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U.S. Supreme Court Rules that Employer May Lawfully Favor Older Employees Under the ADEA

Article

The Employment and Labor Law Alert

May 25, 2004

In General Dynamics Land Sys. Inc. v. Cline, ___, U.S. ___, 124 S.Ct. 1236 (2004), the United States Supreme Court was asked to consider whether the Age Discrimination in Employment Act (ADEA) prohibits an employer from favoring its older workers over its younger workers. The “favoritism” at issue in this case was a 1997 collective bargaining agreement between General Dynamics and the United Auto Workers. The Agreement obligated General Dynamics to provide health benefits to subsequently retired employees who were at least 50 years of age at the time that the Agreement was signed. A number of employees who were between the ages of 40 and 49 (collectively referred to as “Cline”), and thus protected by the ADEA, complained that they were being discriminated against by being denied these same benefits.

The case was initiated when Cline filed a charge with the Equal Employment Opportunity Commission alleging age discrimination. The EEOC found that the claim had merit and urged the parties to reach a settlement. When no settlement was reached, Cline filed suit in the District Court for the Northern District of Ohio. The District Court dismissed the ADEA claim, relying upon decisions rendered in several other circuits which found that the ADEA does not “protect the younger against the older.” The Sixth Circuit Court of Appeals reversed. The Sixth Circuit determined that the prohibition against age discrimination in the ADEA was so clear that if Congress intended to limit its application only to older workers it would have said so. The Sixth Circuit’s decision, though contrary to the decisions reached in other circuits, was consistent with the EEOC’s interpretation of the ADEA. The United States Supreme Court granted certiorari to resolve the dispute and the opinion of the Court was delivered by Justice Souter. In a 6-3 decision, the Court reversed.

Section 623(a)(1) of the ADEA prohibits discrimination because of an individual’s age. 29 U.S.C. § 623(a)(1). According to the Court, this provision is meant to address discrimination against older workers in favor of younger ones. The Court acknowledged that the provision might also be interpreted to prohibit discrimination against younger workers in favor of older workers but determined that “Congress’ interpretive clues speak almost unanimously to an understanding of discrimination as directed against workers who are older than the ones getting treated better.”

The Court found the first “interpretive clue” in Congress’ refusal to include a prohibition against age discrimination in Title VII of the Civil Rights Act of 19964. Instead, Congress urged that a study be conducted on the issue. The Secretary of Labor conducted the study and ultimately determined that age discrimination was a serious problem. In the Court’s view, the Secretary’s report “was devoid of any indication that the Secretary had noticed unfair advantage accruing to older employees at the expense of their juniors.”

The second “interpretive clue” was found in the hearings that were held before the House of Representatives and the Senate when age discrimination legislation was being considered. The Court cited the comments of numerous legislators, all of which focused on the diminishing then vanishing opportunities afforded to workers as their ages advance. All of the comments cited by the Court reflect the same basic premise: it is more difficult to find and keep a job as one gets older. Conversely, there was nothing to suggest that younger workers were somehow disadvantaged in favor of older workers.

The Court found the third “interpretive clue” in the introductory provisions of the ADEA. The statement of purpose, findings, and statutory objects all contained numerous references to the plight of older workers including (a) difficulty retaining and gaining employment, (b) the imposition of age limits irrespective of actual job performance, and (c) a high unemployment rate among older workers. These three “clues” led the Court to conclude that “the ADEA was concerned to protect a relatively old worker from discrimination that works to the advantage of the relatively young.” The Court found no evidence that younger workers suffered from any kind of discrimination, let alone the type of exclusionary practices that were then being practiced by employers against their older counterparts.

The Court found support for its position in the language of the ADEA itself. That is, the class of individuals protected by the ADEA are those 40 years of age or older. According to the Court, had Congress intended to protect the younger against the older, it would not have imposed this kind of age limit. Referring back to the Secretary of Labor’s report and the legislative hearings, the Court found that the 40-year threshold was selected to protect the class of workers who were in fact the subjects of discrimination.

The Court also examined prior case law and found a dearth of cases reaching the same conclusion that the Sixth Circuit had reached here. To the contrary, the courts that had dealt with the issue had concluded that the ADEA only prohibits discrimination against the old in favor of the young. Although this Court had not squarely addressed the issue in its prior cases, the Court here reviewed several of its prior decisions and found that they supported the proposition that the “text, structure and history point to the ADEA as a remedy for unfair preference based on relative youth, leaving complaints of the relatively young outside the statutory concern.”

In reaching its decision, the Court rejected three arguments advanced by Cline and the EEOC as amicus. First, Cline argued that the phrase “because of an individual’s age” as used in the ADEA is simply a “test of causation” and that the ADEA prohibits treatment “that would not have occurred if the individual’s span of years had been longer of shorter.” In addition, Cline argued that the word “age as used in the ADEA has a uniform meaning; for example, if “age” meant only old age, the bona fide occupational qualification defense in section 623(f) would be rendered meaningless. In rejecting this argument, the Court observed that the word “age” does not have the same meaning whenever it is used in the ADEA and that consideration must be given to the context in which the term is used. Congress was free to and did use alternate yet commonly understood meanings. Given Congress’ intent to prohibit discrimination against older workers, the Court felt it reasonable and appropriate to interpret the phrase “discrimination. . .because of an individual’s age” to mean older age. Likewise, in the context of a bona fide occupational qualification, it was reasonable and appropriate to interpret age to refer to the younger worker.

In their second argument, Cline relied upon the comments made by Senator Yarborough during the legislative hearings on the ADEA. Senator Yarborough was a strong supporter and sponsor of the ADEA and, in the past, the Court had given his words some weight. Here, Senator Yarborough was asked whether a 52-year old worker would have a claim under the ADEA where the employer chose an individual 42-years of age, who was also protected. Cline seized on Senator Yarborough’s response to this situation that “[t]he law prohibits age being a factor in the decision to hire, as to one age over the other, whichever way [the] decision went.” The Court was not persuaded by this lone comment in the course of hearings where the clear focus was on the protection of older workers.

Finally, Cline relied on a regulation promulgated by the EEOC, which states: “If two people apply for the same position, and one is 42 and the other 52, the employer may not lawfully turn down either one on the basis of age, but must make such decision on the basis of some other factor.” 29 CFR § 1625.2(a) (2003). Where Cline urged the Court to give deference to the EEOC, General Dynamics urged the Court to take a more limited approach. Initially, the Court observed that when the EEOC adopted the regulation upon assuming administrative responsibility for the ADEA, it gave no reason for the view expressed. Moreover, the Court saw no reason to elect between a less or more deferential approach because it concluded that the EEOC was simply wrong. That is, the EEOC’s position was so contrary to the history and text of the ADEA that the Court disregarded it altogether. The Court ultimately held that based upon the text, structure, purpose and history of the ADEA, an employer is not prohibited from favoring older employees.

Justices Thomas, Kennedy and Scalia dissented. Justice Thomas, with whom Justice Kennedy, joined, opined that the plain language of the statute, the EEOC’s interpretive regulation and opinion, and the relevant legislative history all lead to the conclusion that the aggrieved workers here, all over age 40 and thus part of the protected class, could bring a claim for age discrimination. In his dissenting opinion, Justice Scalia wrote that he too would defer to the EEOC’s interpretive regulation.

This case presents an interesting factual background. Both the allegedly favored workers and the disfavored workers were members of the class of individuals protected by the ADEA. Yet, the Court’s decision leaves the so-called “younger workers” without a remedy for their perceived discrimination. New Jersey employers, however, should be careful not to [place too much reliance on the Court’s decision, which is limited to the ADEA. The New Jersey Supreme Court has held that the prohibition against age discrimination in the New Jersey Law Against Discrimination is broad enough to accommodate an employee’s claim of age discrimination based on youth. Bergen Commercial Bank v. Sisler, 157 N.J. 188 (1999).