On November 6, 2018, the United States Supreme Court issued its first ruling of the new term — a unanimous 8-0 decision (Justice Kavanaugh did not join the decision because he did not take part in oral argument) which not only expands the reach of the Age Discrimination in Employment Act (the “ADEA”) to public sector employers regardless of the number of people the public entity employs, but also raises the specter of potential individual liability of agents of any employer under the ADEA.
In Mount Lemmon Fire District v. Guido, the Mount Lemmon Fire District, which is a political subdivision in Arizona, laid off two of its oldest full-time firefighters. The firefighters later sued, alleging that their termination violated the ADEA. The Fire District moved to dismiss the lawsuit on the basis that it was too small to qualify as an “employer” under the ADEA because it had fewer than 20 employees. The definition of “employer” under the ADEA “means a person engaged in an industry affecting commerce who has twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year: . . . The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State, and any interstate agency[.]” 29 U.S.C. § 630(b) (emphasis added). The District Court agreed with the Fire District and dismissed the case. The 9th Circuit reversed and held that the ADEA applies to all state and political subdivisions without regard to the number of employees.
In its decision, the Supreme Court affirmed the 9th Circuit, resolving a Circuit split on the issue, and held that the ADEA’s numerosity specification (20 or more employees) does not apply to States or political subdivisions. In so holding, the Supreme Court found that the term “also means” in the ADEA’s definition of “employer” “establishe[s] separate categories – i.e., persons engaged in an industry affecting commerce with 20 or more employees; and States or political subdivisions with no attendant numerosity limitation.” Thus, the words “also means” in the definition of “employer” were “additive rather than clarifying” and thus “add new categories of employers to the ADEA’s reach.”
What does this mean for public sector employers? Governmental units with less than 20 employees will now be covered by the ADEA and subject to its requirements, which bear upon a wide array of decisions affecting the terms and conditions of employment. The Court also rejected the Fire District’s argument that the ADEA should be interpreted similarly to Title VII of the Civil Rights Act of 1964, which only applies to state and local government employers with 15 or more employees. Rather, the Court found that the differences in coverage between ADEA and Title VII are borne out of plain differences in the statutory language that Congress chose to employ. The Court reasoned that for the ADEA, “[t]he better comparator is the FLSA [the Fair Labor Standards Act], on which many aspects of the ADEA are based.”
Given the expansive scope of FLSA liability, the Supreme Court’s comparison between the ADEA and the FLSA should give all employers (public and private) serious pause. Specifically, while the Supreme Court indicated in a footnote that it “need not linger over possible applications of the agents clause [of the ADEA], for no question of agent liability is before us in this case[,]” the close comparison between the FLSA and the ADEA raises the specter of a court eventually finding individual liability under the ADEA. This is not a good forecast for employers, since the term of “employer” under the ADEA “also means any agent of such a person.” Furthermore, since individuals can be held liable under the FLSA, which the Court looked to in framing its analysis of the ADEA, a court may eventually take the next step that the Supreme Court Mount Lemmon declined to take by finding an individual/agent liable under the ADEA. In other words, Mount Lemmon may supply the justification needed for finding individual liability under the ADEA in future cases, making an employer’s understanding of the impact the ADEA has on its workplace even more critical.
Adam E. Konstas is an Attorney in PK Law’s Education and Labor Group. He represents local school boards, superintendents, private schools, colleges, and private sector employers before federal and state courts, and federal and state civil https://www.pklaw.com/pk-law-directory/adam-e-konstas/rights agencies on a variety of matters, including employment discrimination, collective bargaining, and sexual harassment. Mr. Konstas also assists private sector employers with the development and updating of employee handbooks, procedures and training. Mr. Konstas can be reached at 410-339-5786 or email@example.com.