Sitting en banc, the Eleventh Circuit Court of Appeals recently issued a ruling that affects whether job applicants may bring disparate impact claims in discrimination lawsuits under the Age Discrimination in Employment Act (ADEA). In Villarreal v. R.J. Reynolds Tobacco Company (October 5, 2016), the court concluded that “the whole text of the Act makes clear that an applicant for employment cannot sue an employer for disparate impact because the applicant has no ‘status as an employee.’”

The applicant, Richard Villarreal, applied for a sales position with R.J. Reynolds at the age of 49 and was not selected. Villarreal did not inquire about his application or find out that he was not selected for the job for over two years when lawyers contacted him and told him that R.J. Reynolds had discriminated against him on the basis of his age. Villarreal filed suit against R.J. Reynolds and alleged that hiring contractors for Reynolds screened him out from the applicant pool using company guidelines that identified target sales candidates as “2-3 years out of college” who “easily adjusts to change.”

Villarreal’s complaint alleged both disparate treatment (which Villarreal voluntarily dismissed) and disparate impact in violation of the ADEA. He also argued that he had alleged facts entitling him to equitable tolling of his disparate treatment claim.

Disparate Impact

Regarding the disparate impact claim, the court focused on the specific language of section 4(a)(2) of the ADEA and concluded “that the whole text of the Act makes clear that an applicant for employment cannot sue an employer for disparate impact because the applicant has no ‘status as an employee.’” The court further explained that “the plain text of section 4(a)(2) covers discrimination against employees. It does not cover applicants for employment.”

Section 4(a)(2) reads “it is unlawful for an employer . . . to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.” Joined partially by seven other judges, Judge William Pryor, Jr. identified “or otherwise,” as the statute’s key phrase that “operates as a catchall” clearly indicating Congress’s intent to make the first part of the sentence a subset of the latter (i.e., adversely affect his status as an employee, etc.), and consequently only protecting an individual who has status as an employee.

Equitable Tolling

In the second issue raised in the case, the court held that the plaintiff was not entitled to equitable tolling of his undisputed claim of disparate treatment under the ADEA due to his lack of inquiry regarding his application and his failure to pursue his rights diligently.

Dissent

In a vigorous dissent, at one point describing the majority as “just plain wrong,” Judge Beverly Martin disputes the literal reading of the majority. Noting that this decision makes the Eleventh Circuit the first court of appeals to restrict claims that had previously been “used by governing agencies since 1968, she does not find ambiguity but rather holds that the same literal interpretation arrives at the opposite result. Judge Martin further argues that even though she does not see ambiguity, it must exist as the 11 judges read the statute to mean 3 different conclusions. When this occurs, she notes that courts should “defer to the interpretation given by the agency charged with enforcing the statute,” and the EEOC has historically read the ADEA to include job applicants.

Judge Martin also rejected the majority’s equitable tolling decision. Relying on plaintiff’s statement that he had no knowledge or means to know of R.J. Reynolds internal hiring directives, she argues that the time period should not have begun to run until after the plaintiff had knowledge of the discrimination and that equitable tolling should have been applied.

Practical Impact

In the legal community, reaction to the decision is split and the plaintiff’s legal team is considering a request to the Supreme Court for review. Practically speaking, given the unsettled questions of law raised by this decision, employers in the Eleventh Circuit should not rely on it to alter their hiring practices. Presently, the decision may serve as a strong defense against an applicant’s age discrimination claim, but prudent employers will continue to avoid hiring practices that negatively impact older applicants.