ADEA Meacham RFOA Oral Argument Transcript Analysis

Together with Metlife v. Glenn, the Supreme Court heard another labor and employment law case today, this one involving the "reasonable factors other than age" (RFOA) defense under the Age Discrimination in Employment Act (ADEA) and who has the burden of proving that there is a RFOA.

Our friends at the Cornell Legal Information Institute (LII) provide us with this backgrounder of Meacham v. Knolls Atomic Power Laboratory (06-1505):

In this case, a hair's breadth of analytical difference is worth almost $6 million dollars, as the plaintiffs, former employees at Knolls Atomic Power Laboratory ("KAPL") ask the U.S. Supreme Court to overturn the Second Circuit's finding for the defendants. The plaintiffs had prevailed at trial and on appeal on a disparate impact theory of illegal age discrimination under the Age Discrimination in Employment Act (the "ADEA"), 29 U.S.C. 621 et seq., when the Supreme Court remanded for reconsideration in light of Smith v. City of Jackson.

While upholding the disparate impact theory, City of Jackson also requires the touchstone of the analysis to be whether employers considered "reasonable factors other than age," which the Second Circuit determined was a burden of persuasion to be borne by the plaintiffs. The employee-plaintiffs disagree, maintaining that the "reasonable factors other than age" harbor in the ADEA statute is a traditional affirmative defense on which the employer-defendants bear the burden of proof. In determining where the burden rests, the Supreme Court's decision will impact the nature of future employee litigation under the ADEA, shape the strategies for a successful reduction in force, and determine what deference is due the Equal Employment Opportunity Commission's regulations interpreting the ADEA.

Here is my analysis of today's oral argument transcript in Meacham:

1. A nice encapsulation of the issue by Meacham's counsel, Kevin Russell:

Everyone agrees that under the reasonable factor other than age provision of the Age Discrimination in Employment Act, a business practice that is reasonable is not unlawful even if it has a disparate impact on older workers. The question here is simply what happens in cases in which the proof on reasonableness is in equipoise, which party bears the risk of nonpersuasion. And on that question the statute is not silent such as to leave to the courts to decide for themselves what answer makes the most sense.

In other words, plaintiff is in the unusual situation in this case of making a textualist argument against the employer.  Did you ever think you hear an employee counsel say this?: "The question is not what rule would make sense, but what does the statute -- what rule does the statute contemplate? And we think by phrasing the RFOA provision as a traditional affirmative defense." How does Justice Scalia respond? (See below).

2. The argument is that the statute sets up the RFOA defense as an affirmative defense in the ADEA statute itself and it would make no sense to interpret it otherwise.  And Russell throws in an administrative deference argument in for good measure:

[W]e agree entirely with the EEOC that that question is still determined by the language of the statute, which makes quite clear that Congress thought that this was an exception to liability upon which the employer bears the burden of proof.

Of course, Justice Ginsburg, the employment discrimination law expert, points out that the EEOC never had disparate impact cases under the ADEA in mind when they made their regulation.  Russell responds: "[W]e think that, although it's an inartfully drafted regulation, by using the terms 'individual claim of discriminatory treatment' rather than the term of art "disparate treatment," the language is broad enough to bear their reading."  My question is: Does any person arguing before the Supreme Court not beat up on the incompetence of the EEOC?

3.  Some more elaboration by Russell on where the RFOA determination comes up in a disparate impact (DI) case still ruled by Wards Cove under the ADEA post-Smith:

Even get to it, because by its 3 terms the RFOA provision only applies to conduct that is 4 otherwise prohibited by Section 4(a)(2), and the test for whether something is otherwise prohibited under 6 Section 4(a)(2) is Wards Cove.  This Court in Smith said that language, which was identical to the language Congress used to describe the unlawful- employment practice in Title VII, has the same meaning in both statutes. And in order to establish a violation of Wards Cove, you do have to often look at questions of alternatives.

4. Justice Alito, the lone outlier in the Burlington Northern retaliation decision, challenges the seeming illogic in Russell's position: "Isn't it a strain to say that an employment practice was because of an individual's age, but at the same time was based on reasonable factors other than age?" Russell uses a weight lifting hypothetical to respond:

We use the example in our brief of a weight-lifting requirement. It's quite possible for that requirement, and quite likely, that it will have a disparate impact on older workers because of their age. The effect will be felt by workers because of their age. At the same time, it is quite possible that that practice itself will be entirely reasonable. And the difference is between what the "because of age" refers to in the two different provisions.

Okay, get ready for some down and dirty statutory interpretation about these two different provisions in the ADEA:

[Y]ou have the language of the RFOA provision, and the reasonable -- the "factors other than age" refers to in that case the differentiation, that is the business practice itself. But if you . . . look at the language of (a)(2), the business practice, that is, the limiting, segregating, or classifying, doesn't have to be because of age. [(a)(2) refers to the provision used for DI claims as opposed to disparate treatment (DT) claims.] There wouldn't be a disparate treatment claim. Instead what "because of age" refers to there is the effect of that
facially neutral practice. That is, the employee has to show that the neutral practice deprives or tends to deprive people of opportunities because of their age. And the way that you do that is through the first step of the Wards Cove analysis, by showing that the practice falls more heavily on older workers as a group, so that you can reach the conclusion that the plaintiff is feeling the effect because of her age as opposed to because of her sex or some other reason specific to her. So it's not the fact that a showing of RFOA negates the showing that a disparate impact is felt because of age by the plaintiff.

Phew. That was a mouthful, but seems to be a reasonable response to Alito's qualms.

5. The U.S. is on the side of Meacham on this one: "Congress made very clear in the statute that the 'reasonable factors other than age' provision is precisely such an affirmative defense." Knock me over with a feather but Justice Scalia actuallly helps plaintiff's case by mixing latin with chickens!:

JUSTICE SCALIA: I suppose you could appeal to the maxim noscitur ex sociis, couldn't you -
MR. JOSEFFER: Right. 
JUSTICE SCALIA: -- and say if it's in with two other chickens, it's probably a chicken?

6.    Justice Ginsburg challenges the ASG on whether his reading of the statute makes sense:

The problem is that you would be making this provision more generous to the
plaintiff than -- for example, in Title VII the defense is business necessity; the employer has the burden of production; the employee has the burden of persuasion. Here you'd read -- you're saying you come into the covered category, you were shown because of age through
impact, and then the burden -- the total burden is on the employer.

Two points. One, I have always found it difficult to say for sure whether it is the burden of production or persuasion after a prima facie DI case is made under Title VII. Clearly, Justice Ginsburg believes it is merely a burden of production, which makes some sense if the employee must that show by a preponderance of the evidence a less burdensome alternative practice (per CRA 1991). Two, on Justice Ginsburg's point, the US responds, "that reflects the fact that there are more innocent explanations for age disparity."

7. Attorney for KAPL, Seth Waxman, former SG in the Clinton Admin., focuses on the difference between age discrimination and other forms of discrimination, the fact that employees are able to discover evidence more easily in these cases, and that the EEOC should not be deferred to if the statute is considered ambiguous because it never considered DI cases under the Smith ADEA standard.  The problem Waxman has is that it seems that most of the Justices are in agreement that the placement of the RFOA language in the statute means the burden of persuasion for RFOA justification is on the employer.

8. It appears that Waxman is attempting to say that an ADEA DI case is no different from the normal three-step McDonnell Douglas DT framework and therefore, that RFOA is at the second step a type of legitimate non-discriminatory reason that merely has to be articulated.  The Justices don't seem to be buying it and FWIW, I never understood Wards Cove that way even before Smith.

9. One last curious point about this case that Justice Stevens brings out on Russell's rebuttal argument: "You have an unusual case where the decisive issue, at least when you get to this Court, is something the jury never passed on." The jury never passed on RFOA because it was wrongly believed by both parties (following EEOC regulations at the time) that business necessity was the appropriate standard. One wonders whether then this was the appropriate vehicle to consider the RFOA burden question.

In any event, I still think this is a relatively easy case (I know I am now tempting fate), but I see a 9-0 unanimous opinion in favor of Meacham on purely textualist grounds.

PS