Price Waterhouse: Alive and Well Under the Age Discrimination in Employment Act - H. Lane Dennard, Jr. and Kendall L. Kelly

• Publication year: 2000

Price Waterhouse: Alive and Well Under the Age Discrimination in Employment Actby H. Lane Dennard, Jr.^* and

Kendall L. Kelly^**

I. Introduction

Judicial application of the Age Discrimination in Employment Act of 1967¹ ("ADEA") may be the most divergent of the employment discrimination laws because the ADEA is a hybrid of two statutes: Title VII of the Civil Rights Act of 1964² ("Title VII") and the Fair Labor Standards Act of 1938³ ("FLSA"). The ADEA incorporates only selected portions of each of these statutes.⁴ For example, the general prohibition against age discrimination contained in the ADEA parallels the substantive provisions of Title VII, while the remedial provisions mirror, at least in part, the FLSA. Courts, however, have generally approached the ADEA in the same way as they approach Title VII because of the statutes' shared goal of prohibiting discrimination.

However, this similarity of approach changed when Congress passed the Civil Rights Act of 1991,⁵ amending Title VII and other civil rights laws. Although the amendments to Title VII were broad, Congress made only one express change to the ADEA's procedural provisions. The courts, therefore, have been left to interpret congressional silence with respect to the ADEA's substantive provisions, such as the applicability of Price Waierhouse v. Hopkins,⁶ a Supreme Court case overruled in part by the 1991 amendments to Title VII, in "mixed-motive" discrimination cases.

The authors of this article argue that Price Waterhouse still applies to ADEA cases despite the fact that the Civil Rights Act of 1991 overruled parts of that decision as applied to Title VII. The narrower purpose of the ADEA itself, as described by the Supreme Court in Hazen Paper Co. v. Biggins,⁷ and the ADEA's origins in the FLSA, differentiate the ADEA from Title VII, especially with respect to attorney fees, and support the continued vitality of Price Waterhouse in ADEA cases. Part II describes the changing demographics in the United States and how a growing pool of older workers necessarily increases the importance of the ADEA. This section also focuses on the number of ADEA charges filed with the Equal Employment Opportunity Commission ("EEOC"). Part III analyzes the origin of the specific provisions of the ADEA and discusses the differences between the ADEA and Title VII resulting from the ADEA's hybrid construction and origins in the FLSA. Part D7 reviews the evidentiary burdens of proof in ADEA cases and examines the mixed-motive analysis in particular. This article concludes with the authors' contention that Price Waterhouse, as applied to the ADEA, survives the 1991 amendments to Title VII because of Congress's silence as to the role of mixed-motive analysis under the ADEA, the differing structures of the remedies provisions under the ADEA and FLSA in contrast to Title VII's construction, and the different remedial goals of the ADEA.

II. The Changing Demographics of the United States Workforce

A. An Aging Workforce

The recent tightening of the labor market in the United States has encouraged many employers to recruit older workers. As a result, workers in their fifties and sixties are finding jobs more easily. Moreover, older workers are expected to continue to participate in the workforce in growing numbers.⁸ This older workforce is a result of the large baby-boom generation which completed its entry into the workforce in the late 1970s and early 1980s. Because the workforce will have an ever-increasing pool of ADEA-protected employees as potential plaintiff's, the ADEA is certain to continue to figure prominently in equal employment law litigation.

Despite the current boom in the U.S. labor market and the strength of the economy, however, restructuring and reorganization continue to impact many employers.⁹ During the first two months of 1999, there were more job-cut announcements than there were during a comparable period in 1998.¹⁰ Because many employers will continue to experience restructuring and reductions in force, the ADEA will continue to figure into these workforce changes.

B. EEOC Statistics

Despite the aging of the American workforce, the ADEA represents a declining percentage of the total employment discrimination charges

724 filed with the EEOC.¹¹ For example, charges alleging race discrimination and sex discrimination have consistently exceeded those filed under the ADEA.

Total Number of Individual Charge	Number of Individual	% of Total
Filings--All Types	ADEA Charge Filings	Charges
1991	63,898	17,550	27.5
1992	72,302	19,573	27.1
1993	87,942	19,809	22.5
1994	91,189	19,618	21.5
1995	87,529	17,416	19.9
1996	77,990	15,719	20.2
1997	80,680	15,785	19.6
1998	79,591	15,191	19.1
1999	77,444	14,141	18.312

While EEOC statistics do not yet reflect the impact of the aging workforce, employers have started to feel the monetary effect of ADEA claims. In 1996, for example, employers paid $40.9 million in reported settlements of ADEA claims, an increase of $13.6 million since 1990.¹³

III. Elements of the ADEA

A. Substantive Provisions

The ADEA applies to private sector employers with twenty or more employees,¹⁴ labor unions, employment agencies, and the federal government.¹⁵ The law also protects U.S. citizens aged forty and above employed overseas by American corporations or by foreign corporations controlled by an American employer.¹⁶

The ADEA prohibits discrimination against individuals forty years of age or older.¹⁷ In that sense, the ADEA mirrors Title VII in prohibiting discrimination in employment.¹⁸ Reverse age discrimination is not barred by the ADEA because employees are not protected until they reach age forty. A person forty years of age or older, however, can allege age discrimination against an employer who gives preferential treatment because of age to younger employees also within the protected age category.¹⁹

The ADEA's prohibition of discrimination against applicants or employees based on age applies to all aspects of employment including: hiring, discharges, treatment during employment, advertising, and retaliation. Therefore, employers are prohibited from the following:

1. failing or refusing to hire or discharging any individual or otherwise discriminating "against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age;"²⁰

2. limiting, segregating or classifying "employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his or her status as an employee, because of such individual's age;"²¹

3. reducing the wage rate of any employee in order to achieve ADEA compliance;²²

4. discriminating against an employee or applicant for employment because such individual has opposed any practice made unlawful under the ADEA or because such individual has made a charge, testified, assisted, or participated in any manner in an ADEA investigation, proceeding, or litigation;²³

5. printing or publishing any notice or advertisement relating to employment by such an employer "indicating any preference, limitation, specification, or discrimination, based on age;"²⁴ or

6. establishing or maintaining an employee pension benefit plan which requires or permits, in the case of a defined benefit plan, the cessation of allocations to an employee's account or the reduction of the rate of an employee's benefit accrual,²⁵ or "in the case of a defined contribution plan, the cessation of allocations to an employee's account,

or the reduction of the rate at which amounts are allocated to an employee's account, because of age."²⁶

An employer can avoid liability under the ADEA by proving any of the following: age is a bona fide occupational qualification; the adverse action was based on a reasonable factor other than age;²⁷ observance of a bona fide seniority system;²⁸ observance of a bona fide benefit plan;²⁹ or "discharge or . . . discipline [of] an individual for good cause."³⁰

While these substantive provisions are rooted in Title VII, the remedial and procedural provisions of the ADEA have their origins in the FLSA.

B. Remedial and Procedural Provisions

1. Individual Remedies. The ADEA's remedial provisions mirror those provided in the FLSA.³¹ For example, in Lorillard v. Pons,³² the Supreme Court stated that Congress's decision to enforce the ADEA in accordance with the powers, remedies, and procedures of the FLSA evidences congressional intent to allow jury trials in ADEA cases.³³ Therefore, in an action for damages brought under the ADEA, an individual claimant is entitled to a jury trial on factual issues,³⁴ regardless of whether equitable relief is sought.³⁵ Despite this established right to a jury trial under the ADEA, an individual suing under Title VII did not have a similar right until the Civil Rights Act of 1991 allowed for a jury trial in cases where a plaintiff claims compensatory or punitive damages.³⁶

A plaintiff prevailing on a claim of discriminatory discharge under the ADEA is generally entitled to both back pay and reinstatement to his or her former position.³⁷ Where reinstatement is not feasible or is inappropriate, the plaintiff may be entitled to prospective relief, commonly referred to as "front pay." However, a defendant may limit the plaintiff's damages by offering the individual reinstatement to his old job or a substantially equivalent job. If a reasonable curative offer from the defendant/employer is rejected, the defendant's liability for continuing back pay ceases and the plaintiff forfeits the right to reinstatement or front pay.³⁸ The Supreme Court has reasoned that the defendant's liability ends "if [the plaintiff] refuses a job substantially similar to the one he was denied."³⁹

A willful violation of the ADEA, moreover, entitles the plaintiff to an award of liquidated damages in...