Must Small State Agencies and Political Subdivisions Comply with the Age Discrimination In Employment Act of 1967?
Must Small State Agencies and Political Subdivisions Comply with the Age Discrimination In Employment Act of 1967?
Following the approach long endorsed by the Equal Employment Opportunity Commission (EEOC), the Ninth Circuit held that the Age Discrimination in Employment Act of 1967 (ADEA) governs the employment practices of states and their political subdivisions, regardless of size. This approach differs, however, from four other courts of appeal, which have held that the ADEA’s exclusion of small employers (defined as employers with fewer than 20 employees) applies not only to private companies, but also to state agencies and political subdivisions.
Docket No. 17-587
Argument Date: October 1, 2018
From: The Ninth Circuit
by Jeannette Cox
University of Dayton School of Law, Dayton, Ohio
Must state agencies and political subdivisions with fewer than 20 employees comply with the Age Discrimination in Employment Act of 1967 (ADEA)?
Mount Lemmon Fire District is a small political subdivision with fewer than 20 employees. It serves a 12.5-square mile area of the Santa Catalina Mountains that is a popular location for summer homes and recreation, due to its pleasant summer temperatures, which are often 30 degrees cooler than nearby Tucson, Arizona.
In 2009, reduced property tax revenue caused the Fire District to face a budget shortfall. The district laid off its two oldest full-time firefighters, John Guido and Dennis Rankin. It then replaced them with two younger people.
Suspecting age discrimination, the terminated firefighters filed a charge with the Equal Employment Opportunity Commission (EEOC). After an investigation, the EEOC issued letters finding reasonable cause to believe that the Fire District had indeed violated the ADEA.
However, when the terminated firefighters filed suit in the U.S. District Court for the District of Arizona, the district court promptly dismissed their claims because the Fire District had fewer than 20 employees. The district court cited cases from the Sixth, Seventh, Eighth, and Tenth Circuits that had reached the same conclusion.
The terminated firefighters appealed to the Ninth Circuit, which reversed the district court and instead adopted the EEOC’s preferred interpretation of the ADEA: that it applies to all state and local government employers, regardless of size. In an opinion written by Judge Diarmuid O’Scannlain, one of the Ninth Circuit’s more textualist judges, the Ninth Circuit concluded that its sister circuits’ decisions had improperly relied on legislative history to override the ordinary meaning of the statutory text.
Small political subdivisions are subject to the ADEA’s prohibition against age discrimination only if they fit the ADEA’s definition of “employer.” The ADEA provides that
The term “employer” means a person engaged in an industry affecting commerce who has twenty or more employees…The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State, and any interstate agency, but such term does not include the United States, or a corporation wholly owned by the Government of the United States…29 U.S.C. § 630(b).
Urging the Court to affirm the Ninth Circuit, the terminated firefighters argue that the phrase “also means” signifies that political subdivisions are a wholly distinct category of employers under the ADEA that are not subject to the numerosity requirement that shields small private employers from ADEA coverage. By contrast, the Fire District urges the Court to endorse the approach taken by the Sixth, Seventh, Eighth, and Tenth Circuits. These courts have concluded that “also means” does not signify an entirely new category of employers but instead merely clarifies that states and their political subdivisions are a type of “person” included in the preceding sentence (“a person…who has twenty or more employees”).
To support this argument, the Fire District emphasizes that the ADEA’s inclusion of the phrase “also means” predates Congress’s decision to add state and local government employers to the ADEA. The “also means” sentence in the original 1967 definition expressly excluded state and local employers from the ADEA’s scope, providing that “[t]he term also means any agent of such a person, but such term does not include the United States, a corporation wholly owned by the Government of the United States, or a State or political subdivision thereof.” Pub. L. No. 90-202, § 11(b), 81 Stat. 605.
The Fire District argues that, in the 1967 version, “also means” was serving a transitional, clarifying function instead of adding a new employer category. It made two things clear: first, employers may not circumvent the ADEA by outsourcing their discriminatory practices to an agent. Second, the ADEA excluded federal, state, and local government employers from the term “person” and thus from the obligation to comply with the ADEA.
According to the Fire District, when Congress reversed its treatment of state and local government employers in 1974, the retention of the phrase “also means” did not signify that state and local government entities constituted an entirely new, independent, category of ADEA employer. It instead simply reflected Congress’s decision to include state and local government employers as “persons” on the same terms as private employers. Accordingly, the 20-employee numerosity limitation applies to all ADEA-covered employers, both private and public.
In contrast to the Fire District’s emphasis on the ADEA’s history, the terminated firefighters ask the Court to embrace the textual approach adopted by the Ninth Circuit and the EEOC. Citing numerous dictionaries, they emphasize that the phrase “also means” normally serves an additive, rather than transitional, function. They point to 32 examples in the U.S. Code where the phrase functions to introduce a new freestanding definition. Accordingly, the terminated firefighters argue that the statute contains insufficient ambiguity to justify resorting to legislative history and apparent Congressional intent. Invoking the words of Judge O’Scannlain, the author of the Ninth Circuit’s decision, the terminated firefighters argue that the court does “not need to read minds to read text.”
In response, the Fire District argues that the terminated firefighters’ emphasis on the ordinary meaning of “also means” ignores not only the ADEA’s history but also the rest of the ADEA’s text. The Fire District directs the Court’s attention to the term “person” in the first sentence of the ADEA’s definition of employer. The Fire District emphasizes that the ADEA defines “person” to include “an organized group of persons,” which can reasonably be read to include local political subdivisions. The Fire District also notes that many courts, including the Supreme Court, have frequently concluded that political subdivisions are “persons” even in statutes that do not define the term. To further bolster its argument that political subdivisions are “persons,” the Fire District notes that the ADEA’s explicit exclusion of “the United States” from the ADEA’s definition of “employer” would be unnecessary if the term “person” already excluded public entities.
The terminated firefighters counter the Fire District’s surplusage argument with a surplusage argument of their own. They argue that if the Fire District is correct that the ADEA’s definition of “person” encompasses political subdivisions, the statute’s explicit treatment of political subdivisions in the second sentence would be surplusage. Had Congress thought in 1974 that “person” already included states and political subdivisions and wanted such entities subject to an employee numerosity limitation, Congress could have simply deleted the line stating that “employer” does not include them. The express statement that they are included suggests Congress did not believe that states and political subdivisions were already “persons” under the ADEA.
The Fire District continues its textual argument by emphasizing that “also means” introduces not only “a State or political subdivision” but also “any agent of such a person.” Concluding that “also means” introduces stand-alone employer categories, the Fire District contends, would treat supervisors and human resources administrators (who are agents of their employers) as statutory “employers” personally liable for violating the ADEA. The Fire District reasons that it is highly unlikely that Congress, having deemed a 19-person company too small to penalize, intended to impose liability on individual employees. In response, the terminated firefighters express skepticism that their preferred reading of the statute would require employees to face personal liability. They emphasize that the core purpose of the agency clause is to prevent employers from circumventing the ADEA by outsourcing its discriminatory activities. They also note that the present case does not require the Court to decide whether the ADEA subjects employees to personal liability.
Pointing again to the agency clause to make a different point, the Fire District argues that reading “any agent of such a person” as a freestanding type of “employer” will eliminate employers’ responsibility for their employees’ actions performed within the course of their employment, known as respondeat superior liability. To support this argument, the Fire District points to cases that cite the agency clause as establishing respondeat superior liability for ADEA violations. In response, the terminated firefighters emphasize that respondeat superior liability is a time-honored tort doctrine that predates the ADEA. They argue that courts could easily impose respondeat superior liability for ADEA violations even if the agency clause were not present.
The Fire District’s final textual argument focuses on the “person engaged in an industry affecting commerce” portion of the first sentence of the ADEA’s “employer” definition. The Fire District argues that reading “also means” to introduce new categories of employers prevents the “engaged in an industry affecting commerce” limitation from applying to state agencies and political subdivisions. The Fire District argues that this creates a potential constitutional problem because some tiny political subdivisions have no effect on interstate commerce. The Fire District cites as an example the Franklin Township Cemetery District, whose sole employee maintains the cemeteries in a small Illinois town. The terminated firefighters refute this argument with Supreme Court caselaw that indicates that the Commerce Clause provides Congress power to regulate the employment practices of public employers of all sizes.
Outside the ADEA’s text, the parties also argue about the significance of Title VII, the parallel federal statute that prohibits employment discrimination on the basis of race, color, religion, sex, and national origin. Like the ADEA, Title VII’s definition of “employer” contains a numerosity limitation. Also like the ADEA, Title VII initially excluded state and local governments. However, in 1972, Congress amended Title VII to include them in a manner that makes very clear that Title VII’s numerosity limitation applies to all employers, both private and public.
The Fire District argues that the Ninth Circuit’s decision including small political subdivisions within the ADEA’s scope unreasonably puts the ADEA out of step with Title VII as well as the Americans with Disabilities Act, which follows Title VII. The Fire District argues that the parallel aims of these statutes, as well as their common administration by the EEOC, supports parallel construction. The Fire District further emphasizes the temporal proximity between the 1972 amendments to Title VII and the 1974 amendments to the ADEA. It also notes that the Senate sponsor of the ADEA amendments characterized the ADEA changes as duplicating the changes to Title VII.
The terminated firefighters counter the Fire District’s appeal to Title VII by emphasizing that Congress used different language to amend Title VII and the ADEA. Title VII far more clearly limits coverage to public employers that satisfy the numerosity requirement because Congress expressly added “governments, governmental agencies, [and] political subdivisions” to Title VII’s definition of “person,” which, like the ADEA, forms the core component of Title VII”s definition of “employer.” 42 U.S.C. § 2000e(b). The terminated firefighters argue that, had Congress actually sought to treat small state and local governments the same in the ADEA as in Title VII, Congress would have used the same language to amend the ADEA. In response, the Fire District emphasizes that Title VII started with a narrower definition of “person” than the ADEA so it is unsurprising that the language used to amend the two statutes was not identical.
In addition to emphasizing the textual differences between Title VII and the ADEA, the terminated firefighters also stress that the Court has interpreted the ADEA to differ from Title VII in the past. While the Court has interpreted the ADEA’s substantive provisions to parallel Title VII, it has interpreted the ADEA’s procedural provisions to parallel the Fair Labor Standards Act (FLSA) because, unlike Title VII, the ADEA expressly incorporates the FLSA’s procedures and remedies. The FLSA, which was amended at the same time as the ADEA, covers political subdivisions regardless of size. In response, the Fire District argues that questions about which employers must comply with the ADEA are substantive, rather than procedural, questions. They further argue that the FLSA is an inappropriate comparator because the FLSA does not, and never did, include an employee minimum for any entity, public or private. Finally, the Fire District invokes the interpretive rule outlined in Gregory v. Ashcroft, 501 U.S. 452 (1991), which prevents courts from interpreting federal statutes to interfere with core state functions except when the statutory text makes Congress’s intent to interfere “unmistakably clear.” The terminated firefighters counter this appeal to Gregory in two ways. First, they argue that Gregory should not apply because the ordinary meaning of “also means” is, in fact, unmistakably clear. Second, they emphasize that even if the Court believes the statute to be ambiguous, Gregory does not apply because preventing political subdivisions with fewer than 20 employees from discriminating on the basis of age does not interfere with core state functions.
The Fire District and its amici emphasize that the United States has numerous tiny political subdivisions, many of which provide critical services in sparsely populated areas. They argue that a decision concluding that the ADEA applies to these small public entities jeopardizes important public safety services, such as fire protection. The terminated firefighters and their amici, however, argue that this concern is overblown. They also note that in jurisdictions outside the four courts of appeal that favor the Fire District’s position, small political subdivisions have been subject to the ADEA since 1974 without any significant documented difficulty. In addition, 15 states have age discrimination statutes that include a numerosity requirement for private employers but not public employers.
The case’s larger significance may be what the Court’s decision signals about the future of statutory interpretation. The parties argue for dramatically different interpretive approaches. The Fire District argues that the Court should be sensitive to how the language currently under dispute is a product of both the original ADEA’s text and the 1974 amendments. The terminated firefighters, by contrast, press the Ninth Circuit’s argument that the phrase “also means” has such a clear ordinary meaning that the Court should ignore the history of the ADEA and any speculation about Congress’s intent to harmonize the ADEA with Title VII. Using the words of Judge O’Scannlain, they argue that courts cannot “override the plain meaning of a statute, apparent anomalies or not.”
Jeannette Cox is a professor of law at the University of Dayton School of Law. She specializes in legal issues related to disability rights, employment discrimination, statutory interpretation, and civil procedure. She can be reached at 937.229.4656 and email@example.com.
PREVIEW of United States Supreme Court Cases 46, no. 1 (October 1, 2018): 8–11. © 2018 American Bar Association
In Support of Respondents John Guido, et al.
In Support of Petitioner Mount Lemmon Fire District