by John E. Motylinski (Winter 2019)
On November 6, 2018, the United States Supreme Court unanimously ruled that the Age Discrimination in Employment Act (“ADEA”) applies to all local governments—no matter the number of people they employ. This ruling upends well-established caselaw holding that the ADEA only applies to state and local governments with at least twenty employees. Accordingly, fire protection districts—and potentially individuals accused of age discrimination—will now face greater hurdles in defending age discrimination claims.
Under the ADEA, an “employer” is prohibited from discriminating against a person because of his or her age with respect to any term, condition, or privilege of employment. This includes using age as a basis for hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training.
Originally, the ADEA applied only to private employers. In 1974, however, Congress expanded the definition of the word “employer”:
The term “employer” means person engaged in an industry affecting commerce who has twenty or more employees. . .The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State. (29 U.S.C. §630(b))
The confusing language of this statute has vexed courts for decades. The majority of federal courts of appeals—including the Seventh Circuit (covering Illinois, Wisconsin, and Indiana)—maintained that this expanded definition meant that a local government must have at least twenty employees before the protections of the ADEA were triggered. A minority of federal courts held that the definition of “employer” contains two independent clauses, meaning that local governments are always subject to the ADEA no matter their size.
This dispute came to a head in the recent U.S. Supreme Court case of Mount Lemmon Fire District v. John Guido, 2018 WL 5794639. The Mount Lemmon Fire District (a political subdivision of the State of Arizona) laid off its two oldest full-time firefighters due to a budget crisis. The firefighters sued the Fire District, alleging that their termination violated the ADEA. The Fire District asserted the majority view that it was not an “employer” under the ADEA because it did not have at least twenty employees.
The federal district court agreed with the Fire District and dismissed the case. The firefighters appealed to the United States Court of Appeals for the Ninth Circuit. In June 2017, the Ninth Circuit reversed and held that the age discrimination suit should proceed because the Fire District was an “employer” under the ADEA, even if it did not have twenty employees.
Although the U.S. Supreme Court granted the Fire District’s request to review the case, it ultimately ruled against it and found that all local governments—no matter how large—are subject to the ADEA’s ban on age discrimination.
In reaching its decision, the Court first rejected the Fire District’s argument that the ADEA should be interpreted in a manner similar to Title VII, which is another federal statute prohibiting discrimination against employees on the basis of race, color, religion, sex and national origin. Although Title VII only applies to employers with fifteen or more employees—regardless of whether the employer is private or public—the Supreme Court was persuaded that Congress intentionally chose to give the ADEA and Title VII different requirements as evidenced by their diverse language.
Second, the Court found that the “also means” language in the ADEA’s definition of “employer” added new entities subject to the law, including all states and political subdivisions. The Supreme Court reached this determination, in part, because the phrase “also means” appears “dozens of times throughout the U.S. Code,” and typically carries an “additive” meaning.
Third, the Court was not persuaded by the Fire District’s argument that the expansion of the ADEA to include all local governments would risk “curtailment of vital public services such as fire protection.” The Court observed that many states (including Illinois) have their own laws forbidding age discrimination by political subdivisions of any size. The Court also noted that the Equal Employment Opportunity Commission (“EEOC”) has used the same expanded definition for approximately thirty years. Therefore, the Court was not concerned that its ruling would have adverse practical ramifications.
The Court’s holding in Mount Lemmon now subjects small Illinois fire protection districts (and other small local governments) to federal liability for age discrimination. Although the Illinois Human Rights Act already prohibits these entities from discriminating against employees on the basis of age, there are some key differences in the way the ADEA functions. For instance, the ADEA provides additional restrictions on waiving and releasing age discrimination claims. Indeed, to settle an ADEA claim, employees must be afforded twenty-one days to review any proposed settlement agreement. They must also be given seven days to revoke it after such an agreement is executed. Furthermore, ADEA charges may be filed with the EEOC rather than the Illinois Department of Human Rights.
Moreover, the Court’s reasoning in Mount Lemmon also arguably opens the door to future lawsuits against allegedly discriminating individuals. Recall, the ADEA’s definition of “employer” also includes “any agent” of the employer. Given the Court’s holding that this clause is “additive” instead of clarifying, the Court may have created a cause of action against individual employees accused of discrimination.
Therefore, the Mount Lemmon decision will have direct consequences for small Illinois fire protection districts—and potentially individuals, as well. Accordingly, if your district experiences any age discrimination problems, it is vital that counsel become involved as soon as possible.