Articles

ADEA Expansion

December, 2018

SUPREME COURT EXPANDS ADEA’S APPLICATION TO GOVERNMENT

The U.S. Supreme Court has extended the reach of the Age Discrimination in Employment Act (ADEA) to all states and municipalities, regardless of size, in a unanimous decision that will make it harder for towns to lay off older workers.  Mount Lemmon Fire District v. Guido, 138S.Ct. 1165, 2018 U.S. LEXIS 1479 (2018).

 The ruling also may result in individual liability under the ADEA for company employees.

Prior to the Court’s ruling, a majority of appeals courts had ruled that small public employers were not covered by the law.  However, the Supreme Court held that the ADEA applies, like the Fair Labor Standards Act, to all government employees, regardless of size.

The ADEA prohibits employment discrimination against workers who are 40 or older.

In Mount Lemmon, two laid off firefighters brought an ADEA claim against the Mount Lemmon, Arizona Fire District.  The District had 11 full-time employees.  It fired the two oldest, age 46 and 54.  The employer argued that the ADEA did not apply because it was too small an employer to qualify as an employer under the law.

The ADEA defines “employer” as a “person engaged in an industry affecting commerce who has 20 or more employees … The term also means (1) any agent of such a person and (2) a state or political subdivision of a state.”

Writing for the Court, Justice Ruth Bader Ginsburg noted that the question of coverage boiled down to whether “also means” added new categories to the definition of “employer” such that small employers were covered, or if it merely clarified that states and localities are a type of “person” included in the first sentence of the definition. 

The Court concluded that it meant the former, even though the 7^th, 8^th, and 10^th circuits had reached the opposite conclusion.  But the 9^thCircuit had ruled that the ADEA covered state and local governments regardless of size, which was consistent with 30 years of EEOC interpretation.

The high court’s decision means the ADEA will have a broader reach than Title VII of the Civil Rights Act of 1964, which applies only to employers, private and government, that have 15 or more employees.

The Supreme Court’s decision also means that the technical requirements of the Older Workers Benefits Protection Act (OWBPA), which amended the ADEA in 1990, will apply to state and local governments. 

If releases from age-discrimination claims are used in exchange for severance pay, employers must comply with the OWBPA to waive ADEA claims.  Such a waiver must:

• Be written in a manner that can be clearly understood;
• Specifically refer to rights arising under the ADEA;
• Advise the employee in writing to consult with an attorney before accepting the agreement;
• Provide the employee with at least 21 days to consider the offer;
• Give an employee seven days to revoke his/her signature;
• Not include rights and claims that may arise after the date on which the waiver is executed.

During workforce reductions or voluntary exit incentive programs, two more requirements must be met for releases to be valid: (1) the employer must publicly identify the exiting employees, and (2) the employees who are leaving must be informed in writing of the job titles and ages  of all those singled out for leaving, along with employees in the same job classification or unit who were not selected for departure.

With respect to individual liability under the ADEA, the ruling may make it easier for plaintiffs to bring claims against individuals for direct liability under the ADEA.  The Court’s interpretation of the phrase “also means” indicates that courts may find that individual supervisors are agents of the employer and covered by the Act.

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