Gross v. FBL Financial Services, Inc., Age Discrimination Cases Under the ADEA
On June 18, 2009, a sharply divided Supreme Court issued its decision in Gross v. FBL Financial Services, Inc., No. 08-441. The 5-4 decision establishes that plaintiffs pursuing claims of age discrimination under the federal Age Discrimination in Employment Act (ADEA) will be held to the more stringent “but for” standard of proof than plaintiffs pursuing claims under the other principal federal anti-discrimination statutes. Under Title VII, for example, if a plaintiff can prove that the protected status (race, gender, religion, etc.) was a “motivating factor” in the adverse employment action, the plaintiff has established a claim. Based on Gross, that will not be true for federal age claims. Moreover, the nation’s high court repudiated the concept that the burden of persuasion should shift to defendant in a federal age discrimination mixed motive case. Again, this holding distinguishes age discrimination claims from other types of mixed motive discrimination claims. Specifically, the U.S. Supreme Court held that “a plaintiff bringing a disparate-treatment claim pursuant to the ADEA must prove, by a preponderance of the evidence, that age was the ‘but-for’ cause of the challenged adverse employment action.” In addition, “[t]he burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision.” These companion holdings are likely to make it more difficult for plaintiffs to prove age discrimination claims under the ADEA.
I. Background Facts
In 2003, Jake Gross, a 54-year-old, long-term employee of FBL Financial Group, Inc. (“FBL”), was reassigned from the position of claims administration director to claims project coordinator. As a result of his reassignment, many of Gross’s job responsibilities were assigned to a newly created position filled by another employee, Lisa Kneeskern. Kneeskern was in her late forties at the time of reassignment and previously had been supervised by Gross. Although Gross’s compensation was not reduced, he considered his position change and the corresponding diminution in his responsibilities, to be a demotion.
In 2004, Gross filed suit in the Southern District of Iowa alleging that his reassignment was based, at least in part, on his age, in violation of the ADEA. FBL claimed in its defense that the decision to reassign Gross was part of a corporate restructuring and his new position was better suited to his skills.
The District Court’s jury instructions stated, in part, that a verdict must be returned in Gross’s favor if he proved by a preponderance of the evidence that FBL demoted him and his age was a “motivating factor.” In addition, the jury instructions stated that Gross’s age was a “motivating factor” if it played a part or role in the decision to demote him. The trial court further instructed the jury that if they found FBL proved by a preponderance of the evidence that it would have demoted Gross regardless of his age, a verdict must be returned in FBL’s favor. The jury returned a verdict in favor of Gross. Despite the fact that only a modest sum was awarded (less than $50,000), FBL appealed.
On appeal, the Eighth Circuit reversed and remanded, holding that the jury had been incorrectly instructed under the burden-shifting standard established in the Title VII case Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). (Price Waterhouse, incidentally, is a complicated plurality decision, with a somewhat confusing alignment among the Justices who decided the case, and varying analyses in support of the decision.) Under the Eighth Circuit’s interpretation of Price Waterhouse, the burden of persuasion shifts to the defendant only upon the plaintiff’s demonstration, by direct evidence, that an illegitimate factor played a substantial role in an adverse employment decision. Because Gross conceded that he did not present direct evidence of discrimination – evidence that shows a specific link between the alleged discriminatory animus and the challenged decision – the intermediate appellate court held that a mixed-motive instruction was not warranted under the Price Waterhouse rule and the burden of persuasion should have remained with the plaintiff.
The Supreme Court granted certiorari to decide whether a plaintiff must present direct evidence of discrimination to obtain a mixed-motive instruction in a non-Title VII discrimination case.
II. The Supreme Court’s Analysis
In the opinion authored by Justice Thomas, the Court never reached the question on which review was granted, instead focusing on whether the burden of persuasion ever shifts to the defendant in a mixed-motive discrimination claim brought under the ADEA. (The four dissenting Justices castigated their colleagues for deciding an issue on which certiorari had not been granted, and which had not been briefed by the parties.)
The Court’s majority held that the burden of persuasion does not shift to the defendant and a plaintiff bringing an ADEA claim must show by a preponderance of the evidence that age was the “but for” cause of the employer’s adverse employment decision. In addition, the Court found that an employer need not show it would have made the same decision regardless of age, even if the employee produces some evidence that age may have been a contributing factor in the decision. Thus, the burden-shifting framework applicable in mixed-motive Title VII cases does not apply to age discrimination claims under the ADEA.
In its decision, the Court explicitly rejected the notion that a plaintiff may establish discrimination by showing that age was simply a “motivating factor.” Of particular significance to the Court was that, unlike Title VII, the ADEA has not been amended to include “motivating factor” language. Under the text of the ADEA, it is unlawful for an employer to discriminate against an individual “because of” age. As interpreted by the Court, “because of” age means that age was the “reason” the employer decided to act. Therefore, “[t]o establish a disparate-treatment claim under the plain language of the ADEA…a plaintiff must prove that age was the ‘but-for’ cause of the employer’s adverse decision.”
In addition, the Court held that “the plaintiff retains the burden of persuasion” in ADEA cases. As a result, henceforth ADEA cases will not be governed by the long-followed Price Waterhouse burden-shifting framework. Rather, the burden of persuasion necessary to establish employer liability is the same in mixed-motive cases as in any other ADEA disparate-treatment action – a plaintiff must prove, by a preponderance of the evidence, that age was the “but for” cause of the challenged employer decision.
A fervent dissent was authored by Justice Stevens and joined by Justices Souter, Ginsburg and Breyer. In his dissent, Justice Stevens stated that he disagreed “not only with the Court’s interpretation of the statute [ADEA], but also with its decision to engage in unnecessary lawmaking.” The dissent argued that Price Waterhouse is controlling and it was inappropriate on the part of the Court to “adopt an interpretation of the causation requirement in the ADEA that differs from the established reading of Title VII.”
Unlike the majority, the dissent did not view Congress’ decision to amend Title VII, and not the ADEA, as a rejection of the “motivating factor” test in ADEA cases. The dissenters also took strong exception to other aspects of the majority opinion that they felt were analytically unsound, indifferent to precedent, and impractical.
IV. Case Lessons and Practical Considerations
The Gross decision is instructive on many levels.
First, it illustrates the sharp divisions in the nation’s highest court. Although the well-written majority and dissenting opinions were not entirely uncivil toward the opposing Justices, they highlight the intense divide on the Court with regard to many employment law issues. This division likely will be unaltered if Judge Sotomayor is confirmed as the next Justice, replacing Judge Souter. If President Obama has the opportunity to fill any vacancies from the group of Justices constituting the majority, however, the balance of power on employment cases before the high Court could shift.
Second, the Gross decision will make it more difficult for plaintiffs to prove a case of age discrimination under the ADEA. ADEA plaintiffs now need to meet a more exacting “but for” test to prove their claims, and they have the burden of persuasion in all cases, including mixed motive cases. Some plaintiffs’ counsel may recommend that their clients forego pursuit of federal age claims, relying instead on state court statutory counterparts with a less demanding legal liability standard.
Third, as a corollary to the preceding point, the decision only applies to the ADEA. The case does not dictate how state courts will interpret their parallel state law anti-discrimination statutes, some of which track the ADEA’s language and some of which do not. Although many state courts interpreting state statutes look to the federal courts’ analyses of the federal anti-discrimination statutes for guidance, the federal judicary’s opinions are only “guidance,” nothing more.
Fourth, the decision invites a legislative response. Congress previously acted when it felt the courts were imposing too rigid a standard with regard to Title VII. Indeed, the majority opinion seized on the Congressional modification of Title VII, without a parallel change to the ADEA, as one of the rationales for why a different legal standard was justified. It will be interesting to see whether Congress elects to reconcile the anti-discrimination statutes by now modifying the ADEA.
Fifth, as the dissent pointed out, the case leaves ambiguous the issue of what legal standards will apply and which party will have the burden of persuasion in situations where discrimination claims are brought under both Title VII and the ADEA. This context could get rather confusing. Imagine for example, a judge instructing a jury that with respect to the gender discrimination claim, the legal standard is “motivating factor” and the defendant has the burden of persuasion that it would have taken the adverse action regardless of the plaintiff’s gender, while with regard to the age discrimination claim, the standard is “but for” the plaintiff’s age and the plaintiff has the burden of persuasion. The jury may have a tough task trying to sort through these conflicting standards (another factor that may contribute to legislative intervention).
Sixth, the decision does not provide the lower courts much guidance with regard to mixed motive age discrimination cases. While it is now clear that the plaintiff carries the burden of persuasion and that the “but for” test applies to the evaluation of the defendant’s conduct, the mixed motive context remains ambiguous. For example, if a plaintiff in the protected age group was underperforming, and a company terminated him or her because of the combination of age and sub-par performance (a mixed motive justification for the discharge), has the employee met the “but for” test? Age alone would not have resulted in discharge and the performance deficiencies alone would not have resulted in discharge. If the two are combined, has the “but for” test been satisfied?
Seventh, the majority opinion expressed considerable skepticism about the shifting burden of persuasion in the Title VII mixed motive context, skepticism exacerbated by plurality opinion of the Price Waterhouse case. Specifically, the Court stated, “[w]hatever the deficiencies of Price Waterhouse in retrospect, it has become evident in the years since that case was decided that its burden-shifting framework is difficult to apply.” And, “even if Price Waterhouse was doctrinally sound, the problems associated with its application have eliminated any perceivable benefit to extending its framework to ADEA claims.” Given these observations, there is some doubt that the Title VII mixed motive analysis would have continuing vitality if the issue reached this Court.