In a major decision sure to provoke controversy and legislative attempts to overrule it, the en banc Seventh Circuit, by a vote of 8 to 4, has held in Kleber v. CareFusion Corp., (No. 17-1206, Jan 23, 2019), that Section 4(a)(2) of the federal Age Discrimination In Employment Act (“ADEA”) does not provide rejected external applicants with a cause of action.

The case was brought by Dale Kleber, a 58 year old applicant who applied for a position at CareFusion. The job description allegedly “required applicants to have ‘3 to 7 years (no more than 7 years)’” of relevant experience.

The Court focused closely on the text on §4(a)(2) which makes it 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.

29 U.S.C. §623(a)(2).

The majority noted that by its express terms, §4(a)(2) “proscribes certain conduct by employer(s) and limits its protection to employees.” The majority finds the ADEA protections of the Section apply only to those with “status as an employee.” The majority also notes that Congress amended Title VII of the Civil Rights Act of 1964 in 1972 expressly to cover “applicants for employment” but never passed legislation expressly to cover applicants in §4(a)(2) of the ADEA.

The decision of the Seventh Circuit applies only to federal courts in Illinois, Indiana, and Wisconsin. But as an en banc decision (a decision by all the active judges of the Court) it may be given some greater consideration by other courts. Employers facing ADEA hiring discrimination claims by non-employee applicants, may want to consider a motion to dismiss or for judgment on the pleadings relying on Kleber or to assert the defense in appropriate EEOC proceedings.

It is by no means certain, however, that other courts will reach the same conclusion as the Seventh Circuit. It is also likely that EEOC will not follow this decision outside the Seventh Circuit. And as noted at the outset, a legislative effort to reverse the result of Kleber by amending §4(a)(2) expressly to cover applicants is highly likely. Such a proposal might well pass in the House of Representatives. Its fate in the Senate, however, would be more problematic. In addition, whether President Trump would sign such a bill, if it did pass, is open to conjecture.

In addition, employers should be aware that they certainly may face the same applicant age discrimination claims by outside applicants premised on state and local human rights laws. Such state and local laws generally do not have limiting language like that upon which the Seventh Circuit based its decision in Kleber. Moreover, while employers often prefer federal to state courts, Kleber may encourage age discrimination plaintiffs who are applicants simply to sue under state law in state courts.

Despite Kleber, employers should still take care not to provide outside applicants with a basis for asserting age discrimination in hiring claims under state or local laws with broader language covering such applicants or in federal courts that choose not to follow Kleber. This is especially true as there is already putative class litigation challenging employers and social media platforms and hiring sites that allegedly target or limit notices of particular job openings to those in certain age bands. Consulting with employment counsel about such candidate sourcing activities and the effects of Kleber may be prudent at this point in time.

The U.S. Court of Appeals for the Second Circuit recently clarified that the “motivating factor” standard of causation applies to Family and Medical Leave Act (FMLA) retaliation claims, instead of the “but for” causation standard applied in Title VII and ADEA retaliation cases. The “but for” standard is more onerous for the plaintiff, who must demonstrate that discrimination or retaliation was the determining factor for the adverse employment action, not just one reason among others. The less burdensome “motivating factor” causation standard requires the plaintiff to show only that the action was motivated at least in part by discriminatory or retaliatory animus.  In Woods v. START Treatment & Recovery Ctrs., Inc., the Second Circuit vacated and remanded the jury verdict where the district court incorrectly instructed the jury to apply the “but for” causation standard to Plaintiff’s FMLA retaliation claims.  Specifically, the court held that the “motivating factor” standard applies to FMLA retaliation claims actionable under 29 U.S.C. § 2615(a)(1), which prohibits “any employer to interfere with, retrain, or deny the exercise of or the attempt to exercise” rights under the FMLA.

Background

Plaintiff Woods worked as a substance abuse counselor for Defendant START from 2007 until her termination in 2012. Beginning in 2011, Woods received several warning memos and was placed on probation due to poor performance.  During this period, Woods suffered from severe anemia and other conditions for which she requested medical leave under the FMLA.  Woods was hospitalized as a result of her condition in April 2012 and, shortly after returning to work, was terminated from her position as a counselor.  START proffered that Woods’s termination was the result of her demonstrated poor performance for over a year, whereas Woods claimed that she was discharged due to her request for and use of FMLA leave.  During discovery, START pursued questions about Woods’s prior alleged wrongdoing, but Woods refused to answer and invoked the Fifth Amendment.  At trial, the district court instructed the jury that Woods had to show that she would not have been discharged “but for” her use of FMLA leave, and that the jury could presume, based on her invocation of the Fifth Amendment, that Woods would have answered questions about her alleged wrongdoing in the affirmative.  The jury returned a verdict in favor of START on all counts.

The Second Circuit reversed and remanded, finding the district court erred by improperly instructing the jury on the causation standard and by issuing the adverse inference ruling with regard to the Fifth Amendment claim. While other circuits find a basis for FMLA retaliation claims in 29 U.S.C. § 2615(a)(2), the court determined that FMLA retaliation claims are sourced from § 2615(a)(1).  This is a key distinction because the language in § 2615(a)(2) is similar to the Title VII retaliation language discussed in Univ. of Tex. Sw. Med. Ctr. v. Nassar, 133 S. Ct. 2517 (2013) and Gross v. FBL Fin. Servs., Inc., 557 U.S. 167 (2009), where the Supreme Court determined that the default “but for” causation standard applied.  Relying instead on § 2615(a)(1) as the basis of Woods’s claims, the court adopted the Department of Labor’s regulations requiring the “motivating” or “negative” factor causation standard for FMLA retaliation claims after concluding that Chevron deference required that outcome.  In Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), of course, the Supreme Court held that deference should be given to administrative interpretation of statutes, so long as the statute is unclear and the interpretation is reasonable.

On remand, Woods likely will receive a new trial, where she will have to prove only that FMLA retaliation is one “motivating factor,” among others. Therefore, even if START successfully demonstrates that Woods performed poorly throughout the last twelve months of her tenure, or proves that she committed misconduct constituting a terminable offense, START must also show that the Plaintiff’s use of FMLA leave was not considered at all in the decision to terminate.

Implications

Although some district courts, like the District of Massachusetts, have recently held that the “but for” standard applies to FMLA retaliation claims, the recent trend in the Circuit Courts has been the opposite.  With the holding in Woods, the Second Circuit joins the Third Circuit in finding that the “motivating factor” causation standard applies to FMLA retaliation claims.  Thus, in litigation, employers should be prepared, particularly in these jurisdictions, to respond to this lower causation standard by proving that the same decision would have been made regardless of whether FMLA leave was taken.

This decision also should serve as a reminder to employers that, as discipline, discharge, and similar decisions are made, precautions must be taken to ensure that FMLA and other protected characteristics are not being considered in reaching those decisions. Human Resources and/or the legal department should review such decisions for discriminatory and retaliatory animus, and the non-discriminatory and non-retaliatory reasons for the decision should be contemporaneously documented.  Therefore, if the matter reaches litigation, these precautions will help rebut any claim that discrimination or retaliation motivated the adverse action.

David W. Garland“Take 5: Views You Can Use – April 2012,” written by David W. Garland, a Member of the Firm in Epstein Becker Green’s New York and Newark  Offices, discusses a number of topics relevant to employment in the health care industry.    
 
 The April 2012 issue covers employer’s requests for Facebook access, a new EEOC publication on the rights of disabled veterans returning to the  civilian workforce,  EEOC’s amended rules governing the defense of disparate impact claims based on age, challenges to the use of unpaid interns, and a recent case regarding the application of  Title VII to the provision of severance benefits.
 
Click here  to read the April issue of  “Take 5.”