DiBiase v. SmithKline

Opinions of the United

1995 Decisions States Court of Appeals

for the Third Circuit

2-16-1995

DiBiase v SmithKline

Precedential or Non-Precedential:

Docket 94-1530

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UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_________________

No. 94-1530

_________________

JOHN DiBIASE

v.

SMITHKLINE BEECHAM CORPORATION

Appellant

_________________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 93-cv-3171

_______________

Argued December 15, 1994

BEFORE: BECKER, GREENBERG, and McKEE, Circuit Judges

(Filed: February 16, l995)

______________

Richard A. Ash (argued)

Lyman & Ash

1612 Latimer Street

Philadelphia, PA 19103

Attorneys for Appellee

Alan D. Berkowitz

Steven B. Feirson (argued)

Dechert Price & Rhoads

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103

Attorneys for Appellant

Thomas J. Bender, Jr.

Kristine Grady Derewicz

Buchanan Ingersoll, P.C.

1200 Two Logan Square

18th and Arch Streets

Philadelphia, PA 19103

Attorneys for Amicus

Curiae The Pennsylvania

Chamber of Business and

Industry

Stephen A. Bokat

Robin S. Conrad

National Chamber Litigation

Center, Inc.

1615 H Street N.W.

Washington, DC 20062

Attorneys for Amicus

Curiae Chamber of

Commerce of the United

States

Robert E. Williams

Douglas S. McDowell

Ann Elizabeth Reesman

McGuiness & Williams

1015 Fifteenth St. N.W.

Suite 1200

Washington, DC 20005

Attorneys for Amicus

Curiae Equal Employment

Advisory Council

L. Steven Platt

Arnold & Kadjan

19 West Jackson Boulevard

Chicago, IL 60604

Cathy Ventrell-Monsees

601 E Street N.W.

Washington, DC 20049

Paul H. Tobias

Tobias, Kraus & Torchia

911 Mercantile Library Bldg

414 Walnut Street

Cincinnati, OH 45202

Janette Johnson

3614 Fairmont Street

Suite 100

Dallas, TX 75219

Attorneys for Amicus

Curiae The National

Employment Lawyers

Association

_______________________

OPINION OF THE COURT

_______________________

GREENBERG, Circuit Judge.

This is an appeal from a district court's judgment

predicated on its opinion holding that an employer violates the

Age Discrimination in Employment Act ("ADEA") by offering to all

employees terminated as a result of a reduction-in-force (RIF)

enhanced severance benefits in return for a general release of

all claims, including ADEA claims, against the employer. We

conclude that such a practice does not violate the ADEA, and

therefore we will reverse the judgment of the district court.

Because there is no basis for further proceedings in this case,

we will remand the matter to the district court with instructions

to enter judgment for the defendant.

I. INTRODUCTION, FACTUAL BACKGROUND, AND PROCEDURAL HISTORY

The germane facts are not disputed.1 In 1990, the

employer, defendant SmithKline Beecham Corporation (SmithKline),

a Philadelphia-based pharmaceutical company, consolidated four

computer data centers it operated throughout Pennsylvania and in

Tennessee into a single center at King of Prussia, Pennsylvania.

Prior to the consolidation, SmithKline employed plaintiff John

DiBiase as a first-shift supervisor of computer operators at its

Philadelphia data center. With the consolidation, he moved to

King of Prussia, where six supervisors remained employed, working

two per shift, with each pair overseeing three to five computer

operators. Between late 1991 and early 1992, SmithKline decided

to reduce the staff of this division, and it assessed the

concomitant consequences. Specifically, the data center's

personnel manager "prepared an 'adverse impact analysis'

examining the gender, race, and age of the shift supervisors to

determine if any adverse impact would result from the planned

reduction in staff." DiBiase, 847 F. Supp. at 343. On February

1, 1992, SmithKline decided to lay off DiBiase and one other

shift supervisor and it informed DiBiase of this decision the

next day. At that time, he was 51 years old.

SmithKline offered employees terminated in a RIF a

separation benefit plan, which provided a lump sum payment based

on the employee's length of service, as well as continued health

1

. Unless otherwise noted, we take the facts from the district

court opinion. DiBiase v. SmithKline Beecham Corp., 847 F. Supp.

341 (E.D. Pa. 1994).

and dental benefits. Specifically, the basic plan provided 12

months salary and three months continued benefits. Additionally,

the plan offered enhanced benefits to employees willing to sign a

general release of all claims against SmithKline. Terminated

employees who signed the release were entitled to receive 15

months salary and six months continued health and dental

coverage. The release is in large part the subject of this

appeal, and it stated in pertinent part:

In consideration of the monies and other

consideration to be received by me under the

SmithKline Beecham Separation Program, I

hereby irrevocably and unconditionally

release, waive and forever discharge

SmithKline Beecham Corporation, its

affiliates, parents, successors,

predecessors, subsidiaries, assigns,

directors, officers, employees,

representatives, agents, and attorneys . . .

from any and all claims, agreements, causes

of action, demands, or liabilities of any

nature whatsoever . . . arising, occurring or

existing at any time prior to the signing of

this General Release, whether known or

unknown.

General release § 1 at app. 98. The release provided that

employees who sign it waive

[a]ny and all claims arising under federal,

state, or local constitutions, laws, rules or

regulations or common law prohibiting

employment discrimination based upon age,

race, color, sex, religion, handicap or

disability, national origin or any other

protected category or characteristic,

including but not limited to any and all

claims arising under the Age Discrimination

in Employment Act of 1967, as amended, the

Civil Rights Act of 1964, the Civil Rights

Acts of 1866 or 1871, the National Labor

Relations Act and/or under any other federal,

state or local human rights, civil rights, or

employment discrimination statute, rule or

regulation.

Release § 1 ¶2 at app. 98. Prefatory language to the release

cautioned employees that "YOU SHOULD THOROUGHLY REVIEW AND

UNDERSTAND THE TERMS, CONDITIONS AND EFFECT OF THE SEPARATION

PROGRAM AND OF THIS GENERAL RELEASE. THEREFORE, PLEASE CONSIDER

IT FOR AT LEAST TWENTY-ONE (21) DAYS BEFORE SIGNING IT. YOU ARE

ADVISED TO CONSULT WITH AN ATTORNEY BEFORE YOU SIGN THIS GENERAL

RELEASE." Release at app. 98. Under the terms of the release,

employees were given seven calendar days after signing to revoke

their signature. Release at app. 99.

DiBiase declined to sign the release. Instead, on

April 29, 1992, he wrote a letter to William Mossett,

SmithKline's personnel director, contending that SmithKline's

policy violated the ADEA. The letter reads in pertinent part:

So there can be no possible

misunderstanding I am stating my position as

follows.

* * *

As stated in my grievance I have reason

to believe that the company violated federal

and state age discrimination laws in

terminating me. I am declining the enhanced

separation benefit package because I do not

wish to give up my rights under these

discrimination laws. I believe that the

company's policy of requiring persons over

forty to release age discrimination claims

against the company in order to secure

enhanced separation benefits violates these

age discrimination laws since persons under

forty may elect to receive enhanced

separation benefits determined by the same

formula that applies to persons over forty

without releasing potential age

discrimination claims.

Letter from DiBiase to Mossett of April 29, 1992, at app. 106,

107. Because DiBiase did not sign the release, SmithKline

refused to give him the enhanced benefits. See Letter from

Tyrone Barber, SmithKline's Personnel Manager, to DiBiase of May

4, 1992, at app. 108. Still, DiBiase received the benefits due

him under SmithKline's basic plan. Id.

On July 2, 1992, DiBiase filed an affidavit and charge

with the Equal Employment Opportunity Commission (EEOC) alleging

both that SmithKline terminated his employment because of his

age, and that SmithKline's separation plan violated the ADEA

because it treated older workers differently than younger workers

by requiring them to release ADEA claims. DiBiase EEOC aff. at

app. 109-110. On March 31, 1993, the EEOC determined that "there

is not reasonable cause to believe that there has been a

violation of the statute under which the charge has been filed."

EEOC Determination at app. 67-68.

On June 14, 1993, DiBiase filed a complaint against

SmithKline in the United States District Court for the Eastern

District of Pennsylvania. His amended complaint contained two

counts. Count 1 asserted that SmithKline fired him because of

his age, in violation of the ADEA. Complaint ¶ 15-19 at app. 55-

56. Count 2 alleged that SmithKline's "separation benefit plan

violates ADEA because it discriminates against [him] and its

other employees forty or older by having higher requirements for

them to qualify for the additional separation benefits than apply

to its employees under forty." Complaint ¶ 29 at app. 58.

DiBiase also asserted that SmithKline's actions underlying both

counts were willful and that he was entitled to punitive and

double damages. Complaint ¶¶ 19, 31 at app. 56, 59. On August

2, 1993, SmithKline moved to dismiss count 2 of the amended

complaint, pursuant to Fed. R. Civ. P. 12(b)(6). In a Memorandum

opinion and order filed on September 29, 1993, the district court

denied the motion. The district court suggested that DiBiase

might be able to show that even if SmithKline's plan was a

"facially neutral employment" policy, it "had a significantly

discriminatory impact." Memorandum Op. at app. 47.

On December 20, 1993, SmithKline moved for summary

judgment on both counts of DiBiase's complaint. In an opinion

and order dated March 15, 1994 -- entered the next day and

reported at 847 F. Supp. 341 (E.D. Pa. 1994) -- the district

court granted the motion as to Count 1 and denied it as to Count

2. Specifically, the district court found that "no jury

reasonably could conclude from the facts" that DiBiase had been

replaced in his job. 847 F. Supp. at 346. Inasmuch as DiBiase

had not been replaced, the court concluded that he had failed to

establish a prima facie case of wrongful termination under the

ADEA. Thus, the district court granted summary judgment to

SmithKline on the termination count, count 1.2

However, the district court denied SmithKline's motion

for summary judgment on count 2. Specifically, the court found

that the separation plan involved discriminatory treatment of

older persons. Relying on the ADEA section providing a cause of

action only for persons at least 40 years old, see 29 U.S.C. §

631(a), the district court observed that "[i]n order for an older

employee to receive the same enhanced benefit as a younger

employee, the older employee must release her right to file an

ADEA claim." DiBiase, 847 F. Supp. at 347. The court further

observed that "[t]his treatment is patently different because the

younger employee cannot have an ADEA claim." Id. From these

observations, the district court concluded that "SmithKline's

policy facially discriminates" against employees protected by the

ADEA. Id. at 348. Thus, the court denied SmithKline's motion.

2

. Ordinarily, when employment is terminated as part of a RIF,

the plaintiff need not prove that he or she was replaced by a

worker outside the protected class. Rather, to demonstrate a

prima facie case "[i]n RIF cases, the plaintiff must show he was

in the protected class, he was qualified, he was laid off and

other unprotected workers were retained." Armbruster v. Unisys

Corp., 32 F.3d 768, 777 (3d Cir. 1994). Here, the district court

found that "[p]laintiff cannot make such a showing, however,

because all three retained employees . . . were within the

protected class when plaintiff was terminated." DiBiase, 847 F.

Supp. at 345 n.5. Thus, the district court used the standard for

establishing a prima facie case in the typical age discrimination

case. We need not address whether the district court

appropriately departed from traditional RIF analysis, because

DiBiase has not appealed from the summary judgment on count 1.

On April 26, 1994, DiBiase made a cross-motion for

summary judgment on count 2 of the amended complaint, based

entirely on the district court's reasoning in its March 15, 1994

opinion.3 On May 3, 1994, the district court granted this

motion, "[f]or the reasons fully set forth in my March 15, 1994

Opinion." May 3, 1994 Order at n.1. Because the parties had

stipulated to damages under count 2, the district court entered

4

judgment for DiBiase in the amount of $14,203.03. Id.

Meanwhile, on December 16, 1993, DiBiase had filed

another action alleging that SmithKline had retaliated against

him for pursuing his rights under the ADEA. On December 22,

1993, the district court consolidated the two actions. The

parties settled the retaliation claim, and on April 29, 1994, the

district court signed a stipulation and order (entered on May 2,

1994) dismissing that claim with prejudice. Thus, the May 3,

1994 order granting DiBiase's motion for summary judgment on

count 2 concluded the proceedings before the district court.

SmithKline timely filed a notice of appeal. We have jurisdiction

pursuant to 28 U.S.C. § 1291 and the district court had subject

matter jurisdiction pursuant to 29 U.S.C. § 626(c) and 28 U.S.C.

§ 1331.

3

. Technically this motion was not a cross-motion, since it was

made after the district court's order on the original motion.

Nonetheless, the district court, the parties and the docket sheet

describe it as a "cross-motion" and we follow suit.

4

. It is unclear how the parties arrived at this figure.

We exercise plenary review over the district court's

grant of summary judgment, Petruzzi's IGA Supermarkets, Inc. v.

Darling-Delaware Co., 998 F.2d 1224, 1230 (3d Cir.), cert.

denied, 114 S.Ct. 554 (1993), and, because the facts are

undisputed, we decide the appeal as a matter of law.

II. DISCUSSION

A. Introduction

This case involves the scope of liability under the

ADEA, a federal anti-discrimination statute that renders it

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;

(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.

29 U.S.C. § 623(a).5 With these provisions, "[t]he ADEA 'broadly

prohibits arbitrary discrimination in the workplace based on

age.'" Trans World Airlines, Inc. v. Thurston, 469 U.S. 111,

5

. We generally rely on both ADEA cases and cases arising under

Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et

seq., because "Title VII and the ADEA have been given parallel

constructions due to their similarities in purpose and

structure." Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d

1380, 1385 n.4 (3d Cir. 1994).

120, 105 S.Ct. 613, 621 (1985) (quoting Lorillard v. Pons, 434

U.S. 575, 577, 98 S.Ct. 866, 868 (1978)).6 In a "privilege of

employment" case such as this one, it is irrelevant that

SmithKline had no obligation to provide the particular benefit to

its employees, for once an employer decides to grant an

opportunity to some, "it may not deny this opportunity to others

because of their age." Thurston, 469 U.S. at 121, 105 S.Ct. at

621. As the Supreme Court has explained, "'[a] benefit that is

part and parcel of the employment relationship may not be doled

out in a discriminatory fashion, even if the employer would be

free . . . not to provide the benefit at all.'" Id. (alteration

in original) (quoting Hishon v. King & Spalding, 467 U.S. 69, 75,

104 S.Ct. 2229, 2233-34 (1984)).

SmithKline argues in the first instance that Congress,

in enacting the Older Workers Benefit Protection Act, Pub. L. No.

101-43, 104 Stat. 978 (1990) (OWBPA), explicitly considered and

rejected a provision entitling older workers to extra

consideration for release of ADEA claims.7 The OWBPA set forth,

6

. As noted above, however, the statute provides that "[t]he

prohibitions in this chapter shall be limited to individuals who

are at least 40 years of age." 29 U.S.C. § 631(a).

7

. Somewhat inexplicably, at oral argument DiBiase vigorously

denied that his theory of the case required employers to provide

extra consideration to older workers signing general releases.

To the contrary, he said that a provision for extra consideration

would violate the ADEA as well and that the only way in which

older people would be treated the same as younger people would be

to allow older people to sign a release agreeing to waive all

claims except those under the ADEA.

among other things, specific standards governing whether an

employee's waiver of ADEA claims is valid. See 29 U.S.C. §

626(f). SmithKline points out that early drafts of the OWBPA

provided that a waiver of ADEA claims is valid only when:

the rights or claims are waived in exchange

for consideration in addition to anything of

value --

(ii) that has been offered to a group or

class of individuals under an early

retirement incentive or other employment

termination program.

See 135 Cong. Rec. § 289-01, § 356-57 (introduction of bill in

Senate); 135 Cong. Rec. H 696-03, H 697 (introduction of bill in

House of Representatives). SmithKline is correct in noting that

(..continued)

However, this case has proceeded on the assumption that

DiBiase was claiming extra consideration. In ruling on

SmithKline's motion to dismiss, the district court stated that

DiBiase "argues that an employer could secure a release of ADEA

claims by offering additional consideration beyond that offered

for a release of all claims except ADEA claims." Memorandum of

September 27, 1993, at app. 47. Similarly, the district court

commented in its opinion that "I have difficulty believing that

the widespread industry practice of offering enhanced benefits in

exchange for a release of potential claims is so fragile that a

decision requiring additional consideration for a valid release

of ADEA claims will cause the practice to expire." DiBiase, 847

F. Supp. at 351. In short, the district court certainly believed

that DiBiase was asking for extra consideration.

At any rate, unless DiBiase is arguing that an employer

never could secure a valid general release from a terminated

employee protected by the ADEA, we perceive no analytical

distinction between a claim for extra consideration and a claim

that DiBiase should have been allowed to waive all claims except

ADEA claims in exchange for the enhanced benefits. Both

arguments seek special treatment. In the former situation, the

older worker receives extra money. In the latter situation, the

older employee preserves his or her ADEA claims.

Congress did not include the provision in the OWBPA. This

history supporting SmithKline's position is significant and is

entitled to some weight. See United States v. Alcan Aluminum

Corp., 964 F.2d 252, 264-65 (3d Cir. 1992). However, we do not

rely primarily on legislative history in resolving this case

because, as the following discussion shows, it is evident that

even if we disregard the history we must conclude that

SmithKline's policy did not violate the substantive provisions of

the ADEA.

With this said, we now assess whether SmithKline's

policy of providing enhanced benefits only to terminated

employees signing the release violated the ADEA. A policy can be

discriminatory because of its treatment of or impact on

employees. In a disparate treatment case "'[t]he employer simply

treats some people less favorably than others because of their

race, color, religion [or other protected characteristics].'"

Hazen Paper Co. v. Biggins, ____ U.S. ____, ____, 113 S.Ct. 1701,

1705 (1993) (first alteration added) (quoting Teamsters v. United

States, 431 U.S. 324, 335 n.15, 97 S.Ct. 1843, 1855 n.15 (1977)).

On the other hand, disparate impact liability "'involve[s]

employment practices that are facially neutral in their treatment

of different groups but that in fact fall more harshly on one

group than another and cannot be justified by business

necessity.'" Id. (quoting Teamsters, 431 U.S. at 335 n.15, 97

S.Ct. at 1855 n.15).

DiBiase contends -- and the district court found --

that older workers who signed SmithKline's release gave up more

claims than younger workers who signed the release, since older

workers, unlike younger workers, are protected by the ADEA.

Because the argument is framed to contend that SmithKline treated

older persons less favorably than younger persons, this

articulation of the claim falls under the rubric of "disparate

treatment."

B. Disparate treatment

As the Supreme Court has noted, "'[d]isparate treatment

. . . is the most easily understood type of discrimination.'"

Hazen, ____ U.S. at ____, 113 S.Ct. at 1705 (alteration added)

(quoting Teamsters, 431 U.S. at 335 n.15, 97 S.Ct. at 1855 n.15).

A successful disparate treatment case prevents an employer from

intentionally engaging in discrimination or grants a remedy

against it for such conduct. Thus, "[d]isparate treatment . . .

captures the essence of what Congress sought to prohibit in the

ADEA." Id. at , 113 S.Ct. at 1706. For example, as the

Supreme Court pointed out when considering an employment

termination case, "[i]t is the very essence of age discrimination

for an older employee to be fired because the employer believes

that productivity and competence decline with old age." Id. In

a disparate treatment case, the trier of fact asks not whether

the employer's otherwise nondiscriminatory policy has some

adverse effect on members of the protected class, but rather, "is

'the employer . . . treating "some people less favorably than

others because of their [age]."'" U.S. Postal Serv. Bd. of

Governors v. Aikens, 460 U.S. 711, 715, 103 S.Ct. 1478, 1482

(1983) (emphasis added) (quoting Furnco Constr. Corp. v. Waters,

438 U.S. 567, 577, 98 S.Ct. 2943, 2949 (1978) (second internal

quotation omitted)). Usually, disparate treatment involves an

ad-hoc decision to treat an individual adversely because he or

she is in a particular protected class. For example, in Anderson

v. City of Bessemer City, 470 U.S. 578, 105 S.Ct. 1504 (1985),

the district court found disparate treatment liability based on

sex when a city refused to hire a qualified woman for the

position of recreation director. Id. at 580, 105 S.Ct. at 1515.

"Whatever the employer's decision-making process, a disparate

treatment claim cannot succeed unless the employee's protected

trait actually played a role in that process and had a

determinative influence on the outcome." Id. at ____, 113 S.Ct.

at 1706. Nonetheless, the district court found, and DiBiase

argues, that he did not have to meet this test, because the

policy constitutes explicit facial discrimination.

We agree that when a policy facially discriminates on

the basis of the protected trait, in certain circumstances it

"may constitute per se or explicit [age] discrimination." EEOC

v. Elgin Teachers Ass'n, 780 F. Supp. 1195, 1197 (N.D. Ill.

1991). And, "[w]hether an employment practice involves disparate

treatment through explicit facial discrimination does not depend

on why the employer discriminates but rather on the explicit

terms of the discrimination." Int'l Union, UAW v. Johnson

Controls, Inc., 499 U.S. 187, 199, 111 S.Ct. 1196, 1204 (1991).

This is because, in a facial disparate treatment case, the

protected trait by definition plays a role in the decision-making

process, inasmuch as the policy explicitly classifies people on

that basis. Thus, when the policy itself displays the unlawful

categorization, the employee is relieved from independently

proving intent. See Hazen, ____ U.S. at ____, 113 S.Ct. at 1705

(while "'proof of discriminatory motive is critical, . . . it can

in some situations be inferred from the mere fact of differences

in treatment. . . .'") (citation omitted).

The district court based its conclusion that the policy

constitutes facial discrimination on the following reasoning.

The ADEA provides a cause of action only to persons age 40 or

older. By its terms, then, the ADEA differentiates employees on

the basis of age, and leaves younger workers unprotected by the

statute.8 Thus, on their 40th birthday, workers gain a

substantive, valuable right. By contrast, nearly all other

judicially enforceable rights apply to all persons, not to

8

. As one court has noted, "[t]he House Report for [the ADEA]

cited the example of airline stewardesses, who must apparently

'retire' by the age of 32, as people beset by an obvious age

discrimination problem, yet who will have no remedy under the

[ADEA]." Kodish v. United Airlines, Inc., 463 F. Supp. 1245,

1249 (D. Colo. 1979), aff'd, 628 F.2d 1301 (10th Cir. 1980).

persons whose immutable characteristic falls in a particular

category. For example, Title VII of the Civil Rights Act of 1964

protects not just black workers, but whites as well. Males as

well as females may bring successful gender-discrimination suits.

And, in states with statutes prohibiting discrimination on the

basis of sexual orientation, presumably heterosexuals are

protected as well as homosexuals. The district court next

reasoned that, because the ADEA does not protect younger workers,

while these other rights apply to all, older workers by

definition hold a total number of rights greater than the total

number of rights younger workers hold. Hence, if younger workers

hold rights with the total value of x, older workers have x + 1

rights. In light of this analysis, the court reasoned that older

terminated workers have more accrued claims to give up than

younger workers. Thus, in order to comply with the ADEA,

SmithKline should have given extra consideration to older workers

because by signing the release they were giving up more claims

than younger workers. Accordingly, the court concluded that, by

treating older workers the same as younger workers, SmithKline

facially and explicitly discriminated on the basis of age.

We reject the district court's reasoning and thus we

hold that it erred in concluding that SmithKline's policy is

facially discriminatory and therefore constitutes per se

discrimination. The touchstone of explicit facial discrimination

is that the discrimination is apparent from the terms of the

policy itself. In Thurston, for example, an airline company's

policy constituted facial discrimination independent of proof of

intent because it allowed all disqualified pilots automatically

to be transferred to the position of flight engineer except those

disqualified on the basis of age. Thurston, 469 U.S. at 121, 105

S.Ct. at 622. In Johnson Controls, 499 U.S. at 197, 111 S.Ct. at

1202, the policy at issue violated Title VII because it

"exclude[d] women with childbearing capacity from lead-exposed

jobs and so create[d] a facial classification based on gender."

Similarly, Los Angeles Dep't of Water & Power v. Manhart, 435

U.S. 702, 98 S.Ct. 1370 (1978), prohibited a policy that facially

"require[d] 2,000 individuals to contribute more money into a

fund than 10,000 other employees simply because each of them

[was] a woman, rather than a man." Id. at 711, 98 S.Ct. at 1377.

But SmithKline's policy does not fall within that

limited category of cases. Its plan cannot be said to be

discriminatory on its face, because the district court's

conclusion that the plan is facially discriminatory required

referencing a fact outside the policy -- namely the ADEA.

Consider the district court's holding: "Because ADEA provides a

cause of action for age discrimination only to persons age forty

and above, the Plan explicitly treats older employees differently

than younger employees." DiBiase, 847 F. Supp. at 347. But the

word "explicitly" does not belong. It is impossible to examine

SmithKline's policy and conclude that on its face it treats older

workers disparately. There is a good reason for this -- the

policy does not classify persons on the basis of age. On the

contrary, the plan offering is an archetypical example of a

facially non-discriminatory policy. SmithKline made the expanded

package available to all persons willing to sign the release,

regardless of age. SmithKline did not require employees to waive

only ADEA claims, but to waive all claims. A facially non-

discriminatory policy cannot be transformed into a facially

discriminatory policy simply because of the existence of the

ADEA.9

9

. While our result is not dependent on this point, we observe

that certain precedents suggest that the premise that only

employees 40 or over have anything to surrender under the ADEA is

wrong. Thus, it has been held that employees under the age of 40

may bring retaliation claims under section 4(d) of the ADEA, see

Anderson v. Phillips Petroleum Co., 722 F. Supp. 668, 671-72 (D.

Kan. 1989). Moreover, at least two courts have held that,

despite the statutory provision to the contrary, workers under

the age of 40 may have standing to sue for substantive age

discrimination. In Johnson v. Mayor and City Council of

Baltimore, 515 F. Supp. 1287, 1301 (D.Md. 1981), rev'd on other

grounds, 731 F.2d 209 (4th Cir. 1984), the court held that a 32-

year old plaintiff had standing to challenge the company's early

retirement policy because "[the standing] provision does no more

than define the acts prohibited by the statute and would not

deprive plaintiff . . . of standing in this case." Id. In Allen

v. American Home Foods, Inc., 644 F. Supp. 1553, 1558 (N.D. Ind.

1986), the court held that employees under 40 had standing to sue

under the ADEA when they were terminated in the wake of a plant

closing. Our point is not that these cases were decided

correctly, a conclusion we neither reach nor reject. Rather, our

point is that the provisions of the ADEA -- and how they are

interpreted -- are outside an employer's control. Moreover, the

30-year old's suit certainly imposes costs upon the company, and

once the suit is filed, it cannot be said that the costs will be

contained by an early dismissal. These facts make it even more

difficult to make the blanket statement that older persons'

Thus, DiBiase is left with having to prove both unequal

treatment and intent to discriminate. See Hazen, ____ U.S. at

____, 113 S.Ct. at 1705; Armbruster v. Unisys Corp., 32 F.3d 768,

782 (3d Cir. 1994); Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir.

1994). The Supreme Court plainly has stated that "there is no

disparate treatment under the ADEA when the factor motivating the

employer is some feature other than the employee's age." Hazen,

____ U.S. at ____, 113 S.Ct. at 1705. Here, the record does not

contain even the slightest evidence of discriminatory motive.10

At any rate, even assuming the existence of a

(..continued)

claims are worth more than younger persons' claims. See

generally Typescript at 21-24.

10

. In Hazen, the Supreme Court held that discrimination based

on pension eligibility (when pension eligibility was based on

years of service) does not violate the ADEA despite the strong

correlation between the two categories. The Court did say,

however, that "[w]e do not preclude the possibility that an

employer who targets employees with a particular pension status

on the assumption that these employees are likely to be older

thereby engages in age discrimination. Pension status may be a

proxy for age . . . in the sense that the employer may suppose a

correlation between the two factors and act accordingly." Hazen,

___ U.S. at ____, 113 S.Ct. at 1707. Here, there is nothing in

the record to indicate that SmithKline, by offering the general

release, intended to target older workers. In fact, its motive

is quite obvious -- it wanted to protect itself against all

litigation arising out of the RIF.

DiBiase also contends that the intent to discriminate

can be inferred based on his letter to SmithKline charging

SmithKline with violating the ADEA. This is preposterous. The

logical consequence of the argument is that a terminated employee

can manufacture an illicit intent on the part of the employer

simply by telling the employer that he or she thinks the employer

is violating an anti-discrimination law.

legitimate factual dispute concerning SmithKline's motive, it

simply did not discriminate against DiBiase on the basis of age.

Again, we begin with the district court's reasoning. The

district court properly concluded that employees gain a valuable

substantive right simply by turning 40 for the ADEA protects

workers who are at least 40 years of age from age discrimination.

29 U.S.C. § 631(a). But the district court went on to reason

that all 40-year old employees had accrued ADEA "claims" that

necessarily rendered their bundle of accrued claims more valuable

than younger employees' bundles. Thus, the district court's

reasoning assumes that all terminated employees with races or

with genders have accrued potential Title VII claims against

their former employers, and that terminated employees with sexual

orientations have such potential claims under various relevant

state laws. The court's reasoning also assumes that all such

accrued claims are equally valuable. To take the principle where

it logically leads, it is like saying every person has accrued a

potential due process claim simply because he or she has been a

person and hence has been protected by the Fifth and Fourteenth

amendments.

This kind of reasoning is inappropriate because the

ADEA claim was just one of a plethora of claims that SmithKline

asked employees to waive. Thus, the value of the accrued ADEA

claim has to be weighed against the value of other accrued

claims. For instance, other things being equal, a terminated

employee's potential accrued gender discrimination claim probably

would be worth more if the employee were a woman, even though

both men and women are protected by Title VII. Similarly,

assuming all other variables to be equal, a black employee's race

discrimination claim may be worth more in the abstract than such

a claim from a white employee. Recognizing these possibilities

inevitably leads us away from the abstract reasoning utilized by

the district court into a more practical approach that recognizes

that the value of a bundle of accrued claims depends on a myriad

of factors including, among other things, the employee's work

performance history, the circumstances surrounding the

terminations, and the nature -- if any -- of the rehiring. For

example, a 35-year-old black employee terminated despite a

stellar work performance record certainly has a more valuable

claim under Title VII than a 55-year-old, fired because of

incompetence, has under the ADEA. In theory, if there were a

market for accrued claims, terminated 40-year old employees would

not receive automatically the highest bids, as buyers would want

to know more facts about the circumstances surrounding individual

terminations. The point, of course, is that the district court's

assumption, that because of the ADEA all 40-year old employees

have a more valuable set of claims than younger workers, is

simply wrong. One cannot say in the first instance that the 50-

year-old's accrued "claims" are by definition worth more than

others' accrued claims.

The fallacy in the district court's reasoning is in

large part due to the conflation of the notion of a "right" with

the notion of an accrued "claim." A right to be free

prospectively from certain forms of discrimination always is

worth something; however, whether a person has accrued a claim

based on a right depends entirely on what previously has

occurred. SmithKline did not ask its terminated employees to

give up their statutorily or constitutionally created rights to

be free prospectively of various forms of discrimination.

Rather, the plan's focus was entirely retrospective, on whether

the value of any claims -- by definition already accrued -- was

worth surrendering for the enhanced benefits. The significance

of the distinction between a right and a claim is particularly

demonstrated in this case because the district court found that

DiBiase's substantive age discrimination claim had no merit.

In fact, the district court's reasoning and conclusion

are at odds with propositions of law it acknowledges in its

opinion. The court correctly noted that the ADEA "focuses on

individuals, and precludes treatment of individuals as simply

components of an age-based class." DiBiase, 847 F. Supp. at 347.

By analogy, in Manhart, the pension policy violated Title VII

despite the fact that it was based on legitimate actuarial

calculations, because "the basic policy of the statute requires

that we focus on fairness to individuals rather than fairness to

classes." Manhart, 435 U.S. at 709, 98 S.Ct. at 1376. This is

because "[p]ractices that classify employees in terms of

religion, race, or sex [or age] tend to preserve traditional

assumptions about groups rather than thoughtful scrutiny of

individuals." Id. Yet the district court's reasoning turns this

principle on its head. Here, SmithKline enacted a policy that

called for each individual to weigh the circumstances surrounding

his or her discharge, and to make an informed decision about

whether to sign the release or proceed with claims that, if they

existed, already had accrued. Thus, the policy certainly was

fair to individuals. Yet, the district court's opinion, by

conflating prospective rights with accrued claims, ignored the

variances in each individual's situation, and instead classified

all persons who were at least 40 years old as being in the

identical position. The opinion thus reached a conclusion

directly contrary to the policy it correctly enunciated.

We must emphasize that our result may have been

different had there been no analytical distinction between the

class of disadvantaged employees (assuming such a class) and the

protected class -- that is, had older employees by definition

given up more claims than younger employees. In this regard,

Hazen again is instructive. Although the Court concluded that

"age and years of service are analytically distinct," Hazen,

____ U.S. at ____, 113 S.Ct. at 1707, it expressly declined to

"consider the special case where an employee is about to vest in

pension benefits as a result of his age, rather than years of

service." Hazen, ___ U.S. at ____, 113 S.Ct. at 1707. The

correlation between age and pension status in that special case

is materially different -- the terminated employee always will be

a member of the protected class. The point is important, because

we would have faced a different situation if, for example,

SmithKline conditioned the expanded separation package upon a

waiver only of ADEA claims inasmuch as employees do in fact gain

a substantive right when they turn 40. Thus, assuming no

knowledge of the circumstances surrounding the termination, the

possibility that a terminated older employee actually has a

viable age discrimination claim, is worth something (though

probably not much) in the abstract. It follows, then, that if

SmithKline required terminated employees to give up only ADEA

claims to obtain the enhanced benefits, older employees but not

younger employees would be forced to give up something of

value.11

In the foregoing scenario, SmithKline would have

treated older workers differently than younger workers. Thus, in

EEOC v. Westinghouse Electric Corp., 869 F.2d 696 (3d Cir. 1989),

vacated and remanded, 493 U.S. 801, 110 S.Ct. 37 (1989), we held

that a policy denying severance pay to laid-off employees who

were eligible for early or selected retirement constituted

discrimination on the basis of age. There, the class of people

eligible for early retirement always coincided with members of

11

. But see footnote 9, supra.

the protected class. Id. at 705.12 But that is not the

situation here and we decline to address how we would rule in

such a case. SmithKline conditioned the right to the expanded

benefits on an employee's blanket waiver of all accrued claims;

this treatment cannot be said to be disparate, because it is

impossible to tell whose package of potential claims is more

valuable.13 Therefore, in light of the above, DiBiase has no

disparate treatment claim against SmithKline.

12

. The Supreme Court remanded Westinghouse for reconsideration

in light of Public Employees Retirement System of Ohio v. Betts,

492 U.S. 158, 109 S.Ct. 1854 (1989). In Betts, the Supreme Court

held that the then-existing section 4(f)(2) of the ADEA --

exempting from the ADEA's prohibitions "any bona fide employee

benefit plan . . . which is not a subterfuge to evade the

purposes of the Act" -- insulates bona fide plans from the

purview of the ADEA "so long as the plan is not a method of

discriminating in other, non-fringe-benefit aspects of the

employment relationship." Id. at 177, 109 S.Ct. at 2866.

Congress since overruled Betts. We cite Westinghouse solely for

the proposition that when a company's policy distinguishes

employees on the basis of a factor analytically indistinct from

age, we would be faced with a different situation than that in

this case.

13

. The National Employment Lawyers Association has filed an

amicus brief relying in part on EEOC v. Board of Governors, 957

F.2d 424 (7th Cir.), cert. denied, ____ U.S. ____, 113 S.Ct. 299

(1992). In that case, the Court of Appeals for the Seventh

Circuit held that "a collective bargaining agreement provision

that denies employees their contractual right to a grievance

proceeding whenever the employee initiates a claim, including a

claim of age-based discrimination, in an administrative or

judicial forum", id. at 425, violates section 4(d) of the ADEA.

Id. at 431. Section 4(d) prohibits employers from retaliating

against an employee "because such individual . . . has made a

charge, testified, assisted, or participated in any manner in an

investigation, proceeding or litigation under this chapter." 29

U.S.C. § 623(d). The company's policy therefore commanded a

violation of this provision anytime an employee filed an age

C. Disparate Impact

1. Whether DiBiase adequately has raised this issue

An amicus, the National Employment Lawyers Association

(NELA), urges us to affirm the district court's judgment on the

alternative theory of disparate impact. In a disparate impact

case, the plaintiff claims that the employment practice "has a

disproportionate effect on older workers [and thus] violates the

ADEA." Hazen, U.S. at ____, 113 S.Ct. at 1710 (Kennedy, J.

concurring). While the district court indicated that it "need

not determine whether the policy also constitutes disparate

impact," DiBiase, 849 F. Supp. at 348 n.13, it nevertheless went

on to say:

Disparate impact cases typically focus on

statistical disparities between members of

the protected and unprotected classes. In

this case, however, no statistics are

necessary because all members of the age-

protected class must surrender potential age

discrimination claims, whereas no member of

the non-protected class has potential age

discrimination claims to surrender. Thus, a

disparate impact analysis in this case

involves arguments identical to those

involved in the disparate treatment inquiry,

and results in the same conclusion:

SmithKline's policy causes a disparate impact

because it specifies different treatment.

Id. (citation omitted; emphasis in original). The district

court's observation about disparate impact assumes that older

(..continued)

discrimination charge with the EEOC. This decision does not

support DiBiase's position.

workers signing the release gave up more than younger workers

solely because the ADEA protects only older workers. In light of

our discussion above, that analysis is flawed fundamentally.

Moreover, the district court's reasoning is somewhat circular --

in explaining why there is disparate impact liability, the court

assumed the conclusion of its disparate treatment analysis. That

logical flaw makes the disparate impact analysis redundant: To

say that there is disparate impact because there is disparate

treatment is to say nothing at all. Of course, if a policy is

facially discriminatory, it has a disparate impact on the

discriminated-against individuals. Therefore, we reject the

district court's disparate impact conclusion for the reasons

detailed above.14

But the question remains -- should we still remand the

matter for further proceedings (and perhaps further discovery) on

a different type of disparate impact theory. After all, to

conduct a disparate impact analysis properly in this context, the

court should have assumed that the release did not treat

employees disparately, and then asked whether, in reality, the

14

. The problem with the district court's analysis probably

stems from the fact that the court explicitly indicated that it

need not reach the issue of disparate impact. See DiBiase, 849

F. Supp. at 348 n.13; Br. Amicus Curiae of National Employment

Lawyers Association at 7 (acknowledging that district court

determined that it need not decide whether the severance plan

constitutes unlawful disparate impact). The language following

the district court's disclaimer constituted simply a reflection

on the import of the court's disparate treatment conclusion --

once a policy is deemed facially discriminatory, the policy has a

disparate impact as well.

policy had a disproportionate effect on older employees. Such an

inquiry, of course, would have required use of sophisticated

statistical data, and DiBiase apparently was not inclined to take

this path, as he produced no such evidence.

DiBiase does not urge us to reach this conclusion as

an alternative way to uphold the district court's judgment if we

reject the court's disparate treatment analysis. Only the amicus

argues that DiBiase's "ADEA claims are actionable under a

disparate impact theory," NELA Br. at 7, but an "amicus may not

frame the issues for appeal." Swan v. Peterson, 6 F.3d 1373,

1383 (9th Cir. 1993) (citing Sanchez-Trujillo v. I.N.S., 801 F.2d

1571, 1581 n.9 (9th Cir. 1986), cert. denied, ____ U.S. ____,

____ S.Ct. ____, 1004 U.S. LEXIS 7855 (1994). Absent the

existence of "substantial public interests" calling us to depart

from the general rule, "we consider only issues argued in the

briefs filed by the parties and not those argued in the briefs

filed by interested nonparties." Continental Ins. Cos. v.

Northeastern Pharmaceutical & Chem. Co., Inc., 842 F.2d 977, 984

(8th Cir. 1988), cert. denied, 488 U.S. 821, 109 S.Ct. 66 (1988);

Preservation Coalition, Inc. v. Pierce, 667 F.2d 851, 862 (9th

Cir. 1982).15 Therefore, because DiBiase is not pursuing a

disparate impact claim, the issue is not before us.

15

. SmithKline addresses disparate impact theory, apparently to

protect itself lest we conclude that the district court

adequately reached the issue.

2. The availability of disparate impact theory in this case16

We note, however, that even if the issue properly were

before us, disparate impact theory would not be applicable here.

In a factual scenario remarkably like the one here, the Supreme

Court held that there can be no disparate impact liability. In

Manhart, the City of Los Angeles argued that its pension policy

requiring women to contribute greater amounts into a pension fund

than men was mandated by Title VII itself, reasoning that "a

gender-neutral pension plan would itself violate Title VII

because of its disproportionately heavy impact on male

employees." Manhart, 435 U.S. at 710 n.20, 98 S.Ct. 1370, 1376

n.20. The Court dismissed the argument out of hand: "Even under

Title VII itself -- assuming disparate-impact analysis applies to

fringe benefits -- the male employees would not prevail. Even a

completely neutral practice will inevitably have some

disproportionate impact on one group or another. . . . [T]his

Court has never held . . . that discrimination must always be

inferred from such consequences." Id. That case, like this one,

involved an employer's grant of "fringe benefits." There, the

city argued that it was required to treat people unequally in

order to treat them equally. Here, DiBiase makes the identical

argument -- that SmithKline was required to treat employees

16

. Judge Becker does not join subsection II(C)(2) and II(C)(3)

of the opinion. He would say simply that DiBiase clearly abjured

any intention to proceed under a disparate impact theory, and

therefore there is no disparate impact claim before us.

unequally in order to treat them equally. Like in Manhart, the

disparate treatment is alleged to be justified because older

people as a group would otherwise pay more for the privilege than

younger people.

Moreover, the facts of this case simply do not

implicate the policies underlying disparate impact theory. In

the first place, as described in detail above, the policy does

not per se affect older workers more harshly than younger

workers. Second, there is absolutely no evidence that the

company's policy does in fact affect older people adversely.

Third, even if it did, such a neutral policy -- which does not

rely on an invidious stereotype about older employees, which

clearly is not motivated by a discriminatory impulse, and which

could be demonstrated to have a disparate impact only by the use

of an incredibly sophisticated statistical analysis -- simply

cannot be the basis of ADEA liability. Fourth, this is not a

case where finding liability would help eradicate the entrenched

effects of past discrimination. Finally, use of statistical

evidence demonstrating a disproportionate impact will shed little

light on the employer's motive. In short, there can be no

liability in this case based on disparate impact.

3. Disparate impact theory under the ADEA17

17

. Judge McKee does not join subsection II(C)(3) of the

opinion, as he finds it unnecessary to consider the question of

whether disparate impact theory liability is viable under the

Moreover, in the wake of Hazen, it is doubtful that

traditional disparate impact theory is a viable theory of

liability under the ADEA. In Hazen, the Supreme Court stated

that it was declining to decide whether an employer may be liable

under the ADEA on a disparate impact theory. Id. at ____, 113

S.Ct. at 1706, id. at ____, 113 S.Ct. at 1710 (Kennedy, J.

concurring); Markham v. Geller, 451 U.S. 945, 101 S.Ct. 2028

(1981) (Rehnquist, J., dissenting from denial of certiorari).

Yet the analysis in Hazen casts considerable doubt on the

viability of the theory. And, in fact, we recently recognized

that the existence of disparate impact theory under the ADEA is

an open question. See Armbruster, 32 F.3d at 772 n.4 ("Whether a

disparate impact theory of liability is even available under ADEA

has yet to be addressed by the Supreme Court. In any event,

because the district court has not yet addressed this issue, we

think it would be inappropriate for us to consider it.").

(Citations omitted).18

(..continued)

ADEA. Therefore, Judge Greenberg writes this subsection only for

himself.

18

. In Massarsky v. General Motors Corp., 706 F.2d 111 (3d

Cir.), cert. denied, 464 U.S. 937, 104 S.Ct. 348 (1983), we noted

that "this court has never ruled on whether a plaintiff can

establish a violation of the Act by showing disparate impact

alone." Id. at 120. In MacNamara v. Korean Air Lines, 863 F.2d

1135 (3d Cir. 1988), cert. denied, 493 U.S. 944, 110 S.Ct. 349

(1989), however, we said that "Title VII and ADEA liability can

be found where facially neutral employment practices have a

discriminatory effect or 'disparate impact' on protected groups,

without proof that the employer adopted these practices with a

discriminatory motive." Id. at 1148. That case is not

controlling, however. First, there the plaintiffs challenged

Three premises in the Hazen Court's analysis make the

point. First, though not explicitly deciding the viability of

disparate impact liability under the ADEA, the Court did note

that disparate treatment "captures the essence of what Congress

sought to prohibit in the ADEA." Hazen, ____ U.S. at ____, 113

S.Ct. at 1706. Second, the Court reasoned that "Congress'

promulgation of the ADEA was prompted by its concern that older

workers were being deprived of employment on the basis of

inaccurate and stigmatizing stereotypes." Id. Finally, the

Court held that "[w]hen the employer's decision is wholly

motivated by factors other than age, the problem of inaccurate

and stigmatizing stereotypes disappears. This is true even if

the motivating factor is correlated with age . . . ." Id. In a

pure disparate impact case, the employer's decision by definition

is "wholly motivated by factors other than age."19 Thus, with

the third premise, the Supreme Court apparently concluded that in

(..continued)

"the practice of favoring Korean nationals on the ground that it

has the effect of discriminating against others on grounds of

race or national origin." Id. Thus, the disparate impact

allegation involved Title VII only, and the statement about the

ADEA is pure dicta. Second, the cases relied upon for the

proposition were Title VII cases, and in light of our express

statement in Massarsky that Title VII jurisprudence did not

necessarily apply to the ADEA in this context, it is

inconceivable that we simply would have applied disparate impact

theory without analysis -- particularly when the application was

not relevant to the decision. Third, we decided MacNamara

before Hazen, and subsequent Supreme Court authority necessarily

controls.

19

. I am not concerned here with situations in which impact is

used to prove intent to discriminate.

such cases, the policies behind the ADEA are not implicated.

With that said, it is difficult to see how disparate impact

liability can survive the analysis.

The Court of Appeals for the Seventh Circuit and two

district courts, relying in part on Hazen, recently held that

disparate impact liability is unavailable under the ADEA. EEOC

v. Francis W. Parker School, 41 F.3d 1073, 1077 (7th Cir. 1994)

("decisions based on criteria which merely tend to affect workers

over the age of forty more adversely than workers under forty are

not prohibited") (citing Anderson v. Baxter Healthcare Corp., 13

F.3d 1120 (7th Cir. 1993)); Martincic v. Urban Redevelopment

Authority of Pittsburgh, 844 F. Supp. 1073, 1076-77 (W.D. Pa.

1994) (holding that in light of Hazen, there can be no disparate

impact liability under the ADEA), aff'd, No. 94-3235, F.3d

(3d Cir. Nov. 28, 1994) (table); Hiatt v. Union Pacific R.R. Co.,

859 F. Supp. 1416, 1434 (D. Wyo. 1994) ("[I]t is inappropriate to

incorporate the disparate impact theory of discrimination

enumerated [by the Supreme Court in the Title VII context] into

the ADEA.").20

20

. Yet several courts of appeal have assumed that disparate

impact liability applies under the ADEA. See, e.g., Geller v.

Markham, 635 F.2d 1027, 1032 (2d Cir. 1980), cert. denied, 451

U.S. 945, 101 S.Ct. 2028 (1981); Abbott v. Federal Forge, Inc.,

912 F.2d 867, 872 (6th Cir. 1990); Rose v. Wells Fargo & Co., 902

F.2d 1417, 1423-25 (9th Cir. 1990). These cases were decided

before Hazen, and none of them even purported to conduct any

analysis of the issue. Rather, they probably relied on the oft-

cited principle that interpretations of the ADEA parallel

interpretations of Title VII. Because Hazen, if nothing else at

least disposes of that assumption, those cases are not

persuasive. However, even after Hazen, the Court of Appeals for

The Hazen Court's emphasis on the congressional purpose

behind the ADEA is particularly helpful in confirming the Court's

intimations. First, the statutory language does not explicitly

provide for disparate impact liability. While it has been argued

that section 623(a)(2) authorizes claims of disparate impact, see

Marla Ziegler, Disparate Impact Analysis and the Age

Discrimination in Employment Act, 68 Minn. L. Rev. 1038, 1050-51

(1984), that reading of the statute is inaccurate. The section

renders it "unlawful for an employer ---

(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 . . . ."

29 U.S.C. § 623(a)(2). However, finding the theory lurking in

this section requires reading the language "because of such

individual's age" to modify "adversely affect" rather than to

modify "limit, segregate, or classify." Because of the placement

of the commas, this is a grammatically incorrect reading. See

Pamela S. Krop, Note, Age Discrimination and the Disparate Impact

Doctrine, 34 Stan. L. Rev. 837, 842-43 (1982). Moreover, as Krop

points out, section (2) parallels the language of section (1),

which makes it unlawful for an employer --

(1) to fail or refuse to hire or to discharge

any individual or otherwise discriminate

(..continued)

the Eighth Circuit assumed -- again without analysis -- that

disparate impact liability is cognizable under the ADEA. See

Houghton v. Sipco, Inc., 38 F.3d 953, 958-59 (8th Cir. 1994).

against any individual with respect to his

compensation, terms, conditions, or

privileges of employment, because of such

individual's age.

29 U.S.C. § 623(a). "Under this provision, the 'because of such

individual's age' clause can only modify the description of

prohibited actions . . . . The parallel wording of section

4(a)(2) indicates that it too was aimed at disparate treatment.

An employer may not limit, segregate, or classify employees on

the basis of age in a manner that would adversely affect an

employee." Krop at 843.

More than that, however, although the ADEA language

quoted above parallels the language in Title VII, when the

Supreme Court found disparate impact liability under Title VII,

it relied not on any specific statutory language but on the

policies behind the statute. In that case, Griggs v. Duke Power

Co., 401 U.S. 424, 91 S.Ct. 849 (1971), the Court stated:

The objective of Congress in the enactment of

Title VII . . . was to achieve equality of

employment opportunities and remove barriers

that have operated in the past to favor an

identifiable group of white employees over

other employees. Under the Act, practices,

procedures, or tests neutral on their face,

and even neutral in terms of intent, cannot

be maintained if they operate to 'freeze' the

status quo of prior discriminatory employment

practices.

Id. at 429-30, 91 S.Ct. at 853. This policy is not easily

transplanted into the ADEA, the primary purpose of which is to

prohibit employers from acting upon the assumption that

"productivity and competence decline with old age." Hazen, ____

U.S. at ____, 113 S.Ct. at 1706. As one court has put it, "[i]n

Griggs, the critical fact was the link between the history of

educational discrimination and the use of that discrimination as

a means of presently disadvantaging African-Americans. These

concerns simply are not present when the alleged disparate impact

is based on age." Hiatt, 859 F. Supp. at 1436. Congress itself

recognized this distinction, for it provided in the ADEA that

"[i]t shall not be unlawful for an employer . . . to take any

action otherwise prohibited [by this section] where the

differentiation is based on reasonable factors other than age . .

. ." 29 U.S.C. §623(f)(1). "The sentence is incomprehensible

unless the prohibition forbids disparate treatment and the

exception authorized disparate impact." Metz v. Transit Mix,

Inc., 828 F.2d 1202, 1220 (7th Cir. 1987) (Easterbrook, J.

dissenting) (quoting Douglas Laycock, Continuing Violations,

Disparate Impact in Compensation, and Other Title VII Issues, 49

L. & Contemp. Prob. 53, 55 (Aut. 1986) (referring to identical

language of Equal Pay Act). In other words, by the statutory

language itself, Congress recognized that neutral policies not

motivated by discriminatory intent may be permissible employment

practices. It is difficult to imagine how Congress could have

concluded otherwise -- for application of disparate impact theory

could lead to results which Congress probably did not intend.21

21

. For example, if an employer set the work week at five days

per week, eight hours per day, or if it determined to eliminate

But I need not go so far as to say that disparate

impact theory is never available under the ADEA. Rather,

resolution of that issue must await another day. I write this

section to highlight my doubts and to say that, at any rate,

disparate impact theory should not be applied as a matter of

course. Here, of course, we only need hold that even if in some

situations disparate impact liability may be established under

the ADEA, this case does not present one of them.

III. CONCLUSION

In view of the aforesaid, we hold that an employer may

offer enhanced benefits to all terminated employees agreeing to

waive all claims against the company, without providing extra

consideration to workers protected by the ADEA. Thus, it is

evident that the district court should have denied DiBiase's

motion for summary judgment and should have granted SmithKline's

motion for summary judgment on count 2 of the amended complaint.

Furthermore, it is clear that there is no need for further

proceedings in the district court. See Nazay v. Miller, 949 F.2d

(..continued)

medical insurance coverage, its decisions could have a disparate

impact on older employees. In that circumstance, in an ADEA

action employers would be forced to justify their business

practices with older employees then having the opportunity to

demonstrate that alternative employment practices could fulfill

the employer's needs. See Abbott v. Federal Forge, Inc., 912

F.2d 867, 872 (6th Cir. 1990). Such a regime could subject

employers to unreasonable intrusions by juries into their

business practices. See Gray v. York Newspapers, Inc., 957 F.2d

1070, 1083 (3d Cir. 1992).

1323, 1328 (3d Cir. 1991). Consequently, the order of May 3,

1994, granting DiBiase summary judgment will be reversed and the

matter will be remanded to the district court for entry of

judgment in favor of SmithKline.