DiBiase v. SmithKline ( 1995 )

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
2-16-1995
DiBiase v SmithKline
Precedential or Non-Precedential:
Docket 94-1530
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________
No. 94-1530
_________________
JOHN DiBIASE
v.
SMITHKLINE BEECHAM CORPORATION
Appellant
_________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 93-cv-3171
_______________
Argued December 15, 1994
BEFORE: BECKER, GREENBERG, and McKEE, Circuit Judges
(Filed: February 16, l995)
______________
Richard A. Ash (argued)
Lyman & Ash
1612 Latimer Street
Philadelphia, PA 19103
Attorneys for Appellee
Alan D. Berkowitz
Steven B. Feirson (argued)
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attorneys for Appellant
Thomas J. Bender, Jr.
Kristine Grady Derewicz
Buchanan Ingersoll, P.C.
1200 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103
Attorneys for Amicus
Curiae The Pennsylvania
Chamber of Business and
Industry
Stephen A. Bokat
Robin S. Conrad
National Chamber Litigation
Center, Inc.
1615 H Street N.W.
Washington, DC 20062
Attorneys for Amicus
Curiae Chamber of
Commerce of the United
States
Robert E. Williams
Douglas S. McDowell
Ann Elizabeth Reesman
McGuiness & Williams
1015 Fifteenth St. N.W.
Suite 1200
Washington, DC 20005
Attorneys for Amicus
Curiae Equal Employment
Advisory Council
L. Steven Platt
Arnold & Kadjan
19 West Jackson Boulevard
Chicago, IL 60604
Cathy Ventrell-Monsees
601 E Street N.W.
Washington, DC 20049
Paul H. Tobias
Tobias, Kraus & Torchia
911 Mercantile Library Bldg
414 Walnut Street
Cincinnati, OH 45202
Janette Johnson
3614 Fairmont Street
Suite 100
Dallas, TX 75219
Attorneys for Amicus
Curiae The National
Employment Lawyers
Association
_______________________
OPINION OF THE COURT
_______________________
GREENBERG, Circuit Judge.
This is an appeal from a district court's judgment
predicated on its opinion holding that an employer violates the
Age Discrimination in Employment Act ("ADEA") by offering to all
employees terminated as a result of a reduction-in-force (RIF)
enhanced severance benefits in return for a general release of
all claims, including ADEA claims, against the employer. We
conclude that such a practice does not violate the ADEA, and
therefore we will reverse the judgment of the district court.
Because there is no basis for further proceedings in this case,
we will remand the matter to the district court with instructions
to enter judgment for the defendant.
I. INTRODUCTION, FACTUAL BACKGROUND, AND PROCEDURAL HISTORY
The germane facts are not disputed.1 In 1990, the
employer, defendant SmithKline Beecham Corporation (SmithKline),
a Philadelphia-based pharmaceutical company, consolidated four
computer data centers it operated throughout Pennsylvania and in
Tennessee into a single center at King of Prussia, Pennsylvania.
Prior to the consolidation, SmithKline employed plaintiff John
DiBiase as a first-shift supervisor of computer operators at its
Philadelphia data center. With the consolidation, he moved to
King of Prussia, where six supervisors remained employed, working
two per shift, with each pair overseeing three to five computer
operators. Between late 1991 and early 1992, SmithKline decided
to reduce the staff of this division, and it assessed the
concomitant consequences. Specifically, the data center's
personnel manager "prepared an 'adverse impact analysis'
examining the gender, race, and age of the shift supervisors to
determine if any adverse impact would result from the planned
reduction in staff." DiBiase, 847 F. Supp. at 343. On February
1, 1992, SmithKline decided to lay off DiBiase and one other
shift supervisor and it informed DiBiase of this decision the
next day. At that time, he was 51 years old.
SmithKline offered employees terminated in a RIF a
separation benefit plan, which provided a lump sum payment based
on the employee's length of service, as well as continued health
1
. Unless otherwise noted, we take the facts from the district
court opinion. DiBiase v. SmithKline Beecham Corp., 847 F. Supp.
341 (E.D. Pa. 1994).
and dental benefits. Specifically, the basic plan provided 12
months salary and three months continued benefits. Additionally,
the plan offered enhanced benefits to employees willing to sign a
general release of all claims against SmithKline. Terminated
employees who signed the release were entitled to receive 15
months salary and six months continued health and dental
coverage. The release is in large part the subject of this
appeal, and it stated in pertinent part:
In consideration of the monies and other
consideration to be received by me under the
SmithKline Beecham Separation Program, I
hereby irrevocably and unconditionally
release, waive and forever discharge
SmithKline Beecham Corporation, its
affiliates, parents, successors,
predecessors, subsidiaries, assigns,
directors, officers, employees,
representatives, agents, and attorneys . . .
from any and all claims, agreements, causes
of action, demands, or liabilities of any
nature whatsoever . . . arising, occurring or
existing at any time prior to the signing of
this General Release, whether known or
unknown.
General release § 1 at app. 98. The release provided that
employees who sign it waive
[a]ny and all claims arising under federal,
state, or local constitutions, laws, rules or
regulations or common law prohibiting
employment discrimination based upon age,
race, color, sex, religion, handicap or
disability, national origin or any other
protected category or characteristic,
including but not limited to any and all
claims arising under the Age Discrimination
in Employment Act of 1967, as amended, the
Civil Rights Act of 1964, the Civil Rights
Acts of 1866 or 1871, the National Labor
Relations Act and/or under any other federal,
state or local human rights, civil rights, or
employment discrimination statute, rule or
regulation.
Release § 1 ¶2 at app. 98. Prefatory language to the release
cautioned employees that "YOU SHOULD THOROUGHLY REVIEW AND
UNDERSTAND THE TERMS, CONDITIONS AND EFFECT OF THE SEPARATION
PROGRAM AND OF THIS GENERAL RELEASE. THEREFORE, PLEASE CONSIDER
IT FOR AT LEAST TWENTY-ONE (21) DAYS BEFORE SIGNING IT. YOU ARE
ADVISED TO CONSULT WITH AN ATTORNEY BEFORE YOU SIGN THIS GENERAL
RELEASE." Release at app. 98. Under the terms of the release,
employees were given seven calendar days after signing to revoke
their signature. Release at app. 99.
DiBiase declined to sign the release. Instead, on
April 29, 1992, he wrote a letter to William Mossett,
SmithKline's personnel director, contending that SmithKline's
policy violated the ADEA. The letter reads in pertinent part:
So there can be no possible
misunderstanding I am stating my position as
follows.
* * *
As stated in my grievance I have reason
to believe that the company violated federal
and state age discrimination laws in
terminating me. I am declining the enhanced
separation benefit package because I do not
wish to give up my rights under these
discrimination laws. I believe that the
company's policy of requiring persons over
forty to release age discrimination claims
against the company in order to secure
enhanced separation benefits violates these
age discrimination laws since persons under
forty may elect to receive enhanced
separation benefits determined by the same
formula that applies to persons over forty
without releasing potential age
discrimination claims.
Letter from DiBiase to Mossett of April 29, 1992, at app. 106,
107. Because DiBiase did not sign the release, SmithKline
refused to give him the enhanced benefits. See Letter from
Tyrone Barber, SmithKline's Personnel Manager, to DiBiase of May
4, 1992, at app. 108. Still, DiBiase received the benefits due
him under SmithKline's basic plan. Id.
On July 2, 1992, DiBiase filed an affidavit and charge
with the Equal Employment Opportunity Commission (EEOC) alleging
both that SmithKline terminated his employment because of his
age, and that SmithKline's separation plan violated the ADEA
because it treated older workers differently than younger workers
by requiring them to release ADEA claims. DiBiase EEOC aff. at
app. 109-110. On March 31, 1993, the EEOC determined that "there
is not reasonable cause to believe that there has been a
violation of the statute under which the charge has been filed."
EEOC Determination at app. 67-68.
On June 14, 1993, DiBiase filed a complaint against
SmithKline in the United States District Court for the Eastern
District of Pennsylvania. His amended complaint contained two
counts. Count 1 asserted that SmithKline fired him because of
his age, in violation of the ADEA. Complaint ¶ 15-19 at app. 55-
56. Count 2 alleged that SmithKline's "separation benefit plan
violates ADEA because it discriminates against [him] and its
other employees forty or older by having higher requirements for
them to qualify for the additional separation benefits than apply
to its employees under forty." Complaint ¶ 29 at app. 58.
DiBiase also asserted that SmithKline's actions underlying both
counts were willful and that he was entitled to punitive and
double damages. Complaint ¶¶ 19, 31 at app. 56, 59. On August
2, 1993, SmithKline moved to dismiss count 2 of the amended
complaint, pursuant to Fed. R. Civ. P. 12(b)(6). In a Memorandum
opinion and order filed on September 29, 1993, the district court
denied the motion. The district court suggested that DiBiase
might be able to show that even if SmithKline's plan was a
"facially neutral employment" policy, it "had a significantly
discriminatory impact." Memorandum Op. at app. 47.
On December 20, 1993, SmithKline moved for summary
judgment on both counts of DiBiase's complaint. In an opinion
and order dated March 15, 1994 -- entered the next day and
reported at 847 F. Supp. 341 (E.D. Pa. 1994) -- the district
court granted the motion as to Count 1 and denied it as to Count
2. Specifically, the district court found that "no jury
reasonably could conclude from the facts" that DiBiase had been
replaced in his job. 847 F. Supp. at 346. Inasmuch as DiBiase
had not been replaced, the court concluded that he had failed to
establish a prima facie case of wrongful termination under the
ADEA. Thus, the district court granted summary judgment to
SmithKline on the termination count, count 1.2
However, the district court denied SmithKline's motion
for summary judgment on count 2. Specifically, the court found
that the separation plan involved discriminatory treatment of
older persons. Relying on the ADEA section providing a cause of
action only for persons at least 40 years old, see 29 U.S.C. §
631(a), the district court observed that "[i]n order for an older
employee to receive the same enhanced benefit as a younger
employee, the older employee must release her right to file an
ADEA claim." DiBiase, 847 F. Supp. at 347. The court further
observed that "[t]his treatment is patently different because the
younger employee cannot have an ADEA claim." Id. From these
observations, the district court concluded that "SmithKline's
policy facially discriminates" against employees protected by the
ADEA. Id. at 348. Thus, the court denied SmithKline's motion.
2
. Ordinarily, when employment is terminated as part of a RIF,
the plaintiff need not prove that he or she was replaced by a
worker outside the protected class. Rather, to demonstrate a
prima facie case "[i]n RIF cases, the plaintiff must show he was
in the protected class, he was qualified, he was laid off and
other unprotected workers were retained." Armbruster v. Unisys
Corp., 32 F.3d 768, 777 (3d Cir. 1994). Here, the district court
found that "[p]laintiff cannot make such a showing, however,
because all three retained employees . . . were within the
protected class when plaintiff was terminated." DiBiase, 847 F.
Supp. at 345 n.5. Thus, the district court used the standard for
establishing a prima facie case in the typical age discrimination
case. We need not address whether the district court
appropriately departed from traditional RIF analysis, because
DiBiase has not appealed from the summary judgment on count 1.
On April 26, 1994, DiBiase made a cross-motion for
summary judgment on count 2 of the amended complaint, based
entirely on the district court's reasoning in its March 15, 1994
opinion.3 On May 3, 1994, the district court granted this
motion, "[f]or the reasons fully set forth in my March 15, 1994
Opinion." May 3, 1994 Order at n.1. Because the parties had
stipulated to damages under count 2, the district court entered
4
judgment for DiBiase in the amount of $14,203.03. Id.
Meanwhile, on December 16, 1993, DiBiase had filed
another action alleging that SmithKline had retaliated against
him for pursuing his rights under the ADEA. On December 22,
1993, the district court consolidated the two actions. The
parties settled the retaliation claim, and on April 29, 1994, the
district court signed a stipulation and order (entered on May 2,
1994) dismissing that claim with prejudice. Thus, the May 3,
1994 order granting DiBiase's motion for summary judgment on
count 2 concluded the proceedings before the district court.
SmithKline timely filed a notice of appeal. We have jurisdiction
pursuant to 28 U.S.C. § 1291 and the district court had subject
matter jurisdiction pursuant to 29 U.S.C. § 626(c) and 28 U.S.C.
§ 1331.
3
. Technically this motion was not a cross-motion, since it was
made after the district court's order on the original motion.
Nonetheless, the district court, the parties and the docket sheet
describe it as a "cross-motion" and we follow suit.
4
. It is unclear how the parties arrived at this figure.
We exercise plenary review over the district court's
grant of summary judgment, Petruzzi's IGA Supermarkets, Inc. v.
Darling-Delaware Co., 998 F.2d 1224, 1230 (3d Cir.), cert.
denied, 114 S. Ct. 554 (1993), and, because the facts are
undisputed, we decide the appeal as a matter of law.
II. DISCUSSION
A. Introduction
This case involves the scope of liability under the
ADEA, a federal anti-discrimination statute that renders it
unlawful for an employer:
(1) to fail or refuse to hire or to discharge
any individual or otherwise discriminate
against any individual with respect to his
compensation, terms, conditions, or
privileges of employment, because of such
individual's age;
(2) to limit, segregate, or classify his
employees in any way which would deprive or
tend to deprive any individual of employment
opportunities or otherwise adversely affect
his status as an employee, because of such
individual's age.
29 U.S.C. § 623(a).5 With these provisions, "[t]he ADEA 'broadly
prohibits arbitrary discrimination in the workplace based on
age.'" Trans World Airlines, Inc. v. Thurston, 469 U.S. 111,
5
. We generally rely on both ADEA cases and cases arising under
Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et
seq., because "Title VII and the ADEA have been given parallel
constructions due to their similarities in purpose and
structure." Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d
1380, 1385 n.4 (3d Cir. 1994).
120, 105 S. Ct. 613, 621 (1985) (quoting Lorillard v. Pons, 434
U.S. 575, 577, 98 S. Ct. 866, 868 (1978)).6 In a "privilege of
employment" case such as this one, it is irrelevant that
SmithKline had no obligation to provide the particular benefit to
its employees, for once an employer decides to grant an
opportunity to some, "it may not deny this opportunity to others
because of their age." Thurston, 469 U.S. at 121, 105 S.Ct. at
621. As the Supreme Court has explained, "'[a] benefit that is
part and parcel of the employment relationship may not be doled
out in a discriminatory fashion, even if the employer would be
free . . . not to provide the benefit at all.'" Id. (alteration
in original) (quoting Hishon v. King & Spalding, 467 U.S. 69, 75,
104 S. Ct. 2229, 2233-34 (1984)).
SmithKline argues in the first instance that Congress,
in enacting the Older Workers Benefit Protection Act, Pub. L. No.
101-43, 104 Stat. 978 (1990) (OWBPA), explicitly considered and
rejected a provision entitling older workers to extra
consideration for release of ADEA claims.7 The OWBPA set forth,
6
. As noted above, however, the statute provides that "[t]he
prohibitions in this chapter shall be limited to individuals who
are at least 40 years of age." 29 U.S.C. § 631(a).
7
. Somewhat inexplicably, at oral argument DiBiase vigorously
denied that his theory of the case required employers to provide
extra consideration to older workers signing general releases.
To the contrary, he said that a provision for extra consideration
would violate the ADEA as well and that the only way in which
older people would be treated the same as younger people would be
to allow older people to sign a release agreeing to waive all
claims except those under the ADEA.
among other things, specific standards governing whether an
employee's waiver of ADEA claims is valid. See 29 U.S.C. §
626(f). SmithKline points out that early drafts of the OWBPA
provided that a waiver of ADEA claims is valid only when:
the rights or claims are waived in exchange
for consideration in addition to anything of
value --
(ii) that has been offered to a group or
class of individuals under an early
retirement incentive or other employment
termination program.
See 135 Cong. Rec. § 289-01, § 356-57 (introduction of bill in
Senate); 135 Cong. Rec. H 696-03, H 697 (introduction of bill in
House of Representatives). SmithKline is correct in noting that
(..continued)
However, this case has proceeded on the assumption that
DiBiase was claiming extra consideration. In ruling on
SmithKline's motion to dismiss, the district court stated that
DiBiase "argues that an employer could secure a release of ADEA
claims by offering additional consideration beyond that offered
for a release of all claims except ADEA claims." Memorandum of
September 27, 1993, at app. 47. Similarly, the district court
commented in its opinion that "I have difficulty believing that
the widespread industry practice of offering enhanced benefits in
exchange for a release of potential claims is so fragile that a
decision requiring additional consideration for a valid release
of ADEA claims will cause the practice to expire." DiBiase, 847
F. Supp. at 351. In short, the district court certainly believed
that DiBiase was asking for extra consideration.
At any rate, unless DiBiase is arguing that an employer
never could secure a valid general release from a terminated
employee protected by the ADEA, we perceive no analytical
distinction between a claim for extra consideration and a claim
that DiBiase should have been allowed to waive all claims except
ADEA claims in exchange for the enhanced benefits. Both
arguments seek special treatment. In the former situation, the
older worker receives extra money. In the latter situation, the
older employee preserves his or her ADEA claims.
Congress did not include the provision in the OWBPA. This
history supporting SmithKline's position is significant and is
entitled to some weight. See United States v. Alcan Aluminum
Corp., 964 F.2d 252, 264-65 (3d Cir. 1992). However, we do not
rely primarily on legislative history in resolving this case
because, as the following discussion shows, it is evident that
even if we disregard the history we must conclude that
SmithKline's policy did not violate the substantive provisions of
the ADEA.
With this said, we now assess whether SmithKline's
policy of providing enhanced benefits only to terminated
employees signing the release violated the ADEA. A policy can be
discriminatory because of its treatment of or impact on
employees. In a disparate treatment case "'[t]he employer simply
treats some people less favorably than others because of their
race, color, religion [or other protected characteristics].'"
Hazen Paper Co. v. Biggins, ____ U.S. ____, ____, 113 S. Ct. 1701,
1705 (1993) (first alteration added) (quoting Teamsters v. United
States, 431 U.S. 324, 335 n.15, 97 S. Ct. 1843, 1855 n.15 (1977)).
On the other hand, disparate impact liability "'involve[s]
employment practices that are facially neutral in their treatment
of different groups but that in fact fall more harshly on one
group than another and cannot be justified by business
necessity.'" Id. (quoting Teamsters, 431 U.S. at 335 n.15, 97
S. Ct. at 1855 n.15).
DiBiase contends -- and the district court found --
that older workers who signed SmithKline's release gave up more
claims than younger workers who signed the release, since older
workers, unlike younger workers, are protected by the ADEA.
Because the argument is framed to contend that SmithKline treated
older persons less favorably than younger persons, this
articulation of the claim falls under the rubric of "disparate
treatment."
B. Disparate treatment
As the Supreme Court has noted, "'[d]isparate treatment
. . . is the most easily understood type of discrimination.'"
Hazen, ____ U.S. at ____, 113 S.Ct. at 1705 (alteration added)
(quoting Teamsters, 431 U.S. at 335 n.15, 97 S. Ct. at 1855 n.15).
A successful disparate treatment case prevents an employer from
intentionally engaging in discrimination or grants a remedy
against it for such conduct. Thus, "[d]isparate treatment . . .
captures the essence of what Congress sought to prohibit in the
ADEA." Id. at , 113 S.Ct. at 1706. For example, as the
Supreme Court pointed out when considering an employment
termination case, "[i]t is the very essence of age discrimination
for an older employee to be fired because the employer believes
that productivity and competence decline with old age." Id. In
a disparate treatment case, the trier of fact asks not whether
the employer's otherwise nondiscriminatory policy has some
adverse effect on members of the protected class, but rather, "is
'the employer . . . treating "some people less favorably than
others because of their [age]."'" U.S. Postal Serv. Bd. of
Governors v. Aikens, 460 U.S. 711, 715, 103 S. Ct. 1478, 1482
(1983) (emphasis added) (quoting Furnco Constr. Corp. v. Waters,
438 U.S. 567, 577, 98 S. Ct. 2943, 2949 (1978) (second internal
quotation omitted)). Usually, disparate treatment involves an
ad-hoc decision to treat an individual adversely because he or
she is in a particular protected class. For example, in Anderson
v. City of Bessemer City, 470 U.S. 578, 105 S. Ct. 1504 (1985),
the district court found disparate treatment liability based on
sex when a city refused to hire a qualified woman for the
position of recreation director. Id. at 580, 105 S.Ct. at 1515.
"Whatever the employer's decision-making process, a disparate
treatment claim cannot succeed unless the employee's protected
trait actually played a role in that process and had a
determinative influence on the outcome." Id. at ____, 113 S.Ct.
at 1706. Nonetheless, the district court found, and DiBiase
argues, that he did not have to meet this test, because the
policy constitutes explicit facial discrimination.
We agree that when a policy facially discriminates on
the basis of the protected trait, in certain circumstances it
"may constitute per se or explicit [age] discrimination." EEOC
v. Elgin Teachers Ass'n, 780 F. Supp. 1195, 1197 (N.D. Ill.
1991). And, "[w]hether an employment practice involves disparate
treatment through explicit facial discrimination does not depend
on why the employer discriminates but rather on the explicit
terms of the discrimination." Int'l Union, UAW v. Johnson
Controls, Inc., 499 U.S. 187, 199, 111 S. Ct. 1196, 1204 (1991).
This is because, in a facial disparate treatment case, the
protected trait by definition plays a role in the decision-making
process, inasmuch as the policy explicitly classifies people on
that basis. Thus, when the policy itself displays the unlawful
categorization, the employee is relieved from independently
proving intent. See Hazen, ____ U.S. at ____, 113 S.Ct. at 1705
(while "'proof of discriminatory motive is critical, . . . it can
in some situations be inferred from the mere fact of differences
in treatment. . . .'") (citation omitted).
The district court based its conclusion that the policy
constitutes facial discrimination on the following reasoning.
The ADEA provides a cause of action only to persons age 40 or
older. By its terms, then, the ADEA differentiates employees on
the basis of age, and leaves younger workers unprotected by the
statute.8 Thus, on their 40th birthday, workers gain a
substantive, valuable right. By contrast, nearly all other
judicially enforceable rights apply to all persons, not to
8
. As one court has noted, "[t]he House Report for [the ADEA]
cited the example of airline stewardesses, who must apparently
'retire' by the age of 32, as people beset by an obvious age
discrimination problem, yet who will have no remedy under the
[ADEA]." Kodish v. United Airlines, Inc., 463 F. Supp. 1245,
1249 (D. Colo. 1979), aff'd, 628 F.2d 1301 (10th Cir. 1980).
persons whose immutable characteristic falls in a particular
category. For example, Title VII of the Civil Rights Act of 1964
protects not just black workers, but whites as well. Males as
well as females may bring successful gender-discrimination suits.
And, in states with statutes prohibiting discrimination on the
basis of sexual orientation, presumably heterosexuals are
protected as well as homosexuals. The district court next
reasoned that, because the ADEA does not protect younger workers,
while these other rights apply to all, older workers by
definition hold a total number of rights greater than the total
number of rights younger workers hold. Hence, if younger workers
hold rights with the total value of x, older workers have x + 1
rights. In light of this analysis, the court reasoned that older
terminated workers have more accrued claims to give up than
younger workers. Thus, in order to comply with the ADEA,
SmithKline should have given extra consideration to older workers
because by signing the release they were giving up more claims
than younger workers. Accordingly, the court concluded that, by
treating older workers the same as younger workers, SmithKline
facially and explicitly discriminated on the basis of age.
We reject the district court's reasoning and thus we
hold that it erred in concluding that SmithKline's policy is
facially discriminatory and therefore constitutes per se
discrimination. The touchstone of explicit facial discrimination
is that the discrimination is apparent from the terms of the
policy itself. In Thurston, for example, an airline company's
policy constituted facial discrimination independent of proof of
intent because it allowed all disqualified pilots automatically
to be transferred to the position of flight engineer except those
disqualified on the basis of age. Thurston, 469 U.S. at 121, 105
S.Ct. at 622. In Johnson Controls, 499 U.S. at 197, 111 S.Ct. at
1202, the policy at issue violated Title VII because it
"exclude[d] women with childbearing capacity from lead-exposed
jobs and so create[d] a facial classification based on gender."
Similarly, Los Angeles Dep't of Water & Power v. Manhart, 435
U.S. 702, 98 S. Ct. 1370 (1978), prohibited a policy that facially
"require[d] 2,000 individuals to contribute more money into a
fund than 10,000 other employees simply because each of them
[was] a woman, rather than a man." Id. at 711, 98 S.Ct. at 1377.
But SmithKline's policy does not fall within that
limited category of cases. Its plan cannot be said to be
discriminatory on its face, because the district court's
conclusion that the plan is facially discriminatory required
referencing a fact outside the policy -- namely the ADEA.
Consider the district court's holding: "Because ADEA provides a
cause of action for age discrimination only to persons age forty
and above, the Plan explicitly treats older employees differently
than younger employees." DiBiase, 847 F. Supp. at 347. But the
word "explicitly" does not belong. It is impossible to examine
SmithKline's policy and conclude that on its face it treats older
workers disparately. There is a good reason for this -- the
policy does not classify persons on the basis of age. On the
contrary, the plan offering is an archetypical example of a
facially non-discriminatory policy. SmithKline made the expanded
package available to all persons willing to sign the release,
regardless of age. SmithKline did not require employees to waive
only ADEA claims, but to waive all claims. A facially non-
discriminatory policy cannot be transformed into a facially
discriminatory policy simply because of the existence of the
ADEA.9
9
. While our result is not dependent on this point, we observe
that certain precedents suggest that the premise that only
employees 40 or over have anything to surrender under the ADEA is
wrong. Thus, it has been held that employees under the age of 40
may bring retaliation claims under section 4(d) of the ADEA, see
Anderson v. Phillips Petroleum Co., 722 F. Supp. 668, 671-72 (D.
Kan. 1989). Moreover, at least two courts have held that,
despite the statutory provision to the contrary, workers under
the age of 40 may have standing to sue for substantive age
discrimination. In Johnson v. Mayor and City Council of
Baltimore, 515 F. Supp. 1287, 1301 (D.Md. 1981), rev'd on other
grounds, 731 F.2d 209 (4th Cir. 1984), the court held that a 32-
year old plaintiff had standing to challenge the company's early
retirement policy because "[the standing] provision does no more
than define the acts prohibited by the statute and would not
deprive plaintiff . . . of standing in this case." Id. In Allen
v. American Home Foods, Inc., 644 F. Supp. 1553, 1558 (N.D. Ind.
1986), the court held that employees under 40 had standing to sue
under the ADEA when they were terminated in the wake of a plant
closing. Our point is not that these cases were decided
correctly, a conclusion we neither reach nor reject. Rather, our
point is that the provisions of the ADEA -- and how they are
interpreted -- are outside an employer's control. Moreover, the
30-year old's suit certainly imposes costs upon the company, and
once the suit is filed, it cannot be said that the costs will be
contained by an early dismissal. These facts make it even more
difficult to make the blanket statement that older persons'
Thus, DiBiase is left with having to prove both unequal
treatment and intent to discriminate. See Hazen, ____ U.S. at
____, 113 S.Ct. at 1705; Armbruster v. Unisys Corp., 32 F.3d 768,
782 (3d Cir. 1994); Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir.
1994). The Supreme Court plainly has stated that "there is no
disparate treatment under the ADEA when the factor motivating the
employer is some feature other than the employee's age." Hazen,
____ U.S. at ____, 113 S.Ct. at 1705. Here, the record does not
contain even the slightest evidence of discriminatory motive.10
At any rate, even assuming the existence of a
(..continued)
claims are worth more than younger persons' claims. See
generally Typescript at 21-24.
10
. In Hazen, the Supreme Court held that discrimination based
on pension eligibility (when pension eligibility was based on
years of service) does not violate the ADEA despite the strong
correlation between the two categories. The Court did say,
however, that "[w]e do not preclude the possibility that an
employer who targets employees with a particular pension status
on the assumption that these employees are likely to be older
thereby engages in age discrimination. Pension status may be a
proxy for age . . . in the sense that the employer may suppose a
correlation between the two factors and act accordingly." Hazen,
___ U.S. at ____, 113 S.Ct. at 1707. Here, there is nothing in
the record to indicate that SmithKline, by offering the general
release, intended to target older workers. In fact, its motive
is quite obvious -- it wanted to protect itself against all
litigation arising out of the RIF.
DiBiase also contends that the intent to discriminate
can be inferred based on his letter to SmithKline charging
SmithKline with violating the ADEA. This is preposterous. The
logical consequence of the argument is that a terminated employee
can manufacture an illicit intent on the part of the employer
simply by telling the employer that he or she thinks the employer
is violating an anti-discrimination law.
legitimate factual dispute concerning SmithKline's motive, it
simply did not discriminate against DiBiase on the basis of age.
Again, we begin with the district court's reasoning. The
district court properly concluded that employees gain a valuable
substantive right simply by turning 40 for the ADEA protects
workers who are at least 40 years of age from age discrimination.
29 U.S.C. § 631(a). But the district court went on to reason
that all 40-year old employees had accrued ADEA "claims" that
necessarily rendered their bundle of accrued claims more valuable
than younger employees' bundles. Thus, the district court's
reasoning assumes that all terminated employees with races or
with genders have accrued potential Title VII claims against
their former employers, and that terminated employees with sexual
orientations have such potential claims under various relevant
state laws. The court's reasoning also assumes that all such
accrued claims are equally valuable. To take the principle where
it logically leads, it is like saying every person has accrued a
potential due process claim simply because he or she has been a
person and hence has been protected by the Fifth and Fourteenth
amendments.
This kind of reasoning is inappropriate because the
ADEA claim was just one of a plethora of claims that SmithKline
asked employees to waive. Thus, the value of the accrued ADEA
claim has to be weighed against the value of other accrued
claims. For instance, other things being equal, a terminated
employee's potential accrued gender discrimination claim probably
would be worth more if the employee were a woman, even though
both men and women are protected by Title VII. Similarly,
assuming all other variables to be equal, a black employee's race
discrimination claim may be worth more in the abstract than such
a claim from a white employee. Recognizing these possibilities
inevitably leads us away from the abstract reasoning utilized by
the district court into a more practical approach that recognizes
that the value of a bundle of accrued claims depends on a myriad
of factors including, among other things, the employee's work
performance history, the circumstances surrounding the
terminations, and the nature -- if any -- of the rehiring. For
example, a 35-year-old black employee terminated despite a
stellar work performance record certainly has a more valuable
claim under Title VII than a 55-year-old, fired because of
incompetence, has under the ADEA. In theory, if there were a
market for accrued claims, terminated 40-year old employees would
not receive automatically the highest bids, as buyers would want
to know more facts about the circumstances surrounding individual
terminations. The point, of course, is that the district court's
assumption, that because of the ADEA all 40-year old employees
have a more valuable set of claims than younger workers, is
simply wrong. One cannot say in the first instance that the 50-
year-old's accrued "claims" are by definition worth more than
others' accrued claims.
The fallacy in the district court's reasoning is in
large part due to the conflation of the notion of a "right" with
the notion of an accrued "claim." A right to be free
prospectively from certain forms of discrimination always is
worth something; however, whether a person has accrued a claim
based on a right depends entirely on what previously has
occurred. SmithKline did not ask its terminated employees to
give up their statutorily or constitutionally created rights to
be free prospectively of various forms of discrimination.
Rather, the plan's focus was entirely retrospective, on whether
the value of any claims -- by definition already accrued -- was
worth surrendering for the enhanced benefits. The significance
of the distinction between a right and a claim is particularly
demonstrated in this case because the district court found that
DiBiase's substantive age discrimination claim had no merit.
In fact, the district court's reasoning and conclusion
are at odds with propositions of law it acknowledges in its
opinion. The court correctly noted that the ADEA "focuses on
individuals, and precludes treatment of individuals as simply
components of an age-based class." DiBiase, 847 F. Supp. at 347.
By analogy, in Manhart, the pension policy violated Title VII
despite the fact that it was based on legitimate actuarial
calculations, because "the basic policy of the statute requires
that we focus on fairness to individuals rather than fairness to
classes." Manhart, 435 U.S. at 709, 98 S.Ct. at 1376. This is
because "[p]ractices that classify employees in terms of
religion, race, or sex [or age] tend to preserve traditional
assumptions about groups rather than thoughtful scrutiny of
individuals." Id. Yet the district court's reasoning turns this
principle on its head. Here, SmithKline enacted a policy that
called for each individual to weigh the circumstances surrounding
his or her discharge, and to make an informed decision about
whether to sign the release or proceed with claims that, if they
existed, already had accrued. Thus, the policy certainly was
fair to individuals. Yet, the district court's opinion, by
conflating prospective rights with accrued claims, ignored the
variances in each individual's situation, and instead classified
all persons who were at least 40 years old as being in the
identical position. The opinion thus reached a conclusion
directly contrary to the policy it correctly enunciated.
We must emphasize that our result may have been
different had there been no analytical distinction between the
class of disadvantaged employees (assuming such a class) and the
protected class -- that is, had older employees by definition
given up more claims than younger employees. In this regard,
Hazen again is instructive. Although the Court concluded that
"age and years of service are analytically distinct," Hazen,
____ U.S. at ____, 113 S.Ct. at 1707, it expressly declined to
"consider the special case where an employee is about to vest in
pension benefits as a result of his age, rather than years of
service." Hazen, ___ U.S. at ____, 113 S.Ct. at 1707. The
correlation between age and pension status in that special case
is materially different -- the terminated employee always will be
a member of the protected class. The point is important, because
we would have faced a different situation if, for example,
SmithKline conditioned the expanded separation package upon a
waiver only of ADEA claims inasmuch as employees do in fact gain
a substantive right when they turn 40. Thus, assuming no
knowledge of the circumstances surrounding the termination, the
possibility that a terminated older employee actually has a
viable age discrimination claim, is worth something (though
probably not much) in the abstract. It follows, then, that if
SmithKline required terminated employees to give up only ADEA
claims to obtain the enhanced benefits, older employees but not
younger employees would be forced to give up something of
value.11
In the foregoing scenario, SmithKline would have
treated older workers differently than younger workers. Thus, in
EEOC v. Westinghouse Electric Corp., 869 F.2d 696 (3d Cir. 1989),
vacated and remanded, 493 U.S. 801, 110 S. Ct. 37 (1989), we held
that a policy denying severance pay to laid-off employees who
were eligible for early or selected retirement constituted
discrimination on the basis of age. There, the class of people
eligible for early retirement always coincided with members of
11
. But see footnote 9, supra.
the protected class. Id. at 705.12 But that is not the
situation here and we decline to address how we would rule in
such a case. SmithKline conditioned the right to the expanded
benefits on an employee's blanket waiver of all accrued claims;
this treatment cannot be said to be disparate, because it is
impossible to tell whose package of potential claims is more
valuable.13 Therefore, in light of the above, DiBiase has no
disparate treatment claim against SmithKline.
12
. The Supreme Court remanded Westinghouse for reconsideration
in light of Public Employees Retirement System of Ohio v. Betts,
492 U.S. 158, 109 S. Ct. 1854 (1989). In Betts, the Supreme Court
held that the then-existing section 4(f)(2) of the ADEA --
exempting from the ADEA's prohibitions "any bona fide employee
benefit plan . . . which is not a subterfuge to evade the
purposes of the Act" -- insulates bona fide plans from the
purview of the ADEA "so long as the plan is not a method of
discriminating in other, non-fringe-benefit aspects of the
employment relationship." Id. at 177, 109 S.Ct. at 2866.
Congress since overruled Betts. We cite Westinghouse solely for
the proposition that when a company's policy distinguishes
employees on the basis of a factor analytically indistinct from
age, we would be faced with a different situation than that in
this case.
13
. The National Employment Lawyers Association has filed an
amicus brief relying in part on EEOC v. Board of Governors, 957
F.2d 424 (7th Cir.), cert. denied, ____ U.S. ____, 113 S. Ct. 299
(1992). In that case, the Court of Appeals for the Seventh
Circuit held that "a collective bargaining agreement provision
that denies employees their contractual right to a grievance
proceeding whenever the employee initiates a claim, including a
claim of age-based discrimination, in an administrative or
judicial forum", id. at 425, violates section 4(d) of the ADEA.
Id. at 431. Section 4(d) prohibits employers from retaliating
against an employee "because such individual . . . has made a
charge, testified, assisted, or participated in any manner in an
investigation, proceeding or litigation under this chapter." 29
U.S.C. § 623(d). The company's policy therefore commanded a
violation of this provision anytime an employee filed an age
C. Disparate Impact
1. Whether DiBiase adequately has raised this issue
An amicus, the National Employment Lawyers Association
(NELA), urges us to affirm the district court's judgment on the
alternative theory of disparate impact. In a disparate impact
case, the plaintiff claims that the employment practice "has a
disproportionate effect on older workers [and thus] violates the
ADEA." Hazen, U.S. at ____, 113 S.Ct. at 1710 (Kennedy, J.
concurring). While the district court indicated that it "need
not determine whether the policy also constitutes disparate
impact," DiBiase, 849 F. Supp. at 348 n.13, it nevertheless went
on to say:
Disparate impact cases typically focus on
statistical disparities between members of
the protected and unprotected classes. In
this case, however, no statistics are
necessary because all members of the age-
protected class must surrender potential age
discrimination claims, whereas no member of
the non-protected class has potential age
discrimination claims to surrender. Thus, a
disparate impact analysis in this case
involves arguments identical to those
involved in the disparate treatment inquiry,
and results in the same conclusion:
SmithKline's policy causes a disparate impact
because it specifies different treatment.
Id. (citation omitted; emphasis in original). The district
court's observation about disparate impact assumes that older
(..continued)
discrimination charge with the EEOC. This decision does not
support DiBiase's position.
workers signing the release gave up more than younger workers
solely because the ADEA protects only older workers. In light of
our discussion above, that analysis is flawed fundamentally.
Moreover, the district court's reasoning is somewhat circular --
in explaining why there is disparate impact liability, the court
assumed the conclusion of its disparate treatment analysis. That
logical flaw makes the disparate impact analysis redundant: To
say that there is disparate impact because there is disparate
treatment is to say nothing at all. Of course, if a policy is
facially discriminatory, it has a disparate impact on the
discriminated-against individuals. Therefore, we reject the
district court's disparate impact conclusion for the reasons
detailed above.14
But the question remains -- should we still remand the
matter for further proceedings (and perhaps further discovery) on
a different type of disparate impact theory. After all, to
conduct a disparate impact analysis properly in this context, the
court should have assumed that the release did not treat
employees disparately, and then asked whether, in reality, the
14
. The problem with the district court's analysis probably
stems from the fact that the court explicitly indicated that it
need not reach the issue of disparate impact. See DiBiase, 849
F. Supp. at 348 n.13; Br. Amicus Curiae of National Employment
Lawyers Association at 7 (acknowledging that district court
determined that it need not decide whether the severance plan
constitutes unlawful disparate impact). The language following
the district court's disclaimer constituted simply a reflection
on the import of the court's disparate treatment conclusion --
once a policy is deemed facially discriminatory, the policy has a
disparate impact as well.
policy had a disproportionate effect on older employees. Such an
inquiry, of course, would have required use of sophisticated
statistical data, and DiBiase apparently was not inclined to take
this path, as he produced no such evidence.
DiBiase does not urge us to reach this conclusion as
an alternative way to uphold the district court's judgment if we
reject the court's disparate treatment analysis. Only the amicus
argues that DiBiase's "ADEA claims are actionable under a
disparate impact theory," NELA Br. at 7, but an "amicus may not
frame the issues for appeal." Swan v. Peterson, 6 F.3d 1373,
1383 (9th Cir. 1993) (citing Sanchez-Trujillo v. I.N.S., 801 F.2d
1571, 1581 n.9 (9th Cir. 1986), cert. denied, ____ U.S. ____,
____ S.Ct. ____, 1004 U.S. LEXIS 7855 (1994). Absent the
existence of "substantial public interests" calling us to depart
from the general rule, "we consider only issues argued in the
briefs filed by the parties and not those argued in the briefs
filed by interested nonparties." Continental Ins. Cos. v.
Northeastern Pharmaceutical & Chem. Co., Inc., 842 F.2d 977, 984
(8th Cir. 1988), cert. denied, 488 U.S. 821, 109 S. Ct. 66 (1988);
Preservation Coalition, Inc. v. Pierce, 667 F.2d 851, 862 (9th
Cir. 1982).15 Therefore, because DiBiase is not pursuing a
disparate impact claim, the issue is not before us.
15
. SmithKline addresses disparate impact theory, apparently to
protect itself lest we conclude that the district court
adequately reached the issue.
2. The availability of disparate impact theory in this case16
We note, however, that even if the issue properly were
before us, disparate impact theory would not be applicable here.
In a factual scenario remarkably like the one here, the Supreme
Court held that there can be no disparate impact liability. In
Manhart, the City of Los Angeles argued that its pension policy
requiring women to contribute greater amounts into a pension fund
than men was mandated by Title VII itself, reasoning that "a
gender-neutral pension plan would itself violate Title VII
because of its disproportionately heavy impact on male
employees." Manhart, 435 U.S. at 710 n.20, 98 S. Ct. 1370, 1376
n.20. The Court dismissed the argument out of hand: "Even under
Title VII itself -- assuming disparate-impact analysis applies to
fringe benefits -- the male employees would not prevail. Even a
completely neutral practice will inevitably have some
disproportionate impact on one group or another. . . . [T]his
Court has never held . . . that discrimination must always be
inferred from such consequences." Id. That case, like this one,
involved an employer's grant of "fringe benefits." There, the
city argued that it was required to treat people unequally in
order to treat them equally. Here, DiBiase makes the identical
argument -- that SmithKline was required to treat employees
16
. Judge Becker does not join subsection II(C)(2) and II(C)(3)
of the opinion. He would say simply that DiBiase clearly abjured
any intention to proceed under a disparate impact theory, and
therefore there is no disparate impact claim before us.
unequally in order to treat them equally. Like in Manhart, the
disparate treatment is alleged to be justified because older
people as a group would otherwise pay more for the privilege than
younger people.
Moreover, the facts of this case simply do not
implicate the policies underlying disparate impact theory. In
the first place, as described in detail above, the policy does
not per se affect older workers more harshly than younger
workers. Second, there is absolutely no evidence that the
company's policy does in fact affect older people adversely.
Third, even if it did, such a neutral policy -- which does not
rely on an invidious stereotype about older employees, which
clearly is not motivated by a discriminatory impulse, and which
could be demonstrated to have a disparate impact only by the use
of an incredibly sophisticated statistical analysis -- simply
cannot be the basis of ADEA liability. Fourth, this is not a
case where finding liability would help eradicate the entrenched
effects of past discrimination. Finally, use of statistical
evidence demonstrating a disproportionate impact will shed little
light on the employer's motive. In short, there can be no
liability in this case based on disparate impact.
3. Disparate impact theory under the ADEA17
17
. Judge McKee does not join subsection II(C)(3) of the
opinion, as he finds it unnecessary to consider the question of
whether disparate impact theory liability is viable under the
Moreover, in the wake of Hazen, it is doubtful that
traditional disparate impact theory is a viable theory of
liability under the ADEA. In Hazen, the Supreme Court stated
that it was declining to decide whether an employer may be liable
under the ADEA on a disparate impact theory. Id. at ____, 113
S.Ct. at 1706, id. at ____, 113 S.Ct. at 1710 (Kennedy, J.
concurring); Markham v. Geller, 451 U.S. 945, 101 S. Ct. 2028
(1981) (Rehnquist, J., dissenting from denial of certiorari).
Yet the analysis in Hazen casts considerable doubt on the
viability of the theory. And, in fact, we recently recognized
that the existence of disparate impact theory under the ADEA is
an open question. See Armbruster, 32 F.3d at 772 n.4 ("Whether a
disparate impact theory of liability is even available under ADEA
has yet to be addressed by the Supreme Court. In any event,
because the district court has not yet addressed this issue, we
think it would be inappropriate for us to consider it.").
(Citations omitted).18
(..continued)
ADEA. Therefore, Judge Greenberg writes this subsection only for
himself.
18
. In Massarsky v. General Motors Corp., 706 F.2d 111 (3d
Cir.), cert. denied, 464 U.S. 937, 104 S. Ct. 348 (1983), we noted
that "this court has never ruled on whether a plaintiff can
establish a violation of the Act by showing disparate impact
alone." Id. at 120. In MacNamara v. Korean Air Lines, 863 F.2d
1135 (3d Cir. 1988), cert. denied, 493 U.S. 944, 110 S. Ct. 349
(1989), however, we said that "Title VII and ADEA liability can
be found where facially neutral employment practices have a
discriminatory effect or 'disparate impact' on protected groups,
without proof that the employer adopted these practices with a
discriminatory motive." Id. at 1148. That case is not
controlling, however. First, there the plaintiffs challenged
Three premises in the Hazen Court's analysis make the
point. First, though not explicitly deciding the viability of
disparate impact liability under the ADEA, the Court did note
that disparate treatment "captures the essence of what Congress
sought to prohibit in the ADEA." Hazen, ____ U.S. at ____, 113
S.Ct. at 1706. Second, the Court reasoned that "Congress'
promulgation of the ADEA was prompted by its concern that older
workers were being deprived of employment on the basis of
inaccurate and stigmatizing stereotypes." Id. Finally, the
Court held that "[w]hen the employer's decision is wholly
motivated by factors other than age, the problem of inaccurate
and stigmatizing stereotypes disappears. This is true even if
the motivating factor is correlated with age . . . ." Id. In a
pure disparate impact case, the employer's decision by definition
is "wholly motivated by factors other than age."19 Thus, with
the third premise, the Supreme Court apparently concluded that in
(..continued)
"the practice of favoring Korean nationals on the ground that it
has the effect of discriminating against others on grounds of
race or national origin." Id. Thus, the disparate impact
allegation involved Title VII only, and the statement about the
ADEA is pure dicta. Second, the cases relied upon for the
proposition were Title VII cases, and in light of our express
statement in Massarsky that Title VII jurisprudence did not
necessarily apply to the ADEA in this context, it is
inconceivable that we simply would have applied disparate impact
theory without analysis -- particularly when the application was
not relevant to the decision. Third, we decided MacNamara
before Hazen, and subsequent Supreme Court authority necessarily
controls.
19
. I am not concerned here with situations in which impact is
used to prove intent to discriminate.
such cases, the policies behind the ADEA are not implicated.
With that said, it is difficult to see how disparate impact
liability can survive the analysis.
The Court of Appeals for the Seventh Circuit and two
district courts, relying in part on Hazen, recently held that
disparate impact liability is unavailable under the ADEA. EEOC
v. Francis W. Parker School, 41 F.3d 1073, 1077 (7th Cir. 1994)
("decisions based on criteria which merely tend to affect workers
over the age of forty more adversely than workers under forty are
not prohibited") (citing Anderson v. Baxter Healthcare Corp., 13
F.3d 1120 (7th Cir. 1993)); Martincic v. Urban Redevelopment
Authority of Pittsburgh, 844 F. Supp. 1073, 1076-77 (W.D. Pa.
1994) (holding that in light of Hazen, there can be no disparate
impact liability under the ADEA), aff'd, No. 94-3235, F.3d
(3d Cir. Nov. 28, 1994) (table); Hiatt v. Union Pacific R.R. Co.,
859 F. Supp. 1416, 1434 (D. Wyo. 1994) ("[I]t is inappropriate to
incorporate the disparate impact theory of discrimination
enumerated [by the Supreme Court in the Title VII context] into
the ADEA.").20
20
. Yet several courts of appeal have assumed that disparate
impact liability applies under the ADEA. See, e.g., Geller v.
Markham, 635 F.2d 1027, 1032 (2d Cir. 1980), cert. denied, 451
U.S. 945, 101 S. Ct. 2028 (1981); Abbott v. Federal Forge, Inc.,
912 F.2d 867, 872 (6th Cir. 1990); Rose v. Wells Fargo & Co., 902
F.2d 1417, 1423-25 (9th Cir. 1990). These cases were decided
before Hazen, and none of them even purported to conduct any
analysis of the issue. Rather, they probably relied on the oft-
cited principle that interpretations of the ADEA parallel
interpretations of Title VII. Because Hazen, if nothing else at
least disposes of that assumption, those cases are not
persuasive. However, even after Hazen, the Court of Appeals for
The Hazen Court's emphasis on the congressional purpose
behind the ADEA is particularly helpful in confirming the Court's
intimations. First, the statutory language does not explicitly
provide for disparate impact liability. While it has been argued
that section 623(a)(2) authorizes claims of disparate impact, see
Marla Ziegler, Disparate Impact Analysis and the Age
Discrimination in Employment Act, 68 Minn. L. Rev. 1038, 1050-51
(1984), that reading of the statute is inaccurate. The section
renders it "unlawful for an employer ---
(2) to limit, segregate, or classify his
employees in any way which would deprive or
tend to deprive any individual of employment
opportunities or otherwise adversely affect
his status as an employee, because of such
individual's age . . . ."
29 U.S.C. § 623(a)(2). However, finding the theory lurking in
this section requires reading the language "because of such
individual's age" to modify "adversely affect" rather than to
modify "limit, segregate, or classify." Because of the placement
of the commas, this is a grammatically incorrect reading. See
Pamela S. Krop, Note, Age Discrimination and the Disparate Impact
Doctrine, 34 Stan. L. Rev. 837, 842-43 (1982). Moreover, as Krop
points out, section (2) parallels the language of section (1),
which makes it unlawful for an employer --
(1) to fail or refuse to hire or to discharge
any individual or otherwise discriminate
(..continued)
the Eighth Circuit assumed -- again without analysis -- that
disparate impact liability is cognizable under the ADEA. See
Houghton v. Sipco, Inc., 38 F.3d 953, 958-59 (8th Cir. 1994).
against any individual with respect to his
compensation, terms, conditions, or
privileges of employment, because of such
individual's age.
29 U.S.C. § 623(a). "Under this provision, the 'because of such
individual's age' clause can only modify the description of
prohibited actions . . . . The parallel wording of section
4(a)(2) indicates that it too was aimed at disparate treatment.
An employer may not limit, segregate, or classify employees on
the basis of age in a manner that would adversely affect an
employee." Krop at 843.
More than that, however, although the ADEA language
quoted above parallels the language in Title VII, when the
Supreme Court found disparate impact liability under Title VII,
it relied not on any specific statutory language but on the
policies behind the statute. In that case, Griggs v. Duke Power
Co., 401 U.S. 424, 91 S. Ct. 849 (1971), the Court stated:
The objective of Congress in the enactment of
Title VII . . . was to achieve equality of
employment opportunities and remove barriers
that have operated in the past to favor an
identifiable group of white employees over
other employees. Under the Act, practices,
procedures, or tests neutral on their face,
and even neutral in terms of intent, cannot
be maintained if they operate to 'freeze' the
status quo of prior discriminatory employment
practices.
Id. at 429-30, 91 S.Ct. at 853. This policy is not easily
transplanted into the ADEA, the primary purpose of which is to
prohibit employers from acting upon the assumption that
"productivity and competence decline with old age." Hazen, ____
U.S. at ____, 113 S.Ct. at 1706. As one court has put it, "[i]n
Griggs, the critical fact was the link between the history of
educational discrimination and the use of that discrimination as
a means of presently disadvantaging African-Americans. These
concerns simply are not present when the alleged disparate impact
is based on age." Hiatt, 859 F. Supp. at 1436. Congress itself
recognized this distinction, for it provided in the ADEA that
"[i]t shall not be unlawful for an employer . . . to take any
action otherwise prohibited [by this section] where the
differentiation is based on reasonable factors other than age . .
. ." 29 U.S.C. §623(f)(1). "The sentence is incomprehensible
unless the prohibition forbids disparate treatment and the
exception authorized disparate impact." Metz v. Transit Mix,
Inc., 828 F.2d 1202, 1220 (7th Cir. 1987) (Easterbrook, J.
dissenting) (quoting Douglas Laycock, Continuing Violations,
Disparate Impact in Compensation, and Other Title VII Issues, 49
L. & Contemp. Prob. 53, 55 (Aut. 1986) (referring to identical
language of Equal Pay Act). In other words, by the statutory
language itself, Congress recognized that neutral policies not
motivated by discriminatory intent may be permissible employment
practices. It is difficult to imagine how Congress could have
concluded otherwise -- for application of disparate impact theory
could lead to results which Congress probably did not intend.21
21
. For example, if an employer set the work week at five days
per week, eight hours per day, or if it determined to eliminate
But I need not go so far as to say that disparate
impact theory is never available under the ADEA. Rather,
resolution of that issue must await another day. I write this
section to highlight my doubts and to say that, at any rate,
disparate impact theory should not be applied as a matter of
course. Here, of course, we only need hold that even if in some
situations disparate impact liability may be established under
the ADEA, this case does not present one of them.
III. CONCLUSION
In view of the aforesaid, we hold that an employer may
offer enhanced benefits to all terminated employees agreeing to
waive all claims against the company, without providing extra
consideration to workers protected by the ADEA. Thus, it is
evident that the district court should have denied DiBiase's
motion for summary judgment and should have granted SmithKline's
motion for summary judgment on count 2 of the amended complaint.
Furthermore, it is clear that there is no need for further
proceedings in the district court. See Nazay v. Miller, 949 F.2d
(..continued)
medical insurance coverage, its decisions could have a disparate
impact on older employees. In that circumstance, in an ADEA
action employers would be forced to justify their business
practices with older employees then having the opportunity to
demonstrate that alternative employment practices could fulfill
the employer's needs. See Abbott v. Federal Forge, Inc., 912
F.2d 867, 872 (6th Cir. 1990). Such a regime could subject
employers to unreasonable intrusions by juries into their
business practices. See Gray v. York Newspapers, Inc., 957 F.2d
1070, 1083 (3d Cir. 1992).
1323, 1328 (3d Cir. 1991). Consequently, the order of May 3,
1994, granting DiBiase summary judgment will be reversed and the
matter will be remanded to the district court for entry of
judgment in favor of SmithKline.