Does the Age Discrimination in Employment Act apply to state political subdivisions regardless of how many employees they have, or only to state political subdivisions with at least twenty employees?
This case asks the Supreme Court to resolve whether the Age Discrimination in Employment Act (“ADEA”) applies to political subdivisions of a state regardless of the subdivision’s number of employees, or whether the ADEA applies only to those political subdivisions of a state that have at least twenty employees for statutorily-required length of time. Mount Lemmon Fire District contends that the ADEA defines “employer” to cover only political subdivisions having twenty or more employees. John Guido and Dennis Rankin assert that the ADEA’s definition of “employer” creates separate categories of employers, one of which is state political subdivisions with no minimum-employee requirement. The outcome of this case will have implications on the liability of small state political subdivisions under the ADEA for age-based hiring decisions.
Questions as Framed for the Court by the Parties
Under the ADEA, does the same twenty-employee minimum that applies to private employers also apply to political subdivisions of a State, as the Sixth, Seventh, Eighth, and Tenth Circuits have held, or does the ADEA apply instead to all State political subdivisions of any size, as the Ninth Circuit held in this case?
In 1967, Congress passed the Age Discrimination in Employment Act (“ADEA”) “to protect older workers from ‘arbitrary age discrimination in employment.’” Guido v. Mount Lemmon Fire District at 3, 5. Originally, the statute—which applies to “employers,”—only applied to private-sector employers. Id. at 4, 5. In 1974, Congress amended the ADEA to cover states, political subdivisions of states, and other state-related entities. Id. Section 630(b) of the ADEA defines the term “employer” as “a person engaged in an industry affecting commerce who has twenty or more employees . . . .” Id. at 4. Additionally, § 630(b) states that “[t]he term also means (1) any agent of such a person, and (2) a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State . . . .” Id.
Mount Lemmon Fire District (hereinafter, “Mount Lemmon”) is a special district and political subdivision of Arizona that provides local fire protection services to a 12.5-square mile area of the Santa Catalina Mountains near Tucson. Brief for Respondents, John Guido and Dennis Rankin at 3. Mount Lemmon has an independent budget drawn primarily from local property taxes. Brief for Petitioner, Mount Lemmon Fire District at 11. John Guido and Dennis Rankin served as full-time firefighter captains for Mount Lemmon. Guido at 3. Nine years after they were hired, Mount Lemmon suffered a budget cut of approximately $67,000. Brief for Petitioner at 11. Mount Lemon subsequently fired Guido and Rankin, the two oldest of its eleven full-time employees at ages forty-six and fifty-four, respectively. Guido at 3.
Following their terminations, Guido and Rankin each filed age discrimination claims against Mount Lemmon with the Equal Employment Opportunity Commission (“EEOC”), believing that they were fired due to their ages. Guido at 3; Brief for Respondents, at 4. In both cases, the EEOC found reasonable cause to believe that the Fire District violated the ADEA. Guido at 3. Following these rulings, Guido and Rankin brought an age discrimination claim under the ADEA against Mount Lemmon in the United States District Court for the District of Arizona. Id. The District Court granted summary judgment in favor of Mount Lemmon, concluding that it was not an “employer” under the ADEA because it had less than twenty employees. Id. at 15. Guido and Rankin appealed the ruling to the United States Court of Appeals for the Ninth Circuit. See Brief for Respondents at 6.
The Ninth Circuit rejected Mount Lemmon’s argument that the ADEA’s definition of “employer” is ambiguous. Guido at 12. In doing so, the court disagreed with the Sixth, Seventh, Eighth, and Tenth Circuits. Id. at 10. Additionally, the Ninth Circuit rejected Mount Lemmon’s argument that the Seventh Circuit’s analysis of the ADEA’s legislative history favors the alternative interpretation. Id. at 13–15. The Ninth Circuit therefore reversed the District Court’s finding that Mount Lemmon was not an “employer” under the ADEA, and held that the twenty-employee minimum does not apply to political subdivisions. Id. at 5–6; 15. On October 18, 2017, Mount Lemmon petitioned the Supreme Court of the United States for a writ of certiorari, which the Court granted. Brief for Petitioner at 1.
THE ADEA’S PLAIN MEANING
Petitioner Mount Lemmon maintains that § 630(b)’s definition of “employer” is ambiguous. Brief for Petitioner, Mount Lemmon Fire District at 18. Given the statute’s context, Mount Lemmon argues that the best interpretation of the phrase “also means” is “includes.” Id. Mount Lemmon then asserts that because the term ‘person,’ as defined in § 630(a) includes state and local government employers, those same employers must fall under the scope of § 630(b). Id. at 19–22. In addition to the definition of “person” in § 630(a), Mount Lemmon notes that both Congress and the Court have historically interpreted the term “person” to include these employers. Id. at 20. Mount Lemmon also points to § 630(a)’s references to “corporations,” “associations,” and “any organized group of persons as evidence that government employers count as persons. Id. at 21. According to Mount Lemmon, the Ninth Circuit erred in overlooking the the term “person” as defined by § 630(a), because the word is essential to understanding how the ADEA treats state political subdivisions. Id. at 25. Mount Lemmon then argues that the phrase “also means” clarifies § 630(b)’s definition of employers with twenty or less employees, rather than adding a new and separate group of employers that are not subject to a numerosity requirement. Id. at 25–26. This must be the case, Mount Lemmon asserts, because the second sentence of § 630(b) merely explains which governmental employers are included in the first sentence and which are not. Id. at 31–32. Mount Lemmon looks to the structure and syntax of the clause to support this assertion, highlighting the inconsistency that would result from adopting Guido and Rankin’s reading. Id. at 32–33. Specifically, Mount Lemmon explains it is unlikely that Congress would have introduced the second sentence of § 630(b) just to expand the coverage of the first sentence and that the clause in fact defines entities that have no numerosity requirement as well those that do. Id. Mount Lemmon also points out that dictionaries give several definitions for the term “also,” and often categorize it as a clarifying term. Id. at 18. Finally, Mount Lemmon observes that the Ninth Circuit is the only circuit court to hold that the ADEA contains no numerosity requirement for state and local government employers. Id. at 43.
On the other hand, Respondents Guido and Rankin claim that § 630(b) is clear on its face, and that the term “also” in the phrase “also means” is equivalent to “in addition”. Brief for Respondents, John Guido and Dennis Rankin at 10. Guido and Rankin support this interpretation by pointing to the usual use and definition of “also” in ordinary language and in dictionaries. Id. at 10–13 Furthermore, Guido and Rankin contend that Mount Lemmon’s analysis of the term “person” in § 630(a) is unnecessary because the statute’s definition of employer is unambiguous. Id. at 16. In fact, Guido and Rankin argue that the term “person” in § 630(a) does not encompass state and local governments. Id. at 16–17. To support this assertion, Guido and Rankin refer first to a fundamental rule of statutory construction that bars applying the general language of a statute to a specific matter in another part of the same statute. Id. at 17. Accordingly, Guido and Rankin argue that the definition given for “person” in § 630(a) cannot be applied to the use of the term “person” in § 630(b) because “person” is defined generally in § 630(a) and is used specifically to refer to state and local employers in § 630(b). Id. at 17–18. Second, Guido and Rankin point out that Congress would not have amended the ADEA in 1974 to include state and local employers as a separate group of employers if the term “person” had already entailed state and local employers. Id. at 19. Consequently, Guido and Rankin contend that “person” cannot be used to clarify the definition of employers in § 630(b). Id. Additionally, Guido and Rankin point out that Congress has used the term “also means” in place of “in addition” throughout the United States Code. Id. at 12. Guido and Rankin add that the Court has referred to employers with greater than twenty employees and government employers as two separate groups in past cases involving the ADEA’s application to state agencies. Id. at 13–14. Lastly, Guido and Rankin point out that the EEOC compliance manual interprets § 630(b) as applying to state and local government employers regardless of size. Id. at 24–25.
LEGISLATIVE INTENT AND STATUTORY CONTEXT
Mount Lemmon points out that Congress’s stated intent was to put private and public employers on equal footing and harmonize the ADEA with the Americans with Disabilities Act (“ADA”) and Title VII. Brief for Petitioner, Mount Lemmon Fire District at 43–44. In this context, Mount Lemmon asserts that the ADEA is anomalous if it has no numerosity requirement for state and local government employers. Id. Mount Lemmon points out that the ADA and Title VII both contain a numerosity requirement for state and local government employers. Id. at 44–45. Additionally, Mount Lemmon notes that a statute cannot be read to interfere with state government in the absence of a clear statement from Congress. Id. at 36–37. Mount Lemmon contends that Guido and Rankin’s interpretation of the statute interferes with state governments. Id. at 40. Furthermore, Mount Lemmon argues that there is no clear statement from Congress for the ADEA to interfere with state and local governments because of the strong disagreement between the circuit courts and the parties in this case regarding the ADEA’s plain meaning. Id.
Guido and Rankin contend that their interpretation of the ADEA is not as anomalous as Mount Lemmon suggests. Brief for Respondents, John Guido and Dennis Rankin at 26. Guido and Rankin point out that several states have anti-discrimination statutes that apply to government employers regardless of size. Id. at 28–29. In fact, Guido and Rankin assert that the ADEA is more aligned with the Fair Labor Standards Act (“FLSA”) than with Title VII or the ADA. Id. at 26. Guido and Rankin argue that the definitions, procedures, and structure of the ADEA derive from the FLSA. Id. at 27. Accordingly, because the FLSA has no numerosity requirement for state and local employers, Guido and Rankin maintain that it is consistent for the ADEA also to have no numerosity requirement for state and local employers. Id. They add that it is not proper for a court to revise legislation because of an apparent anomaly. Id. at 30–31. Moreover, Guido and Rankin suggest that a clear statement from Congress is not necessary here because the statute is not ambiguous in the first place. Id. at 36. Lastly, Guido and Rankin claim that even if the statute was ambiguous, the clear statement rule does not apply here because a statute preventing states from discrimination does not trigger the rule. Id. at 37.
Commerce Clause Violation
Mount Lemmon asserts that Guido and Rankin’s interpretation of § 630(b) would violate the Commerce Clause. Brief for Petitioner, Mount Lemmon Fire District at 40–41. According to Mount Lemmon, Congress cannot apply statutory authority over a state and local employer without a qualifying phrase like “affecting commerce” that links the statute to the constitutional power embodied in the Commerce Clause. Id. at 41. Thus, Mount Lemmon argues that Guido and Rankin’s interpretation of § 630(b) raises constitutional issues because the statute would potentially apply to state and local government employers that do not affect commerce. Id. at 40–41.
In contrast, Guido and Rankin argue that their interpretation of the ADEA statute does not stretch Congress’s Commerce Clause powers, because the Court has already established that economic activity falls within the scope of the Commerce Clause when it substantially affects interstate commerce. Brief for Respondents, John Guido and Dennis Rankin at 38. Guido and Rankin contend that aggregate employment activity under the ADEA substantially affects interstate commerce. Id. at 37. Accordingly, Guido and Rankin conclude that the ADEA’s employment activity is well within the Commerce Clause’s scope. Id. at 38. Lastly, Guido and Rankin point out that Mount Lemmon has not cited any case showing that the ADEA must include a qualifying phrase to invoke the Commerce Clause. Id.
The National Conference of State Legislatures (“NCSL”) and other not-for-profit organizations seeking to advance the interests of state and local government officials, in support of Mount Lemmon, claim that imposing ADEA liability on political subdivisions of any size violates principles of federalism. Brief of Amici Curiae NCSL et al., in Support of Petitioner at 29. The NCSL contends that applying no minimum-employee requirement on political subdivisions interferes with the balance between federal and state sovereigns by taking away the states’ ability “to set liability thresholds according to the needs of its particular political subdivisions.” Id. at 31–32. In support of this contention, the NCSL points to the fact that most states have enacted statutes prohibiting age-based employment decisions, but that the minimum-employee requirements vary by state. Id. According to the NCSL, this suggests that each state is in the best position to balance anti-discrimination and the ability of small special districts to withstand litigation costs. Id. at 32. Thus, the NCSL asserts that imposing liability on special districts under the ADEA, regardless of the number of employees, places a disproportionate burden on special districts and will ultimately hurt the citizens who rely on them to perform public services. Id. at 32–33.
The American Association of Retired Persons (“AARP”), AARP Foundation, and the National Employment Lawyers Association, in support of Guido and Rankin, counter that the ADEA would still cover political subdivisions with less than twenty employees due to their agency relationships with larger public entities. See Brief of Amici Curiae AARP et al., in Support of Respondents at 30. The United States, in support of Guido and Rankin, adds that the ADEA only exposes state agencies to limited liability in suits brought by individuals. Brief of Amicus Curiae United States, in Support of Respondents at 26–27. As the AARP explains, state employers are immune from monetary relief under the ADEA, unlike under most state age-discrimination statutes which allow for recovery of compensatory and/or punitive damages from small state political subdivisions. Brief of AARP et al. at 33–34.
INCREASED LITIGATION COSTS
In further support of Mount Lemmon, the NCSL argues that imposing no employer-minimum on political subdivisions threatens the ability of small special districts to deliver critical public services due to the risk of increased litigation costs. See Brief of Amici Curiae NCSL et al. at 16–17. As the NCSL contends, special districts often operate on tight budgets, and the need to cut costs results in lay-offs and terminations that generate more employment discrimination claims. Id. at 23–24. Additionally, the NCSL asserts that special districts cannot simply transfer liability costs to larger state entities because these small subdivisions have independent budgets and are governed by dedicated boards. Id. at 26. Similarly, the NCSL notes that insurance pools will not offset the added litigation costs because they carry increased premiums that impose further financial burdens on special districts. Id. at 27. Ultimately, the NCSL maintains that increased litigation costs will result in the closure of special districts that provide crucial public services. See Id. at 28.
The United States contends that applying the ADEA to political subdivisions of any size is unlikely to result in increased litigation because the status quo outside of the Sixth, Seventh, Eight, and Tenth Circuits has been that the ADEA so applies. Brief of United States at 30. Additionally, due to the availability of superior remedies under state age-discrimination laws, AARP et al. suggest that state-law litigation is a much greater financial concern than ADEA litigation for most small political subdivisions. Brief of AARP et al. at 34. Even so, the United States argues that potential ADEA litigation does not threaten the survival of small political subdivisions because liability may be transferred to a larger county or other state entity, most public entities participate in insurance pools covering employment-discrimination lawsuits, and Congress is can create exceptions for entities it thinks are particularly vulnerable. See Brief of United States at 32–34. Moreover, the AARP maintains that the number of special districts potentially affected by application of the ADEA with no employee minimum is “perhaps 6,000 or even fewer”—a fraction of the total number of special districts. Brief of AARP et al. at 34–36.
- Howard Fischer, US Supreme Court to hear age discrimination case against Mt. Lemmon Fire District, Tucson.com (July 10, 2018).
- Bernard Bell, On the Supreme Court Docket — Guido v. Mt. Lemmon School District: Numerosity Requirements in the ADEA and Other Employment Discrimination Statutes (Part I), 36 Yale J. on Reg.: Notice & Comment (May 10, 2018).
- Bernard Bell, On the Supreme Court Docket — Guido v. Mt. Lemmon School District: Numerosity Requirements in the ADEA and Other Employment Discrimination Statutes (Part II), 36 Yale J. on Reg.: Notice & Comment (May 15, 2018).