The Age Discrimination in Employment Act of 1967: Issues Litigated at the Supreme Court Level
I n 2000, the U.S. Bureau of the Census estimated that 12.4 percent of the U.S. population was age 65 or older.1 B etween the years 2010 and 2030, when the post-World War II baby boom population begins to retire, the elderly will comprise an estimated 21.8 percent of the total population.2 T he issue of older Americans in the workforce is heightened because of the current downturn of the American economy. Prospective employees are seeking a limited number of jobs. Employers are cutting available jobs. These pressures can provide the kindling for age discrimination in the workplace.
The Age Discrimination in Employment Act of 1967 (ADEA) was created to combat arbitrary discrimination in the workplace because of age.3 S pecifically, under the ADEA, an employer may not “fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age. ”4 C ongress passed the ADEA because of its concern “that older workers were being deprived of employment on the basis of inaccurate and stigmatizing stereotypes.”5 A ge discrimination was not included in Title VII of the Civil Rights Act of 1964 because Congress understood that there are legitimate reasons — for instance, increased pension costs, as well as invidious reasons — for employment decisions based on age.6
The ADEA specifically protects individuals — both employees and job applicants — who are 40 years of age or older, from age discrimination in employment.7 S pecifically, it is unlawful to discriminate against a protected individual “with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training.”8 T he ADEA applies to employers with 20 or more employees, including federal, state, and local governments, employment agencies, and labor organizations.9 C ongress placed the Equal Employment Opportunity Commission (EEOC) in charge of implementing the ADEA.10
This article will examine the Supreme Court’s interpretation of the ADEA for the past three decades. The following will be examined: 1) substantive claims available under the ADEA, 2) the ADEA’s affirmative defenses, and 3) procedural issues under the ADEA. It is the author’s hope that examining the Supreme Court’s interpretation of ADEA issues will illuminate the boundaries of age discrimination protection at an economic time crucial to such an understanding.
Interpretation of Substantive Claims Under ADEA
• Disparate Impact Claims — Under the disparate treatment theory of discrimination, “an employer simply treats some people less favorably than others” because of some protected characteristic.11 In Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), the court stated that “[p]roof of discriminatory motive is critical, although it can in some situations be inferred from the mere fact of differences in treatment.”12 There is no question that the disparate treatment theory of discrimination is available under the ADEA.13 The ADEA clearly states that it is illegal for an employer “to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age.”14 Liability under the ADEA requires that age actually motivate the employer’s decision, whether formally or informally.15
In Hazen Paper, the Supreme Court found that discharging a 62-year-old employee to prevent his pension benefits from vesting was not disparate treatment under the ADEA.16 Specifically, it held that “interfering with an older employee’s pension benefits that would have vested by virtue of the employee’s years of service” does not violate the ADEA.17 In other words, although years of service can be a proxy for age, in this case, it was not seen as being motivated by such.18 In Kentucky Retirement Systems v. Equal Employment Opportunity Commission, 128 S. Ct. 2361 (2008), the Supreme Court again found no violation of the ADEA. The court focused on the expressed purpose of the plan to decide that “differences in treatment were not ‘actually motivated by’ age.”19 Furthermore, the majority stated that although some older workers are disadvantaged because of the plan, other older workers are advantaged by the plan, thus, confirming “the underlying motive is not an effort to discriminate ‘because of … age.’”20
Under the disparate impact theory of discrimination, an employment practice that is facially neutral in its treatment of different groups, but in fact falls more harshly on one group versus another (and cannot be justified by business necessity) is unlawful.21 Because the text of 29 U.S.C. §623(a)(2) focuses “on the effects of the action on the employee rather than the motivation for the action of employer,” no proof of discriminatory motive for disparate impact claims is needed.22 In Smith v. City of Jackson, Mississippi, 544 U.S. 288 (2005), the Supreme Court held that the ADEA’s prohibition against actions that “deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age” recognized disparate impact claims.23 Recognition of disparate impact claims under the ADEA, however, is still hotly contested by disagreeing Supreme Court justices.24 Justice O’Connor, with whom Justice Kennedy and Justice Thomas joined, filed an opinion in Smith “that disparate impact claims are not cognizable under the ADEA.”25
• Retaliation Claims in the Federal Sector — Under 29 U.S.C. §623(d), the ADEA prohibits retaliation against individuals who complain about age discrimination in the private sector. In Gomez-Perez v. Potter, 128 S. Ct. 1931 (2008), the Supreme Court recognized retaliation claims to be included within the statutory phrase “discrimination based on age,” stated in the federal sector provisions of the ADEA. The respondent in that case argued that the omission by Congress of a provision for retaliation in the federal sector of the ADEA, when such provision for retaliation exists in the private sector of the ADEA, reflected an intentional exclusion.26 The Supreme Court disagreed by noting that the two provisions were not enacted together, and are, in fact, “sharply” different in language in other corresponding sections as well.27
• Reverse Age Discrimination — General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 581 (2004), the Supreme Court addressed the question of whether the ADEA “prohibits favoring of the old over the young.”28 In Cline, the court was faced with a collective bargaining agreement that eliminated a company’s “obligation to provide health benefits to subsequently retired employees, except as to then-current workers at least 50 years old.”29 The respondents in the case were protected by the ADEA at above age 40, but were under age 50 (and, therefore, “without the promise of the benefits” under the agreement).30
Both parties agreed that the ADEA protects against “discriminat[ion] … because of [an] individual’s age” … that “helps the younger by hurting the older.”31 The majority interpreted Congress’ intent as an “understanding of discrimination as directed against workers who are older than the ones getting treated better.”32 The majority decided that the ADEA was designed to “protect a relatively old worker from discrimination that works to the advantage of the relatively young.”33 After all, in Hazen Paper, the court noted that “the very essence of age discrimination [is] for an older employee to be fired because the employer believes that productivity and competence decline with old age.”34
• Pension Status and Age Discrimination — The ADEA allows an employer to condition pension eligibility on age.35 In Hazen Paper, the Supreme Court rejected a disparate treatment claim from a 62-year-old employee who was dismissed a few weeks shy of reaching pension vesting status.36 The court noted that “an employee’s age is analytically distinct from his years of service.”37 Since it believed that age is distinct from pension status, an employer can take into account one,while ignoring the other, and, thus, decisions based on pension status were not necessarily “age based.”38 The Hazen Paper court narrowed its holding that pension status is not a proxy for age, when pension status is determined solely by an employee’s years of service, rather than on an employee’s age.39
This narrowed holding would allow the same issue of pension status as a proxy for age to arise to the Supreme Court level 15 years later in Kentucky Retirement Systems v. EEOC, 128 S. Ct. 2361 (2008). In Kentucky Retirement Systems, Kentucky allowed “‘hazardous position’ workers to retire and receive ‘normal retirement’ benefits after either 1) working for 20 years; or 2) working for five years and attaining the age of” 55.40 It additionally allowed workers not otherwise eligible for retirement who became seriously disabled “to retire immediately and receive ‘disability retirement’ benefits.”41 In this manner, Kentucky treated some of these disabled individuals better than it treated “some of those individuals who became disabled only after becoming eligible for retirement on the basis of age.”42
The Kentucky Retirement Systems court held that the differences in treatment under Kentucky’s plan were not “actually motivated” by age.43 The court noted that:
[w]here an employer adopts a pension plan that includes age as a factor, and that employer then treats employees differently based on pension status, a plaintiff, to state a disparate treatment claim under the ADEA, must adduce sufficient evidence to show that the differential treatment was “actually motivated” by age, not pension status.44
Thus, while pension status can be used illegally as a proxy for age under the ADEA, policies challenged as such have yet to be found illegal on those grounds.
• Liquidated Damages — Section 7(b) of the ADEA allows a prevailing plaintiff double damages “only in cases of willful violations.”45 The legislative history of the ADEA “indicates that Congress intended for liquidated damages to be punitive in nature.”46The affirmed standard for “willful” is whether “the employer … knew or showed reckless disregard for the matter of whether its conduct was prohibited by the ADEA.”47 An employer who “knowingly relies on age in reaching its decision” does not “invariably commit knowing or reckless violation of the ADEA.”48 However, “[o]nce a ‘willful’ violation has been shown, the employee need not additionally demonstrate that the employer’s conduct was outrageous, or provide direct evidence of the employer’s motivation, or prove that age was the predominant, rather than a determinative, factor in the employment decision.”49
Interpretation of the ADEA Affirmative Defenses
Section 623(f)(1) of the ADEA “creates an exemption for employer actions ‘otherwise prohibited’ by the ADEA, but ‘based on reasonable factors other than age’” (RFOA).50 Thus, “an employer facing a disparate-impact claim and planning to defend on the basis of RFOA must not only produce evidence raising the defense, but also persuade the factfinder of its merit.”51 In a concurrence, Justice Scalia clarified that the “RFOA defense is relevant only as a response to employer actions ‘otherwise prohibited’ by the ADEA.”52 The court stated that “[i]n disparate-impact cases … the allegedly ‘otherwise prohibited’ activity is not based on age,” it is “in cases involving disparate-impact claims that the RFOA provision plays its principal role by precluding liability if the adverse impact was attributable to a nonage factor that was ‘reasonable.’ ”53 However, the RFOA provision is not to be construed as an independent “safe harbor from liability.”54
Section 4(f)(1) of the ADEA allows an employer to take “any action otherwise prohibited” when age is a “bona fide occupational qualification” (BFOQ).55 However, in order for the BFOQ to be allowed under §4(f)(1), the age-based discrimination must be “reasonably necessary to the normal operation of the particular business.”56 The “particular business” clause of this statutory affirmative defense has been read as referring to “the job from which the protected individual is excluded.”57 The BFOQ defense “shifts the focus from the merits of the individual employee to the necessity for the age classification as a whole.”58
In Thurston, TWA adopted a plan that any employee in “flight engineer status” at age 60 was entitled to continue working at that position.59 Sixty-year-old captains, though, did not receive the right to automatically begin training as flight engineers.60 Instead, the 60-year-old captain was required to use bidding procedures to obtain “flight engineer status.”61 This bidding procedure required a captain, before his 60th birthday, “to submit a ‘standing bid’ for the position of flight engineer.”62 However, when no vacancy occurred before the captain’s 60th birthday, or if he or she lacked the seniority sufficient to bid successfully for the vacancies that did occur, the captain was involuntarily retired.63 Thus, many captains under the age of 60 were forced to become flight engineers, which resulted in lower pay and responsibility.64
TWA argued that the age-based transfer policy from captain to flight engineer was justified by the BFOQ defense.65 The Thurston court disagreed because “age is not a BFOQ for the ‘particular’ position of flight engineer.”66 Additionally, an employer may not discriminate against older workers “seeking to transfer to another position, on the ground that age was a BFOQ for his former job.”67
Procedural Issues Under ADEA
• Procedures for Deferral States—Section 14(b) of the ADEA states:
In the case of an alleged unlawful practice occurring in a [s]tate which has a law prohibiting discrimination in employment because of age and establishing or authorizing a [s]tate authority to grant or seek relief from such discriminatory practice, no suit may be brought under section 626 of this title before the expiration of  days after proceedings have been commenced under the [s]tate law, unless such proceedings have been earlier terminated: Provided,. . . [i]f any requirement for the commencement of such proceedings is imposed by a [s]tate authority other than a requirement of the filing of a written and signed statement of the facts upon which the proceeding is based, the proceeding shall be deemed to have been commenced for the purposes of this subsection at the time such statement is sent by registered mail to the appropriate [s]tate authority.68
The Supreme Court has interpreted this section as requiring an ADEA grievant to resort to appropriate state administrative proceedings before bringing suit in federal court under §7(c) of the ADEA.69Nevertheless, under 29 U.S.C. §§626(d) and 633(b), the ADEA allows “concurrent rather than sequential state and federal administrative jurisdiction in order to expedite the processing of age-discrimination claims.”70 Specifically, the ADEA grievant may file with the [s]tate before or after they file with the Secretary of Labor.71 However, §14(b) does not force the grievant to commence the appropriate state proceedings within the state law’s time limits.72 Section 14(b) provides only that “no suit may be brought … before the expiration of  days after proceedings have been commenced under the [s]tate law.”73
The Evans court read state limitations periods as clearly such requirements “other than a requirement of the filing of a written and signed statement of the facts upon which the proceeding is based.”74 Thus, a state’s requirement of timeliness as a precondition for commencement of suit would regardless be deemed “commenced” for purposes of §14(b) as soon as the complaint was filed.75 The Evans court carefully noted that §14(b) of the ADEA does not require a grievant to exhaust the available state remedies, only that state agencies be given “a limited opportunity to settle the grievances of ADEA claimants in a voluntary and localized manner so that the grievants thereafter have no need or desire for independent federal relief.”76
• A “Charge” Under the ADEA — Section 626(d) of 29 U.S.C. requires that a charge of unlawful age discrimination be filed with the EEOC to set the ADEA’s enforcement mechanisms into motion. However, the word “charge” has no statutory definition.77 Various courts have adopted different definitions — which creates difficulties for any applicant or employee seeking relief for age discrimination in the courts under the ADEA.78 The EEOC has statutory authority under 29 U.S.C. §628 of the ADEA to issue regulations to interpret ambiguous statutory terms.79 The proper test for whether a charge is sufficient, in addition to alleging discriminatory acts and naming a charged entity, is if “the filing, taken as a whole, should be construed as a request by the employee for the agency to take whatever action is necessary to vindicate her rights.”80 The court justifies this permissive test by pointing out that the ADEA, like Title VII, must be accessible to laypersons who have “no detailed knowledge of the relevant statutory mechanisms and agency processes.”81
• Arbitration of ADEA Claims — Statutory claims may be subject to an arbitration agreement.82The Supreme Court has held that arbitrating a statutory claim does not “forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than judicial, forum.”83Because federal policy favors arbitration, a party subject to an arbitration agreement “should be held to [arbitrate] unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.”84 An ADEA claimant subject to an arbitration agreement is still “free to file a charge with the EEOC, even though the claimant is not able to institute a private judicial action.”85 Moreover, the Supreme Court was careful to note that “the mere involvement of an administrative agency in the enforcement of a statute is not sufficient to preclude arbitration.”86
At the end of the day, an elderly plaintiff who experiences age discrimination has a substantial friend in the ADEA. However, what could have been a hulking presence has been diminished through judicial interpretation. In particular, the Supreme Court’s demand for evidence of actual motivation to discriminate based on age in disparate treatment cases is problematic in light of its decisions construing otherwise.87
The entire cohort of baby boomers has already surpassed the lower limit of the ADEA’s protections.88 The U.S. Department of Labor’s Bureau of Labor Statistics released the “Mass Layoffs Summary” for September 2009, stating that the “national unemployment rate was 9.8 percent in September 2009 … little changed from 9.7 percent the prior month.”89 With such economic pressures creating an atmosphere of financial alarm, many older Americans may be in danger of employment age discrimination. Unfortunately, anticipated relief under the ADEA may be illusory.
1 Laura B. Shrestha, CRS Report for Congress, The Changing Demographic Profile of the United States at Table 3, p. 17 (Order Code RL32701, updated June 7, 2006).
2 U.S. Senate Special Committee on Aging, et al., Aging in America: Trends and Projections, Preface at 6 (DHHS Pub. No. (FCoA) 91-28001, 1991).
3 Age Discrimination in Employment Act of 1967, 81 Stat. 602, as amended, 29 U.S.C. §621 et seq.
4 29 U.S.C. §623(a)(1) (emphasis added).
5 Hazen Paper Co. v. Biggins, 507 U.S. 604, 610 (1993).
6 General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 581, 586-87 (2004).
7 29 U.S.C. §631; §12(a). The ADEA’s upper bound protected age of 65 was raised to 70 in 1978. Age Discrimination in Employment Act Amendments of 1978, §3, 92 Stat. 189. This upper limit was struck entirely in 1986. Pub. L. 99-592, §2(c)(1) of the ADEA, 100 Stat. 3342.
8 Equal Employment Opportunity Commission, Age Discrimination, (March 4, 2008), http://www.eeoc.gov/types/age.html.
10 29 U.S.C. §628.
11 Hazen Paper, 507 U.S. at 609.
14 29 U.S.C. §623(a)(1).
15 Hazen Paper, 507 U.S. at 610. Therefore, age must not only play a role in the decision to enact a policy but also have a “determinative influence on the outcome.” Id.
16 Id. at 613.
17 Id. (emphasis added).
18 See id. at 612-13.
19 Kentucky Retirement Systems, 128 S. Ct. at 2367.
20 Id. at 2369.
21 Hazen Paper, 507 U.S. at 609.
22 Smith v. City of Jackson, Mississippi, 544 U.S. 228, 236 (2005).
23 Id. at 235 (citing 29 U.S.C. §623 (a)(2)) (emphasis added).
24 See id. at 247-268 (O’Connor, J., concurring).
25 Id. at 248 (O’Connor, J., concurring).
26 Gomez-Perez, 128 S. Ct. at 1939-40.
27 Id. at 1940.
28 Cline, 540 U.S. at 584.
30 Id. The ADEA protects individuals age 40 and above. 29 U.S.C. §631(a); Pub. L. 99-592, §2(c)(1) of the ADEA, 100 Stat. 3342.
31 Id. at 586 (citing 29 U.S.C. §623(a)(1)).
33 Id. at 590-91.
34 Id. at 592 (citing Hazen Paper, 507 U.S. at 610).
35 29 U.S.C. §623(l)(1)(A)(i) (Supp. 2007).
36 Hazen Paper, 507 U.S. at 607.
37 Id. at 611.
39 Id. at 613.
40 Kentucky Retirement Systems, 128 S. Ct. at 2364.
43 Id. at 2367- 69.
44 Id. at 2370.
45 29 U.S.C. §626(b).
46 Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 125 (1985).
47 Thurston, 469 U.S.at 126.
48 Hazen Paper, 507 U.S. at 616.
49 Id. at 617.
50 Meacham, 128 S. Ct. at 2398 (2008).
52 City of Jackson, 544 U.S. at 246 (Scalia, J., concurring) (emphasis in original).
53 Id. at 239.
54 Id. at 238.
55 29 U.S.C. §623(f)(1).
57 Thurston, 469 U.S. at 122.
58 Kimel v. Florida Board of Regents, 528 U.S. 62, 87 (2000).
59 Id. at 115-16.
60 Id. at 116.
65 Id. at 122.
68 29 U.S.C. §633(b).
69 Oscar Meyer & Co. v. Evans, 441 U.S. 750, 753 (1979).
70 Id. at 757.
71 Id. at 756 n.4.
72 Id. at 753.
73 29 U.S.C. §633(b).
74 Evans, 441 U.S. at 760 (citing 29 U.S.C. §663(b)).
76 Id. at 761.
77 Federal Express Corp. v. Holowecki, 128 S. Ct. 1147, 1154 (2008).
78 Id. at 1152-53.
79 Id. (citing Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843-45 (1984)).
80 Id. at 1155-56.
81 Id. at 1158.
82 Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991).
83 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985).
84 Id. at 628.
85 Gilmer, 500 U.S. at 28.
86 Id. at 28-29.
87 See Kentucky Retirement Systems, 128 S. Ct. at 2370.
88 Baby boomers were born between 1946 and 1964, making them, as of 2009, between the ages of 45 and 63.
89 U.S. Department of Labor, Bureau of Labor Statistics, Mass Layoffs in September 2009 (October 22, 2009), http://www.bls.gov/news.release/mmls.nr0.htm.
Candice P. Holliday is an attorney in the Ft. Walton Beach office of Keefe, Anchors, Gordon & Moyle, P.A. She practices with the firm’s business disputes and commercial litigation practice. She earned her J.D. from the University of Michigan and her B.A. from Washington University in St. Louis.a
This column is submitted on behalf of the Labor and Employment Law Section, Eric James Holshouser, chair, and Frank E. Brown, editor.