Appeals Court Issues Significant Decision on Age Discrimination Concerning Job Applicants
• Job applicants may bring disparate impact claims of age discrimination under the ADEA against prospective employers
• Screening applicants using “resume review guidelines” that favor less experience over greater experience may raise disparate impact age discrimination issues
• The statute of limitations period may be equitably tolled (suspended) for job applicants until such time as the facts supporting a cause of action for discrimination become apparent or should have become apparent to a reasonably prudent person
On November 30, 2015, a three-judge panel of the United States Court of Appeals for the Eleventh Circuit issued a significant 2-1 decision interpreting the Age Discrimination in Employment Act (ADEA). The decision is Villarreal v. R.J. Reynolds Tobacco Co., 806 F.3d 1288, 2015 BL 391522 (11th Cir. 2015) (Villarreal).
In Villarreal, the Court of Appeals decided on an issue of first impression in its circuit that job applicants may bring disparate impact claims of age discrimination under the ADEA against prospective employers whose policies and procedures lack a discriminatory intent and are purportedly neutral on their face, but nevertheless have a discriminatory effect. The court also found that the plaintiff’s claim, although it was filed two and a half years after he first applied for a position with the defendant company, was not time-barred by the ADEA’s 180-day statute of limitations period.1 The court permitted the plaintiff’s claim under the doctrine of equitable tolling, in which a statute of limitations will not bar a claim if, despite the use of due diligence, the plaintiff did not or could not discover the injury until after the expiration of the limitations period.
Overview of the Villarreal Decision
In this case, the plaintiff, Richard Villarreal, first applied in November 2007 for a position with the defendant employer, R.J. Reynolds Tobacco Company (Reynolds), as a territory manager (a regional sales representative) by submitting an online application. At the time of that application, the plaintiff was 49 years old and thus in the protected age category under the ADEA. Reynolds never responded to Mr. Villarreal’s application. More than two years later, in May 2010, the plaintiff filed a charge of unlawful age discrimination with the Equal Employment Opportunity Commission (EEOC) alleging that Reynolds had discriminated against him on the basis of his age. While his charge was pending with the EEOC, Mr. Villarreal applied for the same position five additional times and was unsuccessful.
With the assistance of third-party recruiting services, Reynolds uses a set of what were termed “resume review guidelines” in screening applicants for territory manager positions. These guidelines list a number of characteristics Reynolds sought in its new hires, some of which could be considered as relating to age. Included in the guidelines were instructions to hiring managers to target candidates who are “2-3 years out of college” and to “stay away from” candidates with “8-10 years” of sales experience. As the Court of Appeals noted in its decision, of the 1,024 people hired by Reynolds as territory managers from September 2007 to July 2010, 19 were over 40 years old.
Mr. Villarreal filed his lawsuit in the United States District Court for the Northern District of Georgia, raising both disparate treatment (discriminatory intent) and disparate impact claims after the EEOC chose to not take further action and issued him a right-to-sue letter. The District Court dismissed his disparate impact claims entirely upon finding that the ADEA allows suits for disparate impact claims to be brought only by current employees, rather than applicants. That court further dismissed as untimely all claims related to hiring decisions that occurred more than 180 days prior to the date the EEOC charge was filed.
With regard to whether the ADEA allows disparate impact claims, the Court of Appeals considered first whether the applicable provision in the statute barring disparate impact discrimination is clear or ambiguous. That provision, Section 4(a)(2), prohibits employer conduct that “would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee” (emphasis added). The plaintiff argued that the term “any individual” covers both applicants and current employees. In contrast, the defendant argued that the term covers only current employees because other provisions of the ADEA specifically mention job applicants, thereby demonstrating that Congress knew how to reference job applicants and chose not to do so in Section 4(a)(2). The Court of Appeals determined that both readings seem reasonable, and therefore, the plain language of the statute does not make clear whether applicants may bring disparate impact claims.
Upon finding that a plain language reading of the language in the statute could not resolve whether applicants are covered, the Court of Appeals turned to how the language at issue has been interpreted by the EEOC, the agency tasked with enforcement. The Court of Appeals noted that the EEOC’s current ADEA disparate impact regulations do not distinguish between prospective and existing employees.2 The Court of Appeals pointed to the preamble to the regulations, which makes clear that the term “individuals” covers both employees and applicants and gives a number of examples of cases involving job applicants. In the court’s view, as the EEOC’s regulations are a reasonable interpretation of the statute, it is entitled to receive the court’s deference.
The Court of Appeals then examined the plaintiff’s equitable tolling argument in support of allowing consideration of his discrimination charges, which were filed two-and-a-half years after his first employment application with the defendant and well beyond the 180-day statute of limitations. The plaintiff alleged that he was entitled to equitable tolling because he did not know—nor could he have known—that he had been discriminated against until he learned in April 2010 about the resume review guidelines and the defendant’s hiring practices. The District Court had found that Mr. Villarreal was not entitled to equitable tolling because he did not allege either that Reynolds had misrepresented relevant facts or that he had diligently pursued his rights by asking the company why he had not been hired. However, the Court of Appeals found that the District Court incorrectly required the plaintiff to have made those allegations.
According to the Court of Appeals, a “reasonably prudent” person standard should be applied to determining whether to equitably toll the limitations period in employment discrimination cases. This standard would not require employer misrepresentation. Rather, in such cases, the inquiry a court would make in deciding whether to toll the limitations period would be whether the facts supporting a cause of action for discrimination became apparent or should have become apparent to a reasonably prudent person. In this case, the Court of Appeals observed that because the defendant never contacted Mr. Villarreal about his application until April 2010, he could only have known that he applied for the position but was not offered a job. The Court of Appeals concluded that these were insufficient facts to support his cause of action and start the running of the limitations period prior to that date.
The Court of Appeals made two key rulings in Villarreal, one regarding the applicability of the disparate impact theory to applicants and one on the equitable tolling of the statute of limitations. Yet the latter ruling is likely to have a more far-reaching consequence by facilitating a substantial number of discrimination claims of all types (race, sex, religion, national origin, and disability, in addition to age as in this case) to be filed perhaps even several years after job seekers have applied for positions. Employers may want to review their application screening procedures and other hiring processes to gain assurance that they are not adversely affecting protected groups.
1. If there is a fair employment practices agency in the plaintiff's area that enforces a state or local law that prohibits the same type of discrimination as is alleged under federal law, the deadline for filing a discrimination charge with the federal EEOC is extended to 300 days.
2. The EEOC regulation implementing Section 4(a)(2) of the ADEA, 29 CFR §1625.7(c), states, “Any employment practice that adversely affects individuals within the protected age group on the basis of older age is discriminatory unless the practice is justified by a ‘reasonable factor other than age.’” The regulation extends disparate impact liability to all “individuals within the protected age group.” The EEOC argued in an amicus curiae brief filed in support of the plaintiff that the regulation therefore established the agency’s view that Section 4(a)(2) protects any individual an employer discriminates against.
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