Supreme Court Concludes that the ADEA Does Not Prohibit Reverse Age Discrimination

It came as a great surprise and disappointment to the employer community when, in July 2002, the United States Court of Appeals for the Sixth Circuit held that the federal Age Discrimination in Employment Act (the “ADEA”) prohibits not only discrimination against older workers in favor of younger ones, but also “reverse” age discrimination – that is, discrimination against younger workers in favor of older ones. In Cline v. General Dynamics Land Systems, Inc., 296 F.3d 466 (6^th Cir. 2002), the Sixth Circuit held that an employer had violated the ADEA by agreeing with a union to eliminate the employer’s obligation to provide retiree health benefits for then-current employees under the age of 50 upon their subsequent retirement, but not for employees who were then older than 50.

Employers can now breathe a sigh of relief, because the United States Supreme Court has reversed the Sixth Circuit in a 6-3 decision. See General Dynamics Land Systems, Inc. v. Cline, 540 U.S. __ (2002), reported at 2004 WL 329956 (February 24, 2004). The Supreme Court held in this decision that “the ADEA does not mean to stop an employer from favoring an older employee over a younger one,” and instead is limited to prohibiting discrimination against older employees in favor of younger ones.

The question revolved around what it means to discriminate on the basis of “age.” Since race discrimination includes discrimination against white workers because of their race, see McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273 (1976) (Title VII prohibits discriminating against whites in favor of racial minorities), and since sex discrimination includes discrimination against men because of their sex, see Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998) (Title VII prohibits harassment of men, by men, because they are male), it is not entirely implausible to think that discrimination because of age could include discrimination because of relatively younger age as well as discrimination because of relatively older age. After all, as the Court observed, the statutory “reference to ‘age’ carries no express modifier and the word could be read to look two ways.” Slip op. at 3 (emphasis added).

The Court addressed this problem of statutory construction, as it often does, by reviewing the process by which the ADEA became law, including the testimony before the congressional committees that considered the bill, the committee reports that approved it, and the subsequent congressional debates. Virtually all of this legislative history referred to problems that older workers experienced because of negative stereotypes directed at older workers and the ways that society and employers favor youth and younger employees. The Court also noted that if the statute was supposed to protect the younger worker from discrimination in favor of the older one, it is unlikely that the statute would have limited its protections to those who are age forty and above.

Justices Scalia, Thomas, and Kennedy dissented, pointing to an EEOC regulation which provides, in pertinent part, that “if two people apply for the same position, and one is 42 and the other is 52, the employer may not lawfullly turn down either one on the basis of age, but must make such decision on the basis of some other factor.” 29 C.F.R. § 1625.2(a) (2003). Justice Scalia’s dissent argued that the Court should have accorded deference to this EEOC regulation.

Nonetheless, the majority concluded that “age discrimination” under the ADEA means discrimination against older workers. A contrary holding would have wreaked havoc with employee benefit plans and many other employer practices that tend to favor older and longer-tenured employees. In sum, General Dynamics Land Systems, Inc. v. Cline is significant not for what it does — for it really signals no change in ADEA law as most employers have understood and applied it — but rather for the mischief that would have ensued had the Court gone the other way and ruled that it is just as unlawful to favor older employees as younger ones.