Did the New Cause of Action for Job Applicants Under the ADEA Get Axed?

In November 2007, Richard Villarreal applied to R.J. Reynolds Tobacco Company (R.J. Reynolds) for a Territory Manager position. R.J. Reynolds, using a contractor named Pinstripe, Inc., did not hire Villarreal based on several screening tools. The screening guidelines identified target candidates as being two to three years out of college, and encouraged hiring managers to “stay away from” applicants with eight to 10 years of sales experience.

In May 2010, over two years after having applied for the position, Villarreal filed a charge with the Equal Employment Opportunity Commission (EEOC) alleging that R.J. Reynolds discriminated against him on the basis of his age in violation of the ADEA. The EEOC issued a right to sue letter in April 2012, and Villarreal commenced a collective action against R.J. Reynolds and Pinstripe under the ADEA. In the complaint, Villarreal alleged disparate treatment under Section 4(a)(1) of the ADEA, disparate impact under Section 4(a)(2), and facts to support equitable tolling of the statute of limitations period. Villarreal claimed that he did not become aware of the discriminatory conduct until “shortly before filing the charge” with the EEOC and, thus, the statute of limitations should be tolled.

To give some procedural history, the district court dismissed several of Villarreal's claims and, on appeal, the Eleventh Circuit reversed. In Villarreal v. R.J. Reynolds Tobacco Co., 806 F.3d 1288 (11th Cir. 2015), the Eleventh Circuit deferred to the EEOC and held that job applicants may bring “disparate impact” claims for age discrimination against potential employers, even in the absence of evidence of intentional discrimination. The court additionally held that the statute of limitations for filing a charge with the EEOC may be tolled in such cases.

On rehearing en banc, the court reversed course. In a decision that is consistent with similar holdings in the U.S. Courts of Appeal for the Seventh, Eighth and Tenth Circuits, the Eleventh Circuit concluded that: 1) Section 4(a)(2) of the ADEA does not create a disparate impact cause of action for applicants for employment; and 2) Villarreal was not entitled to equitable tolling.

Section 4(a)(2) of the ADEA and Statutory Interpretation

In reaching its conclusion, the Eleventh Circuit first considered the statutory context of Section 4(a)(2). Section 4(a)(2) of the ADEA states that “[i]t shall be 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.”

In reading the plain text, the court focused on the key phrase “or otherwise adversely affect his status as an employee.” After conducting a detailed analysis of each of the relevant terms and their underlying construction and meaning, the Eleventh Circuit concluded that Section 4(a)(2) only protects individuals who have a “status as an employee,” and that applicants for employment do not enjoy such status.

While Villarreal cited to several Supreme Court cases — including Smith v. City of Jackson, 544 U.S. 228 (2005), Robinson v. Shell Oil Co., 519 U.S. 337 (1997) and Griggs v. Duke Power Co., 401 U.S. 424 (1971) — to support their argument that Section 4(a)(2) extends beyond employees, the Eleventh Circuit was unpersuaded. Rather, the court noted that the above cases applied to employees in separate contexts and, often, under different statutory language than that contained in Section 4(a)(2) of the ADEA.

Villarreal also urged the court to defer to the EEOC's interpretation of the statue. However, once again, the Eleventh Circuit declined. As the court noted, Section 4(a)(2) is unambiguous and the “legislature says in a statute what it means and means in a statute what it says there.” According to the court, “we do not defer to an agency's interpretation of a statute when the text is clear.” Indeed, in the absence of ambiguity, the “judicial inquiry is complete.”

Based on its findings, the Eleventh Circuit reversed its decision as to the disparate impact claim. The court held that Section 4(a)(2) of the ADEA protects employees, not job applicants, from disparate impact.

To Toll or Not to Toll

The Eleventh Circuit also re-examined the important issue of tolling. To pursue a claim of age discrimination, an individual must file a charge of discrimination with the EEOC within 180 days of the adverse employment decision. However, Villarreal filed his complaint two years after submitting his online application to R.J. Reynolds. His claims could therefore only be timely if the court tolled the statute of limitations.

The party seeking equitable tolling bears the burden of proof. The general test for equitable tolling obligates the party to establish that: 1) “he was pursuing his rights diligently; and 2) that some extraordinary circumstance stood in his way and prevented timely filing.”

Villarreal argued that he was entitled to equitable tolling and requested a “special test” to support. According to Villarreal, he did not know, nor could he have known, of R.J. Reynolds' resume review guidelines and hiring practices at the time he submitted his application, or at any other time within the 180-day limitation period. Rather, Villarreal contended that he did not learn of R.J. Reynolds' alleged discriminatory practices until April 2010, at which time he promptly filed his EEOC charge.

The court rejected Villarreal's request because “strict adherence to the procedural requirements specified by the legislature is the best guarantee of even handed administration of the law.” The Eleventh Circuit also mentioned the U.S. Courts of Appeal for the Sixth, Eighth, Ninth, and Tenth Circuits all applied the general test “or a materially similar one in discrimination cases.”

To that end, the court applied the general test and determined that Villarreal was neither diligent, nor did he encounter extraordinary circumstances. Rather, he let two years pass after his initial application and did not inquire about it. Such behavior led the court to conclude he failed to meet the burden of proof to show that he was entitled to equitable tolling.

The Dissent

The Eleventh Circuit's reversal was not without dissent. Judge Beverly B. Martin (joined by Judges Charles R. Wilson and Jill A. Pryor) filed a dissenting opinion arguing that the “majority's holding in this case [does] harm to this court's precedent and to the nation's anti-discrimination laws.” According to Judge Martin, Section 4(a)(2) “must be read to protect job applicants … because the EEOC has always read the ADEA to protect them.”

Judge Martin also disagreed with the majority's ruling that Villarreal was not entitled to equitable tolling. The majority stated that Villarreal failed the general test for tolling because he was not diligent in learning of his potential claims; however, Judge Martin noted that Villarreal could not have known that R.J. Reynolds employed an illegal hiring criterion in reviewing his application, or of “R.J. Reynolds's secret elimination of older workers from the hiring pool until just before he filed the EEOC charge.” According to Judge Martin, “[s]ecret preferences in hiring and even more subtle means of illegal discrimination, because of their very nature, are unlikely to be readily apparent to the individual discriminated against” and therefore are more susceptible to tolling arguments.

Conclusion

The Eleventh Circuit has now aligned itself with other circuits in finding that the ADEA's disparate impact provisions apply only to current employees, and not applicants for employment. Still, Judge Martin's dissent spotlights several arguments that challenge the majority opinion and may be up for consideration if the case is taken to the Supreme Court.

***** Matthew R. Simpson is a partner in the Atlanta office of Fisher Phillips, a national labor and employment law firm. He can be reached at [email protected].