "most natural reading" of which, Justice Stevens writes, "proscribes adverse employment actions motivated in whole or in part by the age of the employee." The dissent concedes that the majority could plausibly refuse to apply the revised version of mixed-motive analysis, given Congress' failure to amend the ADEA in the CRA. But it goes on to very persuasively argue that the majority has no basis on which to refuse to apply Price Waterhouse, which interpreted the same words in virtually the same context only twenty years ago.

Indeed, there is specific precedent for applying the Supreme Court's version of a Title VII test to an ADEA claim, while applying Congress' "fixed" version to Title VII cases. Disparate impact theory was first established by a Supreme Court interpretation of Title VII, which said nothing express about unintentional discrimination, in the 1971 case of Griggs v. Duke Power Co. The Court later narrowed the theory by imposing certain obstacles for plaintiffs in a series of cases ending with Wards Cove Packing Co. v. Atonio, which dramatically lightened the defendant's burden in disparate impact cases. In the CRA, Congress codified disparate impact theory in Title VII and, in so doing, used language to restore the Court's original broad definition of the claim.

In the Smith case, which I mentioned earlier, the Court was faced with the question whether disparate impact claims could be brought under the ADEA. It held that they could, but that they would be governed by the pre-CRA precedents like Wards Cove because the Congressional "fix" only applied to Title VII. But the Court's original interpretation of Title VII in Griggs applied with equal force to the ADEA, which similarly defined discrimination. Courts thus now apply two different legal tests when examining disparate impact claims depending on whether the claimant is proceeding under the ADEA or Title VII – which seems absurd.

The dissent also takes the majority to task for reaching a conclusion contrary to the one unanimously reached by federal appellate courts, all of whom thought it obvious that mixed-motive analysis could indeed be used in ADEA litigation.

A Court Decision that Congress Would Be Well-Advised to Override

It may seem like proof structures are technical or unimportant, but they often make or break an employee's case. Mixed-motive analysis serves as an important deterrent to employers who might otherwise permit improper motives to infect their decision-making processes – and as a deterrent, it may affect, and protect, numerous employees.

In the end, the majority made a major error, and the dissent was far more persuasive: If an employer takes a prohibited characteristic into account, then it commits illegal discrimination, for which there ought to be a legal remedy.

This ruling is ripe for a Congressional override, much like its many predecessors that necessitated the Civil Rights Act of 1991. Let's hope that Congress makes the dissent's well-reasoned analysis the law.

Joanna Grossman, a FindLaw columnist, is a professor of law at Hofstra University. Her columns on family law, trusts and estates, and discrimination, including sex discrimination and sexual harassment, may be found in the archive of her columns on this site.

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