The Employer’s Strategy in Gross v. FBL Financials
Last Term in Gross v. FBL Financials, a 5-4 decision written by Justice Thomas, the Court decided that a plaintiff bringing a claim of individual disparate treatment age discrimination — an ADEA action — must prove, by a preponderance of evidence, that age was the “but-for” cause of defendant’s treatment of plaintiff. Thus, unlike Title VII, the burden of persuasion never shifts on the issue of linking what happened to plaintiff— “an adverse employment action” — to defendant’s intent to discriminate, even if plaintiff had produced evidence that age was “a motivating factor” of the defendant. This is an important discrimination case since the Court appears to be adding age cases to discrimination cases under the ADA (before its recent amendments) that deserve lesser enforcement than the Title VII claims of race, color, sex, national origin and religion discrimination. It will have ramifications in other areas of discrimination law, including retaliation cases and cases brought under 42 U.S.C. 1981. It even raises the question whether the iconic McDonnell Douglas v. Green approach to proving defendant’s intent to discriminate applies in age act cases. (So far, the two circuits deciding that question continue to apply McDonnell Douglas).
For those not interested in employment discrimination law, of which I suppose there may be a few, this may not seem a startling decision. But for those attuned to discrimination litigation and to Court watchers generally, the decision came as a quite a surprise. Most surprising is that the Court answered a question not presented to it for decision. In most situations when the Court determines that some question other than the one presented has come to the fore, certiorari is dismissed as improvidently granted or the case is remanded to the lower courts to decide this new question.
The question originally presented in Gross was: “Must a plaintiff present direct evidence of discrimination in order to obtain a mixed-motive instruction in a non-Title VII discrimination case?” What this referred to was Title VII authority that allowed burden shifting to the defendant of the issue of linkage between defendant’s intent to discriminate – the employer’s motivation for its action — and plaintiff’s harm and how that burden shifting might apply in age discrimination cases. Long story short, the Justice O’Connor’s concurring opinion back in a 1989 Title VII sex discrimination case, Price Waterhouse v. Hopkins, came to be viewed by the lower courts as the holding since her opinion was seen as the narrowest basis for the decision in which there was no majority. She required plaintiff to introduce “direct” evidence of discrimination in order to rely on a “substantial factor” test of linkage that shifted the burden of persuasion to the defendant to prove a same-decision defense. The 1991 Civil Rights Act then amended Title VII so that plaintiffs established liability by showing defendant’s intent to discriminate was only “a motivating factor,” with the burden then shifting to the defendant to prove the same-decision defense to full remedies, not to liability. The new provisions did not mention “direct” evidence and so Title VII was interpreted in Desert Palace v. Costa as not requiring any “direct” evidence threshold to the use of the new “a motivating factor” standard.
The question presented in Gross was how that all worked out in an age discrimination case. Up until the employer filed its reply brief, the case proceeded on the assumption that burden shifting applied, with the question being whether or not the plaintiff needed to point out “direct” evidence to take advantage of that shift in the burden of persuasion. Raised for the first time in its reply brief to plaintiff’s brief on the substance, the employer argued that a prior question needed to be answered before that question could be decided: Was burden shifting ever available in an ADEA case? The Court agreed that it should answer that question instead of the one presented and answered it in favor of defendant. Thus, the original question presented was mooted out.
For Court watchers, the more interesting question is why the employer decided so late in the game to try to shift the focus of the case.
One explanation is that the employer changed counsel. Carter Phillips of Sidley & Austin, a very experienced Supreme Court practitioner, took up the case. But why did Phillips decide that his chances of winning improved if he could get the Court to change the focus of the case? In this era when there is some talk of the Court taking a “minimalist” approach to its decisionmaking, it seemed a bold move to ask the Court to answer a prior question with much deeper and broader potential implications than the one the Court said it was going to decide. Of course, if the Court dismissed the writ as improvidently granted, defendant still would win because it won below. But, a remand to the lower courts would delay, if not prevent, that victory. And, the Court could answer that question in favor of the plaintiff and still decide that “direct” evidence was not needed when the plaintiff sought to use the burden shifting approach to linkage. At a minimum, the strategic decision to ask the Court to decide a different question than the one presented was not without risk.
One reason to try to change the focus of the case was that answering the question the employer now posed allowed the Court a way to avoid deciding the messy question of what “direct” evidence exactly is. As a background in Desert Palace, there was a slew of authority going every which way on that question. That uncertainty is understandable since, at bottom, there is no “direct” evidence of someone’s state of mind in the classic sense of evidence that proves the ultimate fact in dispute without the need to draw any inferences: State of mind is not directly observable. Recognizing this, some of the lower courts had rested on a formulation that “direct” evidence really meant strong circumstantial evidence of defendant’s intent to discriminate. That was a distinction, however, that could not hold. In Desert Palace, the Court avoided having to get into that swamp of authority by deciding that the plaintiff never needed any direct evidence to get burden shifting in Title VII mixed-motive cases. In Gross, the Court could avoid answering the same question, but this time by deciding that burden shifting was never available in individual disparate treatment ADEA cases, whether or not a plaintiff could point to some evidence that might be characterized as “direct.”
Perhaps a more significant reason to try to shift the focus was based on the change in the composition of the Court, especially the retirement of Justice O’Connor, since Price Waterhouse had been decided. Recently in Smith v. City of Jackson, the Court had decided that the disparate impact amendments to Title VII did not apply in an age case, but that the Title VII disparate impact authority pre-existing the 1991 Act did apply. Based on Smith, many Court watchers predicted that it was likely that the Court would find that the Title VII authority on linkage that pre-existed the Act would also apply in individual disparate treatment cases claiming age discrimination. That would leave open the question whether or not Justice O’Connor’s concurring opinion in Price Waterhouse applied to require “direct” evidence to get burden shifting – that is, whether Justice O’Connor’s concurring opinion was the holding of Price Waterhouse that applied to age discrimination cases. With Justice O’Connor being replaced by the more conservative Justice Alito, Phillips may have decided that the employer would win the votes all four Justices to the right of the middle of the Court — the Chief Justice and Justices Scalia, Thomas and Alito. Saying it another way, without those four, the employer’s case was doomed. Thus, the goal was to pick up one more vote, with Justice Kennedy the likely target since he sat in the middle of the Court. It maybe was not so clear that Justice Kennedy would go one way or the other on the “direct” evidence question since he had thought that there should never be burden shifting in Title VII, a point he made clear in his dissent in Price Waterhouse. Phillips might have calculated that it would be easier to persuade Justice Kennedy that he was right all along in Price Waterhouse and that it should be overruled, than it would be to get him to agree on the narrower question of how burden shifting worked as to the need for “direct” evidence if burden shifting applied somehow.
The gamble paid off: Justice Thomas appeared to undermine if not explicitly overrule Price Waterhouse, saying, “it is far from clear that the Court would have the same approach [as it took in Price Waterhouse] were it to consider the question today in the first instance.” With Price Waterhouse gone, burden shifting for age act cases was also gone. Though we did not know this until Gross, the linkage standards of both the ADEA and, at least before the 1991 Amendments, Title VII were always the same: “but-for” with the burden of persuasion on the plaintiff. Neither Title VII nor the ADEA had burden shifting even though we did not know that until Gross was decided in 2009. Therefore, adopting a bold strategic move paid off for the employer and its counsel before the Supreme Court.