R.J. Reynolds Applicant Seeks Justices’ Review of Age Bias Claims

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By Patrick Dorrian

A rejected R.J. Reynolds applicant wants the U.S. Supreme Court to consider whether those 40-and-over can sue for hiring discrimination even when they can’t show intent on the employer’s part. The right to do so is “critical” as more and more older people plan to work into their later years, advocates told Bloomberg BNA.

If the justices do decide to review the Eleventh Circuit’s October decision in Villarreal v. R.J. Reynolds Tobacco Co., the outcome could hinge on whether the court embraces the Equal Employment Opportunity Commission’s view that the federal Age Discrimination in Employment Act permits such “disparate impact,” or unintended bias, claims by job applicants.

The popular belief that Supreme Court nominee Judge Neil Gorsuch isn’t a fan of courts deferring to federal agencies’ interpretations of the laws they enforce may take on added significance for both employers and workers during his confirmation hearing, set to begin March 20.

And in California, a federal judge’s recent decision requiring PricewaterhouseCoopers to defend its use of a recruitment tool focusing on college students may help persuade the justices to take a look at Villarreal.

No Classic Circuit Split.

In Rabin v. PricewaterhouseCoopers LLP, a proposed class of 40-and-over applicants claim they were denied entry-level accountant and auditor positions with PricewaterhouseCoopers. The accounting giant allegedly engaged in a “pattern or practice” of age-based discrimination in hiring, including use of a campus-track recruitment tool that can only be accessed by applicants with a current college affiliation.

In Villarreal, a 49-year-old online job seeker similarly claims R.J. Reynolds Tobacco Co.’s use of “resume review guidelines” that screen out older workers was the reason he was repeatedly rejected for hire. The complaint also includes class allegations.

The Atlanta-based U.S. Court of Appeals for the Eleventh Circuit held in Villarreal that employees can sue under the ADEA for disparate impact discrimination but job applicants must show intentional discrimination. Rabin reached the opposite conclusion, holding that older job applicants can sue for disparate impact bias.

The Supreme Court often waits until a divide develops among the federal appeals courts on a legal question—what is known as a circuit split—before it decides to hear a case raising the issue. But that Rabin, a ruling by the U.S. District Court for the Northern District of California, didn’t create the classic “circuit split,” may not matter as the decision nevertheless could influence the justices in deciding whether to take up Villarreal, lawyers told Bloomberg BNA.

Rabin “shows that a dispute is brewing,” AARP Litigation Foundation’s Laurie A. McCann told Bloomberg BNA. The Washington-based advocacy group for older people supported Villarreal before the Eleventh Circuit and is co-counsel to the plaintiffs in Rabin.

“I think Rabin certainly will come up in the briefing in Villarreal,” management-side attorney Rae Vann of NT Lakis LLP in Washington said. But Vann said she suspects the ruling by itself won’t be enough to persuade the justices to grant review. Vann represents the Equal Employment Advisory Council, an employer rights organization that backed R.J. Reynolds before the Eleventh Circuit.

Other Reasons for Granting Review.

Not only does Rabin show that views vary on the permissibility of disparate impact hiring claims under the ADEA, but so does the outcome in Villarreal, McCann and Vann said.

In the Eleventh Circuit case, the 11 judges who decided the issue offered at least three different takes on how the ADEA’s disparate impact provision should be interpreted. This demonstrates the sort of confusion the Supreme Court is often called on to clear up, McCann said.

Plus, the Villarreal majority opinion conflicts with Supreme Court precedent on how the term “employee” is interpreted, she added. She’s a senior attorney with AARP.

“So there is more than one thing the Supreme Court could hang its hat on” in deciding to grant review in Villarreal, McCann said.

Rabin indicates that the justices might have to deal with the question of the viability of disparate impact hiring bias under the ADEA “sooner or later, so why not deal with it sooner,” McCann said.

Issue ‘Critical’ for Older Americans.

The issue is “critical” for older Americans, and its importance for older workers “can’t be overstated,” Tucson, Ariz.-based attorney and consultant Patricia G. Barnes told Bloomberg BNA.

“The stakes are exceptionally high with respect to both the Villarreal and Rabin cases because they pose a fundamental challenge to a practice that is deeply embedded in this country’s status quo—age discrimination in hiring,” she said.

Even the Labor Department and the EEOC “operate so called attorney ‘honors’ hiring programs that are open only to graduating students who are almost all under the age of 40,” Barnes said. A former judge, she is the author of “Betrayed: The Legalization of Age Discrimination in the Workplace” and other books on job bias and workplace bullying.

Whether disparate impact hiring claims are allowed under the ADEA is an “issue that’s hugely important to older workers,” and Rabin shows that there are differences in opinion on the question, McCann said.

Agency Deference Issue in Play?

Any ultimate ruling on the merits by the justices could boil down to whether the EEOC’s view on ADEA disparate impact hiring claims should carry the day.

The agency, which is tasked with enforcing the federal age discrimination law and which supported Villarreal before the Eleventh Circuit, says it has long maintained that older applicants—not just incumbent employees—can sue for unintentional hiring bias.

Courts, including the Supreme Court, often defer to a federal agency’s view on an issue where the language of a law is unclear. The conflicting holdings in Rabin and Villarreal, together with the fractured nature of the decision in the latter case, would seem to make deference to the EEOC “that much more compelling” here, Barnes said.

Both Rabin and the dissent in Villarreal point to the EEOC’s view and the deference that may be owed to the agency’s interpretation as an additional reason why older workers should be allowed to sue for discrimination in hiring, even if they can’t show intent on the part of an employer. The EEOC’s view is long-held, stated in a regulation that is the product of notice-and-comment rulemaking and is a reasonable interpretation of the ADEA, those judges said.

But Vann questioned whether the EEOC really has said in notice-and-comment rulemaking—regulations on which stakeholders and the public have a chance to weigh in—that the ADEA permits disparate impact bias claims by job applicants. The agency’s current regulations on the issue use the term “individuals,” not the term “applicants,” she said, even though the agency knew at the time that the ADEA’s disparate impact provision was subject to dispute.

The EEOC has never stated in its ADEA regulations or formal guidance the view it advocated in Villarreal, she said. Rather, the agency has only taken that position in litigation, including in amicus briefs of the sort filed with the Eleventh Circuit, she said.

Might a Justice Gorsuch Shape the Result?

The timing of the upcoming hearing on the nomination of Judge Gorsuch to fill a seat on the high court also may be a factor in the ultimate result of the case.

The prevailing wisdom is that his nomination will go through, Vann said. “I think it will play out” timing-wise that Gorsuch would participate in Villarreal if review is granted by the high court.

For the plaintiffs, it’s “not particularly encouraging that Judge Gorsuch has shown skepticism on” agency deference, Barnes said.

However, despite Gorsuch’s documented reservations about agency deference, it’s risky to suggest he would rule a particular way on the issue of disparate impact hiring claims under the ADEA, Vann said.

The age-protected class covered by federal age bias law doesn’t really fall within either a traditional conservative or liberal ideological perspective, she said, “so it’s folly to predict” how Gorsuch might come down.

Barnes partly agreed. Gorsuch is a “literalist” when it comes to interpreting a statute, which is bad for agency deference. But a sober and unbiased reading of the ADEA may lead to the conclusion that disparate impact hiring claims are permitted under the law, she said.

Besides, deference to an agency’s reading of a statute isn’t “set in stone,” but is instead “a contextual thing,” Barnes said. Here, the context would seem to support the Supreme Court’s embracing the EEOC’s view.

Justices’ Track Record on EEOC Deference.

The Supreme Court, however, typically hasn’t tended to go along with the EEOC’s interpretations of the laws it enforces, Professor Melissa Hart of the University of Colorado Law School told Bloomberg BNA.

The high court has only deferred to the EEOC after the court had already decided an issue and the agency’s position is consistent with the court’s take, she said. In those instances where the justices have deferred to the EEOC, they’ve really done so “in name only,” Hart said.

The fact that the EEOC doesn’t always state its positions on how federal job bias laws should be interpreted in formal rulemaking may be one reason the Supreme Court is reluctant to embrace its views, she said. Hart authored a 2006 law review article examining the “remarkably little respect” the Supreme Court has given to the EEOC’s views and the court’s preference to “chart its own course.”

The EEOC sometimes states its positions in various resource and other guidance documents, she said. “That’s part of why the deference issue with the EEOC has always been complicated,” she said.

Nothing has changed in the 10 years since her law review article was published, Hart said.

Hart, who clerked for former Justice John Paul Stevens, argued in her law review article that the Supreme Court’s general refusal to respect the EEOC’s interpretations of the laws it enforces is a mistake. Stevens authored the high court’s opinion in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., one of the landmark cases on agency deference.

Gorsuch’s view on agency deference seems to be consistent with the Supreme Court’s treatment of the EEOC’s statutory interpretations to date, Hart said. She sees Gorsuch’s approach not as anti-deference, but that judges and courts shouldn’t abdicate their independent judgment in favor of an agency’s view.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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