End of the Road for Gross v. FBL Financial Services

Actually that's a misleading headline, what it should say is the end of the line for Jack Gross, the ill fated plaintiff whose lawsuit became the vehicle for the Supreme Court's 2009 decision, which held that the ADEA, unlike Title VII, never permits a mixed motive analysis instead requiring a "but for" test.

Ironically, the well traveled case, which started with a 2003 reassignment Mr. Gross felt was to a lower position, was finally decided on the question which many had hoped the Supreme Court would address -- how do you determine when you get a mixed motive instruction?  In an unpublished opinion affirming a jury verdict in favor of Gross's former employer, the 8th Circuit held that it is a question for the Court, to be determined after all the evidence is presented. Not too surprisngly given the difficulty courts have had applying mixed motive, the Court failed to tell us on what basis it is to be determined. 

I had to smile because one of the cases relied on by the 8th Circuit was Smith v. Xerox Corp, a 2010 decision from the 5th Circuit that has been criticized not only by me, see 5th Circuit En Banc Request on Smith v. Xerox, Please! but also by four members of the 5th Circuit, see Stirrings on Smith v. Xerox in 5th Circuit Internecine Squabble.


Although as expected, the initial Gross decision did result in some legislative stirrings, fortunately none passed. Three years ago next week, I testified before the Senate Judiciary Committee in opposition to such proposed legislation. I wish I could say it was my brilliant thoughts (you can judge for yourself here ,about 51:30 into the hearing) that forestalled such legislation, but I have my doubts.   But last Friday's decision, as well as Smith v. Xerox, illustrate the point I made to the Senate Judiciary Committee. Mixed motive, created when discrimination cases were tried to the court, has not fared well in the world of jury trials. I testified then, and still believe, it is both complex and unneeded, and what should be done is to jettison it from all of employment law, not just ADEA claims, where fortunately,  it has been. 

A UK/USA Split - Protection For Those Over 65

The British High Court has apparently just held that mandatory retirement at age 65 is permissible. 65 all out…….. ».

That's where the U.S. statutory protection, the Age Discrimination in Employment Act, started; but two amendments later, it has no upper cap.

Supreme Court Says No Mixed Motive for Age Cases

One of the more anticipated decisions of this Supreme Court was going to answer under what circumstances a mixed-motive decision would be appropriate. Since the whole procedural law of mixed-motive cases seems muddled, help from the Supremes on any aspect was eagerly anticipated.

But today in Gross v. FBL Financial Services (S.Ct 6/18/09)[pdf] the Supreme Court took a pass on that specific question, and instead answered the question it (well at least the 5 in the majority) really wanted to answer:

Can you ever have a mixed-motive instruction under the ADEA?

Since the answer was no, the question the rest of us were waiting for, under what circumstances do you get one, remains an open question, at least for Title VII cases.

The reason the 5-4 opinion went the way it did, with Justice Thomas writing it, has to do with differences between the ADEA and Title VII, in particular on the issue of the burden of persuasion.

Even worse, the majority teased us with the idea that perhaps the Supreme Court might if it had it to do over again jettison the mixed motive idea, since it has been so difficult for the courts to implement. (Unfortunately, that idea seems likely foreclosed by the Congressional amendments to Title VII discussed in Justice Thomas' opinion.)

Workplace Prof's first look, thinks it could also impact ADA cases. More detailed analysis will be forthcoming from many I am sure.

My first take -- its an important decision, for now. However, since it is based on a question of statutory interpretation, stay tuned for the Jack Gross Mixed-Motive for Old Folks Bill coming to a Congress near you soon.

American Employment Law More Liberal Than Europe

At least in one small area — mandatory retirement. Unlike the ADEA which has no upper limit and bars mandatory retirement, the European Union's top court has held that country laws establishing a retirement age could be "justified to promote social policies like improving employment. Here is the Judgment of the Court from the International Court of Justice.

For more background on the dispute that was brought by Felix Palacios de la Villa after he was forced to retire from Spanish retailer Cortefiel SA when he turned 65, see the International Herald Tribune article, Court ruling upholds mandatory retirement in Europe.

One caveat of the ruling — it is necessary to also provide adequate provisions for retirees.

This ruling must be particularly painful to those remaining partners at Sidley, Austin who have recently agreed to not only give up their mandatory retirement requirement, but also kick in $27.5 million to some former partners. See the EEOC press release here.

Discrimination Damages and Remedies in the 5th Circuit - the Palasota Story Continues

Today, a 5th Circuit panel issued the second substantive decision in the case of Palasota v. Haggar Clothing Co. (5th Cir. 9/7/07). Its first decision almost 4 years to the day earlier, overturned the trial court's granting of a judgment notwithstanding the verdict.

On remand after the first decision, the trial court entered a judgment in favor of Palasota for

• $840,000 in economic damages,
• a like amount as liquidated damages,
• ordered reinstatement,
• with interim pay of $14,500 a month until he was offered a position,
• and awarded a lump sum of back pay in the amount of $525,000 for the period of time from the end of trial to the date of the second judgment

The Court found that the issue of liability was foreclosed by its first decision and that there was sufficient evidence (detailed in the opinion) to support a willful finding, and the accompanying $840,000 liquidated damage award.

In what appears to be a throw-away comment and without any citation, the Court added this unhelpful language:

Haggar’s unsuccessful efforts to have Palasota release it from ADEA claims upon his termination tended to show that Haggar had knowingly violated the ADEA or recklessly disregarded whether its conduct toward Palasota was prohibited by the statute.

Given that requesting a release is a standard practice when a severance package is being given, such evidence standing alone is unlikely to be sufficient to sustain a finding of willfulness. It's the sort of thing that if the Court is asked to revisit its opinion should be eliminated as being unnecessary, but not necessary harmless, dicta.

Given the size of the judgment and that liability was already decided, the opinion is the rare case where the Court talks at length about damages and remedies. Among the holdings --

• affirmed the jury's finding of compensatory damages as supported by the evidence, even though it took into account the effect of improper discriminatory actions occurring before the limitations period;
• discussed the shifting burdens of proof on the issue of mitigation, outlining the burden on the defendant when challenging an adverse jury finding;
• reversed the court's order on reinstatement, finding that it would not be the same position he had before, would either displace or harm the income of existing employees and that there likely existed ill will among the parties that made reinstatement not a satisfactory remedy;
• sent the $525,000 front pay award back to the trial court to re-consider, with a strong hint that perhaps the liquidated damages would negate the need for such an award since it might well result in a windfall for Palasota and "ADEA damages are not meant to be punitive."

Although they may not be intended to be "punitive" given that the trial court did not believe that discrimination was proved, my guess is it would be hard to convince the employer of that.

EEOC 2, Old Folks 1 - 3rd Circuit Upholds Medicare Coordination Rule

A hotly contested EEOC regulation which authorizes “the practice of altering, reducing or eliminating employer-sponsored retiree health benefits when retirees become eligible for Medicare or a State-sponsored retiree health benefits program," which has had an up and down judicial ride, ends the day on an up note as the 3rd Circuit holds that it is within the agency's power. AARP v. EEOC(3rd Cir. 6/4/07) [pdf].

Although AARP had initially won summary judgment, the lower court reversed itself following an intervening Supreme Court decision dealing with an agency's powers. See my earlier posts here and here. The 3rd Circuit affirmed the victory for the EEOC, although on different grounds.

The decision lifts the injunction and allows the EEOC to go forward with implementing the regulation. The final rule is on the EEOC's web site here.

"Labor lawyers see gray storm gathering" — Great Headline, Not Much More

The Dallas Business Journal has one of the better headlines I have seen recently, unfortunately, the story doesn't add much. The article describes the coming "perfect storm" (a now well overused cliché) as follows:

• Baby boomers, whose ages range from about 42 to 60, make up the largest group in the workplace, with 77 million men and women in the United States, nearly double the population of Gen X, which makes up 44 million and whose members are just beginning to hit their 40s.
• As baby boomers climb the corporate ladder, they become more expensive to employ.
• As employers look at ways to keep costs down, they'll look at reducing their biggest expense: people.

And an obligatory quote that juries are sympathetic to older workers because they can identify with people who look like them. Yawn.

But just because there is not a lot of substance to the story, doesn't mean there is not a lot of truth to it. And you have to agree, it is a great headline.