WASHINGTON — Age discrimination — the fastest growing category of job bias complaints filed last year with the Equal Employment Opportunity Commission — is the backdrop for a U.S. Supreme Court challenge asking a key question about what employees and employers must prove when litigating cases under the Age Discrimination in Employment Act (ADEA).
The underlying age bias claim in Jack Gross' case before the Supreme Court represents the somewhat typical controversy when an employer takes an adverse job action against an employee, triggering a discrimination complaint, said employment law scholar Paul Secunda of Marquette University Law School.
Gross' case is a so-called mixed-motive case, he said, unlike a pretext case in which the employee charges that the employer took the adverse action because of an illegal factor, such as race or sex, and the employer counters that the reason was legitimate, such as bad performance. The employee must prove that bad performance is a pretext for discrimination.
"Mixed motive is more nuanced and, properly thought of, is what happens in the usual employment situation," said Secunda. "The employer offers a range or layer of reasons, some legitimate, some illegitimate, and you're trying to figure out whether the illegitimate reason motivated the employer."
At issue is what kind of evidence of discrimination the employee must show in these types of cases before the burden shifts to the employer to prove it would have taken the same action absent discrimination. Gross v. FBL Financial, No. 08-441.
Lawyers for employees argue that circumstantial evidence that age motivated the employer's action, even though other, legitimate factors may have influenced the decision, is enough to shift the burden under the ADEA.
Lawyers for employers counter that the burden to prove age was the reason should always be on the employee. But if the justices apply burden-shifting in mixed-motive cases, then employees must show direct, or at least substantial, evidence of age discrimination as the motivating factor before the burden shifts to the employer.
The Supreme Court and Congress resolved the issue in favor of employees in cases brought under Title VII of the Civil Rights Act of 1964, which bars job discrimination because of race, color, sex, religion and national origin. But lower courts have split over the answer in non-Title VII cases.
Given the economic recession, increasing layoffs and company restructurings, lawyers on both sides agree, the high court's answer will be important to litigation of the increasing number of age claims, but also of other non-Title VII job bias claims such as disability, Family and Medical Leave Act status and pay, among others.
The Gross case is one in a series of recent high court cases in the job bias area that are not so much about how employers should apply the anti-discrimination laws but about how job bias complaints are brought and litigated, said Paul Mollica, a partner at Chicago's Meites, Mulder, Mollica & Glink who co-authored an amicus brief for the National Employment Lawyers Association on behalf of Gross.
"These cases have been about, for example, what is a 'charge' filed with the EEOC, and is 'me, too' evidence admissible," he said. "These are lawyers' cases."
Jack Gross, born in June 1948, began working for FBL Financial Group Inc.'s Iowa Farm Bureau division as a claims adjustor in 1971. In 1978, he left FBL but returned in 1987 and thereafter received regular promotions. In 1999, he was made claims administration vice president.
When Gross' longtime supervisor was demoted and then retired, his new supervisor changed Gross' job title. Although his duties remained the same, Gross believed it was a demotion because he received fewer points in the company's salary grade system. He also began to receive poorer job evaluations. Two years later, he was moved to another position, which he viewed as a demotion, and most of his former duties went to a woman in her early 40s in a newly created position. He was 54 at the time.
Gross filed suit under the ADEA, claiming that the reassignment amounted to age discrimination. A jury found for Gross and awarded $46,945 in lost compensation.
The district court held that, even though there was no "direct evidence of discrimination," there was "ample circumstantial evidence" that FBL intentionally discriminated based on Gross' age. In particular, the court pointed to evidence that Gross "was far more experienced and qualified" than the woman, given his duties; that other older employees were demoted around the same time; and that the stated reason for his demotion — that his new position was "a good fit for his strengths and weaknesses" — was not credible because there was no defined position for him to "fit into."
The 8th U.S. Circuit Court of Appeals reversed, relying on Justice Sandra Day O'Connor's concurring opinion in the plurality decision, Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). O'Connor said plaintiffs in a Title VII case must show "by direct evidence that an illegitimate factor played a substantial role" in the employment decision in order to get a mixed-motive jury instruction.
The 8th Circuit rejected Gross' argument that Congress in the Civil Rights Act of 1991 and the Supreme Court, construing that act in Desert Palace Inc. v. Costa, 539 U.S. 90 (2003), had eliminated any direct evidence requirement under the ADEA. The Price Waterhouse decision was one of several job bias decisions that term that Congress sought to overturn or limit in the 1991 act. The court said the 1991 act, by its own terms, applied only to Title VII claims, not to ADEA claims.
The circuit courts have split over whether there is a direct-evidence requirement in non-Title VII cases. The 1st, 5th, 7th, 9th and 10th circuits have said direct evidence is not required; the 2d, 3d and 8th still require it.
Battle lines drawnThe Gross case, as with other job bias cases in the high court, has drawn traditional foes into the legal fray.
Gross is supported by the United States solicitor general, the National Employment Lawyers Association, seniors' advocacy group AARP and an array of civil rights groups, including the Lawyers' Committee for Civil Rights Under Law and the National Women's Law Center.
Supporting FBL is the U.S. Chamber of Commerce, the Equal Employment Advisory Council, the National School Boards Association, the National Federation of Independent Business Small Business Legal Center and the Society for Human Resource Management.
Gross' high court counsel, Eric Schnapper of the University of Washington School of Law, argues that the ADEA does not require a plaintiff or a defendant to establish anything by direct evidence; does not bar reliance on circumstantial evidence; and does not insist on proof by clear and convincing evidence.
In both Desert Palace and Price Waterhouse, he said, the justices said they would not depart from conventional rules of civil litigation unless the relevant statute authorized it. Price Waterhouse noted that the normal rule in civil litigation is proof by a preponderance of evidence, he said.
When Congress has wanted to depart from the normal rule of proof, he added, it has done so expressly. There are 94 federal laws requiring proof by clear and convincing evidence, said Schnapper.
"In the absence of such express provisions, it is reasonable to conclude that Congress intended that the conventional standards would apply."
Why didn't Congress address the ADEA when it took up legislation that became the Civil Rights Act of 1991?
"Price Waterhouse was a Title VII case and Congress was addressing Title VII," he said. It would have been "impractical," he added, for Congress to have read through the nearly 100 other federal discrimination laws at the time to determine which had to be amended.
FBL's high court advocate, Carter Phillips, a partner in the Washington office of Sidley Austin, attacks Price Waterhouse, arguing that, if the justices re-examine it, they should throw out the whole decision.
"The burden-shifting it authorizes is inconsistent with the text and purpose of the ADEA; it is a departure from conventional rules of civil litigation; its precise holding was never resolved; and it is unworkable and unfair to employers," he contends.
He and his business supporters urge the court to put all job bias cases under the framework of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), whereby the employee always bears the burden of proof on causation.
If the court doesn't overrule Price Waterhouse, Phillips said, O'Connor's concurrence in that decision should apply and not Desert Palace.
Shifting the burden of persuasion on the ultimate issue of whether the employer discriminated, he said, is an "extraordinary departure" from the ordinary rules of civil litigation
"If this is to occur at all, it should occur only under a heightened standard."
One standard
Employer defense counsel Lawrence Lorber, a partner in the Washington office of New York's Proskauer Rose, was heavily involved in negotiations on the Civil Rights Act of 1991 and said it was clear that Congress intended to "significantly liberalize" the evidence standard in favor of employees in Title VII cases.
"While the Civil Rights Act only dealt with Title VII, I would think the court would apply the statute to the ADEA," he said. "Under the ADEA, there's a large body of law that says you look at Title VII precedents. To the extent, the justices want a sort of uniform process-oriented treatment of discrimination, they would apply it in this case to the age act."
Marquette's Secunda agreed, asking, "Why can't we have just one normal test? I'm looking at this from a prudential standpoint. I think we should have one standard that applies to all discrimination cases."
But if that one standard does not require employees to produce direct evidence of discrimination, plaintiffs will be able "to turn every age discrimination claim into a mixed-motive case, thus imposing on employers a meaningful and substantial hardship," said Rae Vann, general counsel of the Equal Employment Advisory Council.
Unlike race or sex, age often correlates with legitimate factors, such as seniority or salary, she writes in her amicus brief, adding that, while Title VII and the ADEA are alike in many ways, there are significant differences justifying applying them differently.
But not in this situation, countered Thomas Osborne, counsel to the AARP.
"The direct evidence requirement is not in either statute," he said. "There is no difference in the way you prove that the action was 'because of' an illegitimate factor. Both statutes have the 'because of' language. We argued very simply: Don't make age a second-class right here. At least in this matter, there really isn't any need to do that. It just doesn't make sense."
