What's Age Got to Do with It? Recent Developments in Employment Law in the United States Supreme Court

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Introduction

OVER the last year and a half, we have witnessed the United States Supreme Court significantly reshape the landscape of labor and employment law. From a seminal decision regarding the application of the Age Discrimination in Employment Act (1) (ADEA) to claims of "reverse" age discrimination to the tax treatment of settlement proceeds in employment cases, the Supreme Court has given labor and employment lawyers much to consider. This article addresses the cases decided and pending before the Supreme Court and serves as a primer for practitioners on recent developments in employment law and litigation.

General Dynamics Land Systems, Inc. v. Cline (2)

In one of its most significant decisions in recent years, the Supreme Court finally answered the question of whether the ADEA supports a claim for reverse age discrimination. The Supreme Court found that the ADEA does not prohibit reverse age discrimination and that older workers in the protected class of forty and over can lawfully be favored over younger workers in the protected class.

In General Dynamics, a group of plaintiffs between the ages of forty and fifty challenged a decision made by General Dynamics to cease providing health benefits upon retirement to individuals presently working for the company but under the age of fifty at the time of retirement. These employees argued that the company's decision violated the ADEA because it "discriminate [d against them ] ... with respect to ... compensation, terms, conditions, or privileges of employment, because of [their] age." (3) More simply, they argued that the proposal set forth by General Dynamics favored older workers in the protected class over younger workers in the protected class.

The district court rejected the claim on the grounds that the ADEA does not prohibit "reverse age discrimination" (i.e., the favoring of older employees). (4) A divided panel of the Sixth Circuit reversed, holding that the statutory language prohibiting discrimination "because of age" was so clear that if Congress had meant to limit coverage only to older employees against younger employees, it would have so indicated. (5) A somewhat divided Supreme Court reversed, holding that Congress enacted the statute to protect the rights of older employees, who were often seen as less productive because of their age. When analyzed using this interpretation, the Court concluded that younger workers could not claim the statute as legal protection against discriminatory policies used to favor older workers, even though both were in the "protected" class as defined by the ADEA. (6)

In reaching this conclusion, Justice Souter, writing for the majority, found that, although the language "in the abstract" could be open to a construction favored by the employees, such a reading would not "square with the natural reading of the whole provision prohibiting discrimination" or with Congress' "interpretative clues [which] speak almost unanimously to an understanding of discrimination as directed against workers who are older than the ones who are getting treated better." (7) This view was bolstered by the legislative history, which focused on the arbitrary stereotypes facing older employees. The opinion points out that "if Congress had been worrying about protecting the younger against the older, it would not likely have ignored everyone under 40." (8) Given the legislative history, the majority concluded that the "ADEA's ban on 'arbitrary limits' thus applies to age caps that exclude older applicants, necessarily to the advantage of younger ones." (9)

Justice Scalia authored a brief dissent, focusing on the fact that the EEOC regulations supported the employees' view and that the statutory language itself "does not unambiguously require a different inter. pretation." (10) Justice Scalia also joined in Part II of the dissent authored by Justice Thomas (with Justice Kennedy joining Part II). …