sullengerfirm.com Blog

The Supreme Court recently delivered some bad news for age discrimination claims. The Court held the Age Discrimination in Employment Act, unless Title VII, does not allow for “mixed motive” claims.

In discrimination claims brought pursuant to Title VII, the employee can prevail by showing a prohibited consideration was a “factor” in the challenged employment action. Thus, if the employer demoted the employee both because of his poor work skills and his race, the employee will be able to prevail.

This sort of “mixed motive” case was authorized by Congress when it amended Title VII in 1991. Congress made some amendments to the ADEA at the same time, but it did not authorize mixed-motive claims. The ADEA continues to allow recovery only when an adverse action was taken “because of” the employee’s age. Thus, The Supreme Court held no recovery was available where the employer based its decision primarily on a valid reason.

Age discrimination plaintiffs must prove they would not have been terminated “but for” their age. This is a high standard. Plaintiffs now have a tough road to establish age discrimination.

The Supreme Court held that pension benefits calculated before passage of the Pregnancy Discrimination Act in a way that gave less retirement credit for pregnancy leave than for medical leave generally did not necessarily violate the PDA and was protected against challenge because the benefit calculation rule in question was part of a bona fide seniority system.

The company calculated pension benefits as years of service minus uncredited leave time. In the 1960s and early 1970s, employees who took “disability” leave received full service credit for the entire period of absence while employees who took “personal” leave received a maximum service credit of 30 days. Pregnancy leave was treated as personal leave, not disability leave. In 1977, the company revised its policy to grant up to six weeks of service credit for employees on pregnancy leave. In 1978, after passage of the Pregnancy Discrimination Act prohibited treating pregnancy-related conditions less favorably than other medical conditions, the company changed its policy to give the same service credit for pregnancy leave as for other temporary disabilities. It did not, however, grant retroactive service credit to employees who had taken pregnancy leaves under the prior policies.

Four female employees sued to get the additional retirement benefits they would have earned if their pregnancy leaves had been treated the same as other disability leaves. The courts of appeal had split on whether differential benefits for pregnancy prior to the PDA violated the law. The Supreme Court held they did not.

The Supreme Court noted the pension system was a seniority system that granted additional benefits with length of service. The company’s system clearly would violate the PDA today by granting lesser benefits to pregnant women. The system, however, does not necessarily violate current law – the PDA – by giving effect to previous rules that were permissible when they were applied to pregnant employees.

Congress gave seniority systems special protection because stability is essential to their function. Thus, Title VII excludes from liability differentials applied to employees as part of a bona fide seniority system unless the differential results from an intention to discriminate against a protected class of employees. Because providing lesser benefits for pregnant employees had been held non-discriminatory by the Supreme Court before the PDA, the company’s differential treatment did not result from intentional discrimination. The seniority system could only be illegal, the Court said, if Congress had applied the PDA retroactively to behavior occurring before it was enacted, which Congress explicitly did not do.

The lesson of this case is that the law seeks stability. Where, as here, employers followed existing law, they generally will not be held retroactively liable once the law changes so long as they promptly adjust to the new law.