New Jersey Employment Lawyer Blog

Supreme Court Rules Employer Has Burden to Prove Adverse Employment Action Based on Reasonable Factors Other Than Age

The Age Discrimination in Employment Act of 1967, 29 U.S.C. 621, et seq. (“ADEA”), is a federal law that prohibits discrimination in employment because of age. On June 19, 2008, the United States Supreme Court made it easier for employees to prevail in disparate impact claims under the ADEA, by placing an important burden of proof on the employer. A disparate impact case under the ADEA is when an individual seeks to prove that his or her employer illegally discriminated against him or her because of age, even though it did not necessarily intend to discriminate, because it used a specific test, requirement, or practice that disproportionately harmed employees who are at least 40 years old.

In that case, Meacham v. Knolls Atomic Power Laboratory, the Supreme Court interpreted a provision of the ADEA that permits an employer to take an adverse employment action against an employee, even if the employment action is “otherwise prohibited” by the ADEA, as long as the adverse action is “based on reasonable factors other than age.” The Supreme Court ruled that if an employer seeks to rely on that defense, it has the burden to prove that its decision was based on a reasonable factor other than age.

In Meacham, Knolls Atomic Power Laboratory was planning to lay off a number of employees. The company had its supervisors rate their subordinates based on their “performance,” “flexibility,” and “critical skills.” Knolls totaled those scores, and gave the employees additional points based on their years of service. It then used those totals to decide who to lay off. Thirty of the 31 salaried employees the company laid off were at least 40 years old. Twenty-eight of those 31 employees sued under the ADEA, claiming Knolls illegally fired them because of their age.

At the trial, a jury found Knolls had violated the ADEA because its layoff procedure had a disparate impact based on age.

Specifically, the jury found that although the plaintiffs did not prove that Knolls intentionally discriminated against them, they did prove that Knolls’ method of deciding who to lay off disproportionately harmed older workers. The United States Court of Appeals for the Second Circuit initially affirmed the jury’s findings, but after the United States Supreme Court asked it to reconsider, the Second Circuit reversed itself and ruled in favor of Knolls. The Supreme Court then agreed to hear the case, and eventually reversed the Second Circuit and reinstated the jury’s finding that Knolls’ policy unlawfully discriminated because of age.

In reaching its conclusion that the employer has the burden to prove the “reasonable factors other than age” defense, the Supreme Court looked at another provision of the ADEA, the bona fide occupational qualification (“BFOQ”) defense. The BFOQ defense states that it is not unlawful for an employer to take adverse employment actions otherwise prohibited by the ADEA “where age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business.” In other words, the ADEA permits employers to discriminate based on age considering age is legitimately necessary under the circumstances. For example, it would not be illegal to consider criteria for a particular role in a movie that has a disparate impact on age, if the part calls for someone of a particular age. The Supreme Court has previously recognized that the employer has the burden to establish the BFOQ affirmative defense.

The Supreme Court also relied on previous decisions in which it recognized that the employer has the burden of proof to establish similar defenses under other federal anti-discrimination laws. Specifically, it has previously ruled that the employer has the burden of proof with respect to the defense that a pay differential is based on “any other factor other than sex” under the Equal Pay Act of 1963 (“EPA”), and that the employer has the burden of proof to establish an exemption under the Fair Labor Standards Act of 1938 (“FLSA”). The Supreme Court found that the reasonable factor other than age defense was similar to those provisions, and that therefore the burden of proof should be on the employer.

Thus, the Supreme Court made it clear that once an employee establishes that a specific test, requirement, or practice of his or her employer disproportionately harms older workers, the employee will win his or her case unless the employer can prove that age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business, or can show that its decision was based on a reasonable factor other than age. As the Supreme Court recognized, that not only makes it easier for employees to win disparate impact cases under the ADEA, but it is also likely to impact the way some employers make layoff decisions. It is therefore likely to further support the primary goal of the ADEA: eliminating age discrimination from the workplace.

House of Representatives Approves Amendments to Restore the Americans With Disabilities Act to Protect Disabled Employees From Discrimination.

On June 25, 2008, the United States House of Representatives approved an amendment to the Americans with Disabilities Act of 1990 ("ADA") by a vote of 402 to 17. The ADA is a federal law which prohibits discrimination against individuals with disabilities, both in the context of employment and places of public accommodation, such as restaurants, hotels, theaters, doctors' offices, pharmacies, retail stores, museums, libraries, parks, private schools, and day care centers. However, courts have interpreted the ADA so narrowly that according to at least one study over 97% of cases filed under the ADA are dismissed, primarily due to the fact that the individual bringing the case could not meet the statute's definition of "disability."

The United States Senate still has not voted on the bill, which is known as the ADA Restoration Act of 2008. If the Senate were to approve the Act, it would need to be signed into law by the President before it would go into effect.

The ADA Restoration Act of 2008 is "intended to restore the original intent of the Americans with Disabilities Act." If passed into law, it would reverse many United States Supreme Court cases which have interpreted the ADA narrowly and limited the scope of its protection. For example, it would amend the ADA to make it clear that:

1. The ADA is intended to provide broad coverage to protect anyone who faces discrimination on the basis of a disability, and its definition of disability should be interpreted broadly.

2. An impairment that substantially limits a major life activity, such as caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating and working, does not need to limit another major life activity to be considered a disability.

3. An episodic impairment or an impairment in remission is still a disability if it would substantially limit a major life activity when it is active.

4. It is improper to take into consideration most measures that would reduce the impact of an impairment, such as medication, prosthetics, or other technology, when determining if an individual is disabled.

5. The ADA protects employees from discrimination if their employers discriminate against them because they perceive the employee to have a disability, even if the individual is not actually disabled.

New Jersey Supreme Court Clarifies that Supervisors Are Liable for Discrimination if They Actively and Purposefully Participated in it

On May 28, 2008, the New Jersey Supreme Court made an important ruling that helps to clarify when a supervisor or manager can be held legally responsible for his or her participation in discrimination or harassment under the New Jersey Law Against Discrimination, N.J.S.A. § 10:5-1, et seq. ("LAD"). The LAD makes it illegal for a company to discriminate against or harass its employees on the basis of their race, creed, color, national origin, nationality, ancestry, age, sex, pregnancy, familial status, marital status, domestic partnership status, sexual orientation, military service, or mental or physical disability.

The case, Cicchetti v. Morris County Sheriff's Office, first recognizes that although the LAD makes it illegal for a company to discriminate against its employees, it does not make it illegal for an individual, such as a supervisor or manager, to discriminate. However, the case further recognizes that the LAD does make it unlawful for an individual to "aid, abet, incite, compel or coerce the doing of any of the acts forbidden" by the LAD. N.J.S.A. § 10:5-12(e). The Supreme Court then ruled that an employee who brings a claim of discrimination or harassment against a supervisor must prove that the supervisor engaged in "active and purposeful conduct" before he or she can be held liable for aiding and abetting discrimination or harassment. Thus, the Supreme Court clarified that it is possible to sue a supervisor who participated in discrimination or harassment, but the employee must prove that the individual was actively and intentionally involved in the discrimination to prevail on that claim.

Independent Contractors Protected by New Jersey's Conscientious Employee Protection Act

On July 25, 2007, the New Jersey Supreme Court decided two employment law cases that clarified that the Conscientious Employee Protection Act ("CEPA") applies to many individuals who have traditionally been considered independent contractors: D'Annunzio v. Prudential Insurance Company of America, 192 N.J. 110 (2007) and Stomel v. City of Camden, 192 N.J. 137 (2007). CEPA, which is often referred to as a whistleblower law, is a New Jersey statute that prohibits employers from retaliating against employees who object or refuse to participate in activities that they reasonably believe are illegal, fraudulent, criminal, or violate a clear mandate of New Jersey's public policy relating to public health, safety or welfare.

In D'Annunzio, the New Jersey Supreme Court adopted a test that the Appellate Division established to determine whether an individual is an "employee" for purposes of another employment law statute, the New Jersey Law Against Discrimination. Those factors are: 1. the employer's right to control the means and manner of the worker's performance; 2. the kind of occupation-supervised or unsupervised; 3. skill; 4. who furnishes the equipment and workplace; 5. the length of time in which the individual has worked; 6. the method of payment; 7. the manner of termination of the work relationship; 8. whether there is annual leave; 9. whether the work is an integral part of the business of the "employer;" 10. whether the worker accrues retirement benefits; 11. whether the "employer" pays social security taxes; and 12. the intention of the parties.

D'Annunzio holds that Courts should primarily focus on three of those factors: 1. the degree of employer control; 2. the worker's economic dependence on the relationship; and 3. whether the work is an integral part of the business. In its opinion, the Court notes that an individual is more likely to be considered an employee if he/she is a "cog" in the employer's business, his/her work is continuously required by the employer's business, his/her services are regularly at the employer's disposal, or he/she performs routine or administrative activities.

Decided on the same day as D'Annunzio, Stomel repeats that courts should focus on the three factors discussed in D'Annunzio to determine whether an individual is a employee protected by CEPA. However, the decision appears to focus on whether the employee's work was an integral part of the employer's business over the other two factors. Specifically, the New Jersey Supreme Court concluded that the plaintiff, a public defender, was an "employee" of the City of Camden and therefore covered by CEPA because his services were integrated into the City's delivery of services to its residents. The Court reached this conclusion even though Mr. Stomel worked through a private law firm and exercised substantial independent judgment regarding his clients which the City did not have any right to control. In other words, the Court found that he was an employee for purposes of CEPA based on the presence of only one of the three primary factors, his integration into the employer's business.

Thus, both D'Annunzio and Stomel apply broad definitions of "employee," which include many individuals who are otherwise treated as independent contractors. While many other factors are relevant, the primary focus appears to be on the extent to which the individual's work is an integral part of the employer's business.

On May 30, 2008, in the case of Doe v. C.A.R.S. Protection Plus, Inc., the United States Court of Appeals for the Third Circuit ruled that Title VII of the Civil Rights Act of 1964, 42 U.S.C.A. 2000e, et seq. ("Title VII") protects a woman from discrimination because she had an abortion. The Third Circuit is the federal appellate court that includes the state of New Jersey, as well as Pennsylvania, Delaware, and the Virgin Islands.

Title VII makes it illegal for employers with 15 or more employees to discriminate against an employee because of his or her race, color, religion, sex, or national origin. The Pregnancy Discrimination Act of 2000 amended Title VII to clarify that the prohibition of discrimination because of sex includes discrimination because of "pregnancy, childbirth, or related medical conditions." In C.A.R.S., the Court concluded that since an abortion is a pregnancy-related medical condition, it is illegal to fire or otherwise discriminate against an employee because she has had an abortion. This was the first time an appellate court covering the state of New Jersey had considered whether it is illegal to fire an employee because she had an abortion.

In reaching the conclusion that the Pregnancy Discrimination Act prohibits employers from discriminating against individuals who have had an abortion, the Third Circuit relied on the 1996 decision of the Sixth Circuit Court of Appeals, Turic v. Holland Hospitality, Inc., which reached the same conclusion. The Court also gave significant consideration to a regulation of the Equal Employment Opportunity Commission ("EEOC") which specifically states that a woman is protected from being fired because she is pregnant or has had an abortion. It also considered the legislative history of the Pregnancy Discrimination Act, which expressly recognizes that no employer may, for example, "fire or refuse to hire a woman simply because she has exercised her right to have an abortion."

In C.A.R.S., the employee's lawyer also argued that, since the Pregnancy Discrimination Act makes it illegal to retaliate against an employee who opposes a practice the Pregnancy Discrimination Act prohibits, it also prohibits discrimination an employee who "contemplates having an abortion, or who supports the rights of women who do so." However, the Court did not find it necessary to decide whether the law actually extends that far, leaving that issue to be decided in a future case.

Jonathan I. Nirenberg is an Employment Law and Civil Rights Attorney who represents employees in New York and New Jersey.

On May 21, 2008, President Bush signed the Genetic Information Nondiscrimination Act ("GINA") of 2008. The statute had previously passed the Senate unanimously and the House by a 414 to 1 vote. Upon the President signing it, GINA went into effect immediately.

The Genetic Information Nondiscrimination Act prohibits discrimination on the basis of genetic information with respect to health insurance and employment. Congress passed it in recognition that there are great opportunities for medical advancement from sequencing the human genome and other genetic advances. However, those advances are threatened by the potential for employers and health insurance companies to misuse genetic information to discriminate. Congress noted the historical discrimination and oppression of individuals who were presumed to have genetic defects, specifically mentioning mental retardation, mental disease, epilepsy, blindness, and hearing loss in the statute. Congress also recognized the prevalence of genetic discrimination in the workplace.

As it applies to the context of the workplace, the Genetic Information Nondiscrimination Act makes it unlawful to use genetic information as a reason to refuse to hire or fire, or to discriminate against any employee with respect to compensation or other terms, conditions, or privileges of employment. It also prohibits employers from using genetic information to limit, segregate, or classify employees in a way that deprives employees of job opportunities, or otherwise adversely affects them. With limited exceptions, it also prohibits employers from seeking genetic information regarding an employee or a family member.

The Genetic Information Nondiscrimination Act also prohibits retaliation, by making it illegal to discriminate against anyone who opposes a violations of the Act. It also requires employers that have genetic information about an employee to maintain that information in a separate confidential medical file, and limits an employer's right to provide genetic information about an employee to anyone else.

GINA defines a "genetic information" to include a disease or disorder of an individual=s family member, as well as information revealed in an individual's genetic tests or genetic tests of an individual's family member, other than information about gender or age. It defines a "family member" very broadly, including any dependent, and any first, second, third, or fourth‑degree relative.

An individual who prevails in an employment case under the Genetic Information Nondiscrimination Act case potentially receive damages for lost salary and benefits, as well as emotional distress damages, attorneys fees, and costs of litigation. Like many other federal employment discrimination laws, an individual who has a claim under the Genetic Information Nondiscrimination Act must file a complaint with the United States Equal Employment Opportunity Commission ("EEOC") and receive the A "right to sue" before he or she can file a federal lawsuit.

Jonathan I. Nirenberg is an employment law and civil rights lawyer in New Jersey and New York.