John DiBIASE v. SMITHKLINE BEECHAM CORPORATION, Appellant.
No. 94-1530.
United States Court of Appeals, Third Circuit.
Argued Dec. 15, 1994. Decided Feb. 16, 1995.
Sur Petition For Rehearing March 21, 1995.
48 F.3d 719
Alan D. Berkowitz, Steven B. Feirson (argued), Dechert Price & Rhoads, Philadelphia, PA, for appellant.
Thomas J. Bender, Jr., Kristine Grady Derewicz, Buchanan Ingersoll, P.C., Philadelphia, PA, for amicus curiae The Pennsylvania Chamber of Business and Industry.
Stephen A. Bokat, Robin S. Conrad, National Chamber Litigation Center, Inc., Washington, DC, for amicus curiae Chamber of Commerce of the U.S.
Robert E. Williams, Douglas S. McDowell, Ann Elizabeth Reesman, McGuiness & Williams, Washington, DC, for amicus curiae Equal Employment Advisory Council.
L. Steven Platt, Arnold & Kadjan, Chicago, IL, Cathy Ventrell-Monsees, Washington, DC, Paul H. Tobias, Tobias, Kraus & Torchia, Cincinnati, OH, Janette Johnson, Dallas, TX, for amicus curiae The Nat. Employment Lawyers Ass‘n.
Before: BECKER, GREENBERG and McKEE, Circuit Judges.
OPINION OF THE COURT
GREENBERG, Circuit Judge.
This is an appeal from a district court‘s judgment predicated on its opinion holding that an employer violates the Age Discrimination in Employment Act (“ADEA“) by offering to all employees terminated as a result of a reduction-in-force (RIF) enhanced severance benefits in return for a general release of all claims, including ADEA claims, against the employer. We conclude that such a practice does not violate the ADEA, and therefore we will reverse the judgment of the district court. Because there is no basis for further proceedings in this case, we will remand the matter to the district court with instructions to enter judgment for the defendant.
The germane facts are not disputed.1 In 1990, the employer, defendant SmithKline Beecham Corporation (SmithKline), a Philadelphia-based pharmaceutical company, consolidated four computer data centers it operated throughout Pennsylvania and in Tennessee into a single center at King of Prussia, Pennsylvania. Prior to the consolidation, SmithKline employed plaintiff John DiBiase as a first-shift supervisor of computer operators at its Philadelphia data center. With the consolidation, he moved to King of Prussia, where six supervisors remained employed, working two per shift, with each pair overseeing three to five computer operators. Between late 1991 and early 1992, SmithKline decided to reduce the staff of this division, and it assessed the concomitant consequences. Specifically, the data center‘s personnel manager “prepared an ‘adverse impact analysis’ examining the gender, race, and age of the shift supervisors to determine if any adverse impact would result from the planned reduction in staff.” DiBiase, 847 F.Supp. at 343. On February 1, 1992, SmithKline decided to lay off DiBiase and one other shift supervisor and it informed DiBiase of this decision the next day. At that time, he was 51 years old.
SmithKline offered employees terminated in a RIF a separation benefit plan, which provided a lump sum payment based on the employee‘s length of service, as well as continued health and dental benefits. Specifically, the basic plan provided 12 months salary and three months continued benefits. Additionally, the plan offered enhanced benefits to employees willing to sign a general release of all claims against SmithKline. Terminated employees who signed the release were entitled to receive 15 months salary and six months continued health and dental coverage. The release is in large part the subject of this appeal, and it stated in pertinent part:
In consideration of the monies and other consideration to be received by me under the SmithKline Beecham Separation Program, I hereby irrevocably and unconditionally release, waive and forever discharge SmithKline Beecham Corporation, its affiliates, parents, successors, predecessors, subsidiaries, assigns, directors, officers, employees, representatives, agents, and attorneys . . . from any and all claims, agreements, causes of action, demands, or liabilities of any nature whatsoever arising, occurring or existing at any time prior to the signing of this General Release, whether known or unknown.
General release § 1 at app. 98. The release provided that employees who sign it waive [a]ny and all claims arising under federal, state, or local constitutions, laws, rules or regulations or common law prohibiting employment discrimination based upon age, race, color, sex, religion, handicap or disability, national origin or any other protected category or characteristic, including but not limited to any and all claims arising under the
Release § 1 ¶ 2 at app. 98. Prefatory language to the release cautioned employees that “YOU SHOULD THOROUGHLY REVIEW AND UNDERSTAND THE TERMS, CONDITIONS AND EFFECT OF THE SEPARATION PROGRAM AND OF THIS GENERAL RELEASE. THEREFORE, PLEASE CONSIDER IT FOR AT LEAST TWENTY-ONE (21) DAYS BEFORE SIGNING IT. YOU ARE ADVISED TO CONSULT WITH AN ATTORNEY BEFORE YOU SIGN THIS GENERAL RELEASE.” Release at app. 98. Under the terms of the release, employees were given seven calendar days after signing to revoke their signature. Release at app. 99.
DiBiase declined to sign the release. Instead, on April 29, 1992, he wrote a letter to William Mossett, SmithKline‘s personnel director, contending that SmithKline‘s policy
So there can be no possible misunderstanding I am stating my position as follows.
* * * * * *
As stated in my grievance I have reason to believe that the company violated federal and state age discrimination laws in terminating me. I am declining the enhanced separation benefit package because I do not wish to give up my rights under these discrimination laws. I believe that the company‘s policy of requiring persons over forty to release age discrimination claims against the company in order to secure enhanced separation benefits violates these age discrimination laws since persons under forty may elect to receive enhanced separation benefits determined by the same formula that applies to persons over forty without releasing potential age discrimination claims.
Letter from DiBiase to Mossett of April 29, 1992, at app. 106, 107. Because DiBiase did not sign the release, SmithKline refused to give him the enhanced benefits. See Letter from Tyrone Barber, SmithKline‘s Personnel Manager, to DiBiase of May 4, 1992, at app. 108. Still, DiBiase received the benefits due him under SmithKline‘s basic plan. Id.
On July 2, 1992, DiBiase filed an affidavit and charge with the Equal Employment Opportunity Commission (EEOC) alleging both that SmithKline terminated his employment because of his age, and that SmithKline‘s separation plan violated the ADEA because it treated older workers differently than younger workers by requiring them to release ADEA claims. DiBiase EEOC aff. at app. 109-110. On March 31, 1993, the EEOC determined that “there is not reasonable cause to believe that there has been a violation of the statute under which the charge has been filed.” EEOC Determination at app. 67-68.
On June 14, 1993, DiBiase filed a complaint against SmithKline in the United States District Court for the Eastern District of Pennsylvania. His amended complaint contained two counts. Count 1 asserted that SmithKline fired him because of his age, in violation of the ADEA. Complaint ¶¶ 15-19 at app. 55-56. Count 2 alleged that SmithKline‘s “separation benefit plan violates ADEA because it discriminates against [him] and its other employees forty or older by having higher requirements for them to qualify for the additional separation benefits than apply to its employees under forty.” Complaint ¶ 29 at app. 58. DiBiase also asserted that SmithKline‘s actions underlying both counts were willful and that he was entitled to punitive and double damages. Complaint ¶¶ 19, 31 at app. 56, 59. On August 2, 1993, SmithKline moved to dismiss count 2 of the amended complaint, pursuant to
On December 20, 1993, SmithKline moved for summary judgment on both counts of DiBiase‘s complaint. In an opinion and order dated March 15, 1994—entered the next day and reported at 847 F.Supp. 341 (E.D.Pa.1994)—the district court granted the motion as to Count 1 and denied it as to Count 2. Specifically, the district court found that “no jury reasonably could conclude from the facts” that DiBiase had been replaced in his job. 847 F.Supp. at 346. Inasmuch as DiBiase had not been replaced, the court concluded that he had failed to establish a prima facie case of wrongful termination under the ADEA. Thus, the district court granted summary judgment to SmithKline on the termination count, count 1.2
However, the district court denied SmithKline‘s motion for summary judgment on
On April 26, 1994, DiBiase made a cross-motion for summary judgment on count 2 of the amended complaint, based entirely on the district court‘s reasoning in its March 15, 1994 opinion.3 On May 3, 1994, the district court granted this motion, “[f]or the reasons fully set forth in my March 15, 1994 Opinion.” May 3, 1994 Order at n. 1. Because the parties had stipulated to damages under count 2, the district court entered judgment for DiBiase in the amount of $14,203.03. Id.4
Meanwhile, on December 16, 1993, DiBiase had filed another action alleging that SmithKline had retaliated against him for pursuing his rights under the ADEA. On December 22, 1993, the district court consolidated the two actions. The parties settled the retaliation claim, and on April 29, 1994, the district court signed a stipulation and order (entered on May 2, 1994) dismissing that claim with prejudice. Thus, the May 3, 1994 order granting DiBiase‘s motion for summary judg- ment on count 2 concluded the proceedings before the district court. SmithKline timely filed a notice of appeal. We have jurisdiction pursuant to
We exercise plenary review over the district court‘s grant of summary judgment, Petruzzi‘s IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1230 (3d Cir.), cert. denied, 510 U.S. 994, 114 S.Ct. 554, 126 L.Ed.2d 455 (1993), and, because the facts are undisputed, we decide the appeal as a matter of law.
II. DISCUSSION
A. Introduction
This case involves the scope of liability under the ADEA, a federal anti-discrimination statute that renders it unlawful for an employer:
(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual‘s age;
(2) 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.
SmithKline argues in the first instance that Congress, in enacting the Older Workers Benefit Protection Act, Pub.L. No. 101-433, 104 Stat. 978 (1990) (OWBPA), explicitly considered and rejected a provision entitling older workers to extra consideration for release of ADEA claims.7 The OWBPA set forth, among other things, specific standards governing whether an employee‘s waiver of ADEA claims is valid. See
the rights or claims are waived in exchange for consideration in addition to anything of value—
(ii) that has been offered to a group or class of individuals under an early retirement incentive or other employment termination program.
See 135 Cong.Rec. S 289-01, S 356-57 (introduction of bill in Senate); 135 Cong.Rec. H 696-03, H 697 (introduction of bill in House of Representatives). SmithKline is correct in noting that Congress did not include the provision in the OWBPA. This history supporting SmithKline‘s position is significant and is entitled to some weight. See United States v. Alcan Aluminum Corp., 964 F.2d 252, 264-65 (3d Cir.1992). However, we do not rely primarily on legislative history in resolving this case because, as the following discussion shows, it is evident that even if we disregard the history we must conclude that SmithKline‘s policy did not violate the substantive provisions of the ADEA.
With this said, we now assess whether SmithKline‘s policy of providing enhanced benefits only to terminated employees signing the release violated the ADEA. A policy can be discriminatory because of its treatment of or impact on employees. In a disparate treatment case “[t]he employer simply treats some people less favorably than others because of their race, color, religion [or other protected characteristics].” Hazen Paper Co. v. Biggins, 507 U.S. 604, 609, 113 S.Ct. 1701, 1705, 123 L.Ed.2d 338 (1993) (first alteration added) (quoting Teamsters v. United States, 431 U.S. 324, 335 n. 15, 97 S.Ct. 1843, 1855 n. 15, 52 L.Ed.2d 396 (1977)). On the other hand, disparate impact liability “involve[s] employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity.” Id. (quoting Teamsters, 431 U.S. at 335 n. 15, 97 S.Ct. at 1855 n. 15).
DiBiase contends—and the district court found—that older workers who signed SmithKline‘s release gave up more claims than younger workers who signed the release, since older workers, unlike younger workers, are protected by the ADEA. Because the argument is framed to contend that SmithKline treated older persons less favorably than younger persons, this articulation of the claim falls under the rubric of “disparate treatment.”
B. Disparate treatment
As the Supreme Court has noted, “[d]isparate treatment . . . is the most easily understood type of discrimination.” Hazen, 507 U.S. at 609, 113 S.Ct. at 1705 (alteration added) (quoting Teamsters, 431 U.S. at 335 n. 15, 97 S.Ct. at 1855 n. 15). A successful disparate treatment case prevents an employer from intentionally engaging in discrimination or grants a remedy against it for such conduct. Thus, “[d]isparate treatment captures the essence of what Congress sought to prohibit in the ADEA.” Id., 507 U.S. at 610, 113 S.Ct. at 1706. For example, as the Supreme Court pointed out when considering an employment termination case, “[i]t is the very essence of age discrimination for an older employee to be fired because the employer believes that productivity and competence decline with old age.” Id. In a disparate treatment case, the trier of fact asks not whether the employer‘s otherwise nondiscriminatory policy has some adverse effect on members of the protected class, but rather, “is the employer . . . treating ‘some people less favorably than others because of their [age].‘” U.S. Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 715, 103 S.Ct. 1478, 1482, 75 L.Ed.2d 403 (1983) (emphasis added) (quoting Furnco Constr. Corp. v. Waters, 438 U.S. 567, 577, 98 S.Ct. 2943, 2949, 57 L.Ed.2d 957 (1978) (second internal quotation omitted)). Usually, disparate treatment involves an ad-hoc decision to treat an individual adversely because he or she is in a particular protected class. For example, in Anderson v. City of Bessemer City, 470 U.S. 564, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985), the district court found disparate treatment liability based on sex when a city refused to hire a qualified woman for the position of recreation director. Id. at 580, 105 S.Ct. at 1515. “Whatever the employer‘s decision-making process, a disparate treatment claim cannot succeed unless the employee‘s protected trait actually played a role in that process and had a determinative influence on the outcome.” Id., 507 U.S. at 610, 113 S.Ct. at 1706. Nonetheless, the district court found, and DiBiase argues, that he did not have to meet this test, because the policy constitutes explicit facial discrimination.
We agree that when a policy facially discriminates on the basis of the protected trait, in certain circumstances it “may constitute per se or explicit [age] discrimination.” EEOC v. Elgin Teachers Ass‘n, 780 F.Supp. 1195, 1197 (N.D.Ill.1991). And, “[w]hether an employment practice involves disparate treatment through explicit facial discrimination does not depend on why the employer discriminates but rather on the explicit terms of the discrimination.” Int‘l Union, UAW v. Johnson Controls, Inc., 499 U.S. 187, 199, 111 S.Ct. 1196, 1204, 113 L.Ed.2d 158 (1991). This is because, in a facial disparate treatment case, the protected trait by definition plays a role in the decision-making process, inasmuch as the policy explicitly classifies people on that basis. Thus, when the policy itself displays the unlawful categorization, the employee is relieved from independently proving intent. See Hazen, 507 U.S. at 609, 113 S.Ct. at 1705 (while “‘proof of discriminatory motive is critical, it can in some situations be inferred from the mere fact of differences in treatment . . . .‘“) (citation omitted).
The district court based its conclusion that the policy constitutes facial discrimination on the following reasoning. The ADEA provides a cause of action only to persons age 40 or older. By its terms, then, the ADEA differentiates employees on the basis of age, and leaves younger workers
We reject the district court‘s reasoning and thus we hold that it erred in concluding that SmithKline‘s policy is facially discriminatory and therefore constitutes per se discrimination. The touchstone of explicit facial discrimination is that the discrimination is apparent from the terms of the policy itself. In Thurston, for example, an airline company‘s policy constituted facial discrimination independent of proof of intent because it allowed all disqualified pilots automatically to be transferred to the position of flight engineer except those disqualified on the basis of age. Thurston, 469 U.S. at 121, 105 S.Ct. at 622. In Johnson Controls, 499 U.S. at 197, 111 S.Ct. at 1202, the policy at issue violated Title VII because it “exclude[d] women with childbearing capacity from lead-exposed jobs and so create[d] a facial classification based on gender.” Similarly, Los Angeles Dep‘t of Water & Power v. Manhart, 435 U.S. 702, 711, 98 S.Ct. 1370, 1377, 55 L.Ed.2d 657 (1978), prohibited a policy that facially “require[d] 2,000 individuals to contribute more money into a fund than 10,000 other employees simply because each of them [was] a woman, rather than a man.”
But SmithKline‘s policy does not fall within that limited category of cases. Its plan cannot be said to be discriminatory on its face, because the district court‘s conclusion that the plan is facially discriminatory required referencing a fact outside the policy—namely the ADEA. Consider the district court‘s holding: “Because ADEA provides a cause of action for age discrimination only to persons age forty and above, the Plan explicitly treats older employees differently than younger employees.” DiBiase, 847 F.Supp. at 347. But the word “explicitly” does not belong. It is impossible to examine SmithKline‘s policy and conclude that on its face it treats older workers disparately. There is a good reason for this—the policy does not classify persons on the basis of age. On the contrary, the plan offering is an archetypical example of a facially non-discriminatory policy. SmithKline made the expanded package available to all persons willing to sign the release, regardless of age. SmithKline did not require employees to waive only ADEA claims, but to waive all claims. A facially non-discriminatory policy cannot be transformed into a facially discriminatory policy simply because of the existence of the ADEA.9
Thus, DiBiase is left with having to prove both unequal treatment and intent to discriminate. See Hazen, 507 U.S. at 609, 113 S.Ct. at 1705; Armbruster v. Unisys Corp., 32 F.3d 768, 782 (3d Cir.1994); Fuentes v. Perskie, 32 F.3d 759, 764 (3d Cir.1994). The Supreme Court plainly has stated that “there is no disparate treatment under the ADEA when the factor motivating the employer is some feature other than the employee‘s age.” Hazen, 507 U.S. at 609, 113 S.Ct. at 1705. Here, the record does not contain even the slightest evidence of discriminatory motive.10
At any rate, even assuming the existence of a legitimate factual dispute concerning SmithKline‘s motive, it simply did not discriminate against DiBiase on the basis of age. Again, we begin with the district court‘s reasoning. The district court properly concluded that employees gain a valuable substantive right simply by turning 40 for the ADEA protects workers who are at least 40 years of age from age discrimination.
This kind of reasoning is inappropriate because the ADEA claim was just one of a plethora of claims that SmithKline asked employees to waive. Thus, the value of the accrued ADEA claim has to be weighed against the value of other accrued claims. For instance, other things being equal, a terminated employee‘s potential accrued gender discrimination claim probably would be worth more if the employee were a woman, even though both men and women are protected by Title VII. Similarly, assuming all other variables to be equal, a black employee‘s race discrimination claim may be worth more in the abstract than such a claim from a white employee. Recognizing these possibilities inevitably leads us away from the abstract reasoning utilized by the district court into a more practical approach that recognizes that the value of a bundle of accrued
The fallacy in the district court‘s reasoning is in large part due to the conflation of the notion of a “right” with the notion of an accrued “claim.” A right to be free prospectively from certain forms of discrimination always is worth something; however, whether a person has accrued a claim based on a right depends entirely on what previously has occurred. SmithKline did not ask its terminated employees to give up their statutorily or constitutionally created rights to be free prospectively of various forms of discrimination. Rather, the plan‘s focus was entirely retrospective, on whether the value of any claims—by definition already accrued—was worth surrendering for the enhanced benefits. The significance of the distinction between a right and a claim is particularly demonstrated in this case because the district court found that DiBiase‘s substantive age discrimination claim had no merit.
In fact, the district court‘s reasoning and conclusion are at odds with propositions of law it acknowledges in its opinion. The court correctly noted that the ADEA “focuses on individuals, and precludes treatment of individuals as simply components of an age-based class.” DiBiase, 847 F.Supp. at 347. By analogy, in Manhart, the pension policy violated Title VII despite the fact that it was based on legitimate actuarial calculations, because “the basic policy of the statute requires that we focus on fairness to individuals rather than fairness to classes.” Manhart, 435 U.S. at 709, 98 S.Ct. at 1376. This is because “[p]ractices that classify employees in terms of religion, race, or sex [or age] tend to preserve traditional assumptions about groups rather than thoughtful scrutiny of individuals.” Id. Yet the district court‘s reasoning turns this principle on its head. Here, SmithKline enacted a policy that called for each individual to weigh the circumstances surrounding his or her discharge, and to make an informed decision about whether to sign the release or proceed with claims that, if they existed, already had accrued. Thus, the policy certainly was fair to individuals. Yet, the district court‘s opinion, by conflating prospective rights with accrued claims, ignored the variances in each individual‘s situation, and instead classified all persons who were at least 40 years old as being in the identical position. The opinion thus reached a conclusion directly contrary to the policy it correctly enunciated.
We must emphasize that our result may have been different had there been no analytical distinction between the class of disadvantaged employees (assuming such a class) and the protected class—that is, had older employees by definition given up more claims than younger employees. In this regard, Hazen again is instructive. Although the Court concluded that “age and years of service are analytically distinct,” Hazen, 507 U.S. at 611, 113 S.Ct. at 1707, it expressly declined to “consider the special case where an employee is about to vest in pension benefits as a result of his age, rather than years of service.” Id. The correlation between age and pension status in that special case is materially different—the terminated employee always will be a member of the protected class. The point is important, because we would have faced a different situation if, for example, SmithKline conditioned the expanded separation package upon a waiver only of
In the foregoing scenario, SmithKline would have treated older workers differently than younger workers. Thus, in EEOC v. Westinghouse Electric Corp., 869 F.2d 696 (3d Cir.1989), vacated and remanded, 493 U.S. 801, 110 S.Ct. 37, 107 L.Ed.2d 7 (1989), we held that a policy denying severance pay to laid-off employees who were eligible for early or selected retirement constituted discrimination on the basis of age. There, the class of people eligible for early retirement always coincided with members of the protected class. Id. at 705.12 But that is not the situation here and we decline to address how we would rule in such a case. SmithKline conditioned the right to the expanded benefits on an employee‘s blanket waiver of all accrued claims; this treatment cannot be said to be disparate, because it is impossible to tell whose package of potential claims is more valuable.13 Therefore, in light of the above, DiBiase has no disparate treatment claim against SmithKline.
C. Disparate Impact
1. Whether DiBiase adequately has raised this issue
An amicus, the National Employment Lawyers Association (NELA), urges us to affirm the district court‘s judgment on the alternative theory of disparate impact. In a disparate impact case, the plaintiff claims that the employment practice “has a disproportionate effect on older workers [and thus] violates the ADEA.” Hazen, 507 U.S. at 618, 113 S.Ct. at 1710 (Kennedy, J. concurring). While the district court indicated that it “need not determine whether the policy also constitutes disparate impact,” DiBiase, 847 F.Supp. at 348 n. 13, it nevertheless went on to say:
Disparate impact cases typically focus on statistical disparities between members of the protected and unprotected classes. In this case, however, no statistics are necessary because all members of the age-protected class must surrender potential age discrimination claims, whereas no member of the non-protected class has potential age discrimination claims to surrender. Thus, a disparate impact analysis in this case involves arguments identical to those involved in the disparate treatment inquiry, and results in the same conclusion: SmithKline‘s policy causes a disparate impact because it specifies different treatment.
Id. (citation omitted; emphasis in original). The district court‘s observation about disparate impact assumes that older workers signing the release gave up more than younger workers solely because the ADEA protects only older workers. In light of our discussion above, that analysis is flawed fundamentally. Moreover, the district court‘s reasoning is somewhat circular—in explaining why there is disparate impact liability, the court assumed the conclusion of its disparate treatment analysis. That logical flaw makes the disparate impact analysis redundant: To say that there is disparate impact because there is disparate treatment is to say nothing at all. Of course, if a policy is facially discriminatory, it has a disparate impact on the discriminated-against individuals. Therefore, we reject the district court‘s disparate impact conclusion for the reasons detailed above.14
But the question remains—should we still remand the matter for further proceedings (and perhaps further discovery) on a different type of disparate impact theory. After all, to conduct a disparate impact analysis properly in this context, the court should have assumed that the release did not treat employees disparately, and then asked whether, in reality, the policy had a disproportionate effect on older employees. Such an inquiry, of course, would have required use of sophisticated statistical data, and DiBiase apparently was not inclined to take this path, as he produced no such evidence.
DiBiase does not urge us to reach this conclusion as an alternative way to uphold the district court‘s judgment if we reject the court‘s disparate treatment analysis. Only the amicus argues that DiBiase‘s “ADEA claims are actionable under a dispa-
2. The availability of disparate impact theory in this case16
We note, however, that even if the issue properly were before us, disparate impact theory would not be applicable here. In a factual scenario remarkably like the one here, the Supreme Court held that there can be no disparate impact liability. In Manhart, the City of Los Angeles argued that its pension policy requiring women to contribute greater amounts into a pension fund than men was mandated by Title VII itself, reasoning that “a gender-neutral pension plan would itself violate Title VII because of its disproportionately heavy impact on male employees.” Manhart, 435 U.S. at 710 n. 20, 98 S.Ct. at 1370, 1376 n. 20. The Court dismissed the argument out of hand: “Even under Title VII itself—assuming disparate-impact analysis applies to fringe benefits—the male employees would not prevail. Even a completely neutral practice will inevitably have some
Moreover, the facts of this case simply do not implicate the policies underlying disparate impact theory. In the first place, as described in detail above, the policy does not per se affect older workers more harshly than younger workers. Second, there is absolutely no evidence that the company‘s policy does in fact affect older people adversely. Third, even if it did, such a neutral policy—which does not rely on an invidious stereotype about older employees, which clearly is not motivated by a discriminatory impulse, and which could be demonstrated to have a disparate impact only by the use of an incredibly sophisticated statistical analysis—simply cannot be the basis of ADEA liability. Fourth, this is not a case where finding liability would help eradicate the entrenched effects of past discrimination. Finally, use of statistical evidence demonstrating a disproportionate impact will shed little light on the employer‘s motive. In short, there can be no liability in this case based on disparate impact.
3. Disparate impact theory under the ADEA17
Moreover, in the wake of Hazen, it is doubtful that traditional disparate impact theory is a viable theory of liability under the ADEA. In Hazen, the Supreme Court stated that it was declining to decide whether an employer may be liable under the ADEA on a disparate impact theory. Hazen, 507 U.S. at 618, 113 S.Ct. at 1710 (Kennedy, J. concurring); Markham v. Geller, 451 U.S. 945, 101 S.Ct. 2028, 68 L.Ed.2d 332 (1981) (Rehnquist, J., dissenting from denial of certiorari). Yet the analysis in Hazen casts considerable doubt on the viability of the theory. And, in fact, we recently recognized that the existence of disparate impact theory under the ADEA is an open question. See Armbruster, 32 F.3d at 772 n. 4 (“Whether a disparate impact theory of liability is even available under ADEA has yet to be addressed by the Supreme Court. In any event, because the district court has not yet addressed this issue, we think it would be inappropriate for us to consider it.“). (Citations omitted).18
Three premises in the Hazen Court‘s analysis make the point. First, though not explicitly deciding the viability of disparate impact liability under the ADEA, the Court did note that disparate treatment “captures the essence of what Congress sought to prohibit in the ADEA.” Hazen, 507 U.S. at 610, 113 S.Ct. at 1706. Second, the Court reasoned that “Congress’ promulgation of the ADEA was prompted by its concern that older workers were being deprived of employment on the basis of inaccurate and stigmatizing stereotypes.” Id. Finally, the Court held that “[w]hen the employer‘s decision is wholly motivated by factors other than age, the problem of inaccurate and stigmatizing stereotypes disappears. This is true even if the motivating factor is correlated with age . . . .” Id. In a pure disparate impact case, the employer‘s decision by definition is “wholly motivated by factors other than age.”19 Thus, with the third premise, the Supreme Court apparently concluded that in such cases, the policies behind the ADEA are not implicated. With that said, it is difficult to see how disparate impact liability can survive the analysis.
The Court of Appeals for the Seventh Circuit and two district courts, relying in part on Hazen, recently held that disparate impact liability is unavailable under the ADEA. EEOC v. Francis W. Parker School, 41 F.3d 1073, 1077 (7th Cir.1994) (“decisions based on criteria which merely tend to affect workers over the age of forty more adversely than workers under forty are not prohibited“) (citing Anderson v. Baxter Healthcare Corp., 13 F.3d 1120 (7th Cir.1994)); Martincic v. Urban Redevelopment Authority of Pittsburgh, 844 F.Supp. 1073, 1076-77 (W.D.Pa.1994) (holding that in light of Hazen, there can be no disparate impact liability under the ADEA), aff‘d, 43 F.3d 1461 (3d Cir.1994) (table); Hiatt v. Union Pacific R.R. Co., 859 F.Supp. 1416, 1434 (D.Wyo.1994) (“[I]t is inappropriate to incorporate the disparate impact theory of discrimination enumerated [by the Supreme Court in the Title VII context] into the ADEA.“).20
The Hazen Court‘s emphasis on the congressional purpose behind the ADEA is particularly helpful in confirming the Court‘s intimations. First, the statutory language does not explicitly provide for disparate impact liability. While it has been argued that section 623(a)(2) authorizes claims of disparate impact, see Marla Ziegler, Disparate Impact Analysis and the Age Discrimination in Employment Act, 68 Minn.L.Rev. 1038, 1050-51 (1984), that reading of the statute is inaccurate. The section renders it “unlawful for an employer—
(2) 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 . . . .”
(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual‘s age.
More than that, however, although the ADEA language quoted above parallels the language in Title VII, when the Supreme Court found disparate impact liability under Title VII, it relied not on any specific statutory language but on the policies behind the statute. In that case, Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971), the Court stated:
The objective of Congress in the enactment of Title VII . . . was to achieve equality of employment opportunities and remove barriers that have operated in the past to favor an identifiable group of white employees over other employees. Under the Act, practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to ‘freeze’ the status quo of prior discriminatory employment practices.
Id. at 429-30, 91 S.Ct. at 853. This policy is not easily transplanted into the ADEA, the primary purpose of which is to prohibit employers from acting upon the assumption that “productivity and competence decline with old age.” Hazen, 507 U.S. at 610, 113 S.Ct. at 1706. As one court has put it, “[i]n Griggs, the critical fact was the link between the history of educational discrimination and the use of that discrimination as a means of presently disadvantaging African-Americans. These concerns simply are not present when the alleged disparate impact is based on age.” Hiatt, 859 F.Supp. at 1436. Congress itself recognized this distinction, for it provided in the ADEA that “[i]t shall not be unlawful for an employer . . . to take any action otherwise prohibited [by this section] where the differentiation is based on reasonable factors other than age . . . .”
But I need not go so far as to say that disparate impact theory is never available under the ADEA. Rather, resolution of that issue must await another day. I write this section to highlight my doubts and to say that, at any rate, disparate impact theory should not be applied as a matter of course. Here, of course, we only need hold that even if in some situations disparate impact liability may be established under the ADEA, this case does not present one of them.
III. CONCLUSION
In view of the aforesaid, we hold that an employer may offer enhanced benefits to all terminated employees agreeing to waive all claims against the company, without providing extra consideration to workers protected by the ADEA. Thus, it is evident that the district court should have denied DiBiase‘s motion for summary judgment and should have granted SmithKline‘s motion for summary judgment on count 2 of the amended complaint. Furthermore, it is clear that there is no need for further proceedings in the district court. See Nazay v. Miller, 949 F.2d 1323, 1328 (3d Cir.1991). Consequently, the order of May 3, 1994, granting DiBiase summary judgment will be reversed and the
SUR PETITION FOR REHEARING
Before: SLOVITER, Chief Judge, and BECKER, STAPLETON, MANSMANN, GREENBERG, HUTCHINSON, SCIRICA, COWEN, NYGAARD, ALITO, ROTH, LEWIS, McKEE, and SAROKIN, Circuit Judges.
The petition for rehearing filed by the appellee, John DiBiase, in the above captioned matter having been submitted to the judges who participated in the decision of this court and to all the other available circuit judges of the court in regular active service, and no judge who concurred in the decision having asked for rehearing, and a majority of the circuit judges of the circuit in regular active service not having voted for rehearing by the court in banc, the petition for rehearing is denied.