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.

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6 Responses

  1. Wilson says:

    “(So far, the two circuits deciding that question continue to apply McDonnell Douglas).”

    Which two circuits are these, and in which decisions?

  2. Well done, Mike. How you managed in but one paragraph to capture the tortured doctrinal background of burden- shifting and causation going back to Price Waterhouse is amazing.

    I agree that Gross will have ramifications for other anti-discrimination areas, and was wondering what everyone thinks about the status of Mt. Healthy and its mixed motive burden-shifting paradigm. After all, Mt. Healthy was, in a sense, a godparent of the plurality opinion in Price Waterhouse. While Gross purported to rely in part on the statutory language of the ADEA, which of course is absent in 42 USC 1983, that part of the opinion was weak and, I think, would be a slim basis for distinguishing the two statutes. Perhaps, as you note in your blog, a distinction (at least as a descriptive matter) may be developing based on whether the type of discrimination at stake is “deserving of lesser importance” (perhaps with constitutional / free speech rights and Title VII rights on one side and the ADEA, ADA, and the like on the other).

    Yet I would think even this Supreme Court would have difficulty finding a principled schema for classifying and distinguishing “greater deserving” from “lesser deserving” rights in order to answer the burden-shifting question (unless “greater deserving” simply is used to refer to those statutes that contain clear causation and burden shifting language, akin to that found in the 1991 Title VII amendments).

    So I throw out for discussion: where is Mt. Healthy in all of this, as well as those statutory regimes that have relied on Mt. Healthy to support their burden shifting – causation schemes?

    I note as an aside — what about the NLRA? Would the Gross Court that cast doubt on Price Waterhouse do likewise with NLRB v Transportation Management and its support of the NLRB’s Mt. Healthy-like burden shifting scheme for discrimination under the NLRA? Yes, that case turned in part on Chevron deference, but would that stop the Court today given the manipulable nature of the Chevron doctrine.

    Steven Kaminshine
    Dean and Professor of Law
    Georgia State University College of Law

  3. Mike Zimmer says:

    Paul Secunda, on the Employment Discrimination listserv made a comment and Steve Kaminshine responded to it. They were both kind enough to let me post them here since I think they help flesh out the issues flowing out of Gross:

    Here is Paul’s:

    I can give everyone a vantage point of Mt. Healthy from the public employment law perspective. Although Mt. Healthy is still part of what I refer to as the public employee free speech five-test, its influence as a determinative factor in these cases has waned considerably since it was decided.

    First, of course, came Connick v. Myers, which made these cases increasingly turn on whether the employee’s speech was on a matter of public concern. Second, and more recently, came the bane of my existence, Garcetti v. Ceballos, which further meat cleavered the free speech right of employees. Now these cases are increasingly turning on the Garcetti inquiry: whether the public ee spoke in their capacity as an employee, rather than as a citizen. Be

    Because most of these free speech cases now turn on Connick or Garcetti, or perhaps on the Pickering balance itself, Mt. Healthy’s same decision test plays a remarkably small role. Indeed, it is not unusual to read a free speech decision with Mt. Healthy not even being cited to.

    I will let others chime in on Wright Line/Transportation Management in the NLRA context, but all of this is to say that perhaps the Gross decision was part of a larger move away from the same decision test. Not only in the ADEA, but in other areas like Mt. Healthy and public employment law.

    Here is Steve’s Response:

    I agree with your insight, Paul. I assume though that the decline in Mt Healthy references in public employee speech cases reflects not so much a retreat from Mt Healthy itself but the fact that many of today’semployee speech cases appear not to involve or turn on dual motives —
    that is the employer does not assert the existence of a second non-speech-based motive (such as chronic lateness) but rather focuses on the protected or unprotected nature of employee’s speech activity (i.e.
    whether the employee’s speech-based activity related to a matter of public concern and or was too disruptive to the employer’s operations).

    As I understand it, we only reach the Mt Healthy question if 1) the speech is deemed protected and non-disruptive, and 2) the employer seeks to offer a second reason for the discharge that is not related to the protected speech. Absent 1 and 2, we have no need to apply the same
    decision test.

    Thanks to Paul and Steve!

  4. Mike Zimmer says:

    This may be quite late but I thought I should provide the circuit decisions finding that McDonnell Douglas v. Green is still applicable to age discrimination cases, notwithstanding Gross:

    Geiger v. Tower Automotive, 08-1314 (6th Cir. Sept. 4, 2009)

    Velez v. Thermo King de Puerto Rico, 08-1320 (1st Cir. October 16, 2009).

  5. Frank Harty says:

    Interesting analysis, but based on a false assumption. Nyemaster Goode developed and applied the appeal strategy. Sidley was brought on board by the EPLI carrier two business days before our brief was filed. Carter is brilliant, gracious and experienced… but he argued Nyemaster Goode’s brief. Some innovative thinking does occur on the prairie. I would be happy to share our real strategy offline.