The U.S. Supreme Court issued an opinion today in the case of General Dynamics Land Systems v. Cline, No. 02-1080. You can access the opinion here. In a 6-3 decision, the Court reversed the Sixth Circuit decision and held that…
The U.S. Supreme Court issued an opinion today in the case of General Dynamics Land Systems v. Cline, No. 02-1080. You can access the opinion here. In a 6-3 decision, the Court reversed the Sixth Circuit decision and held that reverse discrimination claims are not cognizable under the Age Discrimination in Employment Act. Justice Souter wrote the majority opinion. Justice Scalia authored a dissenting opinion, and Justice Thomas authored another dissenting opinion joined by Justice Kennedy. The opening statement of the majority opinion reads as follows:
The Age Discrimination in Employment Act of 1967 . . . forbids discriminatory preference for the young over the old. The question in this case is whether it also prohibits favoring the old over the young. We hold it does not.
The Facts of the Case: The company had entered into a collective-bargaining agreement with the union eliminating the company’s obligation to provide retiree health benefits, except for those then-current workers who were at least 50 years old. Employees who were at least 40 years of age, but under 50, brought an action under the ADEA. The EEOC supported the position of the employees based upon an EEOC regulation. A district court had dismissed the case, calling the federal claim one of “reverse age discrimination” upon which no court had ever granted relief under the ADEA. A divided panel of the Sixth Circuit reversed, reasoning that section 623(a)(1) of the ADEA prohibited discrimination on its face and that if Congress had meant to limit its coverage to protect only the older worker against the younger, it would have said so. The U.S. Supreme Court reversed the Sixth Circuit.
The regulation of the EEOC (29 CFR section 1625.2(a)) at issue read as follows:
It is unlawful in situations where this Act applies, for an employer to discriminate in hiring or in any other way by giving preference because of age between individuals 40 and over. Thus, 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.
What the Court Had to Say: The majority opinion argues that the history of the ADEA, its structure, purpose, history and relationship to other federal statutes, does not support a finding that the ADEA meant to stop an employer from favoring an older employee over a younger one. The opinion notes how a contrary ruling would create “discord” among the federal statutes on employee benefit plans. (Comment: “Discord” is an understatement. A contrary ruling would have been like a bombshell going off in the benefits world.) The Court explains this very important point in footnote 9:
An even wider contextual enquiry supports our conclusion, for the uniformity Cline and the EEOC claim for the uses of “age” within the ADEA itself would introduce unwelcome discord among the federal statutes on employee benefit plans. For example, the Tax Code requires an employer to allow certain employees who reach age 55 to diversify their stock ownership plans in part, 26 U.S.C. section 401(a)(28(B); removes a penalty on early distributions from retirement plans at age 59 and 1/2, section 72(t)(2)(A)(i); requires an employer to allow many employees to receive benefits immediately upon retiring at age 65, section 401(a)(14); and requires an employer to adjust upward an employee’s pension benefits if that employee continues to work past age 70 1/2, section 401(a)(9)(C)(iii). The Employee Retirement Income Security Act of 1974 makes similar provisions. See, e.g., 29 U.S.C. section 1002(24) (“normal retirement age” may come at age 65, although the plan specified later); section 1053(a) (a plan may pay full benefits to employees who retire at normal retirement age). Taken one at a time any of these statutory directives might be viewed as an exception Congress carved out of a generally recognized principle that employers may not give benefits to older employees that they withhold from younger ones. Viewed as a whole, however, they are incoherent with the alleged congressional belief that such a back-ground principle existed.
The Court also held that the EEOC was “clearly wrong” in its interpretation of the ADEA in regulation section 1625.2(a) (see above) noting as follows:
When the EEOC adopted section 1625.2(a) in 1981, shortly after assuming administrative responsibility for the ADEA, it gave no reasons for the view expressed, beyond noting that the provision was carried forward from an earlier Department of Labor regulations. . . In Edelman v. Lynchburg College, 535 U.S. 106, 114 (2002), we found no need to choose between Skidmore and Chevron, or even to defer, because the EEOC was clearly right; today, we neither defer nor settle on any degree of deference because the Commission is clearly wrong.
Other notable quotes from the opinion:
(1) ” . . .[T]he testimony, reports, and congressional findings simply confirm that Congress used the phrase “discriminat[ion] . . .because of [an] individual’s age” the same way that ordinary people in common usage might speak of age discrimination any day of the week. One common place conception of American society in recent decades is its character as a “youth culture,” and in a world where younger is better, talk about discrimination because of age is naturally understood to refer to discrimination against the older. . . If Congress had been worrying about protecting the younger against the older , it would not likely have ignored everyone under 40. The youthful deficiencies of inexperience and unsteadiness invite stereotypical and discriminatory thinking about those a lot younger than 40, and prejudice suffered by a 40-year-old is not typically owing to youth, as 40-year-olds sadly tend to find out. The enemy of 40 is 30, not 50.”
(2) “The Courts of Appeals and the District Courts have read the law the same way, and prior to this case have enjoyed virtually unanimous accord in understanding the ADEA to forbid only discrimination preferring young to old. So the Seventh Circuit held in Hamilton, and the First Circuit said in Schuler, and so the District Courts have ruled in cases too numerous for citation here in the text. The very strength of this consensus is enough to rule out any serious claim of ambiguity, and congressional silence after years of judicial interpretation supports adherence to the traditional view.”
USAToday.com: “Justices block reverse age discrimination cases.”
Dow Jones Newswires via Quicken.com: “Supreme Court Rules for General Dynamics in Age-Bias Case.”
Reuters via the New York Times: “Supreme Court Rejects Reverse Age Bias Lawsuits.”
The Wall Street Journal: “High Court Rules For General Dynamics In Age Case.”
Previous posts on the case here and here.
Also, SCOTUSblog discusses the case here and Michael Fox at Jottings by an Employer’s Lawyer discusses it here.