Amicus Curiae Brief — General Dynamics Land Systems, Inc. v. Cline

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No. 02-1080 | |

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IN THE Je

Supreme Court of the United States

GENERAL DYNAMICS LAND SYSTEMS. INC..

Petitioner.

DENNIS CLINE, ef al...

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

BRIEF AMICI CURTAE OF THE EQUAL

EMPLOYMENT ADVISORY COUNCIL, LPA,

THE HR POLICY ASSOCIATION, THE CHAMBER

OF COMMERCE OF THE UNITED STATES,

AND THE AMERICAN BENEFITS COUNCIL

IN SUPPORT OF PETITIONER

STEPHEN A. BOKAT

ROBIN S. CONRAD

ELLEN DUNHAM BRYANT

NATIONAL CHAMBER

LITIGATION CENTER. INC.

1615 H Street, N.W

Washington, D.C. 20062

(202) 463-5337

\tlorneys for Anmucus Curiae

The Chamber of Commerce

of the United States

July 2003

ANN ELIZABETH REESMAN

DANIEL V. YAGER

KATHERINE Y.K. CHEUNG

Counsel of Record

TIMOTHY J. BARTI

MCGUINESS NORRIS &

WILLIAMS, LLP

lOLS Fifieenth Street. N.W..

Suite 1200

Washington, D.C. 20005

(202) 789-8600

\ttommeys tor Amici Curiae

Equal Employment Advisory

Council and LPA, the HR

Policy Association

LYNN D. DUDLEY

Vice President and Senior

Counsel

AMERICAN BENEFITS COUNCIL

1212 New York Ave., N.W.

Suite 1250

Washington, D.C. 20005

(202) 289-6700

Attorney for Amicus Curiae

American Benefits Council

CATHERINE L. CREECH

DAVIS & HARMAN, LLP

1455 Pennsylvania Ave., N.W.

Suite 1200

Washington, D.C. 20004

(202) 347-2230

Attorney for Amicus Curiae

American Benefits Council

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TABLE OF CONTENTS

TARE GP AU TEOIIRE EDIE cccccccccsccsccccscscccssscnsscccssccsees

INTEREST OF THE AMICI CURTAE .........ccccc0000000000

STATEMENT OF THE CASE.............cc.cccccccsccccssseccseees

SUMMARY OF ARGUMENT ................cccccsssssseseseneens

ARGUMENT

I THE ADEA DOES NOT SUPPORT

A CLAIM FOR’ “REVERSE” AGE

Te

A. The ADEA’s Plain Language Precludes

Reverse Discrimination Claims.................

iv

The ADEA’s statutory language

prohibits only discrimination against

eI

An employer that favors older

employees has not discriminated

based on age under the plain

language of the ADEA .....................4

The EEOC’s __ regulation’ on

comparative age warrants no defer-

ence because it is fundamentally

inconsistent with both the plain

language of the ADEA and the next

section of the regulation ..............0

B. Reverse Discrimination Claims Are

Fundamentally Incompatible With The

ADEA’s Legislative History, Which

Focuses On The Particular Problems

Faced By Older Employees Relative To

pg

10

il

TABLE OF CONTENTS—Continued

C. The Negative Stereotypes That Congress

Intended The ADEA To Combat Are

Absent In Employment Actions That

Beneiie Older Workers .....0....ccccscessssescseeees

ll. THE DECISION BELOW SEVERELY

PREJUDICES EMPLOYERS BY SUBJECT-

ING THEM TO SIGNIFICANTLY MORE,

AND POTENTIALLY CONFLICTING,

DISCRIMINATION” CLAIMS OVER

PE SOUT CEE. AL, CLIUOI crcccersesessnscenevsceseesesevess

lil. THE DECISION BELOW JEOPARD-

IZES EMPLOYER-SPONSORED BENEFIT

A. Employers Need Flexibility To Offer

Enhanced Welfare Benefits To Workers

Who Need Them The Most ...................0...

1. Employers commonly offer en-

hanced welfare benefits to older

GENO ceneensemmmeeen

tv

Limiting an employer's flexibility to

offer enhanced welfare benefits to

older employees may result in an

overall reduction of benefits..............

B. Allowing Reverse Age Discrimination

Claims Could Negatively Impact

Employee Benefit Pension Plans...............

nO ccecmnacssnssnesmmamieuspannioamnmenmemenemnenmmentasinn

Page

15

16

iti

TABLE OF AUTHORITIES

FEDERAL CASES Page

EEOC v. Wyoming, 460 U.S. 226 (1983) ............. 13

Hamilton v. Caterpillar, Inc., 966 F.2d 1226 (7th

So, SI eneenssssnsennsnnmssereesemmesenennsmmanenl 8,9, 10

Hazen Paper Co. v. Biggins, 507 U.S. 604

ee 15, 19

McDonnell Douglas Corp. v. Green, 411 U.S.

a 18

O'Connor v. Consolidated Coin Caterers Corp.,

FE Cee SND Cie ee persmtemensmssemensssemeemmncssen 7,8

Paquin v. Federal National Mortgage Associa-

tion, 119 F.3d 23 (D.C. Cir. 1997)... eeeeeeee 15, 16

Parker v. Wakelin, 882 F. Supp. 1131 (D. Me.

ED warensgrenemsemmesemnanienmmannnnennemennten 9

Public Employees Retirement System v. Betts,

oe 10

Schuler v. Polaroid Corp., 848 F.2d 276 (ist Cir.

ne 9

Sitko v. Goodyear Tire & Rubber Co., No. 02-

SE ee etevterratvinscteinianmieniasiniemessininmetes 19

Stokes v. Westinghouse Savannah River Co., 206

P38 SED C6 Cie., FED ccccccccceesccccsssscccsssececcseess 19

Stone v. Travelers Corp., 58 F.3d 434 (9th Cir.

a 9

Sutton v. United Airlines, Inc., 527 U.S. 471

ee 6

Texas Dept. of Community Affairs v. Burdine,

FP Gee Ce remnegennmanarsmenmnmens 18

United States v. Mead Corp., 533 US. 218

ee 1]

Walton v. McDonnell Douglas Corp. 981

F. Supp. 1273 (E.D. Mo. 1997), aff'd, 17 F.3d

Oe 9

iv

TABLE OF AUTHORITIES—Continued

FEDERAL STATUTES Page

Age Discrimination in Employment Act,

OP es Gre 00 Bi nnn passim

a rs 0p ee ecrrctenmmsemenneennenneenamenene 6

BP ce 9 Gemma 23

Internal Revenue Code

26 U.S.C. § 401(a)(28)(B (ili) «0... eeeeceeeeeeeneenees 23

Older Workers Benefit Protection Act of 1990,

Fis Ce ee bcenstnineninitinenemenmmnmeeeee 12

Title VII of the Civil Rights Act of 1964,

Se ics Ce ee OO BR cctecnestceremeintnionsin 16, 17

FEDERAL REGULATIONS

ee 23

eee 1]

Fe ee 10, 11

es OF HN cenesneriientinntecnininanenenanneeen 11

LEGISLATIVE HISTORY

133 Cong. Rec. H16,170 (daily ed. Dec. 4

a ee 12

136 Cong. Rec. H8614 (daily ed. Oct. 2, 1990)..... 12

H.R. Rep. No. 90-805, reprinted in 1967

U.S.C.C.A.N. 2213........: Ricnsiomantecsinniinidianaientennes 11,12

MISCELLANEOUS

AARP, Update on the Older Worker: 2001 (Apr.

ED cxentesartinninneimmmeeiemnne 14

The Current State of Retiree Health Benefits:

Findings from the Kaiser/Hewitt 2002 Retiree

Health Survey (Dec. 2002).........ecccccccssccsessseeees 21,22

_— ~ —— —— -

v

TABLE OF AUTHORITIES—Continued

Employment Policy Found., Tabulation of

Bureau of Labor Statistics data gathered by the

United States Dep't of Labor, Employment &

Training Administration and reported in

“Worker Displacement 1991-2001” (Aug. 21,

ee TET TED

Employment Policy Found., Tabulation of

Census Bureau/Bureau of Labor Statistics

Current Population Survey (Nov. 2002)............

United States Dep't of Labor, The Older

American Worker—Age_ Discrimination in

Employment, Report of the Secretary of Labor

to the Congress Under Section 715 of the Civil

Rights Act of 1964 (1965), reprinted in

Hearings on H.R. 10634 and Similar Bills

Before the Select Subcomm. on Labor of the

House Comm. on Education and Labor, 89th

Page

14

14,17

Cong., Ist Sess. 201-219 (1965) ..ccccsccccssseesesseees 13,14

IN THE

Supreme Court of the United States

No. 02-1080

GENERAL DYNAMICS LAND SYSTEMS, INC.,

Petitioner.

Vv.

DENNIS CLINE, ef al.,

Respondents,

On Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

BRIEF AMICI CURIAE OF THE EQUAL

EMPLOYMENT ADVISORY COUNCIL, LPA,

THE HR POLICY ASSOCIATION, THE CHAMBER

OF COMMERCE OF THE UNITED STATES,

AND THE AMERICAN BENEFITS COUNCIL

IN SUPPORT OF PETITIONER

The Equal Employment Advisory Council, LPA, the HR

Policy Association, The Chamber of Commerce of the United

States, and the American Benefits Council respectfully

submit this brief amici curiae.' The written consent of all

parties has been filed with the Clerk of this Court. The brief

' Counsel for amici curiae authored this brief in its entirety. No person

or entity, other than the amici curiae, their members, or their counsel,

made a monetary contribution to the preparation or submission of

the brief.

2

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urges this Court to reverse the decision below, and thus

supports the position of the petitioner, General Dynamics

Land Systems, Inc.

INTEREST OF THE AMICI CURIAE

The Equal Employment Advisory Council (“EEAC” or the

“Council is a nationwide association of employers orga-

nized in 1976 to promote sound approaches to the elimination

of employment discrimination. Its membership includes over

340 of the nation’s largest private sector corporations,

collectively employing over 20 million people throughout the

United States. EEAC’s directors and officers include many

of industry’s leading experts in the field of equal employment

opportunity. Their combined experience gives the Council a

unique depth of understanding of the practical, as well as

legal, considerations relevant to the proper interpretation and

application of equal employment policies and requirements.

EEAC’s members are firmly committed to the principles of

nondiscrimination and equal employment opportunity.

LPA, the HR Policy Association (“LPA”), is a public

policy advocacy organization representing corporate execu-

tives responsible for human resource policy from more

than 200 leading corporations doing business in the United

States. LPA’s purpose is to provide in-depth information,

analysis, and opinion about current situations and emerging

trends in labor and employment policy. LPA members are

typically companies with business operations in the United

States that have more than $750 million in revenues and more

than 2,500 employees. The total number of persons em-

ployed by LPA member companies in the United States is

nearly 13 million Americans, more than 12 percent of the

private sector workforce. A large share of LPA members

currently provide retiree health care for their employees. In

light of rapidly increasing health care costs, LPA has a keen

ieee aera, emma ie al

3

interes. in ensuring that employers have sufficient flexibility

with respect to health benefits, thus enabling them to provide

some measure of coverage in the future.

The Chamber of Commerce of the United States (‘the

Chamber”) is the world’s largest business federation, repre-

senting an underlying membership of over three million

businesses and organizations of every size and in every

industry sector and geographical region of the country. A

principal function of the Chamber is to represent the interests

of its members by filing amicus briefs in cases involving

issues of vital concern to the nation’s business community.

The American Benefits Council (“ABC”) is a public policy

organization representing principally Fortune 500 companies

and other organizations that assist employers of all sizes in

providing benefits to employees. Collectively, ABC mem-

bers either sponsor or provide services to retirement and

health plans covering more than 100 million Americans.

All of EEAC’s and LPA’s, and many of the Chamber’s and

ABC’s members, are employers subject to the Age

Discrimination in Employment Act of 1967 (ADEA), as

amended, 29 U.S.C. §§ 621 et seq., as well as other equal

employment statutes and regulations. As employers, and as

potential respondents to employment discrimination claims,

amici’ s members have a strong interest in the issue presented

for the Court’s consideration—whether the ADEA provides a

cause of action for “reverse” discrimination for someone who

claims that an older worker was treated more favorably.

Thus, amici seek to assist this Court by highlighting the

impact its decision may have beyond the immediate concerns

of the parties to the case. Accordingly, this brief brings to the

attention of this Court relevant matters that the parties have

not raised. Because of their experience in these matters,

4

amici are well situated to brief the Court on the implications

of the issues beyond the immediate concerns of the parties to

the case.

STATEMENT OF THE CASE

Under the collective bargaining agreement negotiated

between petitioner General Dynamics Land Systems, Inc.

(“General Dynamics”) and the United Auto Workers

(“UAW”) that was in effect prior to July 1, 1997, General

Dynamics provided full health insurance benefits to retired

workers with 30 years of seniority. Petitioner’s Appendix, at

3a. In early 1997, General Dynamics and UAW negotiated a

new collective bargaining agreement, which obligated Gen-

eral Dynamics to offer retiree health benefits only to

employees who were at least 50 years old as of July 1, 1997,

the date the new agreement took effect. /d.

The respondents are current and former employees of

General Dynamics who were between 40 and 50 years old on

July 1, 1997. Jd. Each of the respondents would have been

eligible for retiree health benefits under the collective bar-

gaining agreement in effect before July 1, 1997, but did

not qualify for benefits under the new agreement. /d.

Respondents sued General Dynamics, alleging that limiting

the availability of retiree health benefits to employees 50

years old and over constituted age discrimination in violation

of the Age Discrimination in Employment Act (ADEA), 29

U.S.C. §§ 621 et seq.

The United States District Court for the Northern District

of Ohio dismissed respondents’ complaint. The district court

reasoned that an allegation that older workers received more

favorable treatment than younger workers was a claim for

“reverse” age discrimination, which was not actionable under

the ADEA. Pet. App. 4a. A divided panel of the U.S. Court

of Appeals for the Sixth Circuit reversed. In the majority’s

view, the ADEA bars employment discrimination against any

5

individual 40 or older on the basis of age, regardless of

whether older or younger workers received more favorable

treatment. Petitioner sought and was granted this Court's

review of the Sixth Circuit’s decision.

SUMMARY OF ARGUMENT

The Age Discrimination in Employment Act (ADEA),

29 U.S.C. §§ 621 ef seqg., does not support a claim for

“reverse” age discrimination for someone who claims that a

comparatively older worker was treated more favorably. By

referring specifically to the problems faced by “older

workers,” particularly in relation to younger employees, the

plain language of the statute precludes reverse discrimination

claims. Therefore, an employer that favors older employees

has not discriminated on the basis of age. The Sixth Circuit's

interpretation of the statute and an Equal Employment Oppor-

tunity Commission (EEOC) regulation on comparative age to

permit a claim of reverse age discrimination conflicts with the

plain language of the statute. Moreover, the EEOC’s regula-

tion on comparative age is fundamentally inconsistent with

both the statutory language and the next section of the regula-

tion, and therefore deserves no deference from this Court.

Reverse discrimination claims also are incompatible with

the ADEA’s legislative history, which reveals an intent to

promote employment opportunities for older workers vis-a-

vis younger ones in light of the harmful and inaccurate

stereotypes about the declining work capabilities associated

with advancing age. The problems and stereotypes that older

employees reportedly continue to experience in. some

workplaces thirty-five years after the passage of the ADEA

further support interpreting the statute to prohibit only

situations in which older workers are discriminated against in

favor of younger ones. Moreover, employment actions that

favor older workers are not based on the negative stereo-

types against older workers that Congress intended the ADEA

to combat.

6

As a practical matter, the decision below severely prej-

udices employers by subjecting them to significantly more,

and potentially conflicting, discrimination claims over per-

sonnel actions. At the same time, it significantly weakens

their ability to defend against such claims. The Sixth

Circuit’s ruling also jeopardizes employer-sponsored benefit

plans. By removing the flexibility employers need to manage

benefit programs in light of escalating costs, the decision

below may force employers to reduce or eliminate completely

many benefits that they voluntarily make available to their

workers, an undesirable result for all workers, regardless of

their age.

ARGUMENT

I. THE ADEA DOES NOT SUPPORT A CLAIM

FOR “REVERSE” AGE DISCRIMINATION

A. The ADEA’s Plain Language Precludes

Reverse Discrimination Claims

1. The ADEA’s statutory language prohibits

only discrimination against older employees

The Age Discrimination in Employment Act (ADEA), 29

U.S.C. §§ 621 ef seq., prohibits employment discrimination

against older workers who are age 40 and above on the basis

of their age. The plain ianguage of the ADEA indicates that

the law does not cover claims brought by younger workers

over 40 that older workers were favored. In the congressional

statement of findings and purpose at the beginning of the

ADEA, Congress specifically referred to the problems faced

by “older workers” and “older persons,” particularly “relative

to the younger ages” as the motivation for the statute. 29

U.S.C. § 621. This language memorialized Congress’s intent

to protect workers who were discriminated against because

they were considered too old, not too young. See Sutton v.

United Airlines, Inc., 527 U.S. 471, 484 (1999) (relying on

7

legislative findings enacted as part of the Americans with

Disabilities Act to show congressional intent).

These statements of legislative findings demonstrate that

Congress did not intend to allow every worker age 40 and

over to claim age discrimination simply because she or he is a

member of the ADEA-protected class. Rather, the statute

prohibits employers from arbitrarily favoring younger work-

ers over older ones based on inaccurate and harmful stereo-

types that as individuals age, they become less able in the

workplace.

The ADEA’s language protecting “older employees” thus

is a comparative term, not an absolute one. Interpreting this

term, this Court ruled in its unanimous opinion in O'Connor

v. Consolidated Coin Caterers Corp., 517 U.S. 308 (1996),

that the appropriate test for illegal age discrimination under

the ADEA is the replacement of the plaintiff by someone who

is substantially younger, but who need not be outside the

protected class, i.e., under 40 years of age. “Because the

ADEA prohibits discrimination on the basis of age and not

class membership, the fact that a replacement is substantially

younger than the plaintiff is a far more reliable indicator of

age discrimination than is the fact that the plaintiff was

replaced by someone outside the protected class.” /d. at 313.

The Court observed that a test which merely looked at

whether or not the comparator is in the protected class would

permit a 40-year-old plaintiff who is replaced by a 39-year-

old to claim age discrimination simply because the plaintiff is

one year older. In practice, the Court said, this type of case

was rare, “since the vast majority of age-discrimination

claims come from older employees.” Id. at 312 (emphasis

added). Nevertheless, the Court rejected this standard as a

reliable indicator of age bias.

Requiring a comparison to a substantially younger worker

to establish a prima facie case of age discrimination thus

8

shows that the term “older employee” means older than the

comparator, The Court’s distinction between 40-year-olds,

who are part of the ADEA’s protected class, and “older

employees” also shows that the word “older” is a comparative

term. “Older” refers to one’s age when compared to someone

else's, not just to one’s chronological age. The Court’s focus

in O'Connor on the plaintiffs older age relative to his

replacement thus shows that the plain language of the ADEA

requires the discrimination to be in favor of someone younger

than the plaintiff to be unlawful. The absence of this essential

point in the decision below warrants reversal.

2. An employer that favors older employees

has not discriminated based on age under

the plain language of the ADEA

Relying on the plain language of the ADEA, the Seventh

Circuit ruled in Hamilton v. Caterpillar, Inc., 966 F.2d 1226

(7th Cir. 1992), that the statute does not support a claim for

reverse age discrimination. In that case, Caterpillar offered

early retirement benefits to workers who were either 60 years

or older with 10 years of service, or 55 years or older, if the

sum of their years of service and age totaled 85. Caterpillar

later modified this plan to extend early retirement benefits

also to workers who were 50 years or older with 10 years of

service. /d. at 1227.

A group of former employees between the ages of 40 and

50 years old who had more than 10 years of service sued

Caterpillar for reverse age discrimination because they were

too young to qualify for the benefits. /d. In rejecting the

plaintiffs’ claims, the Seventh Circuit ruled that the plain

language of the ADEA indicates that the law does not cover

claims brought by younger workers over 40 that older

workers were favored.

[T]he phrase “arbitrary age discrimination” refers to

Congress’s understanding that discriminating against

es °° °° °° ° ° °° °°

7)

older people on the basis of their age is arbitrary . . .

Congress was concerned that older people were being

cast aside on the basis of inaccurate stereotypes about

their abilities. The young . . . cannot argue that they are

similarly victimized.

Id. at 1228 (citation omitted).

The First Circuit's ruling in Schuler v. Polaroid Corp., 848

F.2d 276 (Ist Cir. 1988), also supports reversal of the

decision below. In that case, the First Circuit rejected a

worker's claim that a company severance plan, which gave

greater benefits to workers with more seniority, violated the

ADEA by inducing him to resign.

In an opinion written by then-Judge Breyer, the First

Circuit held that the ADEA “does not forbid treating older

persons more generously than others.” /d. at 278. The court

explained that a company severance incentive package that

offered increased benefits to employees with more seniority

who resigned voluntarily was a favor to them, and thus could

not support an age discrimination claim. “That plan was a

carrot, not a stick, and . . . a ‘carrot’ cannot ordinarily violate

the Age Discrimination in Employment Act.” /d. (citation

omitted); see also Walton v. McDonnell Douglas Corp., 98}

F. Supp. 1273, 1278 n.6 (E.D. Mo. 1997) (“Because the law

does not protect employees because they are too young,

plaintiff cannot prove age discrimination based upon

defendant’s retention of older individuals”), aff'd, 17 F.3d

423 (8th Cir. 1999); Parker v. Wakelin, 882 F. Supp. 1131,

1140-41 (D. Me. 1995) (dismissing ADEA reverse age

discrimination lawsuit by teachers between ages of 40 and 50,

who were too young to vest in retirement benefits).

In addition, the Ninth Circuit expressed considerable doubt

that the ADEA supports a claim for reverse age discrim-

ination in Stone v. Travelers Corp., 58 F.3d 434 (9th Cir.

1995). In that case, a company severance plan permitted only

employees over the age of 55 to receive their benefits as a

10

lifetime annuity. The plaintiff, who was 52 years old,

claimed discrimination because he was too young to receive

an annuity. Although the Ninth Circuit did not rule on the

viability of the plaintiff's reverse age discrimination claim, it

described the nature of his claim with disbelief: “Stone

claims that Travelers violated the ADEA by discriminating

against him because he was too young!” /d. at 437. These

decisions support the conclusion that a reverse age discrim-

ination claim is not cognizable under the plain language of

the ADEA, thereby requiring reversal of the decision below.

3. The EEOC’s regulation on comparative age

warrants no deference because it is

fundamentally inconsistent with both the

plain language of the ADEA and the next

" section of the regulation

The Seventh Circuit in Hamilton also properly rejected a

regulation promulgated by the Equal Employment Oppor-

tunity Commission (EEOC) at 29 C.F.R. § 1625.2(a) that

purportedly interprets the ADEA as supporting a claim for

reverse age discrimination, because it conflicted with the

statute. 966 F.2d at 1228. Subsection (a) states that “It is

unlawful in situations where this Act applies, for an employer

to discriminate in hiring or in any other way by giving

preference because of age between individuals 40 and over.

Thus, if two people apply for the same position, and one is 42

and the other 52, the employer may not lawfully turn down

either one on the basis of age... .” 29 C.F.R. § 1625.2(a).

This provision is contrary to the plain language of the statute,

which indicates that the law does not cover claims brought by

younger workers over 40 that older workers were favored.

See Section LA., supra. As this Court held in Public Em-

ployees Retirement System v. Betts, 492 U.S. 158, 171 (1989),

“no deference is due to agency interpretations at odds with

the plain language of the statute itself.”

Moreover, interpreting this subsection to authorize reverse

age discrimination suits impermissibly creates a conflict with

the next section of the regulation. The regulation’s apparent

prohibition against any preferences for older workers con-

flicts directly with § 1625.2(b), which provides that “([t}he

extension of additional benefits, such as increased severance

pay, to older employees within the protected group may be

lawful if an employer has a reasonable basis to conclude

that those benefits will counteract problems related to

age discrimination.” 29 C.F.R. § 1625.2(b). In contrast to

§ 1625.2(a), the next part of the regulation asserts that there

are some situations, particularly in the context of employer-

provided benefits, in which it is perfectly appropriate for

employers to single out older workers to receive enhanced

benefits. The fundamental inconsistency between the two

sections in § 1625.2 thus creates a great deal of uncertainty

for employers as to whether they lawfully may offer addi-

tional benefits to older workers. The confusion makes

§ 1625.2(a)’s statements against any preferences for older

employees inherently unpersuasive, thereby precluding any

deference from this Court to them. See United States v. Mead

Corp., 533 U.S. 218, 228 (2001) (consistency and persua-

siveness of agency’s position are two factors relevant to

determining amount of deference courts should give).

B. Reverse Discrimination Claims Are Funda-

mentally Incompatible With The ADEA’s

Legislative History, Which Focuses On The

Particular Problems Faced By Older

Employees Relative To Younger Ones

The legislative history of the ADEA is replete with

explanations that the purpose of the bill was to promote

employment opportunities for older workers.’ The congres-

? See, e.g., H.R. Rep. No. 90-805, at 4, 6 (1967), reprinted in 1967

U.S.C.C.A.N. 2213, 2214-17.

12

sional debate accompanying passage of the ADEA reveals the

intent to combat inaccurate and harmful stereotypes of an

older worker as “an inflexible person, in physical decline,

capable of only low productivity, [which] bars the employer

from a fair evaluation of the applicant's actual ability and

performance record.” 133 Cong. Rec. H16,170 (daily ed.

Dec. 4, 1967) (statement of Rep. Olsen).

In fact, Congress deliberately chose not to establish an age

threshold lower than 40 for membership in the protected

class. Congress specifically felt “a further lowering of the

age limit proscribed by the bill would lessen the primary

objective; that is, the promotion of employment opportunities

for older workers.” H.R. Rep. No. 90-805, at 6 (1967),

reprinted in 1967 U.S.C.C.A.N. 2213, 2219. By recognizing

reverse discrimination claims under the ADEA, the decision

below similarly frustrates the primary goal of the ADEA to

protect older workers and must be reversed.

Subsequent amendments to the ADEA further evidence the

intent to protect older workers from discrimination in favor of

younger employees. When Congress amended the ADEA by

passing the Older Workers Benefit Protection Act of 1990

(OWBPA), P.L. 101-433, it was understood that the ADEA

did not require employers to provide the same benefits for

younger workers in the ADEA-protected class as older

workers. For example, in describing a “wide variety” of early

retirement incentives that were lawful under the ADEA even

prior to the OWBPA amendments, the Statement of Managers

that accompanied the Act noted that the ADEA allows “a plan

that gives employees who have attained age 55 and who retire

during a specified window period credit for 5 additional years

of service and/or age... .” 136 Cong. Rec. H8614, H8619

(daily ed. Oct. 2, 1990) (Statement of Managers). The exam-

ple is premised on the interpretation that the ADEA allows an

employer to limit employee benefit enhancements to workers

who are age 55 and older. In contrast, the Sixth Circuit's

:

.

:

13

interpretation would require that benefits be uniform for all

_workers in the ADEA-protected class. This result is inap-

posite with the ADEA’s legislative history demonstrating

Congress's intent to protect older workers from employment

discrimination because of the negative stereotypes associated

with their advancing age, stereotypes that are absent when an

employee is considered too young.

Moreover, the extensive legislative history on which this

Court relied in EEOC v. Wyoming, 460 U.S. 226 (1983), to

hold that the ADEA covered state and local governments also

supports the proposition that the ADEA was designed to

protect “older” workers vis-a-vis younger ones. The Court

specifically cited with approval the findings of a 1965 report

by then-Labor Secretary W. Willard Wirtz on older American

workers that showed age discrimination “was based in large

part on stereotypes unsupported by objective fact, and was

often defended on grounds different from its actual causes.

2.” Id. a 231.

The Secretary’s Report detailed the problems facing older

workers in the U.S., where over half of all employers used an

age ceiling from 45 to 55 when hiring new employees,

regardless of the applicant’s qualifications, and workers over

55 years of age were automatically excluded from over one

half of all job openings in private companies. Secretary's

Report, at 6. The Secretary also noted that workers age 45

and over were unemployed for eight weeks longer than

workers under age 45. /d. at 18. The Secretary’s conclusion

* United States Dep't of Labor, The Older American Worker—Age

Discrimination in Employment, Report of the Secretary of Labor to the

Congress Under Section 715 of the Civil Rights Act of 1964 (1965),

reprinted in Hearings on H.R. 10634 and Similar Bills Before the Select

Subcomm. on Labor of the House Comm. on Education and Labor, 89th

Cong., Ist Sess. 201-219 (1965) (hereinafter cited as “Secretary's

Report”).

14

that workers were having more difficulty obtaining new jobs

as they grew older thus was a compelling reason for enacting

the ADEA.

The same concerns that under.ay the Secretary's Report in

1965 remain valid for older workers today. According to

AARP, older workers, defined as those aged 55 and above,

typically continue to take longer than younger employees to

find a job. AARP, Update on the Older Worker: 2001 (Apr.

2002)." More specifically, job seekers aged 5O and over took

on average 50% longer to find a new job in 2002 than

workers under the age of 50.” Moreover, even when older

workers found another job, they were more likely to suffer a

pay cut than younger employees. While close to 55% of

workers younger than age 55 found another job in which they

earned the same or more than in their previous position, only

47% of workers age 55 or older could say the same.° These

data confirm that “older” workers continue to experience

more problems in the workplace than younger ones, and thus

support the ongoing need to interpret the ADEA to prohibit

only situations in which older workers are discriminated

against in favor of their younger colleagues.

*The report is available at hitp://www.research.aarp.org/econ/dd69

worker html. -

* Employment Policy Found., Tabulation of Census Bureau/Bureau

of Labor Statistics Current Population Survey (Nov. 2002) (micro-

data records public use file available at hitp://www-bls.census.gov/cps/

cpsmain.htm).

* Employment Policy Found., Tabulation of Bureau of Labor Statistics

data gathered by the United States Dep't of Labor, Employment &

Training Administration and reported in “Worker Displacement 1991-

2001” (Aug. 21, 2002).

15

C. The Negative Stereotypes That Congress

Intended The ADEA To Combat Are Absent

In Employment Actions That Benefit Older

Workers

This Court explicitly recognized in Hazen Paper Co. v.

Biggins, 507 U.S. 604 (1993), that Congress intended the

ADEA to protect older workers from inaccurate and dam-

aging stereotypes about their ability to work. In Hazen

Paper, the Court explained that “the very essence of age

discrimination [is] for an older employee to be fired because

the employer believes that productivity and competence

decline with old age . . . 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.” 507 U.S. at 610 (citation omitted).

This Court therefore ruled in Hazen Paper that an em-

ployer’s termination of an employee to prevent his pension

benefits from vesting was lawful under the ADEA, because

the termination was not based on negative stereotypes about

older workers. The absence of the offensive stereotype

against older workers thus meant the employer's conduct did

not violate the ADEA. “The prohibited stereotype (‘Older

employees are likely to be ___*) would not have figured in

this decision, and the attendant stigma would not ensue. The

decision would not be the result of an inaccurate and

denigrating generalization about age... .” /d. at 612.

Likewise, an employer that favors older workers over

younger ones is not acting based on inaccurate and negative

stereotypes about older workers, and therefore also has not

violated the ADEA. For this reason, the D.C. Circuit has

refused to infer unlawful age bias when a plaintiff failed to

show that a challenged employment decision was based on

disparaging stereotypes about older workers. In Paquin v.

Federal National Mortgage Association, 119 F.3d 23 (D.C.

Cir. 1997), the D.C. Circuit rejected the plaintiff's claim that

16

his employer's criticism that he lacked creativity and was

stubborn was evidence that he was terminated based on his

age. As the court noted, those opinions were not based on

negative stereotypes about older workers. 119 F.3d at 31. As

such, “a decision not ‘derived from stereotypical precon-

ceptions about older people[],’ does not support an inference

of age discrimination. . . . To prevail, Paquin must present

evidence that the statements in fact spring from stereotypes.”

Id. (internal citation omitted).

In this case, the lower court’s decision that the ADEA

supports a claim for reverse age discrimination fails to

advance the rationale behind the ADEA of combating the

harmful stereotypes that plague older workers. By prohib-

iting an employer from favoring older employees over

younger ones, the decision below leaves intact the erroneous

and damaging preconception that their advancing age makes

older workers less productive and valuable in the workplace,

the precise evil that the ADEA was intended to eliminate.

Because the decision below ignores the language and purpose

of the ADEA, it must be reversed.

Il. THE DECISION BELOW SEVERELY PREJU-

DICES EMPLOYERS BY SUBJECTING THEM

TO SIGNIFICANTLY MORE, AND POTEN-

TIALLY CONFLICTING, DISCRIMINATION

CLAIMS OVER PERSONNEL ACTIONS

The Sixth Circuit’s decision will increase significantly the

pool of potential claimants alleging age discrimination, and

thus the number of claims to which employers must respond.

Unlike the immutable characteristics covered by Title VII of

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

is a progressive condition that affects everyone. Most work-

ers eventually will attain the age of 40, joining the growing

class of individuals protected under the ADEA. On average,

11,684 people (5816 men and 5868 women) in the United

17

States will turn 40 every day in 2003.’ By expanding the

ADEA to include reverse age discrimination claims, the Sixth

Circuit allows every one of these workers to look at their

older coworkers in addition to younger ones as potential

comparators, vastly increasing the number of potential claims

they can make.

Collectively, amici’s member companies routinely make

and implement millions of employment decisions each year,

including hires, promotions, transfers, disciplinary actions,

terminations, and other employment actions. They devote

extensive resources to training, awareness, and compliance

programs designed to ensure that all of their employment

actions comply with Title VII, the ADEA, and other ap-

plicable legal requirements.

Nevertheless, each employment transaction involving a

worker who is age 40 or over is a potential subject of a

discrimination charge and/or lawsuit. This prospect is true

because each time an employer makes a decision to hire an

applicant or promote an employee, for example, there is

likely to be at least one candidate who was not selected for

the job. In many cases, there will be several candidates who

have been rejected. If a candidate is substantially older than

the individual selected, the candidate probably can establish a

prima facie case of age discrimination. The decision below

allows candidates who are substantially younger than the

person selected also to establish a prima facie case of age

discrimination as well, thereby vastly increasing the number

of individuals who may claim unlawful age discrimination.

Thus, following every hiring decision, every candidate who

was not selected can identify a comparator who is either older

’ Employment Policy Found., Tabulation of Census Bureau/Bureau of

Labor Statistics Current Population Survey (Nov. 2002) (microdata

records public use file available at /Attp://www.bls.census.gov/cps/

cpsmain.him).

18

or younger, and was treated differently. That means that

virtually every plaintiff will be able to establish a prima facie

case of discrimination, thereby shifting the burden to the

employer to articulate a legitimate, nondiscriminatory reason

for the employment action that the plaintiff may attempt to

show is a pretext. See McDonnell Douglas Corp. v. Green,

411 U.S. 792, 802 (1973).

The decision below could lead to absurd results. For

example, an employer that hires a 50-year-old from a pool of

applicants of various ages may receive multiple claims of age

discrimination, all challenging a single employment action.

Some plaintiffs may allege they were not hired because they

were too old, while others claim they were rejected because

they were too young. As long as a substantial age difference

existed between the person selected and the plaintiff, both

older and younger plaintiffs probably would establish a prima

facie case of age discrimination. Thus, an employer could be

sued for discriminating against both older and younger

applicants at the same time.

Although the prima facie test is not an onerous one, it does

weed out clearly unmeritorious claims. See Texas Dept. of

Community Affairs v. Burdine, 450 U.S. 248, 253 (1981).

Under the Sixth Circuit’s ruling, however, a prima facie case

would exist every time any comparator was either sub-

stantially younger or older than the plaintiff. Unless this

Court reverses the decision below, employers will be forced

to defend themselves against significantly more age dis-

crimination complaints. While these employers ultimately

may be able to articulate legitimate, nondiscriminatory

reasons for their employment actions, they still must undergo

a lengthy and expensive process to refute each charge of

discrimination. |

Moreover, as a practical matter, the Sixth Circuit’s decision

effectively eliminates an important defense for employers to

an age discrimination suit. One way an employer may defend

19

against a claim under the ADEA that it discriminated against

an older worker because of his age is to show that it actually

treated the older worker better than a younger one. In Stokes

v. Westinghouse Savannah River Co., 206 F.3d 420 (4th Cir.

2000), for example, the Fourth Circuit held the employer did

not violate the ADEA by requiring the 56-year-old plaintiff to

choose between receiving a lump-sum severance payment or

a special retirement option as part of a lay off. As the court

pointed out, the plaintiff was treated better than his younger

coworkers, who received only the severance benefit. /d.

at 426.

While this defense may defeat the older worker's age

discrimination claim, it also would prove a reverse discrim-

ination claim by a younger employee who is within the

ADEA-protected class under the Sixth Circuit’s decision.

The potential liability for reverse age discrimination created

by this defense may lead employers to forsake the defense

completely.” This Court must reverse the decision below to

* The Sixth Circuit’s recognition of a cause of action for reverse age

discrimination poses problems not only for employers defending against

disparate treatment cases, but also where a plaintiff alleges a disparate

impact based on age. This Court has never recognized that a disparate

impact cause of action exists under the ADEA. Hazen Paper, 507 U.S. at

610. Likewise, the Sixth Circuit has not ruled on the viability of a disparate

impact claim under the ADEA. That court, however, is currently con-

sidering on appeal a case that raises this issue. Sitko v. Goodyear Tire &

Rubber Co., No. 02-4083 (6th Cir.).

If the Sixth Circuit were to rule that disparate impact claims are

cognizable under the ADEA, allowing “reverse” age discrimination would

only complicate matters. To monitor fully every conceivable age dis-

parity, an employer would have to make a statistical comparison of the

impact of each selection criterion on employees of every age to employees

of every other age, both older and younger. This analysis would be overly

burdensome on employers, and ultimately meaningless. Since the age of

the employee population is constantly changing, developing an accurate

picture of the effect of a particular employment practice on employees of

different ages will be impossible.

20

avoid subjecting employers to an increased number of, and

potentially conflicting, age discrimination claims and cur-

tailing their ability to defend against these claims.

lil. THE DECISION BELOW JEOPARDIZES

EMPLOYER-SPONSORED BENEFIT PLANS

A. Employers Need Flexibility To Offer Enhanced

Welfare Benefits To Workers Who Need Them

The Most

1. Employers commonly offer enhanced wel-

fare benefits to older employees

The decision below jeopardizes the operation of employee

benefit plans offered by amici’s member companies. The

most profound effect of the Sixth Circuit’s ruling would arise

under employer welfare arrangements, including retiree

health programs. The ruling calls into question common em-

ployer practices that benefit the oldest workforce employees.

For example, employers may provide enhanced welfare

benefits (such as severance pay or medical coverage) to older

employees in the ADEA-protected class when there is a

reduction in the workforce or a fundamental change in the

employer’s benefit program. An employer that has a

reduction in force might provide a higher level of subsidy or

enhancement in medical coverage to older departing em-

ployees, e.g., age 50 or older, in an effort to help bridge these

workers until they become eligible to receive pension benefits

or Medicare coverage. Like General Dynamics, employers

forced to reduce future retiree health benefits may elect to

keep the same level of retiree health benefits or provide a

better transition benefit for older employees while applying

the new terms to all other workers.

The employer’s decision to provide greater benefits to

those workers who are at or closest to retirement age

recognizes that, as a practical matter, older workers may be

impacted more significantly by benefit changes. Workers on

21

the cusp of pension eligibility may have begun to plan their

retirement in anticipation of receiving retiree medical

coverage. While such voluntary enhancements or transition

benefits are highly beneficial to older workers, they would

appear to be unlawful under the Sixth Circuit’s ruling.

2. Limiting an employer’s flexibility to offer

enhanced welfare benefits to older employ-

ees may result in an overall reduction of

benefits

If the Sixth Circuit’s ruling stands, it could have the

perverse effect of further reducing the availability of retiree

health benefits for all workers. A 2002 nationwide survey of

435 large employers revealed that the cost of providing

retiree health benefits increased an estimated 16% from the

previous year, from $12.5 billion in 2001 to an estimated

$14.5 billion in 2002. The Current State of Retiree Health

Benefits: Findings from the Kaiser/Hewitt 2002 Retiree

Health Survey (Dec. 2002) (hereinafter referred to as the

“Kaiser/Hewitt Survey”). Together, these employers offer

health benefits to approximately 18.5 million workers and

family members and 5.4 million retirees and family members.

Id. at 58. For them, the increase in the cost of providing

retiree health benefits outpaced that of providing health

benefits to active workers. /d. at 10. Rising costs already

have caused some employers with fixed budgets to modify

their retiree health coverage. Over the past few years, many

large employers already have raised retiree contributions to

premiums and the amounts of the insureds’ deductibles and

co-payments. /d. at 37-38.

The increased likelihood that employers will face lawsuits

under the ADEA over any differential in their benefit plans,

including those that actually favor their oldest workers, will

*The survey is available at http://www.kff.org/content/2002/

20021205a/6061 v4 pdf.

22

exacerbate the pressure to control cost by eliminating these

programs altogether. Even if the employer ultimately pre-

vails, mounting a defense to an ADEA lawsuit can be

prohibitively expensive. |

No federal law requires employers to provide workers with

pension or health benefits, or prevents them from reducing or

eliminating completely such benefits. | However, many

employers voluntarily choose to provide such benefits to their

workers as a perquisite of employment. To minimize the risk

of lawsuits under the ADEA, prudent employers simply may

choose not to offer benefits that are likely to be challenged,

such as retiree health insurance. In fact, 13 percent of the

large employers surveyed already have terminated health

benefits for future retirees (often new or recent hires) in the

past two years, and 22 percent predicted that they were likely

to do the same in the next three years. Kaiser/Hewitt Survey,

at 37, 43. By exposing employers that provide retiree health

benefits to greater risk of litigation, the decision below may

drive more employers to scale back further their coverage or

abandon it altogether. This action would make it significantly

harder for older individuals to obtain adequate health insur-

ance coverage. Since older workers often must pay sig-

nificantly higher premiums for coverage under individual

health insurance policies than under an employer’s group

health plan, some individuals may find the insurance

prohibitively expensive, forcing them to become uninsured.

To avoid dramatically increasing the number of uninsureds in

this country, this Court must reverse the decision below to

preserve an employer’s flexibility to manage its voluntary

benefits programs.

B. Allowing Reverse Age Discrimination Claims

Could Negatively Impact Employee Benefit

Pension Plans

While the Sixth Circuit’s ruling affects retiree health and

employer welfare plans most dramatically, amici’s member

23

companies also have concerns about the operation of their

employee benefit pension plans if reverse age discrimination

is a cognizable claim under the ADEA. Under current law,

section 623(1)(1)(A) of the ADEA allows employee benefit

pension plans to condition the payment of normal or early

retirement benefits on the attainment of a certain age. 29

U.S.C. § 623(1)(1)(A). Presumably, this specific excep-

tion for pension plans would not be affected by the Sixth

Circuit's ruling.

Retirement plans may include other provisions contingent

upon age, however, that may not be covered by the exception

in § 623(1). For example, in defined contribution plans, such

as a “401(k)” or similar arrangements, some plans may limit

the ability to take in-service withdrawals before retirement to

participants who have attained age 50 or above. Another

example is the Internal Revenue Code provision requiring

certain tax-qualified plans holding employer securities to

allow participants who have attained age 55 and have 10

years of participation to diversify the assets in which their

accounts are invested. 26 U.S.C. § 401(a)(28)(B)(iii). There

may be uncertainty as to whether a plan that incorporates the

Internal Revenue Code § 401(a)(28) rule violates the ADEA

by not providing similar diversification rights to younger

workers in the ADEA-protected class.

In addition, the Sixth Circuit’s ruling also casts doubt on

another common practice that is recognized by Treasury

Department regulations. Many defined contribution plans

(including target benefit plans) are “age-weighted” so that

larger contributions are made for older participants than for

similarly-situated younger employees. See, ¢.g., 26 C.F.R.

§ 1.401(a)(4)-8(b). Whether plans that contain this feature

unlawfully discriminate against younger workers in the

ADEA-protected class is also unclear under the Sixth

Circuit's decision.

If, as the Sixth Circuit's rulings suggests, the benefits,

rights, and features in employee benefit plans must be

24

uniform for all employees age 40 and over, numerous plan

designs that have long been assumed to be lawful under the

ADEA now would need to be reconsidered. As with retiree

health plans, employers voluntarily offer pension plans to

their employees as an added fit of employment. The risk

that an employer may be sued over one of these pension plan

arrangements, however, may cause it to cut back or eliminate

the program all together. The end result may be a diminution

of the benefits that are provided to the oldest employees in

the workforce, a perverse outcome under a statute that was

intended to protect older employees. This Court must reverse

the Sixth Circuit's decision to avoid inadvertently causing a

reduction in the benefits that employers voluntarily make

available to older workers, which would only compound the

problems that older workers face in the workplace.

CONCLUSION

For the foregoing reasons, the decision of the court of

appeals should be reversed.

Respectfully submitted,

STEPHEN A. BOKAT

ROBIN S. CONRAD

ANN ELIZABETH REESMAN

DANIEL V. YAGER

ELLEN DUNHAM BRYANT KATHERINE Y.K. CHEUNG

NATIONAL CHAMBER Counsel of Record

LITIGATION CENTER, INC. TimoTHy J. BARTL

1615 H Street, N.W. MCGUINESS NORRIS &

Washington, D.C. 20062 WILLIAMS, LLP

(202) 463-5337 1015 Fifteenth Street, N.W.,

Suite 1200

Attorneys for Amicus Curiae Washington, D.C. 20005

The Chamber of Commerce (202) 789-8600

of the Unites States Attomeys for Amici Curiae

Equal Employment Advisory

Council and LPA, the HR

Policy Association

LYNN D. DUDLEY

Vice President and Senior

Counsel

AMERICAN BENEFITS COUNCIL

1212 New York Ave., N.W.

Suite 1250

Washington, D.C. 20005

(202) 289-6700

Attorney for Amicus Curiae

American Benefits Council

July 2003

CATHERINE L. CREECH

Davis & HARMAN, LLP

1455 Pennsylvania Ave., N.W.

Suite 1200

Washington, D.C. 20004

(202) 347-2230

Attorney for Amicus Curiae

American Benefits Council