Tuesday, November 6, 2018

Supreme Court Holds that ADEA Claims Apply to All Government Entities Regardless of Size

This morning a unanimous Supreme Court ruled that the provisions of the Age Discrimination in Employment Act apply to all governmental employers regardless of size.   Mt. Lemmon Fire District v. Guido,  No. 17-587  (11-6-18).   Thus, a fire department with fewer than 20 employees would be subject to ADEA claims challenging its reduction in force.   The Court found that the amendment of the ADEA adding government subdivision liability was more similar to the amendment of the FLSA, which applies to all governmental employers regardless of size, than to the amendment of Title VII, which only applies to employers – including governments – with more than 15 employees.  This is consistent with how the EEOC has traditionally interpreted the statutes, but is contrary to a 1990 Sixth Circuit holding (governing Ohio).  The Court’s holding was based on the different language used to amend the ADEA to include governments because the phrase “the term also means” typically is interpreted to create an additional, separate category than to modify or clarify a prior term.
According to the Court’s opinion, the defendant fire district laid off its two oldest full-time firefighters as part of a budgetary reduction in force.  The plaintiffs filed suit challenging their termination under the ADEA.  The employer moved to dismiss on the grounds that, with fewer than 20 employee, it was not subject to the ADEA.
When originally enacted, neither Title VII nor the ADEA covered state or local governmental entities.  However, Title VII was amended to include governmental employers in 1972.  The ADEA and the FLSA were amended two years later to include local and state governmental entities.   
Following the amendment, Title VII defined employers to include “persons”: “[t]he term ‘employer’ means a person engaged in an industry affecting commerce who has fifteen or more employees . . . .”  42 U. S. C. §2000e(a)–(b).  In turn, “persons” was defined to include governmental employers: “[t]he term ‘person’ includes one or more individuals, governments, governmental agencies, [and] political subdivisions,”  as well as other specified entities.  Thus, all employers must have 15 or more employees and can include governmental entities.
In contrast, the ADEA defines employers differently:
The term ‘employer’ means a person engaged in an industry affecting commerce who has twenty or more employees . . . .  The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State . . . .
29 U. S. C. §630(b) (emphasis added). Thus, the Court was faced with deciding whether the ADEA’s failure to define “person” as it did in Title VII to include governmental entities meant that governmental entities were not subject to the 20-employee threshold that applied to other persons. “Does “also means” add new categories to the definition of “employer,” or does it merely clarify that States and their political subdivisions are a type of “person” included in §630(b)’s first sentence?”  In other words, does the “term” refer to “employer” or to “person” in the preceding sentence?
In further contrast, the FLSA was amended to define covered employers to include: any person acting directly or indirectly in the interest of an employer in relation to an employee and includes a public agency, but does not include any labor organization (other than when acting as an employer) or anyone acting in the capacity of officer or agent of such labor organization.  29 U.S.C. §203(d).   Further, “[p]ublic agency” means the Government of the United States;  the government of a State or political subdivision thereof;  any agency of the United States (including the United States Postal Service and Postal Regulatory Commission), a State, or a political subdivision of a State;  or any interstate governmental agency. Id. at §203(x).
In interpreting the three different definitions of “employer,” the Court based its ruling on a number of factors.  “First and foremost, the ordinary meaning of ‘also means’ is additive rather than clarifying.”    “Also” is generally understood to mean “in addition to” or “besides” or “likewise.”  It can be read to create an additional category of employer.   In other statutes, “also means” is generally interpreted to recognize separate and additional categories from the earlier categories.   The Court had previously held that the ADEA did not violate state government’s Tenth Amendment immunity and noted in that it applied to employers with so many employees and to state and federal governments as though governments were never subject to the numerical threshold.  
Second, reading the statute otherwise would create a “strange” result by requiring a 20-employee threshold for persons and government entities, but not for agents, “a discrete category that, beyond doubt, carries no numerical limitation.”  Why would “agents” be included as a separate category if they were required to also employ 20 employees?
Third, the Court rejected the argument that the ADEA should be interpreted to be consistent with Title VII because the statutes utilized different language to define their coverage.  Rather, the Court found the ADEA language to be more similar to the FLSA, on which some of the ADEA is based.  Governmental employers are covered by the FLSA regardless of size.   For that matter, however, “persons” are also covered by the FLSA regardless of workforce because the FLSA relies on a different threshold for its coverage (i.e., gross volume of sales) that is unrelated to the number of individuals employed.   Nonetheless, the Court did not seem to consider that fact.  
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney