U.S. Supreme Court Holds the ADEA Applies to All Public Employers

In a recent 8-0 decision, the U.S. Supreme Court upheld a Ninth Circuit Court of Appeals decision holding the Age Discrimination in Employment Act (ADEA) applies to public employers of any size.

The plaintiffs, John Guido and Dennis Rankin worked at a local Fire District. They served as fire captains until 2009, when they were laid off. At the time of the layoffs, Guido and Rankin were the oldest employees at the Fire District. Following their layoff, the two sued the district for age discrimination.

The language of the ADEA states that the law applies to businesses with 20 or more employees. The law was amended in 1974 to apply to state and federal government bodies as well. The Fire District argued that because it did not have 20 employees, the ADEA did not apply. The U.S. District Court agreed with the employer and dismissed the case by summary judgment. Guido and Rankin appealed.

The Ninth Circuit disagreed with the district court and held that an employer under the ADEA is defined as a private employer with at least 20 employees, or any public employer regardless of the number of employees. In doing so, the Ninth Circuit created a split. Four other circuit courts (6th, 7th, 8th, and 10th) had found the law was ambiguous and required both private and public employers have 20 employees to be subject to the law. The Fire District appealed to the U.S. Supreme Court.

The Fire District asked the high court to consider the ADEA to be akin to Title VII of the Civil Rights Act of 1964, which has a numerosity threshold that applies to public employers with 15 or more employees.

Justice Ginsberg, in delivering the opinion of the Court, noted the ADEA and Title VII of the Civil Rights Act of 1964 were both amended to include public employers. However, when Congress amended Title VII in 1972, it added state and local governments to the definition of “persons” that met Title VII’s definition of “employer,” which are subject to liability if they have fifteen or more employees. By contrast, when Congress amended the ADEA two years later in 1974, it added “a state or political subdivision of a State” directly to the definition of “employer,” thereby adding new categories to the definition of “employer.” In this sense, Justice Ginsberg noted that the ADEA is more akin to the Fair Labor Standards Act (FLSA), which was amended in the same 1974 enactment to apply to “all government employers regardless of size.”

With regard to the Fire District’s argument that such an interpretation of the ADEA would expose small public entities to excessive costs that may result in curtailing of vital services to the public, the Court noted that the Equal Employment Opportunity Commission has for 30 years interpreted the ADEA to apply to public employers of any size and “[n]o untoward service shrinkage has been documented.”

While this decision specifically impacts public employers, it is a reminder to all employers that during a reduction in force, employers should carefully scrutinize those individuals selected for layoff to assure that the decisions are based on business needs, not age or other protected status.