ADEA Claims in the Wake of Gross v. FBL Financial Services, Inc.

R. Scott Oswald

Corporate Counsel

01-09-2013

In June 2009, the United States Supreme Court issued its decision in Gross v. FBL Financial Services, Inc., holding that an employee bringing a claim under the Age Discrimination in Employment Act must show that age was the “but-for” cause of the challenged adverse action.

Gross won at trial under an ADEA mixed-motive jury instruction, which allowed the jury to find his employer liable for age discrimination if Gross’s age was a “motivating factor” in the adverse action. The Supreme Court reversed Gross’s verdict, finding that “the ordinary meaning of the ADEA’s requirement that an employer took adverse action ‘because of age’ is that age was the [primary] ‘reason’ that the employer decided to act,” and not just one of many factors that played a role in the employer’s decision.

The Gross holding simply means that a plaintiff must prove that her age was the determining factor of the adverse action, not the “sole cause” of the adverse action and not a “motivating factor” in the adverse action. Gross has also affected age discrimination claims brought under state statutes, but has not extended its reach into many distinct federal or state statutes.

Changes Caused by the Gross Decision

Despite a change in the causation standard, courts still apply the traditional framework for processing age discrimination claims. Accordingly, in most courts, employers still must establish a legitimate business reason for taking adverse actions against employees who have set forth a prima facie case of age discrimination.

The cases upon which Gross will have the least impact are the cases where employees have strong direct evidence of age discrimination against them. Where an employee can provide direct evidence of age discrimination, he does not need to establish a causal connection—i.e., Gross’s "but-for" standard of causation—in order to prevail upon his claim.

For example, in Inman v. Klockner Pentaplast of America, Inc., 347 Fed. App’x. 955 (4th Cir. 2009), as the Gross decision was working its way through the courts, the Fourth Circuit held that the discriminatory statements by KPA officials made at the time of Inman’s termination and the disparaging comments made prior to his termination gave Inman substantial direct evidence that KPA terminated his employment because of his age.

Essentially, because Inman had such strong direct evidence of age discrimination, he would not have needed to prove that his age was the determining factor in his termination: KPA had done that for him, by telling him that he no longer fit KPA’s “profile” and “model” and that the company wanted to “revitalize” and to use a “more energetic person.”

With direct evidence of discrimination that bears squarely on the employment decision and reflects a prohibited animus, a jury could easily find that age discrimination was the “but-for” cause of a personnel action against an employee. However, cases built on circumstantial evidence can still survive the Gross analysis, and employers should take these claims seriously.

Additionally, employers can no longer avoid liability in age discrimination claims by asserting that they would have made the “same decision” regarding a questioned personnel action regardless of the employee’s age.

Further, the Gross decision has caused little change in the analysis of employment claims brought under other statutes. Generally, courts have explicitly rejected applying the Gross standard of causation to Title VII claims. In Smith v. Xerox Corp., 602 F.3d 320 (5th Cir. 2010), the Fifth Circuit held that applying Gross to a Title VII retaliation case “would be contrary to Gross’s admonition against intermingling interpretation of the two statutory schemes.” In Seridakis v. S. Broward Hosp. Dist., 468 Fed. Appx. 926 (11th Cir. Mar. 29, 2012), the Eleventh Circuit held that because the ADEA and Title VII have “materially different burdens of persuasion,” the Gross decision did not control the court’s analysis of the plaintiff’s Title VII retaliation claim.

However, the application of Gross to Family and Medical Leave Act cases has been less than homogenous. For example, in Hunter v. Valley View Local Sch., 579 F.3d 688 (6th Cir. 2009), the Sixth Circuit held that the Gross decision does not bar mixed motive claims under FMLA, and in Pantoja v. Monterey Mushrooms, Inc., 10-CV-1184, 2011 WL 4737407 (C.D. Ill. Oct. 6, 2011), the United States District Court for the Central District of Illinois held that Gross requires proof of “but-for” causation in all civil rights and employment discrimination cases unless the statutory language otherwise indicates.

Practical Advice for Handling Age Discrimination Claims After Gross

In-house counsel can improve their clients' employees’ working conditions and reduce client liability for age discrimination claims by closely examining potential age discrimination claims and advising their clients how to handle those claims.

Most states and many localities have enacted their own antidiscrimination laws that prohibit employers from discriminating against employees on the basis of age and employers are likely subject to these, in addition to the ADEA. Many of these statutes are based upon the ADEA, but the Gross decision is not necessarily applicable to all local and state antidiscrimination statutes. Generally, the states that have refused to apply the “but-for” standard of causation to their local and state statutes have done so by relying upon the differences between the ADEA and their own statutes.

If an employee complains of direct evidence of discrimination, analyze whether that evidence meets the standard for direct evidence in the appropriate jurisdiction. Remember that where an employee has direct evidence of discrimination, she does not have to prove that her age was a factor in the personnel action at issue: through that direct evidence, the employer has already done it for her. If an employee does have direct evidence, but it is not substantial, analyze whether the employee can also present any circumstantial evidence of age discrimination, thus forcing the employer to produce a legitimate business reason for the personnel action against the employee.

Also, recall that most jurisdictions still recognize that if an employee can establish a prima facie case of age discrimination, employers must still produce a legitimate business reason for taking the personnel action at issue. Shifting explanations—or lack of an explanation at all—for a personnel action can constitute circumstantial evidence of discrimination. In any of these instances, in-house counsel should advise their clients to take the employee’s claims seriously.

Additionally, employers should not attempt to argue that employees must demonstrate that their age was the “sole cause” of the personnel action taken against them. As widely recognized, “but-for” does not mean “sole cause”—instead, it means that age must be a “determining factor” in the adverse action.

Finally, in-house counsel should advise their clients to treat reports of age discrimination seriously. Gross does not necessarily affect the viability of employees’ retaliation claims based upon adverse actions taken after reporting age discrimination. Although the underlying discrimination itself may not meet the standard set forth in Gross, a subsequent personnel action could lay the proper foundation for a retaliation claim under the ADEA.

Conclusion

In light of the aging population of the United States, the loss of a substantial amount of assets in the recent market crash, and a flood of younger employees on the market, age discrimination claims in the workplace will likely increase as those who are older are not hired or are terminated. As these claims increase, in-house counsel will have to carefully analyze the Gross decision’s impact on their clients’ hiring and employment termination decisions.

R. Scott Oswald is managing director of The Employment Law Group. He focuses his practice on employment law, including whistleblower actions. Mr. Oswald is a prolific author and co-author of journal articles in his specialties and frequently appears as a panelist at professional conferences. He can be reached at soswald@employmentlawgroup.com.