EVIDENCE

Supreme Court clarifies burden of proof in age discrimination claims

How much of a factor must age be in an employer's decision to demote an employee before the employer becomes liable for age discrimination? In a landmark decision, the U.S. Supreme Court answered that question and clarified the burden of proof for disparate treatment claims under the Age Discrimination in Employment Act (ADEA).

Reassigned or demoted because of age?

Jack Gross, a longtime employee of FBL Financial Group, was reassigned from claims administration director to claims project coordinator at the age of 54. At the same time, FBL transferred many of his former job responsibilities to a younger coworker whom he had previously supervised.

Gross believed that the reassignment was a demotion and filed suit in federal district court, alleging violations of the ADEA. The case proceeded to trial, where Gross introduced evidence suggesting that his reassignment was based at least in part on his age. FBL defended its position that Gross' reassignment was part of a corporate restructuring and that his new position was better suited to his skills.

'Gross' error in jury instructions?

At the close of trial, the district court instructed the jury that it must return a verdict for Gross if he proved FBL demoted him and age was a motivating factor (i.e., played a part or a role) in his demotion. The court further instructed the jury that it should return a verdict for FBL if the company proved the demotion would have occurred regardless of Gross' age. The jury returned a verdict for Gross.

FBL challenged the jury instructions on appeal. The Eighth U.S. Circuit Court of Appeals determined that the jury instruction was erroneous and sent the case back for a new trial. Gross appealed the Eighth Circuit's decision to the U.S. Supreme Court, which decided to hear the case.

The 'Price' is wrong

The Supreme Court first examined whether the burden-shifting framework set forth in Price Waterhouse v. Hopkins , a mixed-motive case decided 20 years ago involving claims under Title VII of the Civil Rights Act of 1964, also applied to ADEA cases. A mixed-motive case occurs when an employee alleges that he suffered an adverse employment action because of both permissible and impermissible considerations. In the Price Waterhouse case, the Supreme Court decided that once the employee proves his membership in a protected class was a motivating factor in the employment decision, the employer may avoid liability only by proving that it would have made the same decision had it not taken the factor into account.

Gross argued that the district court was correct in giving jury instructions that applied this burden-shifting framework to his ADEA claim. However, the Supreme Court disagreed, holding that the Price Waterhouse burden- shifting framework didn't apply to his case because Title VII cases are significantly different from ADEA cases with respect to the burden of persuasion.

The Court noted that since Price Waterhouse was decided, Congress has amended Title VII to expressly authorize discrimination claims in which an improper consideration was a motivating factor for an adverse employment decision. It made changes to the ADEA at the same time, but it didn't amend the ADEA to include mixed-motive claims. By neglecting to add such a provision, the high court reasoned, Congress must have intended to leave it out.

The Court also examined the language of the ADEA and concluded that it didn't authorize mixed-motive claims. The ADEA prohibits an employer from discriminating against an individual with respect to the terms and conditions of his employment "because of such individual's age." The phrase "because of" led the Court to believe that age must be the determining influence resulting in the adverse employment action amp;#8213; that "but for" the employer's impermissible consideration of the employee's age, it wouldn't have fired or demoted him.

Thus, the Supreme Court concluded that for an employee to prevail in an ADEA disparate treatment claim, he must prove that age was the "but for" cause of the employer's adverse action and not just a motivating factor. Unlike Title VII cases, ADEA cases don't require the employer to show that it would have taken the adverse employment action regardless of age when the employee has shown that age was a motivating factor. Gross v. FBL Financial Services, Inc. , 129 S. Ct. 2434, 2009 U.S. LEXIS 4535 (June 18, 2009).

Close call on a critical issue

The Gross case isn't just about the technicalities of jury instructions. The implications of the Supreme Court's decision are far-reaching. This case profoundly affects employees' ability to prevail in ADEA disparate treatment claims. The extent to which age plays a role in an employer's decision to fire or demote an employee is usually disputed. By requiring employees to show that age wasn't merely a factor but was the determinative factor in the employer's decision, the Supreme Court has established a rule that lessens the likelihood of employer liability in ADEA cases. Nevertheless, while employers should welcome this decision, they must not become overly optimistic and forget to take precautions against basing employment decisions on employees' age.

Given the significance of this decision, the Supreme Court's narrow margin in arriving at it amp;#8213; a single vote amp;#8213; is noteworthy. While five justices joined the majority opinion, four dissenting justices arrived at the opposite conclusion. Twenty years ago, the Price Waterhouse decision was also decided by a single vote.

However, this time the Supreme Court ignored the burden-shifting framework, finding it difficult to apply even in Title VII cases, and thus was unwilling to extend it to ADEA cases amp;#8213; primarily because Congress didn't amend the language of the ADEA to incorporate it. Like the decision in the Bush v. Gore case, the Supreme Court's opinions in critical cases can come down to a single vote. In this case, the deciding vote comes as a huge relief to employers.

Copyright 2009 M. Lee Smith Publishers LLC

The contents of the UTAH EMPLOYMENT LAW LETTER are intended for general information purposes only and should not be construed or relied upon as legal advice or a legal opinion on any specific facts or circumstances. Anyone needing specific legal advice should consult an attorney. For further information about the content of any article in this newsletter, please contact any of the editors.