Meacham v. Knolls--summary of June 19, 2008 decision

In this employment law case under the Age Discrimination in Employment Act (28 USC sec. 623), the Court held, 7-1 (opinion by Souter; dissent by Thomas), that the burden of production and persuasion in determining whether an employer's termination of a worker older than 40 years of age was reasonable rested on the employer, rather than the employee. In so holding, the Court vacated the decision of the Second Circuit, which had held that Meacham (the employee) had the burden of persuasion as to the reasonableness of termination--that is, the reasonableness of Knolls' use of factors other than age as the basis of the termination.

Let me present some of the facts of the case, along with the chief points in the Court's argument leading to the vacating and remand of the case.

Important Facts

"When the National Government ordered its contractor, respondent Knolls, to reduce its work force, Knolls had its managers score their subordinates on “performance,” “flexibility,” and “critical skills”; these scores, along with points for years of service, were used to determine who was laid off. Of the 31 employees let go, 30 were at least 40 years old. Petitioners (Meacham, for short) were among those laid off, and they filed this suit asserting, inter alia, a disparate-impact claim under the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. § 621 et seq. To show such an impact, Meacham relied on a statistical expert's testimony that results so skewed according to age could rarely occur by chance; and that the scores for “flexibility” and “criticality,” over which managers had the most discretionary judgment, had the firmest statistical ties to the outcomes. The jury found for Meacham on the disparate-impact claim, and the Second Circuit initially affirmed. This Court vacated the judgment and remanded in light of its intervening decision in Smith v. City of Jackson, 544 U.S. 228, 125 S.Ct. 1536, 161 L.Ed.2d 410. The Second Circuit then held for Knolls, finding its prior ruling untenable because it had applied a “business necessity” standard rather than a “reasonableness” test in assessing the employer's reliance on factors other than age in the layoff decisions, and because Meacham had not carried the burden of persuasion as to the reasonableness of Knolls's non-age factors."

Phew. That is a lot of facts, law and procedure. We know already that the Court held that the burden of production and persuasion with respect to "reasonableness" or, in the technical language of the case, "reasonable factors other than age" (RFOA) rests with the employer. Here is the Court's statement of its opinion and its reasoning.

Legal Reasoning

First, it looked at the statute and some Court precedents.

"The ADEA's text and structure indicate that the RFOA exemption creates an affirmative defense, for which the burden of persuasion falls on the employer. The RFOA exemption is listed alongside one for bona fide occupational qualifications (BFOQ), which the Court has recognized to be an affirmative defense: “It shall not be unlawful for an employer ... to take any action otherwise prohibited under subsections (a), (b), (c), or (e) ... where age is a [BFOQ] reasonably necessary to the normal operation of the particular business, or where the differentiation is based on [RFOA] ... .” § 623(f)(1). Given that the statute lays out its exemptions in a provision separate from the general prohibitions in §§ 623(a)-(c), (e), and expressly refers to the prohibited conduct as such, it is no surprise that this Court has spoken of both the BFOQ and RFOA as being among the ADEA's “five affirmative defenses,” Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 122, 105 S.Ct. 613, 83 L.Ed.2d 523. This reading follows the familiar principle that “[w]hen a proviso ... carves an exception out of the body of a statute or contract those who set up such exception must prove it,” Javierre v. Central Altagracia, 217 U.S. 502, 508, 30 S.Ct. 598, 54 L.Ed. 859. As this longstanding convention is part of the backdrop against which the Congress writes laws, the Court respects it unless there is compelling reason to think that Congress put the burden of persuasion on the other side. See Schaffer v. Weast, 546 U.S. 49, 57-58, 126 S.Ct. 528, 163 L.Ed.2d 387. The Court has given this principle particular weight in enforcing the Fair Labor Standards Act of 1968, Corning Glass Works v. Brennan, 417 U.S. 188, 196-197, 94 S.Ct. 2223, 41 L.Ed.2d 1; and it has also recognized that “the ADEA [is] enforced in accordance with the ‘powers, remedies, and procedures' of the FLSA,” Lorillard v. Pons, 434 U.S. 575, 580, 98 S.Ct. 866, 55 L.Ed.2d 40. Nothing in § 623(f)(1) suggests that Congress meant it to march out of step with either the general or specifically FLSA default rules placing the burden of proving an exemption on the party claiming it. Any further doubt would be dispelled by the natural implication of the “otherwise prohibited” language prefacing the BFOQ and RFOA defenses."

The Court made several other points, only one of which calls for comment. It relates to the 2005 case, City of Jackson, in which the Court changed the test for proving age discrimination. Here the Court said:

"City of Jackson confirmed that an ADEA disparate-impact plaintiff must “ ‘ “isolat[e] and identif[y] the specific employment practices that are allegedly responsible for any observed statistical disparities.” ’ ” 544 U.S., at 241, 125 S.Ct. 1536. This is not a trivial burden, and it ought to allay some of the concern that recognizing an employer's burden of persuasion on an RFOA defense will encourage strike suits or nudge plaintiffs with marginal cases into court; but in the end, such concerns have to be directed at Congress, which set the balance by both creating the RFOA exemption and writing it in the orthodox format of an affirmative defense."

So, it is "balance" in the end, even though the law now is clear that the employer bears the burden of persuasion when the issue relates to the reasonability of factors other than age in an employment termination case.

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