Seyfarth Synopsis: In a somewhat rare interlocutory appeal, the Fifth Circuit reviewed and reaffirmed a 40-year old case holding that emotional distress and punitive damages are not available under the ADEA. This decision rejected the EEOC’s own interpretation and is welcomed news for employers doing business in the Fifth Circuit because damages under the ADEA will be limited to front and back pay. This victory may be short-lived, however, as we expect many plaintiffs will file claims under the corresponding state-law statutes, which typically do allow for the recovery of emotional distress and punitive damages.
In Vaughn v. Anderson Regional Medical Center, Susan Vaughan, a nurse supervisor, alleged that her employer fired her in retaliation for raising age-discrimination complaints. The district court dismissed Vaughan’s claims for pain and suffering and punitive damages under the Age Discrimination in Employment Act (ADEA) based on Fifth Circuit precedent, Dean v. Am. Sec. Ins. Co., 559. F.2d 1036 (5th Cir. 1977), barring such recoveries. Noting that the EEOC and other circuits held divergent views on this issue, however, the district court certified the question for a rare interlocutory appeal, and the Fifth Circuit granted review.
The Fifth Circuit rejected Vaughan’s effort to distinguish Dean on the basis that the case involved age discrimination claims, as opposed to retaliation claims under the ADEA. According to the Court, Dean held “in unqualified terms” that the type of damages Vaughn sought are not recoverable “in private actions posited upon the ADEA.” Because the ADEA contained a prohibition on retaliation since its inception, Dean was controlling unless some intervening change in law “undermine[d] its continued vitality.” The Fifth Circuit rejected Vaughn’s arguments on this issue as well.
Vaughn argued there was a change in law since Dean because of the 1977 amendments to the FLSA, which the Fifth Circuit has interpreted as providing remedies “consistent” with the ADEA. According to the Fifth Circuit, those amendments added language that was identical to the provision in the ADEA allowing for “such legal or equitable relief as may be appropriate,” which Dean had already interpreted as precluding emotional distress and punitive damages. These changes, the Court explained, “brought the FLSA’s remedies for employer retaliation into line with the ADEA’s remedies for similar conduct.” Notably, however, this explanation seems to conflict with another decision (Pineda v. JTCH Apartments, LLC) issued by a different panel of the Fifth Circuit just a few days later, which held that plaintiffs may recover emotional distress damages in FLSA retaliation claims.
The Fifth Circuit also declined to give deference to the EEOC’s interpretation on this issue, finding that the agency’s reliance on a Seventh Circuit decision was unpersuasive because it mistakenly relied on the 1977 amendments to the FLSA, which the Court had already rejected. Even if the Fifth Circuit had found the EEOC’s view persuasive, it would not be sufficient to displace Dean because it is not binding precedent. The transfer of ADEA administrative/investigative functions from the Secretary of Labor to the EEOC also did not constitute an “intervening change” in law to override precedent.
Given the apparent conflict between this case and the recent Pineda decision, we may see these issues reviewed by the full panel of the Fifth Circuit. Because the case also creates a split among the circuits courts, we may also see intervention by the Supreme Court in the future. Until the full panel or the Supreme Court rules on this issue, claims for emotional distress and punitive damages under the ADEA will be subject to dismissal, at least in the Fifth Circuit.