The Age Discrimination in Employment Act (“ADEA”) prohibits covered employers from discriminating against employees and applicants who are age 40 or older. All private employers are subject to the ADEA unless they have less than 20 employees. States, and their agencies, instrumentalities and political subdivisions, also fall under the ADEA. However, courts have split on whether the 20-employee threshold for ADEA coverage that applies to private employers also applies to public sector employers.

In Guido v. Mount Lemmon Fire District, the Arizona federal district court held the Fire District, which had less than 20 employees, was not a covered employer under the ADEA, extinguishing the lawsuit brought by two former Fire District employees who alleged they were laid off due to their age. On appeal, the Ninth Circuit Court of Appeals reversed the District Court’s decision, finding that the ADEA applies to all State employers, regardless of their size. The three-judge panel determined that the statutory language applies the 20-employee minimum only to private employers, stating that the plain language of the statute is unambiguous on this point. In doing so, the Ninth Circuit directly disagreed with the Sixth, Seventh, Eighth and Tenth Circuits, which have held the statute is unclear and that further context is required to interpret it on this point. These courts all found the 20-employee minimum does apply to the political subdivisions. The Ninth Circuit’s decision creates a further split among the circuits on this issue, which tees up it up for potential clarification from the United States Supreme Court. Until this time, however, the Ninth Circuit’s decision creates binding precedent for public sector employers within its boundaries (Alaska, Arizona, California, Montana, Nevada, Oregon and Washington).