Avoiding Pretext - Job Descriptions and EEOC Responses

A federal court of appeals recently upheld a jury verdict for an employee in an age discrimination claim.  The decision shows what happens when an employer explains a hiring or promotion decision by relying on a criteria not mentioned in the vacancy announcement.

National American University was hiring a director of admissions for its Rapid City, South Dakota campus.  The employee worked for the university and sought the promotion.  She was one of three finalists but was not offered the job when the two preferred candidates declined it.  Instead, the university broadened its search ultimately offering the job to a substantially younger candidate.

At trial, the University explained its refusal to promote the plaintiff on the ground that she lacked management experience.  While a director of admissions would seemingly need "management experience" the position vacancy announcements failed to mention it.

Worse, in its EEOC response, the University asserted the employee had "struggled" with her performance and had received "mediocre" ratings.  Yet, at trial, the University abandoned this explanation and its witnesses praised the employee's performance.

The lessons from the decision are pretty basic.  Make sure hiring or promotion decisions can be and are explained by reference to criteria stated in the job description.  While employers are not rigidly bound by what is in the position vacancy, it is a mistake to explain a promotion decision by citing criteria that are not in the job description.

The decision also illustrates the importance of making sure the response to an EEOC charge will be the reason asserted at trial.  It is often tempting, in responding to an EEOC charge, to "embellish" by asserting problems the employer had with the employee, even if the problems were not considered in reaching the decision at issue. If that is what the University did here, it backfired

Silently Revisiting Gross v FBL - Does the "Causation Standard" Make a Difference

I'm back.  The press of work and other good causes prevented me from updating the blog.  For that I apologize.

I was prompted to write a post because of a Sixth Circuit decision that came out today.  A teacher at a high school in Michigan sued the school claiming he had been retaliated against under the first amendment for having filed a prior lawsuit alleging harassment of his daughter by another teacher.  (While constitutional retaliation clams are sometimes different than statutory retaliation claims, those differences are unimportant here.)

What caught my eye was the court's description of the causation standard.  In 1977, in a case called Mount Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 285–86 (1977), the Supreme Court said that constitutional retaliation claims required the plaintiff to establish that the improper motive played a "substantial" or "motivating" factor in the decision.  The Court didn't explain but cited to a companion case decided the same day, Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U.S. 252 (1977), which explained, among other things, that the constitution did not require a "sole cause" showing but that the evidence in that case failed to show a racial bias motivated the decision.

Skipping forward to today, the Sixth Circuit set out the "substantial or motivating factor" standard from Mt. Healthy saying "we have interpreted this inquiry to mean that a motivating factor is essentially but-for cause—without which the action being challenged simply would not have been taken." (Quotations omitted.)

That caught my eye because  the 1991 amendments to Title VII - which said a plaintiff can prevail if he or she shows discrimination was a "motivating factor" - have led many to argue that "motivating factor" is a lower or lesser standard than "but for" causation.  Most court decisions simply assume that there is a difference.  (But see Harper, The Causation Standard in Federal Employment Law: Gross v. FBL Financial Services, Inc., and the Unfulfilled Promise of the Civil Rights Act of 1991, 58 Buffalo L. Rev. 69 (2010) (discussing difference but ultimately drawing unsupported conclusion that Congress must have  intended there to be a difference between a "motivating" and "substantial" factor).  The Supreme Court decision in Gross didn't help this by contrasting the Title VII language from the language in the ADEA: "Unlike Title VII, the ADEA's text does not provide that a plaintiff may establish a discrimination by showing that age was simply a motivating factor."  Gross v. FBL Financial Services, Inc., 557 U.S. ____ (2009).  Loose language read out of context is the bane of any jurist or lawyer.  Read in context, the Court seems to have been attempting to explain its holding - that the dual motive theory does not apply to the ADEA.


So what does this mean, practically? Anyone who thinks they can coherently explain the difference (or that there is a difference) between a "contributing", "motivating", "substantial", "causal" or "because of" / "but for" factor is trying to sell you the Brooklyn Bridge.  I've been practicing employment law for 20 plus years and would not begin to try and explain it.  Employers certainly shouldn't get way-laid by concerns over causation or motivation.

Impact of Gross on ADEA Claims

I cautioned earlier that the Supreme Court's decision in Gross v. FBL Financial shouldn't be taken by employers as dramatically making it harder for employees to prove age discrimination.  I have also said that newspaper reports saying Gross requires employees to prove age was the "sole" cause are dead wrong.

A recent decision by the  federal court of appeals in Atlanta (deciding appeals from Florida, Georgia and Alabama) illustrates that Gross doesn't  immunize an employer from its stupid mistakes and loose statements nor does it require employees to prove age was the sole cause of their firing.

A non-profit employed an older worker as a fundraiser.  She was moved to a different job for poor performance (instead of being fired - no good deed goes unpunished).  She was shortly later fired for poor performance in the new job.  The employee fought back by putting on evidence that her boss made the following age statements:

• “I need someone younger I can pay less"
• "you are very old, you are very inept. What you should be doing is taking care of old people. They really need you. I need somebody younger that I can pay less and I can control.”
• “[Plaintiff] is too old to be working here anyway.”

The employer tried to argue that under Gross, it should win because it would have fired the employee for poor performance, even if the decision had age issues (he denied making the statements).  The court didn't buy it, saying the jury had to decide whether age was the reason for the firing.

EEOC Proposes Definition of "Reasonable Factor Other Than Age"

In light of recent Supreme Court decisions construing disparate impact liability under the ADEA, the EEOC has issued a proposed rule meant to define what is a "reasonable factor other than age" or RFOA.  (This is one of the potential rules I mentioned in December.)

The EEOC's definition won't have a significant impact on the routine age discrimination claim most employers face.  It could, however, result in an increase in the number of disparate impact claims asserted in ADEA lawsuits, particularly in IRIF claims.

The RFOA defense only applies when the proof establishes that the employer has engaged in conduct that is "otherwise prohibited" by the ADEA.  In an intentional discrimination claim it will be unusual (but not theoretically impossible) for an employer to be able to show that its conduct is intentionally discriminatory but yet reasonable.  (Some "reasonable" factors are hard wired  into the ADEA and implementing regulations, most relate to employment benefits, allowing employers to "discriminate" against older workers in end result where the cost of providing the benefit is equal to what it costs for a younger employee).

So, the RFOA defense will appear most in disparate impact claims, where the employer has a facially neutral practice that adversely affects older workers.

The EEOC says that "a reasonable factor is one that an employer exercising reasonable care to avoid limiting the employment opportunities of older persons would use."  To decide this you look to various criteria.  I won't go deep into these criteria here.  They can be summed up as follows: An employer taking action that adversely affects employees should (1) make sure it is aware of the effect of the decision on older workers (indeed, on all classes), (2) evaluate the severity of the impact on older workers, (3) consider whether there is some other, less harmful, means of achieving the same goal, and (4) conduct training of managers on how to avoid age-stereotyping.

I said at the outset that the RFOA defense will apply primarily in disparate impact cases.  But as I was reading through the EEOC's comments, what struck me was that this rule will have a significant impact on reduction in force litigation when older employees are disproportionately laid off.

Employers need to realize that disparate impact age claims can be brought (in the same complaint that alleges intentional age discrimination) to challenge the result of any "practice" the employer adopts, including "practices" the employer does not "officially" adopt.   If there is a statistical disparity, it won't be too hard for an employee to argue that there is a  "practice" that causes the skewed statistics.  (One practice can be, the EEOC says, where the employer gives "supervisors unchecked discretion to engage in subjective decision making.")

At that point, the employer will need to be able to show, in an IRIF case, that the criteria used to select employees to be laid off were  "reasonable" and based on some factor other than age.  While the employer does not have to adopt an employment practice that has the least severe impact on older workers,ignoring ways to lessen the impact will not look good.  Employers must also remember that under existing EEOC regulations (not modified by this proposed rule): "A differentiation based on the average cost of employing older employees as a group is unlawful" (with certain exceptions for benefit issues).

New Regulations to Look for From the EEOC

On Monday, December 7, 2009, a number of federal agencies issued their "regulatory plans." A law called the Regulatory Flexibility Act requires agencies publish semiannual regulatory agendas in the Federal Register describing regulatory actions they are developing that may have a significant economic impact on a substantial number of small entities. These take two forms, a Regulatory Plan and a Regulatory Agenda, with the Regulatory Plan being a list of the most significant regulations the agency expects to issue in some form at some point in the future. The Regulatory Agenda/Plan are not used for announcing new rules (or pending rules). Rather, it is a complete list of what to expect from the agency.

The Agenda and Plan for each federal agency can be found at reginfo.gov. The site then links to the "Regulation Identifier Number" or "RIN" for the regulatory action.

The EEOC doesn't issue a great number of regulations. Half of the regulations under consideration are intended to modify existing regulations to conform to or clarify the effect of Supreme Court decisions. The other half implement new Acts of Congress.

One proposed rule the EEOC expects to issue will address "Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act." The EEOC describes the rule it is considering as:

On March 31, 2008, the EEOC published a Notice of Proposed Rulemaking (NPRM) concerning disparate impact under the Age Discrimination in Employment Act. 73 FR 16807 (March 31, 2008). In addition to requesting public comment on the proposed rule, the Commission asked whether regulations should provide more information on the meaning of "reasonable factors other than age" (RFOA) and, if so, what the regulations should say. After consideration of the public comments, and in light of the Supreme Court decisions in Smith v. City of Jackson, 544 U.S. 228 (2005), and Meacham v. Knolls Atomic Power Lab., 554 U.S. ___, 128 S. Ct. 2395 (2008), the Commission believes it is appropriate to issue a new NPRM to address the scope of the RFOA defense. Accordingly, before finalizing its regulations concerning disparate impact under the ADEA, the Commission intends to publish a new NPRM proposing to amend its regulations concerning RFOA.

On a related matter, the EEOC also expects to issue a final rule addressing the "Disparate Impact Burden of Proof Under the Age Discrimination in Employment Act." The EEOC explained:

the EEOC is revising this regulation [29 CFR 1625.7(d)] to conform to both Smith and Meacham. In the March 2008 NPRM, the Commission also asked whether its ADEA regulation should provide more information on the meaning of RFOA and, if so, what the regulations should say. After consideration of the public comments, and in light of the Supreme Court decisions in Smith and Meacham, the Commission believes it is appropriate to issue a separate NPRM to address the scope of the RFOA defense. This new NPRM will be titled "Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act." A Final Rule to be issued in October 2010, will cover the issues addressed in both NPRMs.

The EEOC expects to issue the RFOA and Disparate Impact rules in October. It will first, however, issue a proposed rule on the RFOA.

Turning to the ADA Amendments, I posted in September that the EEOC had issued a proposed rule on the new definition of "disability" added by the 2008 Amendments. The EEOC describes the regulatory action as:

The Americans With Disabilities Act Amendments Act of 2008 ("the Amendments Act") was signed into law on September 25, 2008, with a statutory effective date of January 1, 2009. EEOC proposes to revise its Americans With Disabilities Act (ADA) regulations and accompanying interpretative guidance (29 CFR part 1630 and accompanying appendix) in order to implement the ADA Amendments Act of 2008. Pursuant to the 2008 amendments, the definition of disability under the ADA shall be construed in favor of broad coverage to the maximum extent permitted by the terms of the ADA, and the determination of whether an individual has a disability should not demand extensive analysis. The Amendments Act rejects the holdings in several Supreme Court decisions and portions of EEOC's ADA regulations. The effect of these changes is to make it easier for an individual seeking protection under the ADA to establish that he or she has a disability within the meaning of the ADA.

The EEOC expects to issue the final rule in July.

Finally, the other significant regulation to look for will concern the Genetic Information Nondiscrimination Act ("GINA"). The EEOC issued a proposed rule in March but unfortunately failed to issue a final rule before GINA took effect on November 21, 2009. According to the agenda, the final rule should be issued this month.

I will try to cover the DOL's Regulatory Agenda/Plan in a later post.

Why Evaluations Must be Consistent

When I give talks and write about conducting reductions in force, I emphasize that current evaluations of an employee's performance (assuming performance is a factor in the layoff decision) must be consistent with the employee's past evaluations. No doubt, even good employees are laid off in a RIF but when the reason for the RIF evaluation is inconsistent with the prior evaluations, the employee has a much easier time in showing the RIF selection is pretextual.

An age discrimination decision involving the former Boeing commercial aircraft assembly plant in Kansas provides an example of the problem. Boeing sold the commercial manufacturing plant to a company that became known as Spirit Aerosystems. Spirit didn't have its own employees and didn't want to hire wholesale the existing crop of Boeing employees so it relied upon performance evaluations by Boeing managers. One of the employees ("Woods") who wasn't hired by Spirit sued Boeing and Spirit.

In his last annual performance evaluation before the sale, Woods received "met all expectations" ratings in all categories. The supervisor noted there had been few errors in Wood's work areas and that he had "performed well." In comparison to the others within Woods' group, his rating was the same as two workers, but not as good as two other workers.

Before Spirit took over, it asked the Boeing managers to review the employees and make recommendations regarding who should be hired. Woods was not hired but three employees in his job classification were (this is why it is significant that Woods rating was the same as two others workers, one of whom was hired by Spirit). This time, Woods' performance was described as "limited skills/low quality/ low productivity/marginal teaming abilities." Explaining this, the manager said that Woods didn't know how to use the software as well as the others and that he rated Woods quality as low because of Woods' failure to detect several errors in products he had checked. Of course, Woods was the oldest of the three employees (Woods included) who had scored "met all expectations" on the annual evaluation and Spirit hired the youngest of these three.

This was a close case. Whether or the decision is correct, the reason the court of appeals held a trial was necessary was because of the inconsistencies between the ratings on the annual evaluation and the evaluation prepared for Spirit.

And, to echo what I said in a prior post, employers need to realize, whatever is said by the ill-informed news media, that Gross v. FBL Financial doesn't make it easier to discriminate against older workers.

Why Consistent and Accurate Explanations for Firing are Crucial

A decision out of New York last week illustrates why employers should provide consistent and accurate explanations for their decisions.

Cornell University taught industrial and labor relations to working practitioners at various locations around New York State. One of the instructors was Margaret Leibowitz, who was hired on a contract basis. When the University refused to renew her contract, she sued for age and sex discrimination (and several other claims which I will ignore).

Ms. Leibowitz's job required her to travel from New York City to Ithaca regularly and the funds the University paid her for travel were a regular source of friction. The Dean described Leibowitz requests as "forceful," "demanding," and "pushy." (There was also some hint that male employees also regularly asked for increases in their travel expenses without having problems or being fired.) The Dean also asserted that Leibowitz had "burned bridges" and had "bad blood" with other University personnel, though there was some question about whether these personality conflicts were too old and whether similar conflicts with male employees had been overlooked.

So when it came down to whether to renew Leibowitz contract, the University decided it could not afford her. Ms. Leibowitz was not fired immediately but was told she would not be back after the end of the following school year.

Perhaps the University could have built a case for refusing to renew her contract because of the friction she seemed to generate, but instead, the University defended the non-renewal by saying that their budget couldn't afford her and her travel expense demans. Having made that decision, the University then refused to permit her to move into another position, going so far, the court said, as to fire a Director who made a "not valid" offer of employment to Ms. Leibowitz.

Several things sunk the University's decision. Overall, however, the University's fundamental problem seems to have been that it tried to shoe-horn what could and perhaps should have been a justifiable "termination" into a reduction-in-force mold.

First, while the University demonstrated that it non-renewed Leibowitz due to real "budgetary issues" the evidence also showed that the budget concerns significantly diminished during her final school year and that the University had funding to hire 12 new employees during this time. When I do talks about reductions in force, one of the first things I tell folks is to accurately and consistently explain the reason why a reduction is needed. (I also caution employers about hiring into positions that impacted employees could perform.) Of course, courts don't ordinarily question why a RIF is necessary but the court will examine evidence showing that the employer's actions were not really consistent with budgetary issues.

Second, unwise statements in an e-mail didn't help the University's case. Shortly before the University told Leibowitz it was not renewing her contract, she met with an associate dean about the travel expenses issue. After the meeting, the associate dean sent an e-mail which said "Other than my mention of budget problems, I did not offer any inklings of what is yet to come! Good luck on that one; will be a tough meeting, but will be a good investment." The problem was that the Dean maintained he was still evaluating whether the university could afford to retain Leibowitz. So, the e-mail, which was unwise to begin with, became concrete evidence of inconsistencies that the plaintiff could exploit in getting the appeals court to reverse summary judgment.

The final (major) problem was that while the University characterized its decision as a layoff, it then prevented Leibowitz from finding other work within the University system (at other satellite locations). Firing the director who made a "not valid" offer of a job to Leibowitz was pretty heavy handed, but it was not all that smart to justify refusing to transfer Leibowitz because of perceived personality conflicts that were arguably stale and did not seem to matter when male employees were transferred.

Of course, it is well settled that an employer has no duty to transfer an employee to another position in a reduction in force. But it is not smart for an employer to take action to prevent an impacted employee from obtaining another available position.

There was no real doubt that the University had real budget issues. Its problem was that it used those real budget issues to fire an employee it perceived as a problem rather than relying upon a methodical selection process that accurately evaluated which employees should be laid-off. In short, if an employee is truly a problem, deal with the problem. Don't seize upon "budget issues" as a shortcut to getting rid of a headache.

Communicating without Referring to Age

I'm working on the paper I'll give for Kramer Rayson LLP's Labor and Employment Seminar on October 1, 2009. I came across a recent age discrimination decision from the federal court of appeals in St. Louis (the Eighth Circuit) that caused my jaw to drop.

The employee was the director of an assisted living center and, when she was terminated, she attributed it to her age. She alleged, the decision stated, that the CEO said in meetings that the assisted living facility should:

be a "youth oriented company." He stated that "there was no room for dead wood," that Silver Oak was a "young company" that "enjoy[s] hiring energetic people," and that "if you can't keep up, you're going to get left behind." He also remarked that Silver Oak was "missing the boat by not hiring more younger, vibrant people because they would last longer and they would have more energy and be willing to work more hours," and that employees "should start looking over applications better and try to consider hiring younger people."

There were more similar statements alleged but you get the picture.

The point the court made, which is important, was that some of these statements were "open to interpretation." Specifically, a "'desire to rid the company of "dead wood' could be a legitimate preference to terminate unproductive workers regardless of age" but when uttered by the same manager who made other, overtly ageist statements, the court had to assume even the "open to interpretation" statements referred to an employee's age.

Of course, the court of appeals was deciding whether the age claim should be dismissed prior to a jury trial so it had to resolve any factual disputes in the employee's favor. For all we know the CEO will flatly deny making the ageist statements but would admit to saying the "dead wood" comment. Still, the point is that employers should be careful to never combine references to age (including relative age) with otherwise legitimate assessments of an employee's performance or the needs of the company.

What does Gross Really Mean for Employers?

Gross is, if you don't know, today's U.S. Supreme Court decision which has been heralded with the following sensational (at least in this context) headlines:

Business Gets Stronger Hand in Age Cases (Wall Street Journal)

Supreme Court makes age bias suits harder to win (L.A. Times)

Worker Age-Bias Suits Limited by U.S. Supreme Court (Bloomberg)

Not surprisingly, one senator (Leahy) has already called for its reversal, accusing the Supreme Court of "overreaching" and disregarding precedent.

Employers might think from these headlines that the Supreme Court outright abolished age discrimination altogether.

But focusing, as I try to do, on how the decision actually impacts employers, I would be hard-pressed to say that it changes much of anything.

For quite a while (as in decades) the Supreme Court has recognized, in all sorts of discrimination cases (including NLRA cases a nd constitutional retaliation claims) that employers don't always act with singular motives and that multiple motives usually go into any one employment decision. Sometimes one of these motives is illegal.

For example, an employee who misses a lot of work may justifiably be fired, but suppose part of the reason is that the employee is pregnant. Either motive, alone, might have led to the firing. A legitimate motive is mixed into an illegitimate one. So how does this get sorted out? Badly, in most cases.

Twenty years ago, a divided Supreme Court decided a sex discrimination case against Price Waterhouse brought by a female who had not been promoted to being a partner. She argued her sex played a role and there was some evidence that some of the voting partners had a stereotyped view of how a female should look and act as a Price Waterhouse partner. The Court held the female could sue under Title VII even if she could only show her sex played some role, though not a but-for role, in the vote. It also held, however, that if Price Waterhouse showed she would not have been made a partner despite the stereotyped statements, she would lose.

Congress was OK with the idea that an employee could win a sex discrimination case with only showing a mixed motive but it didn't like the idea that the employer who was motivated by the employees sex to some degree could get off scott free. Congress amended Title VII, giving us the "motivating factor" standard and providing that an employee can partially win a mixed motive case. Congress meant well, no doubt, but the statute has badly confused judges, jurors and lawyers. While Congress amended Title VII, a similar change was not made to the ADEA.

Ostensibly, in Gross, the Supreme was being asked how Price Waterhouse applied to an ADEA claim, that is, what does it take to create a mixed motive case as opposed to a single motive case. The Court, having seen the mess Price Waterhouse created, responded by saying, "enough." We screwed up in Price Waterhouse, we wish we had never heard of a mixed motive. Saying the Price Waterhouse "mixed motive" standard was not compatible with the ADEA, the Court held that an employee claiming age discrimination must prove age was the motive for the decision, not just one of several motives. Age had to have made a difference.

Gross (actually his lawyers) wanted to be able to argue to a jury that the employer had more than one motive for firing him (and that one motive was his age) because, under the cases, that meant the jury would then be told that the employer bears the burden of proving the employee would have been fired even without the illegal motive. Employee lawyers like to press this point because it give an imprimatur to the jury's natural inclination that the employer should justify its decision rather than require the employee to prove they were discriminated against.

Lawyers, you see, love to argue over who has the "burden of persuasion" a topic that, in the real world, makes utterly no difference whatsoever. It is sort-of like the saying, "close only counts in horseshoes." In a legal case, the burden of persuasion only affects what happens when proof is missing and what happens when the evidence is equally divided. Take, for example, our situation above, where the pregnant employee is fired for missing work. The employee could prove sex motivated the decision by showing others who were not pregnant missed as much or more work and were not fired. The pregnant employee bears the burden of persuasion here - it is not up to the employer to prove that it treated all other employees, pregnant and non-pregnant, equally. Of course, if the evidence is there, you can bet that a smart employer's lawyer will put on this evidence of equal treatment. Frankly, I win a lot of cases because the other side fails to ask for this kind of evidence in discovery. Forget about the equally divided cases, that is akin to counting angels on the head of a pin.

To bring this to a resolution, today's decision holds the mixed motives analysis doesn't apply to age discrimination claims. Effectively, that means Price Waterhouse is dead. Good riddance.

Don't celebrate just yet. It may make an age case harder to prove in a legal sense but a strong age case - or even a not so strong age case - will still let a jury find discrimination. Even under Gross decision, an employee simply needs to show that had the employee been substantially younger (5 to 10 years, depending on the court you are in) the decision would have been different. That can be shown in any number of ways, as I've discussed here for some time.

Don't think this means you can start being stupid. Proper documentation, treatment of employees, and investigations are every bit as important today as they were yesterday.

Unfortunately, it probably means Congress will now amend the ADEA to incorporate the mixed motive language from Title VII. While could slap together something, amending the ADEA the right way won't be easy. Age discrimination is unlike sex or race discrimination in many ways. Pensions and other benefits turn on age, in part. It took several years for the impact of the ADEA on those and other issues to be sorted out (the Supreme Court, only last year, had to sort out how the ADEA affected certain disability retirement issues).

Practically, Title VII is meant to combat outright racial and sexual bias. Age discrimination, however, is really more about combatting the stereotype that older workers are more costly and less productive. Some, in the younger generation, may have an outright bias against older folks but by and large most recognize that we will all be older someday. Age matters, in some situations, and hopefully someone in Congress will realize this.