Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

In the first case (Smith v. City of Jackson) decided in 2005, the Supreme Court held that disparate impact claims are cognizable under the ADEA, and that the appropriate standard for determining the legality of a practice that disproportionately affects older workers is the RFOA test, not the more stringent “business necessity” test used for other types of discrimination claims. Three years later in Meacham v. Knolls Atomic Power Laboratories, the Supreme Court held that the employer bears the burden of production and persuasion in making a RFOA defense in an ADEA disparate impact claim. To that end, the EEOC sought to revise the current ADEA regulations to clarify the RFOA standard and issued a proposed rule on February 18, 2010. 

Those voting in favor of sending the rule to the OMB were EEOC Chair Jacqueline Berrien and Commissioners Stuart Ishimaru and Chai Feldblum. The two Republican members of the Commission – Constance Barker and Victoria Lipnic – voted against the draft final rule. More information on the final rule will be provided when published. While details about the rule are not yet available, the party-line vote indicates that the new rule may make it more difficult for an employer to assert an affirmative defense in an ADEA disparate impact case.

Hiring Disabled Veterans

The second portion of the public meeting focused on various obstacles disabled veterans face when re-entering the workforce. A number of representatives from government agencies, the private sector, and advocacy groups discussed the unique hiring barriers these job applicants encounter.

George M. Parker with the Department of Labor’s Veterans Employment and Training Service (DOL VETS) outlined the disability provisions under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Parker noted that this statute’s disability provisions

are broader because the statute does not define “disability”, per se. The Department has interpreted the term to mean any injury or disease (to include psychological conditions) that would substantially interfere with an individual’s ability to perform the functions of his or her job. Accordingly, if a returning service member requires assistive devices or other technology to perform his or her job, the employer is required to make reasonable efforts to provide such assistance.

Claudia Gordon, Special Assistant to the Director of the Office of Federal Contract Compliance Programs (OFCCP), discussed her division’s enforcement of the affirmative action provisions of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). In April 2011, the OFCCP issued a proposed rule that would strengthen a federal contractor and subcontractor’s affirmative action requirements under VEVRAA. Among other things, the proposal describes specific actions a contractor must take to satisfy its obligations, increases the contractor’s data collection obligations, and requires the contractor to establish hiring benchmarks to assist in measuring the effectiveness of its affirmative action efforts. During the public meeting, Gordon said the agency expects to issue a final rule on these affirmative action requirements next year.

In addition, the OFCCP is in the process of drafting a rule that would “strengthen the regulations implementing Section 503 of the Rehabilitation Act of 1973 in order to improve employment opportunities for people with disabilities.” That rule is currently under development.

As for enforcement initiatives, Gordon’s written testimony notes that the agency has added 200 new compliance officers since the beginning of the Obama Administration, and “has shifted its enforcement activities to hold contractors accountable for their employment practices.” To that end, a new OFCCP protocol requires regional compliance officers “to increase on-site reviews which are necessary to improve verification efforts and increase contractor accountability.” Her testimony states that the OFCCP’s investigative procedures “include verification that the employer is listing job openings with an appropriate employment service delivery system so that veterans may be given priority in referral.” According to Gordon, over the past two years 20-30% of OFCCP reviews have uncovered VEVRAA violations.

Speaking on behalf of the U.S. Chamber of Commerce, Vivian Eng Bendewald, Program Manager for the Injured Veterans Employment Initiatives, stated that: “Employer needs are tied to finite resources – some more finite than others. Thus, in creating employment opportunities for the [wounded, ill and injured (WI&I)] there is no algorithm to define best practices due to the diversity of the WI&I population as well as the needs and business abilities of a given employer.” Eng Bendewald also noted that in March 2011 the CoC partnered with the DOL VETS to launch the Hiring Our Heroes (HOH) Veterans Employment Initiative “to improve local public-private sector coordination in communities where veterans and their families live, or return to after military service.”

A complete list of panelists and links to their testimony can be found here.

In addition, the agency intends to proceed with its proposed rules clarifying both the meaning of the “reasonable factors other than age” (RFOA) defense used against an Age Discrimination in Employment Act (ADEA) claim, and the disparate impact burden of proof under the ADEA. In Smith v. City of Jackson, the U.S. Supreme Court held that disparate impact claims were cognizable under the ADEA, and that an employer could use RFOA as a defense against such a claim. To that end, in March 2008, the EEOC issued a notice of proposed rulemaking (NPRM) regarding disparate impact claims under the ADEA. In this NPRM, the EEOC asked whether more information was needed on the meaning of RFOA in this context. In light of the 2008 U.S. Supreme Court opinion in Meacham v. Knolls Atomic Power Lab, in which the Court held that the employer bears the burden of production and persuasion when using a RFOA defense in an ADEA case, and comments it received from its NPRM, the EEOC stated that before issuing final regulations concerning disparate impact claims under the ADEA, it would issue a new NPRM to address the scope of the RFOA defense. In February of this year, the EEOC did just that. The comment period on that NPRM ended in April 2010. Final rules clarifying both elements of the ADEA are scheduled to released by July 2011.

As for proposed rules, the EEOC plans to amend its current Title VII and ADA recordkeeping regulations to address recordkeeping obligations under the Genetic Information Nondiscrimination Act (GINA).  The agency issued a final rule on the employment provisions of GINA last month.

Also at the proposed rule stage, the agency intends to issue regulations revising its race and ethnicity data collection method to conform with current reporting instructions for the EEO-1 Report, making employee self-identification the preferred method for collecting race and ethnic data on employees.  According to the EEOC, current regulations allow employers to gather race and ethnic data about employees by visual surveys of the workforce or from employment records.

At the hearing, some witnesses, including Gail E. Aldrich, Member of the AARP Board of Directors, testified (pdf) that they believed the Gross decision was wrongly decided, and that the Court misinterpreted what Congress intended when it enacted the ADEA. Eric Dreiband, Former General Counsel of the U.S. Equal Employment Opportunity Commission (EEOC), however, stated that he did not believe that the POWADA would benefit the public interest. Specifically, Dreiband testified (pdf) that “the bill as proposed will enable age discrimination and other victims to prove a violation if an impermissible factor was a motivating factor for the practice complained of, even if other factors also motivated that practice,” but also will restore the “same action” defense, in which age discrimination defendants could prevail, even when they improperly considered a person’s age, if they demonstrated that they would have made the same decision or taken the same action for additional reasons unrelated to age. Such a result, according to the witness, “may render the ‘motivating factor’ standard nearly irrelevant,” and “would deprive discrimination victims of any meaningful remedy in ‘same action’ cases.” Dreiband also contended the bill is “overly broad, vague, and ambiguous.” He claimed the legislation:

purports to apply to 'any Federal law forbidding employment discrimination,' and several other laws, but the bill does not identify which laws the bill will amend. As a result, discrimination victims, unions, employers, and others will unnecessarily spend years or decades, and untold amounts of money, fighting in court over whether the bill changes particular laws. This will have no positive consequences for anyone.

A complete list of witnesses and transcripts of their testimony can be found here.

The petitioner in this case, Jack Gross, filed a claim in district court against his employer, FBL Financial Group, Inc. (FBL), alleging that he was demoted on account of his age in violation of the ADEA. At trial, the judge instructed the jury that it must find in the plaintiff’s favor if he proved, by a preponderance of the evidence, that age was a motivating factor in the employer’s decision. Age would be considered a “motivating factor” if it “played a part or role” in the employer’s decision. The jury was further instructed that the employer bore the burden of proving that it would have demoted Gross regardless of his age. In essence, the judge instructed the jury under the “mixed-motive” discrimination standard established by Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), a Title VII sex discrimination case in which the plaintiff alleged that both permissible and impermissible considerations played a part in her failure to make partner. In such a mixed motive situation, the Court reasoned, if a plaintiff can show that unlawful discrimination plays a motivating or substantial factor in the employment decision at issue, the burden of persuasion shifts to the employer to prove that it would have made the same adverse decision regardless of the discriminatory factor. The jury in Gross’s case found in his favor. On appeal, the Eighth Circuit reversed and remanded, finding that the jury had been improperly instructed. Because Gross did not present direct evidence of discrimination, the Court of Appeals held that the lower court erred in requiring the burden of persuasion to shift to the employer to prove that it would have made the same decision regardless of age.

The Supreme Court vacated the Eighth Circuit’s decision, holding that an employer does not need to show that it would have acted regardless of age, even if the plaintiff has provided direct evidence that age was a motivating factor. The Court reasoned that “[u]nlike Title VII, the ADEA’s text does not provide that a plaintiff may establish discrimination by showing that age was simply a motivating factor.” The Court placed great emphasis on the fact that when Congress amended Title VII to explicitly authorize discrimination claims in mixed motive scenarios, it did not similarly amend the ADEA, even though it made other contemporaneous changes to this law. According to the Court, “[w]hen Congress amends one statutory provision but not another, it is presumed to have acted intentionally.”

Additionally, the Court relied on the precise language contained in the ADEA that: “[i]t shall be unlawful 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 an individual’s age.” (emphasis added). Lifting the definition of “because of” from the dictionary, Justice Thomas reasoned that in the ADEA’s context, this phrase means the reason the employer decided to act. Thus, to succeed with an ADEA claim, the employee must show that age was the “but for” cause of the employer’s adverse decision, and nothing in the Act indicates that Congress intended any exception to this burden of proof.

A relief to employers, this case should make it substantially more difficult for many employees to succeed in their age discrimination claims. Unlike the burden-shifting scheme in Title VII mixed motive cases, the burden of proving that age was the decisive factor in the employer’s decision remains with the plaintiff. Time will tell if the current Congress will move to amend the ADEA to counter the results of this decision, as it has with other recent Supreme Court decisions favorable to employers such as the Lilly Ledbetter decision.

Chief Justice Roberts, along with Justices Scalia, Kennedy, and Alito, joined in this opinion. Justice Stevens filed a dissenting opinion, in which Justices Souter, Ginsburg, and Breyer joined. Justice Breyer also filed a dissenting opinion in which Justices Souter and Ginsburg joined.
 

The EEOC will also move forward with regulations regarding the equal employment provisions of the Americans With Disabilities Act Amendments Act (ADAAA).  The ADAAA, enacted in 2008, expanded the definition of “disability” under the Americans with Disabilities Act (ADA) in light of a number of Supreme Court decisions. In December 2008, the EEOC commissioners deadlocked along party lines on whether to approve former Chair Naomi Earp’s proposed regulations.  According to the EEOC’s agenda, a notice of proposed rulemaking will be issued by August of this year.

The Age Discrimination in Employment Act (ADEA) will be subject to two rules as a result of the Supreme Court’s decisions in Smith v. City of Jackson and Meacham v. Atomic Knolls Laboratory. In Smith, the Court held that an employer could defend against a disparate impact claim under the ADEA by showing that its alleged adverse employment decision was due to reasonable factors other than age. In Meacham, the Court ruled that employers bear the burden of providing this defense. The proposed regulations, therefore, address this disparate impact burden of proof under the ADEA.  Final regulations on this issue are expected by March of 2010.  In addition, the EEOC intends to publish a notice of proposed rulemaking to amend its current regulations on what constitutes “reasonable factors other than age” by August of this year.

In a more procedural vein, the EEOC intends to issue a notice of proposed rulemaking by the end of next month to make changes and corrections to the federal sector equal employment opportunity complaint process. The agency also plans to revise its race and ethnicity data collection method to make employee self-identification the preferred method for collecting such data to conform with current reporting instructions for the EEO-1 Report.

The case arose when night watchmen at a commercial office building alleged that their reassignment violated their collective bargaining agreement (CBA), and was also the result of unlawful age discrimination. After an arbitrator dismissed their contract claims, the employees filed their ADEA claims in federal district court. The employer moved to dismiss the charges or, in the alternative, to compel arbitration under the CBA. The district court denied the employer’s motion to compel arbitration, finding that it was constrained to follow the Second Circuit’s decision in Rogers’ v. New York University, in which the appellate court held that union-negotiated collective bargaining agreements waiving an employee’s right to bring a statutory claim in court are unenforceable. On appeal, the Second Circuit affirmed.

The Supreme Court reversed and remanded this decision in a 5-4 vote. The Court found that an examination of both the ADEA and the National Labor Relations Act (NLRA) yielded a “straightforward answer” to the question posed. The union and the employer had freely negotiated a CBA that provided that employment-related discrimination claims, including ADEA claims, would be subject to mandatory arbitration. That provision was a subject of bargaining under the NLRA and entitled to court deference unless the ADEA removed this type of claim from the NLRA’s broad sweep. Based on its own precedent, the Court found that the ADEA did not preclude arbitration of claims brought under the statute. Accordingly, the Court held that “a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law.”

For more information on this decision, see Littler's ASAP:  The Supreme Court Opens the Door to Mandatory Arbitration of Discrimination Claims for Union Members by:  Gavin S. Appleby, Hans Tor Christensen and Jennifer L. Mora.