02-4083(L), 02-7474(XAP) _____________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT _____________________________________ CLIFFORD B. MEACHAM, et al., Plaintiffs-Appellees, v. KNOLLS ATOMIC POWER LABORATORY, et al., Defendants-Appellants. ___________________________________________________ On Appeal from the United States District Court for the Northern District of New York ___________________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE SUPPORTING PLAINTIFFS-APPELLEES ____________________________________________________ NICHOLAS M. INZEO Acting Deputy General Counsel PHILIP B. SKLOVER Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel BARBARA L. SLOAN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, NW, 7th Floor Washington, DC 20507 (202) 663-4721 TABLE OF CONTENTS TABLE OF AUTHORITIES ii STATEMENT OF INTEREST 1 STATEMENT OF THE ISSUE 2 SUMMARY OF ARGUMENT 2 ARGUMENT THE ADEA PROHIBITS EMPLOYMENT PRACTICES THAT ARE FACIALLY NEUTRAL BUT FALL MORE HARSHLY ON OLDER WORKERS UNLESS THE PRACTICES ARE ADEQUATELY JUSTIFIED AS A BUSINESS NECESSITY. 5 A. The plain language of the ADEA supports the disparate impact theory 5 B. The legislative history is not to the contrary 10 C. The disparate impact theory is consistent with Hazen Paper 14 D. The EEOC's regulatory interpretation is entitled to Chevron deference 17 E. Recognizing the disparate impact theory under the ADEA is consistent with sound public policy 22 CONCLUSION 24 CERTIFICATE OF COMPLIANCE 25 CERTIFICATE OF SERVICETABLE OF AUTHORITIES CASES Adams v. Florida Power Corp., 255 F.3d 1322 (11th Cir. 2001), cert. dismissed, 535 U.S. 228 (2002) 8, 17, 22 Bank of America v. FDIC, 244 F.3d 1309 (11th Cir. 2001), cert. denied, 122 S. Ct. 902 (2002) 20 Bankers Life & Casualty Co. v. United States, 142 F.3d 973 (7th Cir. 1998) 21 Bryant v. City of Chicago, 200 F.3d 1092 (7th Cir. 2000) 7 Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) 17-18 Christensen v. Harris County, 529 U.S. 576 (2002) 19 Circuit City Stores v. Adams, 532 U.S. 105 (2001) 11 Connecticut v. Teal, 457 U.S. 440 (1982) 6 DiBiase v. SmithKline Beecham Corp., 48 F.3d 719 (3d Cir. 1995) 17 District Council 37, AFSCME v. NYC Dep't of Parks & Recreation, 113 F.3d 347 (2d Cir. 1997) 5, 17 Dothard v. Rawlinson, 433 U.S. 321 (1977) 6 Dunn v. CFTC, 519 U.S. 465 (1997) 9 EEOC v. Borden's, Inc., 724 F.2d 1390 (9th Cir. 1984) 19 EEOC v. Francis W. Parker School, 41 F.3d 1073 (7th Cir. 1994) 8, 15, 17, 19 Edelman v. Lynchburg College, 122 S. Ct. 1145 (2002) 14 Ellis v. United Airlines, 73 F.3d 999 (10th Cir. 1996) 17 Frank v. United Airlines, 216 F.3d 845 (9th Cir. 2000) 17 Geller v. Markham, 635 F.3d 1027 (2d Cir. 1980) 5, 6, 21 Griggs v. Duke Power Co., 401 U.S. 424 (1971) 6, 7, 23 Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993) 4, 14-17 In re Employment Discrimination Litigation Against Ala., 198 F.3d 1305 (11th Cir. 1999) 16 Kaiser Aluminum & Chemical Corp. v. Bonjorno, 494 U.S. 827 (1990) 5 Kelly v. Robinson, 479 U.S. 36 (1986) 11 Landgraf v. USI Film Productions, 511 U.S. 244 (1994) 13-14 Lorance v. AT&T Tech., 490 U.S. 900 (1989) 6 Lorillard v. Pons, 434 U.S. 575 (1978) 6 Lyon v. Ohio Education Association & Prof. Staff Union, 53 F.3d 135 (6th Cir. 1995) 17 Maresco v. Evans Chemetics, 964 F.2d 106 (2d Cir. 1992) 5 Miami University Wrestling Club v. Miami University, 302 F.3d 608 (6th Cir. 2002) 20-21 Mullin v. Raytheon Co., 164 F.3d 696 (1st Cir. 1999) 17 Oncale v. Sundowner Offshore Services, 523 U.S. 75 (1998) 16 Pension Benefit Guaranty Corp. v. LTV Corp., 496 U.S. 633 (1990) 13 Russello v. United States, 464 U.S. 16 (1983) 9 EEOC v. Wyoming, 460 U.S. 226 (1983) 11 Skidmore v. Swift & Co., 323 U.S. 134 (1944) 21 Smith v. City of Des Moines, 99 F.3d 1466 (8th Cir. 1996) 17, 18 Tolliver v. Xerox Corp., 918 F.2d 1052 (2d Cir. 1990) 19 United States v. Mead Corp., 533 U.S. 218 (2001) 19, 20, 21 Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989) 13-14 Watson v. Fort Worth Bank & Trust, 487 U.S. 977 (1988) 23 Wooden v. Board of Education, 931 F.2d 376 (6th Cir. 1991) 7 STATUTES Civil Rights Act of 1991, Pub. L. 102-166, 105 Stat. 1071 (1991) 13-14 42 U.S.C. § 1981 note 13 Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. passim 42 U.S.C. § 2000e-2(a)(2) 6 Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq. passim 29 U.S.C. § 621(a)(2) 17 29 U.S.C. § 621(b) 23 29 U.S.C. § 623(a)(1) 15 29 U.S.C. § 623(a)(2) 3, 5, 9, 15 29 U.S.C. § 623(f)(1) 1, 3, 7, 17 29 U.S.C. § 628 19 Equal Pay Act, 29 U.S.C. § 206(d)(1) 8-9 REGULATIONS, RULES AND FEDERAL STATUTORY MATERIALS 29 C.F.R. § 860.103-04 (1970) 12 29 C.F.R. § 860.103(f) 12, 19, 22 29 C.F.R. § 1625.7 1, 3, 8, 18 46 Fed. Reg. 47,724-25 (1981) 18, 20 OTHER AUTHORITY H.R. Rep. No. 40, pt.I, 102d Cong., 1st sess. (1991), reprinted in 1991 U.S.C.C.A.N. 549 14 Black's Law Dictionary (6th ed. 1990) 7 U.S. Dep't of Labor, The Older American Worker: Age Discrimination in Employment: Report of the Secretary of Labor to the Congress Under Section 715 of the Civil Rights Act of 1964 (1965) 10-11 IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ________________________ 02-4083(L), 02-7474(XAP) ________________________ CLIFFORD B. MEACHAM, et al., Plaintiffs-Appellees, v. KNOLLS ATOMIC POWER LABORATORY, a/k/a KAPL, INC., et al., Defendants-Appellants. ____________________________________________________ On Appeal from the United States District Court for the Northern District of New York ____________________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE SUPPORTING PLAINTIFFS-APPELLEES ____________________________________________________ STATEMENT OF INTEREST The Equal Employment Opportunity Commission is the agency charged by Congress with interpreting and enforcing the Age Discrimination in Employment Act, 29 U.S.C. §§ 621, et seq. (“ADEA”). The Commission has historically taken the position that plaintiffs suing under the ADEA may use the disparate impact method to prove a violation of the statute. That position has been spelled out not only in briefs and enforcement actions filed by the Commission but also in a regulation, 29 C.F.R. § 1625.7, which interprets the phrase “differentiation based on reasonable factors other than age,” as used in § 4(f)(1) of the ADEA, 29 U.S.C. § 623(f)(1). This Court, too, has consistently held that disparate impact is viable under the ADEA. In this appeal, however, defendants (hereinafter collectively referred to as “KAPL”) urge this Court to hold that disparate impact theory is not available under the ADEA. KAPL's argument, if accepted by this Court, would not only overturn a long line of circuit precedent but also effectively invalidate the Commission's regulation. In our view, any such ruling that would allow employers to use arbitrary or unreasonable employment practices that disproportionately impact older workers would greatly weaken the protections of the ADEA and, so, undermine the purpose of the ADEA: “to promote employment of older persons based on their ability rather than age.” Because of the importance of this issue, we offer our views to the Court. STATEMENT OF THE ISSUE Whether the ADEA prohibits facially neutral employment practices that have a disparate impact on older workers and cannot be justified by business necessity.<1> SUMMARY OF ARGUMENT One well-established method of proving liability in an employment discrimination case is through disparate impact. In contrast to disparate treatment, which requires proof that the employer intentionally based its actions on a protected trait such as age, disparate impact requires proof that a facially neutral employment practice disproportionately affects a protected group of workers to their detriment — but not proof that the practice was adopted with a discriminatory motive. If the practice has this disproportionate effect, the employer is liable for discrimination unless it shows that the practice is justified by business necessity. This Court has consistently held that plaintiffs suing under the ADEA, as well as under Title VII, may use a disparate impact method to prove unlawful employment discrimination. In this appeal, defendants urge this Court to repudiate its longstanding precedent and hold that the disparate impact theory of discrimination is not viable under the ADEA. Section 4(a)(2) of the ADEA prohibits practices that “tend to deprive” any employee of employment opportunities or “adversely affect” the employee because of the employee's age. This language closely tracks the language from Title VII that the Supreme Court construed as supporting a disparate impact theory under that statute. In addition, § 4(f)(1) of the ADEA provides a narrow defense for actions based on “reasonable factors other than age.” Together, these provisions establish the disparate impact theory under the ADEA and the business necessity defense. Even if the meaning of these provisions were not plain on their face, this Court should defer to EEOC's regulation — codified at 29 C.F.R. § 1625.7(d) — interpreting the ADEA as embracing the disparate impact theory. Congress has delegated to the Commission rulemaking authority under the ADEA. The regulation is, at a minimum, a permissible interpretation of the ADEA and, because the Commission followed notice-and-comment procedures in adopting its interpretation, the regulation is entitled to Chevron deference. None of the reasons listed by defendants for rejecting disparate impact come close to providing a basis for this Court to overrule both its precedent and the Commission's regulation. The Department of Labor report — which was not adopted by Congress — does not unambiguously signal a congressional intent to reject the disparate impact theory. To the contrary, the Department's earliest interpretations of the ADEA recognize, consistent with disparate impact theory, that employers must justify any reliance on age-neutral employment practices that disproportionately impact older workers. Nor can any conclusion be drawn from Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), since the Supreme Court explicitly declined to resolve whether disparate impact is available under the ADEA, an issue not raised by the parties to the case. Finally, considerations of public policy weigh in favor of recognizing disparate impact theory. The theory serves a vital role in preventing arbitrary employment practices that disadvantage protected workers without serving employers' legitimate business interests. These practices are just as pernicious when the protected group consists of older workers as when it is a racial minority. ARGUMENT THE ADEA PROHIBITS EMPLOYMENT PRACTICES THAT ARE FACIALLY NEUTRAL BUT FALL MORE HARSHLY ON OLDER WORKERS UNLESS THE PRACTICES ARE ADEQUATELY JUSTIFIED AS A BUSINESS NECESSITY. This Court has consistently held that the ADEA prohibits “employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on [older workers] and cannot be justified by business necessity.” See, e.g., District Council 37, AFSCME v. NYC Dep't of Parks & Recreation, 113 F.3d 347, 351-52 (2d Cir. 1997); Maresco v. Evans Chemetics, 964 F.2d 106, 114 (2d Cir. 1992); Geller v. Markham, 635 F.3d 1027, 1032-33 (2d Cir. 1980). Contrary to defendants' arguments, this holding accords with the statutory language and purpose of the ADEA; it is also consistent with the Commission's regulatory interpretation of the statute. The holding, therefore, should not be reconsidered. A. The plain language of the ADEA supports the disparate impact theory. The starting point for interpreting a statute is the language of the statute itself. Kaiser Alum. & Chem. Corp. v. Bonjorno, 494 U.S. 827, 835 (1990). Section 4(a)(2) of the ADEA 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 prohibitory language of § 4(a)(2) tracks word for word § 703(a)(2) of Title VII, 42 U.S.C. § 2000e-2(a)(2).<2> In Griggs v. Duke Power Co., 401 U.S. 424, 432 (1971), the Supreme Court interpreted § 703(a) as supporting a disparate impact theory under Title VII, ruling that “Congress directed the thrust of the Act to the consequences of employment practices, not simply the motivation.” See also id. at 431 (provision “proscribes not only overt discrimination but also employment practices that are “fair in form but discriminatory in operation”); accord Connecticut v. Teal, 457 U.S. 440, 448 (1982) (disparate impact claim reflects “literal language” of § 703(a)(2) as well as Congress's basic objective in enacting statute).<3> Because the operative language of § 4(a)(2) of the ADEA and § 703(a)(2) of Title VII are the same, § 4(a)(2) should also be construed to prohibit facially neutral practices that are fair in form but discriminatory in effect. See Geller, 635 F.2d at 1032; cf. Lorillard v. Pons, 434 U.S. 575, 584 (1978) (“prohibitions of the ADEA were derived in haec verba from Title VII”). Despite the parallel language in Title VII and the ADEA, KAPL argues that this Court should repudiate its long line of precedent dating back to Geller which holds that disparate impact theory is cognizable under the ADEA. According to defendants, the ADEA should be read differently because it contains a provision not found in Title VII — § 4(f)(1), which allows an employer to take action otherwise prohibited by the ADEA “where the differentiation is based on reasonable factors other than age,” 29 U.S.C. § 623(f)(1). See KAPL Brief at 24-26. Defendants do not, however, explain why inclusion of this provision necessarily precludes disparate impact theory and, in fact, it does not. The provision permits employers to rely on some age-neutral factors when making employment decisions, but there is an important caveat – the factor relied on must be “reasonable.” This is not, as defendants imply, a meaningless limitation. Not all conduct is reasonable, and thus not all conduct passes muster under a reasonableness standard. See Black's Law Dictionary 1265 (6th ed. 1990) (“reasonable” means “[f]it and appropriate to the end in view”). Notably, in the context of Title VII, courts have defined business necessity to include tests or screening devices that are demonstrably a “reasonable measure” of job performance are a business necessity. Griggs, 401 U.S. at 436 (emphasis added); see also Wooden v. Board of Educ., 931 F.2d 376, 380 (6th Cir. 1991) (affirming summary judgment in ADEA disparate impact case because there was no evidence that employer's proffered justification was “unsound, unreasonable, or invalid”); Bryant v. City of Chicago, 200 F.3d 1092, 1098-99 (7th Cir. 2000) (“It would be unrealistic to require more than a reasonable measure of job performance. It therefore is a matter of reasonableness, except in cases in which the plaintiff can show that the employer was using the practice as a mere pretext for discrimination.”). Thus, rather than preclude all disparate impact liability, § 4(f)(1) should more logically be read in context as “a statutory description of the business necessity defense.” See Adams v. Florida Power Corp., 255 F.3d 1322, 1327 (11th Cir. 2001) (Barkett, J., concurring specially), cert. dismissed, 535 U.S. 228 (2002); see also EEOC v. Francis W. Parker School, 41 F.3d 1073, 1080 (7th Cir. 1994) (Cudahy, J., dissenting). As discussed below, this is precisely the position taken by the Commission in its interpretive regulation. See 29 C.F.R. § 1625.7(d). KAPL, in contrast, asserts that, because § 4(f)(1) resembles a provision in the Equal Pay Act (“EPA”) that permits employers to base pay differentials on “any other factor other than sex,” 29 U.S.C. § 206(d)(1), and that provision has been read to preclude disparate impact challenges under the EPA, § 4(f)(1) of the ADEA should likewise be interpreted to preclude disparate challenges under the ADEA. KAPL Brief at 25-26 (citing County of Washington v. Gunther, 452 U.S. 161, 170-71 (1981)). The comparison is inapt, however, because the EPA authorizes employers to classify employees on the basis of “any” factor except sex whereas the ADEA authorizes employers to classify employees on the basis of only those non-age factors that the employer can prove are “reasonable.” This distinction cannot be ascribed to “a simple mistake in draftsmanship.” See Russello v. United States, 464 U.S. 16, 23 (1983) (Congress is presumed to act “intentionally and purposely in the disparate inclusion or exclusion” of language in related statutory provisions). The ADEA was passed four years after the Equal Pay Act. While it could have said in the ADEA what it said in the EPA –- that it is lawful for an employer to rely on “any other factor other than age” -- Congress chose instead to specify that only “reasonable” factors would suffice. If the ADEA provision were nevertheless read, like the EPA provision, to exempt all facially-neutral practices from the reach of the statute, the word “reasonable” in the ADEA would be mere surplusage. Legislative enactments “should not be construed to render their provisions mere surplusage.” Dunn v. CFTC, 519 U.S. 465, 473 (1997). In short, like Title VII, the ADEA reaches conduct that “otherwise adversely affect[s]” an individual's “status as an employee.” 29 U.S.C. § 623(a)(2). In contrast to the EPA, the ADEA explicitly requires that any age-neutral factors relied upon by the employer be “reasonable.” Given the parallels between the substantive provisions of the ADEA and Title VII and the critical textual distinction between the provisions of the ADEA and the EPA, the best understanding of the ADEA is that it codifies the disparate impact theory with a defense for business necessity. B. The legislative history is not to the contrary. The statute's text notwithstanding, KAPL finds support for a more restrictive reading of the ADEA's protections in two snippets of what it characterizes as “legislative history.” KAPL Brief at 26-28. The first of these is a report by the Secretary of Labor issued two years before the ADEA was enacted. See U.S. Dep't of Labor, The Older American Worker: Age Discrimination in Employment: Report of the Secretary of Labor to the Congress Under Section 715 of the Civil Rights Act of 1964 (1965) (“Labor Report”). Defendants note that other appellate courts have read the report as “recommend[ing] that Congress ban arbitrary discrimination, such as disparate treatment based on stereotypical perceptions of the elderly, but that factors affecting older workers, such as policies with disparate impact, be addressed in alternative ways.” KAPL Brief at 26-27. In KAPL's view, the existence of this report distinguishes the ADEA from Title VII where, KAPL suggests, the legislative history supports disparate impact theory. Contrary to KAPL's suggestion, however, the mere existence of the Labor Report does not support a blanket rejection of the disparate impact theory under the ADEA. To begin with, this history comes from an external source. It is not contained in a committee report, nor is it set forth in the floor statement of a sponsor or member. As the Supreme Court recently noted, “Legislative history is problematic even when the attempt is to draw inferences from the intent of duly appointed committees of the Congress. It becomes far more so when we consult sources still more steps removed from the full Congress.” Circuit City Stores v. Adams, 532 U.S. 105, 120 (2001). Even assuming that the “precise intent” of an external source can be determined — a point “doubtful” as a “general rule,” one “ought not attribute to Congress an official purpose” based on the content of external proposals for legislative change. Id.; see also Kelly v. Robinson, 479 U.S. 36, 51 n.13 (1986) (refusing to attach “any significance” to statements made in a “Bankruptcy Laws Commission Report” where the statements in question were not included “in the official Senate and House Reports”). While the Labor Report may have played an important role in the legislative deliberations that led to enacting the ADEA (see EEOC v. Wyoming, 460 U.S. 226, 230-31 (1983)), Congress passed its own statute; it did not enact the report into law. Congress's function is “to consult political forces and then decide how best to resolve conflicts in the course of writing the objective embodiments of the law we know as statutes.” Circuit City, 532 U.S. at 120. Without some specific evidence that Congress understood the report as defendants do and acted on the basis of that understanding in drafting the ADEA, it is speculative at best to read anything of value into the report. In any event, the Labor Report, read carefully, does not reflect an intent to place all age-neutral practices, regardless of their impact on older workers, beyond the reach of the ADEA. The report makes the obvious point that any age discrimination law should focus on “arbitrary” discrimination against older workers. Labor Report at 21-22. A practice that falls more harshly on older workers may well constitute “arbitrary” age discrimination if it cannot be justified as a business necessity. This view is supported by interpretive regulations issued by the Department of Labor (“DOL”) — the same agency that authored this report and the agency initially entrusted with ADEA enforcement — shortly after the ADEA became effective. See 29 C.F.R. §§ 860.103-04 (1970). These regulations recognized that the ADEA prohibited some age-neutral practices that had an adverse effect on older workers. They stated, for example, that age-neutral evaluation factors “such as quantity or quality of production, or educational level, would be acceptable bases for differentiation when, in the individual case, such factors are shown to have a valid relationship to job requirements” (§ 806.103(f)(2)), and that age-neutral physical-fitness standards would be permissible if “reasonably necessary for the specific work to be performed” (§ 860.103(f)(1)(i)). In light of these regulations – which reflect the contemporaneous views of the applicable enforcement agency – KAPL's argument that the Labor Report is an authoritative rejection of disparate impact theory under the ADEA cannot be reconciled with the reality that the Department of Labor effectively approved a disparate impact interpretation of the final version of the statute. KAPL's other “highly significant” piece of legislative history is the fact that Congress, in the Civil Rights Act of 1991 (“CRA”), “amended Title VII to provide explicitly for a disparate impact claim” without adding a parallel provision to the ADEA. Brief at 27-28. According to KAPL, this signals Congress's intent not to provide for a disparate impact theory in the ADEA. There are two main problems with this argument. First, subsequent legislative history of this kind is a “hazardous basis for inferring the intent of an earlier Congress.” Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 650 (1990). Second, and importantly, Congress did not add a disparate impact claim to Title VII; it merely added language “confirm[ing]” the existence of disparate impact theory and clarifying the burden-shifting framework applicable to such claims under Title VII. See Civil Rights Act of 1991, Pub. L. 102-166, § 3(3), 105 Stat. 1071, 1071 (1991, 42 U.S.C. § 1981 note (stating that amendment merely “confirm[ed] statutory authority and provide[d] statutory guidelines for the adjudication of disparate impact suits under title VII”). The CRA was not a systematic attempt to rewrite the federal laws prohibiting employment discrimination. Instead, Congress was principally reacting to specific Supreme Court decisions, and its primary goal was to reverse the holdings of those decisions. Landgraf v. USI Film Prod., 511 U.S. 244, 250 (1994); 1991 CRA, Pub. L. 102-166, §§ 2(2), 3(2)-(4), 105 Stat. 1071, 1071 (1991). Two sections, §§ 104 and 105, were designed to respond to Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989). See Landgraf, 511 U.S. at 250-51. Since Wards Cove was a Title VII case, Congress naturally amended Title VII to correct it. Concern with the Wards Cove decision was focused in particular on its holding that the plaintiff had the burden of proof with respect to the justification for a practice with a disparate impact, as well as on its articulation of the standard for the defense. See H.R. Rep. No. 40, pt.I, at 23-30, 33-34, 102d Cong., 1st sess. (1991), reprinted in 1991 U.S.C.C.A.N 549, 561-68, 571-72. Before passage of the CRA, Title VII contained no specific defense to disparate impact claims: Congress included one in the CRA. There was no need for Congress to add a parallel provision to the ADEA, however, because the ADEA, unlike Title VII, already had the reasonable-factors-other-than-age provision. As discussed infra, the Commission's regulation had long interpreted that provision as adopting a business necessity defense to claims of discrimination based on a disparate impact theory, and until 1994 no appellate court had held to the contrary. Congress was presumably aware of the history of this issue under the ADEA and — quite reasonably — saw no reason to address the point under the ADEA. Cf. Edelman v. Lynchburg College, 122 S. Ct. 1145, 1152 (2002) (“By amending the law without repudiating the regulation, Congress suggests its consent to the Commission's practice.”). C. The disparate impact theory is consistent with Hazen Paper. In addition to their other arguments, defendants also rely on the Supreme Court's decision in Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), which they assert supports their view that disparate impact theory is not cognizable under the ADEA. Defendants misread Hazen Paper. In Hazen Paper, the Supreme Court held that as a general rule employers do not intentionally violate the ADEA, under § 4(a)(1), when they base employment decisions on neutral factors closely linked to age, such as pension vesting (particularly where, as in Hazen Paper, pensions vested after only ten years). 507 U.S. at 609. While the decision clearly establishes that reliance on age-neutral factors is not illegal disparate treatment under 29 U.S.C. § 4(a)(1), it does not hold that such reliance cannot be illegal disparate impact under § 4(a)(2). On the contrary, the Court expressly declined to decide whether disparate impact theory is available under the ADEA because the plaintiff had relied solely on a disparate treatment theory of liability. See 507 U.S. at 610 (“we have never decided whether a disparate impact theory of liability is available under the ADEA,” and “we need not do so here”); accord EEOC v. Francis W. Parker School, 41 F.3d 1073, 1076-77 (7th Cir. 1994) (“Hazen Paper is, by its own terms, a disparate treatment case only”). Even the separate concurrence by three Justices noted only that there were “substantial arguments that it is improper to carry over disparate impact analysis from Title VII to the ADEA” (id. at 618), without definitively opining on whether those arguments are valid. Any other statements in the Court's decision must be viewed in that light. For example, it is clearly true, as the Court noted, that an employer does not violate the ADEA under a disparate treatment theory when it is “wholly motivated by factors other than age.” Id. at 611. It is also true that the ADEA does not “specify” any “characteristics” other than age that the employer must ignore. Such truisms speak to the nature of the disparate treatment theory under the ADEA; they do not call into question the viability of a disparate impact theory of liability. The Supreme Court did suggest in Hazen Paper that disparate treatment “captures the essence of what Congress sought to prohibit in the ADEA.” Id. at 610. This does not foreclose recognizing a disparate impact theory. Indeed, it would be fair to say that disparate treatment also captures the essence of what Congress sought to prohibit in Title VII. Cf. In re Employment Discrimination Litig. Against Ala., 198 F.3d 1305, 1321 (11th Cir. 1999) (characterizing disparate impact theory as a “prophylactic” measure under Title VII). Nonetheless, Title VII plainly embraces the disparate impact theory. “[S]tatutory prohibitions often go beyond the principal evil to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.” Oncale v. Sundowner Offshore Servs., 523 U.S. 75, 79 (1998). Like the parallel provisions of Title VII, the language of the ADEA is broad enough to encompass a disparate impact theory. Congress may have passed the ADEA to eradicate “inaccurate and stigmatizing [age-based] stereotypes,” Hazen Paper, 507 U.S. at 610, but it understood that arbitrary age discrimination sometimes takes the form of “otherwise desirable practices” that “work to the disadvantage of older workers.” 29 U.S.C. § 621(a)(2). Hazen Paper recognized the primacy of the disparate treatment theory. It does not deny the existence of the disparate impact theory.<4> Accordingly, none of the reasons defendants have proffered provide a basis for this Court to repudiate its precedent and reject disparate impact under the ADEA. D. The EEOC's regulatory interpretation is entitled to Chevron deference. In any event, if, as defendants argue, § 4(f)(1) – the reasonable-factors-other-than-age provision – were somehow at odds with the prohibitory sections of the ADEA, at worst, this would create an ambiguity in the statute. Where a statute is silent or ambiguous on a particular issue and the agency charged with its enforcement fills the gap by regulation, the question for the courts is whether the regulation is based on a permissible construction of the statute. See, e.g., Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43 (1984). If so, the agency's interpretation is entitled to deference. See id. at 844. Significantly, here, the Commission has interpreted the ADEA to permit plaintiffs to prove age discrimination using a disparate impact method. This interpretation -- which defendants do not even mention -- is at a minimum a permissible reading of the statute and, so, entitled to full deference under the Chevron framework. Since 1981, shortly after assuming enforcement responsibility over the ADEA, the Commission has by regulation taken the position that disparate impact theory is available under the ADEA and that § 4(f)(1), the reasonable-factors-other-than-age provision, constitutes a defense to such claims. See 46 Fed. Reg. 47,724 (1981). Interpreting the phrase “differentiation based on reasonable factors other than age,” as used in § 4(f)(1), the regulation provides that “[w]hen an employment practice, including a test, is claimed as a basis for different treatment of employees or applicants for employment on the grounds that it is a ‘factor other than' age, and such a practice has an adverse impact on individuals within the protected age group, it can only be justified as a business necessity.” 29 C.F.R. § 1625.7(d). The Commission has consistently defended this interpretation in the courts, arguing that a claim of discrimination under a disparate impact theory is cognizable under the ADEA. See, e.g., Smith v. City of Des Moines, 99 F.3d 1466 (8th Cir. 1997); EEOC v. Francis W. Parker School, 41 F.3d 1073 (7th Cir.); EEOC v. Borden's, Inc., 724 F,2d 1390 (9th Cir. 1984). The interpretation is also consistent with regulations issued by DOL shortly after the ADEA was enacted. See 29 C.F.R. § 860.103-04 (1968). The EEOC's regulatory interpretation of the ADEA is entitled to full Chevron deference. Two “good indicator[s] of delegation meriting Chevron treatment” are “express congressional authorization to engage in the process of rulemaking . . . that produces regulations for which deference is claimed” and the existence of “a relatively formal administrative procedure tending to foster fairness and deliberation.” See United States v. Mead Corp., 533 U.S. 218, 229-31 (2001); see also Christensen v. Harris County, 529 U.S. 576, 586-87 (2002) (“framework of deference set forth in Chevron” applies to interpretations arrived at through “notice-and-comment rulemaking”). Both such indicators are present here. Unlike Title VII, the ADEA provides the Commission with substantive rulemaking authority. 29 U.S.C. § 628 (“[i]n accordance with the provisions of [title 5], the Equal Employment Opportunity Commission may issue such rules and regulations as it may consider necessary or appropriate for carrying out this chapter . . .”); but cf. Tolliver v. Xerox Corp., 918 F.2d 1052, 1057 (2d Cir. 1990) (in upholding ADEA procedural regulation, stating that “EEOC's interpretation of the ADEA is entitled to the same deference accorded to its interpretation of analogous Title VII provisions”). Moreover, the Commission followed formal notice-and-comment procedures in issuing the regulation. See 46 Fed. Reg. 47,724. In promulgating the final regulation, the Commission noted that, in response to public comment, it had modified the proposed regulation to “make it clear that employment criteria that are age-neutral on their face but which nevertheless have a disparate impact on members of the protected age group must be justified as a business necessity.” Id. at 47,725. The regulation was thus the product of a “formal administrative procedure,” reflecting the kind of careful “deliberation” that supports Chevron deference. Although the EEOC characterized the regulation as an “interpretive rule[] or statement[] of policy,” 46 Fed. Reg. at 47,724, and did not explicitly invoke its rulemaking authority, Chevron deference is nevertheless appropriate. More significant is the fact that EEOC had full enforcement authority under the ADEA, including substantive rulemaking authority, and issued the regulations through formal notice-and-comment procedures. Cf. Mead 533 U.S. at 230 (noting that “overwhelming number of our cases applying Chevron deference have reviewed the fruits of notice-and-comment rulemaking or formal adjudication”); see also Miami Univ. Wrestling Club v. Miami Univ., 302 F.3d 608, 615 (6th Cir. 2002) (according Chevron deference to regulation agency deemed to be interpretive rule or statement of policy because agency chose to follow a formal notice-and-comment procedure); Bank of Am. v. FDIC, 244 F.3d 1309, 1322 (11th Cir. 2001) (applying Chevron to uphold an FDIC interpretive rule that was developed through notice-and-comment procedures), cert. denied, 122 S. Ct. 902 (2002); Bankers Life & Cas. Co. v. United States, 142 F.3d 973, 980 (7th Cir. 1998) (“When an agency undertakes notice and comment procedures it elevates the status of a regulation above mere interpretation.”). Furthermore, even if it did not qualify for Chevron deference, the Commission's regulatory interpretation would nevertheless be entitled to considerable weight. “‘The weight [accorded to an administrative] judgment in a particular case will depend upon the thoroughness evident in its consideration, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.'” See Mead, 533 U.S. at 228 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)). Here, as noted above, the Commission's interpretation is longstanding and consistent with both the statutory language and earlier pronouncements on the issue. There is also a “thoroughness evident in its consideration,” the interpretation having been formulated pursuant to a notice-and-comment procedure. Accordingly, under either Chevron or Skidmore, this Court should defer to the Commission's regulation – which accords completely with Geller and its progeny – and, so, decline defendants' invitation to hold that disparate impact theory is not cognizable under the ADEA. E. Recognizing the disparate impact theory under the ADEA is consistent with sound public policy. In addition to the sound reasons based on the text and history of the ADEA, there are also important policy reasons for recognizing the disparate impact theory under the ADEA. A number of factors — experience, years of service, pension eligibility, physical fitness — may correlate in some fashion with age. Of course, in some cases using these factors may be justified as a business necessity. Indeed, disparate impact “is probably a more difficult claim to make under the ADEA than in a race or gender context because the impact of neutral policies which fall disproportionately on class members protected by the ADEA can be proven to be related to legitimate business reasons in more instances than those which might impact other protected groups.” Adams, 255 F.3d at 1327 (Barkett, J., concurring specially). In other cases, where no showing of business necessity can be made, however, these factors may have the effect of arbitrarily screening out a significant number of older workers. For example, as the DOL's regulations recognized, it might be perfectly legitimate for an employer to adopt a strength test for an iron worker's job even if the effect of doing so is to disqualify a disproportionate number of older workers. 29 C.F.R. § 860.103(f)(1)(ii) (1970). The same would not be true for a sedentary job such as librarian. In that case, a strength test would be an unreasonable barrier to employment for older workers while serving no legitimate interest of the employer. In recognizing the disparate impact theory under Title VII, the Supreme Court opined that “good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as ‘built-in headwinds' for minority groups and are unrelated to measuring job capability.” Griggs, 401 U.S. at 432. The Court later explained that “the necessary premise of the disparate impact approach is that some employment practices, adopted without a deliberately discriminatory motive, may in operation be functionally equivalent to intentional discrimination.” Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 987 (1988). The Court stressed that discrimination cannot be “adequately policed” through disparate treatment analysis alone, because “the problem of subconscious stereotypes and prejudices would remain.” Id. at 990. That is equally true under the ADEA, the purpose of which is to “promote employment of older persons based on their ability rather than age.” 29 U.S.C. § 621(b). A blanket rule precluding any use of the disparate impact theory under the ADEA would deprive plaintiffs of a necessary tool for challenging employment practices that arbitrarily exclude older workers from employment opportunities. Significantly, there is no need for this Court to revisit the question of whether disparate impact theory is available under the ADEA. Defendants' arguments are not new, and nothing in the law has changed since this Court's most recent – and, in our view, entirely correct – rulings on the issue. Should it choose to address the matter, however, we urge the Court to reject defendants' arguments and reaffirm, consistent with the language and purpose of the ADEA as well as with the Commission's regulatory interpretation, that employers may violate the statute by relying on facially neutral employment practices that fall more harshly on older workers and cannot be justified by business necessity. CONCLUSION For the foregoing reasons, the Commission respectfully requests that, should it reach the question, this Court should reject defendant's suggestion that it reconsider its existing precedent and hold, consistent with that precedent, that disparate impact theory remains a viable means of proving discrimination under the ADEA. Respectfully submitted, NICHOLAS M. INZEO Acting Deputy General Counsel PHILIP B. SKLOVER Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel __________________________ BARBARA L. SLOAN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, NW, 7th Floor Washington, DC 20507 (202) 663-4721 CERTIFICATE OF COMPLIANCE In accordance with Federal Rule of Appellate Procedure 32(a)(7)(C), I certify that this brief was prepared using Courier New (monospaced) font, 12 point, and contains 5812 words from the Statement of Interest through the Conclusion, as determined by the Corel Word Perfect 9 word counting program. ____________________________ BARBARA L. SLOAN CERTIFICATE OF SERVICE I certify that two copies of the foregoing Brief of the Equal Employment Opportunity Commission As Amicus Curiae were sent this 19th day of February, 2003, by first-class mail, postage prepaid, to: Margaret A. Clemens John E. Higgins NIXON PEABODY LLP P.O. Box 31051 Clinton Square Rochester, NY 14604-1051 John B. DuCharme BERGER & DUCHARME, LLP 1023 Route 146 Clifton Park, NY 12065 Courtesy copies were also sent to: Stephen A. Bokat NATIONAL CHAMBER LITIGATION CENTER 1615 H Street, N.W. Washington, DC 20062 Laurie McCann AARP FOUNDATION LITIGATION 601 E Street, N.W., Fourth Floor Washington, DC 20049 Jennifer Bosco NATIONAL EMPLOYMENT LAWYERS ASSOCIATION 44 Montgomery Street, Suite 2080 San Francisco, CA 94104 ____________________________________ Barbara L. Sloan 1 The Commission takes no position on any other issue raised in this appeal, including whether the jury correctly found that any of KAPL's employment practices had an illegal disparate impact on older workers. 2 Section 703(a)(2) of Title VII 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 race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e-2(a)(2). 3 See also, e.g., Lorance v. AT&T Tech., 490 U.S. 900, 904 (1989) (§ 703(a)(2) reaches practices that are fair in form but discriminatory in operation); Dothard v. Rawlinson, 433 U.S. 321, 337-38 (1977) (Rehnquist, J., concurring) (§ 703(a)(2) addresses disparate impact claims). 4 As a final reason why this Court should abandon its longstanding precedent, KAPL asserts that “a majority of circuit courts” -- six in all -- “have held that the ADEA does not permit a disparate impact claim.” KAPL Brief at 29-31. That is simply wrong. In fact, only four circuits have so held. See Adams, 255 F.3d 1322 (11th Cir.); Mullin v. Raytheon Co., 164 F.3d 696 (1st Cir. 1999); Ellis v. United Airlines, 73 F.3d 999 (10th Cir. 1996); Francis W. Parker School, 41 F.3d 1073 (7th Cir.). In contrast, two circuits have joined this one in holding that ADEA disparate impact theory is cognizable. See District Council 37, 113 F.3d 347 (2d Cir.); Frank v. United Airlines, 216 F.3d 845 (9th Cir. 2000); Smith v. City of Des Moines, 99 F.3d 1466 (8th Cir. 1996). Although KAPL adds the Third and Sixth Circuits to the list of circuits that have rejected disparate impact theory, see KAPL Brief at 29, that is incorrect. In the Third Circuit, two judges on the three-judge panel expressly refused to join the sections of Judge Greenberg's opinion addressing disparate impact; he wrote “only for himself.” See DiBiase v. SmithKline Beecham Corp., 48 F.3d 719, 731-32 nn.16-17 (3d Cir. 1995). Similarly, in a decision issued after the one that KAPL cites, the Sixth Circuit noted the contrary authority in other circuits but specified that it had “stated that a disparate impact theory of age discrimination may be possible.” Lyon v. Ohio Educ. Assn & Prof. Staff Union, 53 F.3d 135, 139 n.5 (6th Cir. 1995).