Subtle age discrimination gets a court’s blessing

Noah Feldman

A company puts out word that it’s hiring: recent college graduates only, no experienced salespeople need apply. That’s age discrimination, right? Not according to a ruling from a federal appeals court last week.
Overturning a half-century of practice, the U.S. Court of Appeals for the 11th Circuit held that job applicants can’t benefit from the disparate-impact provision of the Age Discrimination in Employment Act — only employees can. The decision, based on a literal reading of the text, flies in the face of logic and common sense. Other circuits won’t agree — and the U.S. Supreme Court should take the case and reverse the
holding.
The employment act expressly prohibits intentional age discrimination both in hiring job applicants and in firing employees. The case decided by the appeals court arises from a separate provision of the law that says employers can’t adopt policies that have the effect of treating people disparately based on age.
That provision, Section 4(a)2, says it’s unlawful for an employer to “limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.”
You’ll notice the provision doesn’t specifically mention job applicants. But Congress pretty clearly meant to prohibit hiring policies that have discriminatory effects. And the Equal Employment Opportunity Commission long ago adopted a rule interpreting the law to extend to age-discriminatory hiring practices.
Richard Villarreal, then 49, encountered exactly that kind of discriminatory hiring policy when he applied for a job as a territorial manager with tobacco giant R.J. Reynolds. RJR outsourced its hiring, but provided discriminatory guidelines. It told the human resources company that its “targeted candidate” would be a person “2–3 years out of college” who “adjusts easily to changes.” The guidelines said to “stay away from” applicants who had been “in sales for 8–10 years.”
That’s classic disparate-impact discrimination. The guidelines don’t say “no older people.” Instead they create conditions that seem neutral — you can graduate from college at any age — but as applied will lead to hiring almost all young people. The EEOC told Villarreal he could go ahead and sue RJR.
But the 11th Circuit, sitting en banc, threw out Villarreal’s claim. It held that the language of the disparate-impact provision in the age-discrimination act excludes job hiring.
I’ll spare you most of the technical argument. But the key to the court’s conclusion is the word “otherwise.” The first part of the relevant provision says that an employer can’t “deprive any individual of employment opportunities.” That certainly sounds like it covers job applicants. But because the law goes on to say “or otherwise adversely affect his status as an employee,” the court said the whole sentence must only apply to employees.
This is a terrible result, for multiple reasons. First, it’s bad textualism, and an embarrassment to Justice Antonin Scalia’s legacy.
The court said the sentence only refers to an employee. But grammatically, the sentence first refers to “an individual.” Then it shifts to “his status as an employee.”
The most natural literal reading is that there’s something in between: namely the word “otherwise,” which is plainly meant to change the subject. In other words, textualism should lead to the opposite result reached by the court.
If you don’t buy that reading, then the next best option is to admit the sentence is ambiguous because it’s badly drafted. The courts have a rule for what to do when a statute is ambiguous: defer to the reasonable interpretation of the agency charged with applying the statute.
That rule, known as the Chevron doctrine for the landmark 1984 Supreme Court case that formalized it, was a favorite of Scalia’s, partly because it saved courts from having to make law by choosing among controversial policies created by Congress’s being vague.
Applying Chevron deference would also have led, in this case, to continuity and legal predictability. The EEOC has read the age-discrimination provision to cover hiring since its inception.
That makes common sense. Why in the world should Congress want to prohibit disparate treatment for employees and not applicants?
But the 11th Circuit refused to apply the Chevron principle and accept the EEOC interpretation. It said that the law wasn’t ambiguous at all — and clearly excluded job applicants by the words “status as an employee.”
The court didn’t even bother to explain why Congress would have wanted to pass such an illogical law. It said that its literalism absolved it of the need to consider the law’s rationale.
And that’s the worst thing about the decision. A judge’s job isn’t to be some sort of computer program applying the law mechanically, like a judicial robot.
The judge is supposed to interpret the law, which means translating Congress’s necessarily abstract words into a concrete decision. That decision needs to accord with common sense and work in the world.
Asking Congress to fix every statutory ambiguity sounds nice. But it isn’t practical, given how hard it is to get Congress to do anything.
Other circuits can and will disagree with this decision. The Supreme Court should then take the case and fix the bad literalism. Until then, disparate impact age discrimination can flourish in 11th Circuit.
—Bloomberg