Alert July 16, 2009

U.S. Supreme Court Clarifies Burden Shifting Analysis in Mixed-Motive Claims Brought Under the Age Discrimination in Employment Act

Much of the media attention at the end of the U.S. Supreme Court’s recent term was devoted to its decision in Ricci v. DeStefano, which concerned the decision of the City of New Haven to disregard promotional test results for firefighters, at least in part as a result of the differences in pass rates among racial groups. The Ricci case concerned tension between the standards applicable to the different forms of employment discrimination cases – disparate treatment cases and disparate impact cases. Although this tension was fodder for both media and legal commentary, it is of limited relevance to most employers, as disparate treatment cases are brought far more frequently than disparate impact cases, particularly against private sector employers.

Refinement of the law governing disparate treatment claims can have more relevance for private sector employers than developments concerning disparate impact cases. Shortly before issuing the Ricci decision, the Supreme Court decided Gross v. FBL Financial Services, in which it addressed the allocation of the burden of persuasion in mixed-motive cases brought under the Age Discrimination in Employment Act (“ADEA”). The petitioner in Gross argued that he had been discriminated against when his job responsibilities were assigned to a younger employee who formerly had been his subordinate. At trial the parties contested whether, to shift the burden of persuasion to the employer, the plaintiff must present “direct evidence” that the employer considered age in making its decision. But the Supreme Court held that the “direct evidence” question was irrelevant because, unlike in Title VII claims, the burden of persuasion under the ADEA never shifts to the employer, even in a mixed-motive discrimination case.

Background

The Supreme Court first addressed mixed-motive discrimination claims in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). In Price Waterhouse, a four-member plurality of the Court held that, once a plaintiff in a Title VII case shows that an employee’s protected class status played a motivating part in an employment decision, the defendant may then avoid liability only by proving that it would have made the same decision even if it had not taken the employee’s protected class status into account. Justice O’Connor, concurring, stated that she would shift the burden to the employer only if the plaintiff presented “direct evidence” that an illegitimate criterion was a substantial factor in the decision. Following Price Waterhouse, many courts took Justice O’Connor’s opinion as controlling on the basis that she was the fifth vote concurring in the judgment on the narrowest grounds.

The Civil Rights Act of 1991 (“1991 Act”) rejected the Price Waterhouse decision by providing that an unlawful employment practice is established under Title VII whenever an employee’s protected class status is a “motivating factor” for an adverse employment action, even though other factors motivated the decision as well. If an employee can make such a showing, the 1991 Act provides that an employer may avoid monetary damages, rather than all liability, by affirmatively showing that it would have taken the same action in the absence of the impermissible motivating factor. In Desert Palace v. Costa, 539 U.S. 90 (2003), the Supreme Court held that the 1991 Act’s silence on the requirement of “direct evidence” indicated that direct evidence was not required in a Title VII case to shift the burden of persuasion to the employer, and that the employee need only show “by a preponderance of the evidence” that a suspect classification was a motivating factor in order for the burden to shift.

Despite the Supreme Court’s decision in Desert Palace clarifying the proper framework for Title VII mixed-motive cases, the question remained whether the Price Waterhouse analysis should continue to be applied to non-Title VII cases. On the one hand, the 1991 Act only amended Title VII and left the ADEA untouched. On the other hand, the language in the two statutes prohibiting discrimination “because of” protected class status is identical. The Supreme Court’s decision in Gross reconciles this lingering confusion regarding the effect of Price Waterhouse and the 1991 Act on ADEA claims.

Gross v. FBL Financial Services

In Gross, writing for a five-member majority, Justice Thomas bypassed the “direct evidence” question and held that a mixed-motive jury instruction is never proper in an ADEA case. Justice Thomas largely relied on the statutory language of the ADEA. He noted that, unlike Title VII, the ADEA does not have a provision stating that a plaintiff may establish discrimination by showing that age was a motivating factor. Moreover, Justice Thomas noted that when Congress passed the 1991 Act and added a “motivating factor” provision to Title VII, it neglected to add a similar provision to the ADEA even though it contemporaneously amended the ADEA in several other ways.

Focusing solely on the language of the ADEA, the Court held that the ordinary meaning of “because of age” is that “age was the ‘reason’ that the employer decided to act.”  Therefore, a plaintiff must prove, either by direct or circumstantial evidence, that age was the “but-for” cause of the employer’s adverse decision in order to establish a disparate treatment claim under the ADEA. The burden of persuasion in an ADEA case always remains with the plaintiff, and the employer need not make an affirmative defense if the employee presents only evidence that age was a motivating factor in the employer’s decision. Hence, “the burden of persuasion necessary to establish employer liability is the same in alleged mixed-motive cases as in any other ADEA disparate-treatment action.”

Impact

Gross is strongly pro-employer in holding that the plaintiff bears the burden of persuasion at all times and that an employer’s consideration of the employee’s age in taking an adverse employment action will not result in liability unless age is the “but for” reason for the adverse action. However, as a practical matter, employers should continue to avoid taking age into consideration rather than risk a finding by a court or jury that the plaintiff satisfied his or her burden of proving that age was, in fact, the determinative factor.

Moreover, there is a reasonable possibility that Congress will legislatively overrule the Court’s decision and require that parties in ADEA lawsuits proceed under the same legal framework followed in Title VII cases. Congress’s willingness to act in this area is evidenced by its recent negation of the Court’s holding in Ledbetter v. Goodyear, 550 U.S. 618 (2007). In Ledbetter, the Court strictly construed the statute of limitations for filing EEOC charges under Title VII of the Civil Rights Act of 1964, holding that new pay discrimination violations do not occur each time an employer issues a paycheck to a female employee that is less than what similarly situated male employees receive. Congress responded by passing the Fair Pay Act in 2009, which stated that an unlawful employment practice occurs not only when a discriminatory compensation decision or practice is adopted, but also each time the individual is subject to the discriminatory compensation decision or practice, thereby allowing employees to bring discrimination claims now based upon employment decisions that were made years ago. Given the current filibuster-proof Democratic majority in the Senate, an amendment to the ADEA remains a possibility.

A more detailed analysis of Congress’s legislative reversal of Ledbetter is available in Goodwin Procter’s February 12, 2009 Client Alert “New Federal Law Expands Employees’ Entitlement to Sue Over Compensation-Discrimination Issues.”