Now, as more workers remain actively engaged or are seeking active employment in the workforce well beyond what may have been considered “normal” retirement age in 1967, the need to ensure equal employment opportunities regardless of age continues to be an important public policy and civil rights concern. Older workers may be unfairly stereotyped as close-minded, less productive, less adaptable to new technology and ideas, slower, less physically active, and more prone to sickness. For example, Lehman v. Prudential Ins. Co. of Am., 74 F.3d 323, 330 (1st Cir. 1996), describes a meeting where a consultant used a handout that contrasted the “Organizational Man” of the “Ozzie and Harriet generation,” who is pessimistic, cautious, oriented to bureaucracies, and has a 30-year career plan, with the “New Manager” of the “Kuzak & Gracie of LA Law generation,” who is a risk taker, optimistic, well-educated, and hardworking. Although the ADEA is in place to remedy the negative consequences of these stereotypes, the need to eliminate discrimination based on inaccurate stereotypes associated with age continues.
This article begins with a look at 1967, the pivotal year in which Congress enacted the ADEA. First, this article will discuss what prompted the need for the ADEA, with a focus on the law prior to 1967 and Congress’s decision to enact remedial legislation. Second, this article will discuss the Act itself—the statutory language and the amendments to the Act. Third, this article will examaine the ADEA in action and will discuss how it has been interpreted by the courts (the evolution of the ADEA may well be a surprise to the original proponents of the law). In conclusion, this article will offer insight about the future of the ADEA and the litigation of age discrimination claims.
What Prompted the Need for the ADEA?
The ADEA is widely considered to be an outgrowth of Title VII of the Civil Rights Act of 1964. In fact, the Supreme Court stated just one year after the ADEA’s enactment that the substantive prohibitions of the ADEA “were derived in haec verba” from Title VII. (See Lorillard v. Pons, 434 U.S. 575, 584 & n.12 (1978).) Although Title VII was intended to prevent all discrimination on the basis of race, color, religion, sex, or national origin, Congress considered and ultimately chose not to include age as one of these five protected classes.
Nevertheless, the desire to provide equal employment opportunities and remove the scourge of discrimination against employees because of their age was not pushed to the wayside after Congress enacted Title VII. In fact, Congress directed the Secretary of Labor to produce a report on age discrimination. The data presented by the Secretary of Labor showed endemic discrimination against older workers. By 1967, just three years after the passage of Title VII, it was clear to many that older Americans were disproportionately excluded from, or surreptitiously driven out of, the workforce. Testimony before the Senate General Subcommittee on Labor and Public Welfare in 1967 revealed a number of troubling statistics that helped motivate Congress to take action. For example, in 1964, applicants over 55 years of age were barred from half of all job openings in the private sector. Workers over 45 were barred from a quarter of these jobs, and workers over 65 were barred from almost all of them.
The data presented to Congress also indicated that the problem was worsening over time—jobs were disappearing, and older workers were bearing the brunt of the layoffs. Between 1965 and 1966 alone, the share of workers unemployed for 27 weeks or more that were over age 45 increased from 30.2 percent to 34.3 percent. Older men, it was reported, had been leaving the workforce in droves since 1951.
The picture presented to Congress in that 1967 testimony was stark: When workers turned 40 or 45, they “go through some employment crises.” Once becoming unemployed, older workers had difficulty finding new work and eventually became so discouraged that they ceased searching for employment. Worse, still, older Americans had nowhere to turn for assistance in finding employment. Although local employment services had been established to provide referrals, counseling, and training, half of the unemployed Americans who sought help through these services reported receiving no help at all.
In addition to this troublesome data, the reports before Congress showed that age-based employment discrimination was regulated by a patchwork of inconsistent state laws. Although some of the state laws appeared to successfully mitigate the harmful effects of age-related employment discrimination, others were described in the Secretary of Labor’s report as “virtually inoperative” and functioning merely as “declarations of policy.” The reports to Congress indicated that the nationwide emphasis on preventing discrimination on the basis of race, color, religion, sex, and national origin might have caused states to divert resources previously dedicated to helping older workers.
Another issue was that the state-based anti–age discrimination statutes were not routinely litigated in court. In 1963 only ten states had such statutes, and over half of the 1,560 complaints filed in 1963 came from Massachusetts, New York, Oregon, and Pennsylvania. Many of the other states saw only ten to 15 complaints filed each year, but half of the complaints filed led to a finding that anti-discrimination laws had been violated.
Further, the patchwork of state laws, through its lack of uniformity, created confusion for businesses. In particular, the 1967 congressional testimony highlighted the fact that businesses whose operations covered multiple states or whose workforce had traveling personnel were affected by “diverse and conflicting regulation.” The airline industry was highlighted as a victim of differing state laws.
Despite the reasons advanced in support of passing an age-based employment discrimination law, the congressional testimony was not without opposition. In particular, many trade associations came out against the ADEA. For example, the National Association of Manufacturers stated that “voluntary efforts offer the best means” to fight joblessness among older Americans. Similarly, the Chamber of Commerce stated its opposition to the bill while lauding the goals of anti-discrimination. In contrast, the Secretary of Labor and the AFL–CIO came out as staunch advocates of the legislation.
The Statute and Its Amendments
Although not unanimous, the majority sentiment during the 1967 debates regarding age discrimination was clear: The stereotyping of older workers that was occurring in America needed to stop. As Senator Stephen M. Young articulated:
[T]he view that a man or woman is so old at 65 as to warrant compulsory retirement from industry stems from an era before the turn of the century and comes to us from a period when life expectancy was about half of the life expectancy of Americans and Europeans at the present time. . . . In fact, today [people] are not as old at 65 [in] thought, action, physical and mental ability as men and women . . . were at the age of 40 in the 1880’s. Yet, for some reason or other, we Americans have adhered to this view of 65 as being the proper age for retirement notwithstanding the fact that this concept is today as outdated as are flint-lock muskets and candle dips of the eighteenth century.
The ADEA was passed by Congress in December 1967 and signed into law by President Lyndon B. Johnson that same month. The ADEA states:
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, conditions, or privileges of employment, because of such individual’s age . . . [or] (2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.
Data from the U.S. General Accounting Office (USGAO) reveals that the American public was quick to assert their age discrimination rights: In 1980, the first full year for which the Equal Employment Opportunity Commission (EEOC) had enforcement authority for the ADEA, nearly one-fifth (18.6 percent) of the discrimination charges with the EEOC were age discrimination charges. In 1986 that percentage increased to 25.3 percent, and by 1992 a total of 27.4 percent of the charges filed with the EEOC constituted age discrimination charges.
As the legislation took effect, some in Congress advocated for removing the upper age limit from the text of the statute. They argued that the removal of the upper age limit would not result in significantly more litigation. In support of that contention, they relied on then-current EEOC statistics indicating that 78 percent of all ADEA claims were brought by individuals 59 and under. They also cited state laws with no upper age limit that revealed a very low number of cases filed by persons 69 years of age or older. In 1986, supporters of the amendment prevailed, and Congress voted to pass the new legislation that removed the age ceiling from the ADEA.
Just four years after President Ronald Reagan signed the amendment removing the upper age limit from the ADEA, Congress passed the Older Workers Benefit Protection Act (OWBPA). Although it was created to protect the benefits of older workers, OWBPA provided flexibility to employers, permitting them to observe the terms of “bona fide employee benefit plans,” such as retirement, pension, or insurance plans that do contain age-based distinction, so long as those distinctions are cost-justified. The OWBPA also required certain disclosures and mandated fixed time periods to consider the disclosures, when individuals were asked to waive their ADEA rights as part of a separation or severance from employment.
The ADEA in Action
By its plain language, the ADEA requires employers to ignore age when making employment decisions. Over the years, the courts have interpreted the statute as prohibiting disparate treatment of employees based on their age. For example, Hazen Paper Co. v. Biggins, 507 U.S. 604, 611 (1993), states that an employer who makes adverse employment decisions on the basis of age is liable under ADEA, and Western Air Lines, Inc. v. Criswell, 472 U.S. 400, 422 (1985), states, “under the [ADEA], employers are to evaluate employees between the ages of 40 and 70 on their merits and not on their age.”
Plaintiffs who believe an employer intentionally disadvantaged them because of their age must prove their case under the disparate treatment model, which was developed in the Title VII context in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). However, it was for some time unclear whether a plaintiff can use disparate impact analysis—the allegation that a facially neutral employment policy or practice has a disparate or adverse impact on older workers—as a means of proving liability under the ADEA. The Supreme Court explicitly recognized this uncertainty 1993, stating “[W]e have never decided whether a disparate impact theory of liability is available under the ADEA . . . and we need not do so here.” Hazen Paper Co. v. Biggins, 507 U.S. at 609 (1993).
In Smith v. City of Jackson, 544 U.S. 228 (2005), the Supreme Court held that the ADEA, like Title VII, provided a cause of action for disparate-impact claims. According to the Court, because legitimate employment criteria such as length of service and experience are often correlated with increasing age, the legislature’s use of the phrase “reasonable factors other than age” was meant to insulate business decisions from challenges, even if those business decisions disproportionately affect older workers. The Court noted that the scope of disparate impact liability under the ADEA is narrower than under Title VII in that under the ADEA, the “reasonable factors other than age” (RFOA) defense “preclud[es] liability if the adverse impact was attributable to a non-age factor that was ‘reasonable.’”
More recently, on March 30, 2012, the EEOC amended regulations concerning the RFOA defense to disparate impact claims. In the EEOC’s view, the viability of the RFOA defense depends on the employer’s ability to show that the challenged practice was objectively reasonable when viewed from the position of a “prudent employer” mindful of its responsibilities under the ADEA under like circumstances. According to the EEOC, the “prudent employer” standard was based on principles derived from tort law, such that “whether a factor is reasonable can be determined only in light of all of the surrounding facts and circumstances, including the employer’s duty to be cognizant of the consequences of its choices.” The regulation further explained that to establish the defense, “an employer must show that the employment practice was both reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known, or should have been known, to the employer.”
In Gross v. FBL Fin. Servs., Inc., 557 U.S. 167 (2009), the Supreme Court created a new fissure in employment law, ruling that ADEA plaintiffs are not entitled to establish liability for a violation of the ADEA by showing that age was a “motivating factor” in the adverse employment decision carried out by the employer. The original “motivating factor” standard was established (in the gender context) by the Supreme Court in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). There, the plaintiff, Ann Hopkins, alleged that the defendant employer declined to promote her on account of her gender. The facts of the case established that although some of the employer’s reasons were based on Hopkins’s performance, others were, indeed, based on sexist assumptions about women. Hopkins argued that the jury should be instructed that if her gender played any part in the employment decision, Price Waterhouse would be in violation of Title VII. A plurality of the Court agreed, holding that if Hopkins could prove that her gender was a “motivating factor” in the decision, the employer would then bear the burden of proving that it would have made the same decision regardless of Hopkins’s gender. This holding was based on the plurality’s reading of Title VII, which prohibited adverse employment action “because of” an individual’s sex. Rejecting a “but-for” causation requirement, the Supreme Court plurality held that “gender must be irrelevant to employment decisions.” Congress ultimately codified the Price Waterhouse “motivating factor” standard into Title VII by amending it to add §2000e2(m).
However, the Supreme Court declined to extend this same “motivating factor” causation standard to disparate treatment cases under the ADEA. In Gross, the eponymous plaintiff was a 54-year-old claims project director who was demoted and replaced by a younger supervisee. The District Court instructed the jury to return a verdict for Gross if they found that his age was a “motivating factor” in his demotion. The Supreme Court, however, held that the “motivating factor” framework from Price Waterhouse was inapplicable to ADEA cases. The Court reasoned that because Congress failed to codify the “motivating factor” standard into the ADEA as it did with Title VII, the Court should presume that the omission was intentional. As a result, the Court ruled that Gross could not benefit from the “motivating factor” standard and would instead have to prove that his age was the “but-for” cause of his demotion. Therefore, the Gross case resulted in a higher standard for plaintiffs alleging age discrimination under the ADEA than it did for protected classes under Title VII. The Supreme Court reached this result despite the fact that the original language in Title VII, “because of,” was identical to that of the ADEA.
Some members of Congress immediately perceived the ruling in Gross as a threat to the effectiveness of the ADEA. In fact, in every year since 2009, members of Congress have attempted (unsuccessfully to date) to pass a bill to overturn Gross. The most recent iteration, H.R. 2852, is titled the “Protecting Older Workers Against Discrimination Act” (POWADA). This bill would amend the ADEA to state that “an unlawful employment practice is established when a protected characteristic was a motivating factor for any employment practice, even though other factors also motivated the practice.” Further, the POWADA explicitly states that its purpose is to reject the Supreme Court’s reasoning in Gross.
POWADA has the support of the Congressional Democrats as well as the AARP. Indeed, an AARP poll found that 78 percent of older voters support the passage of POWADA. Democrats have promised to make POWADA a priority. However, given the current political climate, it is unlikely that POWADA will make it through the Republican-controlled House of Representatives.
The ADEA at Its 47th Anniversary and Beyond
Calendar year 2014 marks the 47th anniversary of the ADEA’s passage. How has it fared after nearly a half-century of legislative, regulatory, and judicial tinkering? Some are ready to eulogize the ADEA in light of Gross. Opinions vary, but many hold the steadfast belief that Gross will adversely affect employees over the age of 40 and their ability to combat age discrimination in the workplace. A simple Internet search produces a litany of pun-titled articles that are as critical as they are clever, including “Gross Injustice,” “Grossly Overbroad,” “Gross Confusion,” “Gross Misunderstanding,” and “Gross’ed Out.” In her 2014 book Betrayed, Judge Patricia Barnes goes as far as to argue that age discrimination has effectively been legalized. Clearly, some believe that the ADEA is not the vigorous protective legislation that its founders envisioned.
Some evidence supports the idea that Gross will make it more difficult for ADEA plaintiffs to establish liability for age discrimination in disparate treatment cases. One experimental study has shown that without the “motivating factor” standard, plaintiffs are far less likely to recover attorney fees. As a result, it has been argued that attorneys are now more reluctant to take on ADEA claims than other employment discrimination claims. The specter of a successful plaintiff recovering his or her attorney fees provides a natural incentive for the filing of such claims, and it is not uncommon for the fees to be larger than the damages in a particular piece of litigation. Therefore, some say that the ability to shift the fees of successful litigation from the prevailing plaintiff to the violating employer is an essential hallmark of effective civil rights legislation and is as important to the desired deterrent effect, if not more so, than a finding of legal liability.
Yet others argue that Gross has had little effect on actual outcomes in ADEA cases. An analysis conducted by Randall Coffey one year after Gross found that summary judgment is now granted at approximately the same rate in the post-Gross era (tinyurl.com/mb5v867). Coffey found that although summary judgment for defendant employers was granted in 64 percent of the pre-Gross cases, it was granted in 68 percent of post-Gross cases. Coffey thus concluded that the effects of Gross are negligible at best. At a minimum this study and the anecdotal information described above reflect that there is a healthy disagreement among practitioners and commentators as to whether the ADEA will continue to act as an effective check against age discrimination.
Today, individuals are living longer and working longer, and workers over the age of 40 represent an increasingly large percentage of the U.S. workforce. Employers, too, increasingly rely on this segment of the workforce for the essential production of goods and services and the benefits that come from these workers’ collective experience. Thus, both individuals and businesses stand to gain when the law requires employment decisions to be based on a non-discriminatory evaluation of an individual’s productivity and contribution in the workplace. For nearly half a century, the ADEA has provided a legal recognition of that principle and a mechanism for enforcement. Only time will tell if the ADEA endures as a protector of equality in the workplace for the next 50 years.