Client Bulletin #416

7.10.09

For a printer-friendly copy, click here.

The Supreme Court’s recent decision in Gross v. FBL Financial Services, Inc., illustrates the often confusing and conflicting standards that apply when a plaintiff claims that an employment decision was discriminatory.

In the Gross case, the Supreme Court majority held that a plaintiff in a case under the Age Discrimination in Employment Act must prove that “but for” his age, he would not have been subjected to the adverse employment action. The plaintiff’s position was restructured when he was age 54, and some of his job duties were given to a female co-worker in her 40’s. The plaintiff won at trial, but his victory was reversed by the U.S. Court of Appeals for the Eighth Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota). The Supreme Court majority, in an opinion written by Justice Thomas and joined by Chief Justice Roberts and Justices Alito, Kennedy, and Scalia, reasoned that the ADEA prohibits adverse action against an employee “because of” his age and that “because of” is just another way of saying that the action would not have been taken “but for” the plaintiff’s age. Under the “but for” test, discrimination must have been the determining reason for the decision, not just one reason among others.

This means that burden is on the plaintiff to rule out any non-discriminatory reasons for the action taken. Gross is a very good decision for employers.

However, the Gross standard applies only to age discrimination cases under the ADEA, not to cases of discrimination based on race, sex, national origin, color, or religion under Title VII of the Civil Rights Act of 1964.

Why is there a difference? Because Title VII provides that a plaintiff can prevail by showing that race (etc.) was “a motivating factor” in the employer’s decision (emphasis added). The ADEA has no such language. Therefore, the burdens of proof are different.

Price Waterhouse: How it all started

In the 1980’s, a female CPA was denied partnership in her accounting firm because, among other reasons, she was viewed as not “feminine” enough. She sued her firm for sex discrimination, and the firm defended on the grounds that the plaintiff had interpersonal issues that justified her being denied partnership. The case, Price Waterhouse v. Hopkins, made its way to the Supreme Court, and in what Justice Thomas called a “splintered” opinion, the Court applied the Title VII standard described above. Justice Sandra Day O’Connor, in a concurring opinion, found that the plaintiff in such a case would have to present “direct evidence” that discrimination “was a substantial factor” in the decision. Direct evidence would normally include a discriminatory comment – for example, “I don’t want any women partners around here!” In other words, in Justice O’Connor’s view, it would not be enough for the plaintiff to present “circumstantial evidence” of discrimination – for example, that she was denied partnership while her male counterparts became partners. Although Justice O’Connor’s proviso did not necessarily have force of law, many federal courts treated it as if it did.

After Price Waterhouse, Congress amended Title VII to provide that a plaintiff establishes an unlawful employment practice by showing that one motivation was discriminatory, “even though other factors motivated the practice.” (Title VII also limits the remedies available to plaintiffs who prevail in this type of case.) The ADEA was amended about the same time, but the ADEA amendments did not include this mixed-motive language.

Years later, in Desert Palace, Inc. v. Costa, the Supreme Court unanimously held that in a Title VII mixed-motive case, it was not necessary for the plaintiff to present direct evidence of discriminatory motivation to get a mixed motive jury instruction.

Under Price Waterhouse and a different provision of Title VII, an employer in a mixed-motive case under Title VII can still prevail if it persuades the trier of fact (either a judge or a jury) that it would have taken the same action in the absence of the discriminatory motivation.

Back to Gross

Now we are back to the Gross decision. The trial court gave the jury a “mixed-motive” instruction consistent with Desert Palace and the amended provisions of Title VII. The Eighth Circuit reversed on the ground that Mr. Gross had presented no “direct evidence” of age discrimination, per Justice O’Connor’s concurrence in Price Waterhouse. Therefore, the question before the Supreme Court was whether direct evidence of age discrimination was necessary for a mixed-motive instruction in an ADEA case. The majority found that there was no “mixed-motive” cause of action at all under the ADEA. Hence the decision that a plaintiff in a federal age discrimination case had to prove that “but for” his age, he would not have been demoted (or terminated, or rejected for hire or promotion).

Justice Stevens, in a dissent joined by Justices Breyer, Ginsburg, and Souter, blasted the majority for failing to answer the question for which the Court had granted certiorari, but it is difficult to see how the majority could have reached any other result given their finding that the ADEA did not have a mixed-motive cause of action at all. If the majority had answered that no direct evidence was required, their answer would have implied that the Desert Palace/Title VII standard applied to the ADEA. If they had answered yes, their answer would have implied that the Price Waterhouse O’Connor concurrence applied. In other words, the majority was in a “when did you stop beating your wife” situation – either a “yes” or “no” answer would have indicated that mixed motives could apply in the context of the ADEA.

Implications for Employers

What does this legal minutiae mean for employers? In the “preventive” context, probably very little. As always, employers are strongly advised to make employment decisions without regard to race, sex, national origin, color, religion, disability, or age, but rather to focus on legitimate, job-related criteria. However, the Gross decision may have some deterrent effect on age discrimination lawsuits related to reductions in force and other restructurings, the situations where non-discriminatory motives are likely to exist along with the allegedly discriminatory motives. In our poor economy and with the aging of the baby boomer generation, this cannot be a bad thing. The decision may also help employers defend themselves in age discrimination cases when counsel did not participate “preventively” but is called in to defend an employment decision that was already made.

Constangy’s attorneys are available to help you with reductions in force and other employment decisions that have a high risk of resulting in age discrimination claims. If you need such assistance, please contact any member of Constangy’s Litigation Practice Group or the Constangy attorney of your choice.

Constangy, Brooks & Smith, LLP has counseled employers on labor and employment law matters, exclusively, since 1946. A “Go To” Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by publications such as Chambers USA, Super Lawyers, and Top One Hundred Labor Attorneys in the United States. More than 100 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Georgia, Florida, South Carolina, North Carolina, Tennessee, Alabama, Virginia, Massachusetts, Missouri, Illinois, Wisconsin, Texas and California. For more information, visit www.constangy.com.

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