At a time when charges of age discrimination are soaring, theU.S. Supreme Court may have given a break to employers and theiremployment practices liability insurers with their recent rulingthat a worker has the burden to prove age was a key factor in anegative employment decision.

The decision was close, however, with the 5-4 ruling favoringemployers in Gross v. FBL Financial.

The underlying case leading to the high court's ruling on thestandard of proof for a suit under the Age Discrimination inEmployment Act of 1967 involved Jack Gross, an employee of FBLFinancial, who was demoted from his position as a claimsadministration director in 2003.

Mr. Gross filed suit in an Iowadistrict court in April 2004, alleging that his reassignment to theposition of claims project coordinator violated the ADEA, whichmakes it unlawful for an employer to take adverse action against anemployee because of their age.

While Mr. Gross presented evidence at trial to suggest that hisdemotion was based at least in part on his age, FBL defended itsdecision on the grounds that it was part of a corporaterestructuring and that his new position was better suited to hisskills.

Writing for the majority in the Supreme Court ruling, whichvacated a judgment by the 8th Circuit Court of Appeals, JusticeClarence Thomas said “the burden of persuasion does not shift tothe employer to show that it would have taken the action regardlessof age, even when a plaintiff has produced some evidence that agewas one motivating factor in that decision.”

“A plaintiff bringing an ADEA disparate-treatment claim mustprove, by a preponderance of the evidence, that age was the'but-for' cause of the challenged adverse employment action,” hewrote.

Distinguishing the ADEA from Title VII–which applies to cases ofdiscrimination based on race, color, religion, sex or nationalorigin–Judge Thomas' opinion noted that the ADEA's text “does notprovide that a plaintiff may establish discrimination by showingthat age was simply a motivating factor.”

“Moreover, Congress neglected to add such a provision to theADEA when it amended Title VII” in this regard, “even though itcontemporaneously amended the ADEA in several ways,” he wrote.

“We cannot ignore Congress' decision to amend Title VII'srelevant provisions but not make similar changes to the ADEA. WhenCongress amends one statutory provision but not another, it ispresumed to have acted intentionally,” he wrote.

The timing of this decision would appear to be beneficial toemployers and their employment practices liability insurers who arecurrently facing a significant jump in age discrimination claimsarising from a growing number of layoffs tied to the economicdownturn.

Lawyers and insurance experts who spoke to NU lastmonth noted that while there are some mitigating factors keeping alid on the severity of EPL claims, frequencies are climbing.

As evidence, they pointed to charge statistics for 2008 releasedby the U.S. Equal Employment Opportunity Commission earlier thisyear, which show that age discrimination charges grew more than anyother category–jumping nearly 29 percent to over 24,000.

In contrast, the biggest category of employment discriminationcharges, relating to race, grew only 11 percent.

“We call it the baby boomer generational issue as weunderwrite,” said Cathy Padalino, vice president and EPL productmanager for Chubb & Son in Warren, N.J., noting that a rise inclaims from aging baby boomers would be a factor for EPL insurersto deal with even absent current economic conditions.

Ms. Padalino, who spoke to NU in May, added that intoday's economy, “just simply based upon the demographic makeup ofthe baby boomer generation, the odds are higher and higher as theclock ticks that someone [losing his or her job] is going to be of[that] protected class.”

Jack McCalmon, a partner with the law firm of Titus, Hillis,Reynolds, Love, Dickman & McCalmon, PLC in Tulsa, Okla., saidthat “typically, when [companies] lay off, they want to cut salaryand overhead costs,” noting that older employees make more moneyand typically have higher benefit costs. “They're going to cut thepeople who are the most costly,” and even though it's illegal to doso, “that tends to be older workers,” he said.

Sen. Patrick Leahy, D-Vt., issued a statement criticizing theruling, saying it reminded him “of the court's wrong-headed rulingin Ledbetter. In fact, it was these same five justices whomisconstrued an employment discrimination statute in that case andalso overturned a jury verdict in favor of the employee.”

Earlier this year, President Barack Obama signed legislationreversing the court's Ledbetter decision, which held thatif employees did not file claims of sex-based discrimination (underthe Equal Pay Act of 1963) within 180 days of their employer'sdecisions to pay them less, they were barred forever fromchallenging the discriminatory paychecks that followed.