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Opening the Floodgates: The Validity of Reverse Age Discrimination Claims

December 31, 2003

On November 12, 2003, the U.S. Supreme Court heard oral argument in a case which raises the question of the viability of so-called "reverse age discrimination" claims under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq. ("ADEA") . At issue in General Dynamics Systems, Inc. v. Cline, Docket No. 02-1080, is whether the ADEA permits employees over the age of 40 -- and therefore protected by the ADEA -- to assert age discrimination claims based on an employer policy that favors older employees. The outcome could significantly impact corporate America , as it could lead to a deluge of age discrimination suits filed by individuals over 40, thereby increasing already significant litigation costs, as well as increasing the costs borne by employers in the implementation and administration of retirement and health plans.

Recognition of Reverse Discrimination Claims In Employment.

The Supreme Court recognized the viability of claims of reverse discrimination on the basis of race over a quarter century ago in McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273 (1976). The case was brought by two white males who claimed that they were discriminated against on the basis of their race under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., which proscribes employment discrimination on the basis of race, sex, national origin, and religion. While acknowledging that a primary purpose of Title VII is to combat discrimination against racial minorities, the Court reasoned that race is an immutable characteristic that arises at birth and that discrimination against anyone -- whether a minority or not -- on the basis of such a characteristic is prohibited by the terms of Title VII. It is now well settled that Title VII's prohibitions apply equally to males and females and to all racial, religious, and ethnic groups. See Mills v. Health Care Servs. Corp., 171 F.3d 450, 457 (7th Cir. 1999) (recognizing reverse race discrimination claim); Wheeler v. Missouri Highway & Transp. Com'n , 02-3569, 02-3570 , 2003 WL 22461787 (8th Cir. Oct. 31, 2003) (upholding reverse sex discrimination claim by male applicant) .

Age is a unique protected category because age, unlike race and sex, is not an immutable characteristic. Age constantly changes. Moreover, while Title VII, by its terms, provides universal redress (i.e., it prohibits discrimination against any employee or applicant on the basis of the protected characteristics), the ADEA expressly protects only individuals age 40 and older. To this point, the Supreme Court has left open the issue of whether individuals who are in the ADEA's protected age class can assert reverse age discrimination claims to challenge more favorable treatment of older workers (i.e., a 45 year old employee claiming that more favorable treatment of employees over age 60 is discriminatory). Until the decision by the United States Court of Appeals for the Sixth Circuit in General Dynamics Land Systems, Inc. v. Cline, 296 F.3d 466 (6th Cir. 2002), every federal Circuit Court to face the issue had decided that reverse age discrimination is not actionable. Because the ADEA was enacted to protect older workers, these courts reasoned, an employer's more favorable treatment of older employees does not run afoul of the purpose of the statute. See, e.g., Hamilton v. Caterpillar, Inc., 966 F.2d 1226 (7th Cir. 1992) (finding the ADEA does not authorize discrimination claims on the basis of more favorable treatment given to older employees); Schuler v. Polaroid Corp., 848 F.2d 276 (1st Cir. 1988); see also Stone v. Travelers Corp., 58 F.3d 434 (9th Cir. 1995) (noting that ADEA does not forbid treating older workers more favorably than younger workers); Dittman v. General Motors Corp., 941 F. Supp. 284 (D. Conn. 1996) (dismissing reverse age discrimination claim by workers within protected class), aff'd on other grounds, 1997 WL 340267 (2d Cir. June 20, 1997). The Sixth Circuit decision in General Dynamics Systems, holding that reverse age discrimination claims are actionable, created a split among the federal Circuit Courts , and the Supreme Court agreed to hear the case to resolve this disagreement.

The Facts and Procedural History of General Dynamics Systems

In General Dynamics Systems, a group of nearly 200 General Dynamics employees, aged 40 through 49, brought suit alleging age discrimination because the company entered into a collective bargaining agreement with the United Auto Workers that eliminated retiree health insurance benefits for all workers who were younger than age 50 as of July 1, 1997. Previously, General Dynamics provided health benefits to all retired workers who had accrued 30 years of seniority. Under the new system, these retiree benefits were eliminated immediately for employees younger than 50, and would eventually disappear altogether for General Dynamics employees.

The U.S. District Court dismissed the plaintiffs' claims, finding that they sought to assert "reverse discrimination" claims which are not cognizable under the ADEA. Like the courts which had previously addressed the issue, the district court reasoned that Congress intended the ADEA to protect older workers rather than those who were discriminated against because they were too young.

On appeal, the U.S. Court of Appeals for the Sixth Circuit reversed, concluding that all employees over age 40 are protected against age-related discrimination in employment. It noted that "courts must apply a statute as its language directs, not in accordance with a judicial supposition as to what the legislature might better have written." 296 F.3d at 469. In particular, the Court focused on the lang uage of Section 623(a)(1) of the ADEA, which provides that:

It shall be unlawful for an employer (1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditio ns, or privileges of employment, because of such individual's age.

29 U.S.C. § 623(a)(1) (emphasis added). The Court also observed that Section 631(a) of the ADEA declares that "any individual" means those "individuals who are at least 40 years of age." Thus, the Court reasoned, the statute's plain language prohibits discrimination against any worker age 40 or older on the basis of age. As a result, a 2-1 majority ruled that employees between the ages of 40 and 49 could proceed with their lawsuit claiming that employees 50 years of age and older were treated more favorably.

During oral argument on November 12, the Supreme Court Justices devoted considerable attention to a regulation promulgated by the Equal Employment Opportunity Commission ("EEOC"), relied upon by the plaintiffs, which states that:

[i]t 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.

29 C.F.R. § 1625.2(a). The plaintiffs, supported by an amicus curiae brief submitted by the Bush Administration, argued that the EEOC is the agency charged with responsibility for enforcing the ADEA, and its regulation is therefore entitled to deference by the Court. The employer, on the other hand, argued that the regulation is ambiguous and unpersuasive, and that it was unnecessary for the Court to consider the regulation in any event, because a reading of the entire statute in context establishes that the kind of reverse age discrimination claim that the plaintiffs sought to assert was not intended by the ADEA.

Potential Ramifications of the Supreme Court's Decision.

The decision in General Dynamics Systems will undoubtedly have ramifications far beyond the specific fact situation presented, particularly if the Supreme Court recognizes the concept of reverse age discrimination. Many employment policies such as retirement plans which provide enhanced additional retirement health benefits to individuals over a certain age or early retirement opportunities to people over a certain age, treat older employees more favorably than employees who are younger but nonetheless over the age of 40. If the Supreme Court agrees with the Sixth Circuit such policies could be called into question. Moreover, if employees gain the right to sue under the ADEA for reverse age discrimination, the already overburdened federal courts could be called upon to resolve many more age discrimination cases. Employers could effectively be forced to offer the same benefits to every employee over 40 or face the prospect of costly ADEA litigation. One possible but unintended result of a decision recognizing reverse age discrimination claims might be to cause some employers to decide to eliminate certain benefits altogether, rather than attempting to apply them in a way that would avoid reverse age discrimination claims.

A decision in the case is expected by next June.