Reverse Discrimination Case Decision Looms In High Court; Outlook Unclear Washington

Employers may face a new type of age discrimination liability depending on the outcome of a case now pending before the United States Supreme Court.

The case involves allegations by a group of workers in their 40s that they are victims of reverse discrimination because their employer provided more general employee benefits to fellow workers age 50 and older.

In the caseGeneral Dynamics Land Systems v. Clinethe younger workers argue that General Dynamics policy violates the federal Age Discrimination in Employment Act.

However, the impact of the case on employment practices liability insurance is unclear.

The Washington-based National Association of Manufacturers filed an amicus brief arguing that the case could have significant implications for employers.

“None of the legislative history (of ADEA) suggests Congress was at all concerned with opportunities and benefits denied employees because they were too young,” said Quentin Riegel, NAMs vice president for litigation.

In its brief, NAM, along with a coalition of other business groups, argues that allowing this type of reverse discrimination claim would significantly increase the pool of potential claimants alleging age discrimination and the number of claims to which employers must respond.

Employers, NAM said, routinely make and implement millions of employment decisions each year, including hirings, promotions, terminations and transfers.

Each transaction, NAM said, is a potential subject of a discrimination charge. The reverse discrimination charge at the heart of the General Dynamics case would allow job applicants who are substantially younger than the person selected to establish a prima facie case of age discrimination, NAM said.

Already, NAM said, if an applicant is substantially older than the person selected for a job, the older candidate can establish a prima facie case of age discrimination.

“That means virtually every plaintiff will be able to establish a prima facie case of discrimination, thereby shifting the burden to the employer to articulate a legitimate, non-discriminatory reason for the employment action that the plaintiff may attempt to show is a pretext,” NAM said.

Joe Monteleone, vice president and claims counsel for Hartford Financial Products, Hartford, Conn., agreed that from the prospective of the employer, there would be a potential increase in discrimination claims.

But it is premature to say whether there actually would be an explosion of claims should the high court allow this type of reverse discrimination claim, he added.

Even if such claims are allowed, Mr. Monteleone said, the high court may provide some guidance on the right way to handle these issues that employers could follow.

Mr. Monteleone added that EPL insurance remains a very valuable part of a business insurance portfolio. He noted that current policies would not have to be changed depending on the outcome of the case, since they already cover all forms of discrimination, whether traditional or reverse.

Moreover, he said, discrimination cases are not complex ones from the standpoint of a plaintiff seeking to get a claim before a jury. EPL insurance, Mr. Monteleone said, offers substantial value to employers.

But Jim Crockett, manager of risk and employee benefits for Denver Water and a member of the New York-based Risk and Insurance Management Society, said he does not believe the outcome of the case would necessarily make a difference regarding the decision of a risk manager to purchase EPL coverage.

He noted that his company elected not to purchase the coverage even though it was once hit with a reverse discrimination claim

The company was sued by a male claiming reverse discrimination, Mr. Crockett noted, when it hired a female for a position that had been traditionally staffed by a male. The male claimant said that gender was a factor in the hiring decision and prevailed in court, he said.

Each hiring decision, he said, is subject to an allegation of a wrongful act, but human resources personnel are accustomed to documenting files to demonstrate that hiring decisions do not violate non-discrimination laws.

Even if the Supreme Court allows reverse age discrimination lawsuits, the documentation should not be a major problem for employers, Mr. Crockett said.

Mr. Crockett noted that he is 62 years old. He said that if he were looking for a job and was not hired in favor of a younger person, it would be difficult to convince him that age was not a factor in the hiring decision.

However, he said, proving discrimination is another matter. Employers look for reasons such as education and experience in making hiring decisions, Mr. Crockett said.

In the General Dynamics case, the 6^th Circuit Court of Appeals ruled that ADEA prohibits employers from discriminating against workers over age 40, even if older workers receive more favorable treatment.

The case involves a collective bargaining agreement between General Dynamics and the United Auto Workers. Prior to the new agreement, General Dynamics was obliged to provide full retiree health benefits to workers who had accumulated 30 years of seniority.

But under the new agreement, the company only had to provide retiree health benefits to those who had 30 years of seniority and who were age 50 or older as of the effective date of the agreement.

A group of employees who were between ages 40 and 49 sued the company under ADEA, which bars age discrimination against all workers age 40 and over.

The plaintiffs argued they were part of ADEAs “protected class,” and thus a benefit program that treated them less favorable than other workers, even older workers, was illegal.

A United States District Court ruled in favor of General Dynamics, stating that the intent of Congress in drafting ADEA was not to recognize reverse discrimination.

However, the 6^th Circuit reversed the lower court, citing the plain language of ADEA.

The plain language of ADEA bars discrimination against “any individual” based on age, the 6^th Circuit said.

ADEA “clearly and unambiguously” forbids employers from defining the terms and benefits of any individuals employment based solely on age, the court added.

Whatever the legislative history of ADEA, the court said, there is no reason to examine it when the statutes language is plain and unambiguous.

It is not the role of courts, the 6^th Circuit said, to address perceived inadequacies in a statute.

Rejecting this type of reverse discrimination claim, the court added, would require a holding that the plain language of ADEA does not mean what it says.

If Congress wanted to limit the ADEA to protect only those workers who are relatively older, the 6^th Circuit said, it clearly had the power and acuity to do so. But it did not.

The Supreme Court will hear the General Dynamics case during its 2003-2004 term.

Reproduced from National Underwriter Edition, June 16, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.

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Reverse Discrimination Case Decision Looms In High Court; Outlook Unclear

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