1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-16-1995

DiBiase v SmithKline

Precedential or Non-Precedential:

Docket 94-1530

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Recommended Citation

"DiBiase v SmithKline" (1995). 1995 Decisions. Paper 54.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/54
 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 _________________ 

 No. 94-1530 

 _________________ 

 JOHN DiBIASE 

v. 

 SMITHKLINE BEECHAM CORPORATION 

 Appellant

 _________________ 

 On Appeal from the United States District Court 

 for the Eastern District of Pennsylvania 

 (D.C. No. 93-cv-3171 

 _______________ 

 Argued December 15, 1994 

 BEFORE: BECKER, GREENBERG, and McKEE, Circuit Judges

 (Filed: February 16, l995) 

 ______________ 

 Richard A. Ash (argued) 

 Lyman & Ash 

 1612 Latimer Street 

 Philadelphia, PA 19103 

 Attorneys for Appellee

 Alan D. Berkowitz 

 Steven B. Feirson (argued) 

 Dechert Price & Rhoads 

 4000 Bell Atlantic Tower 

 1717 Arch Street 

 Philadelphia, PA 19103 

 Attorneys for Appellant

 Thomas J. Bender, Jr. 

 Kristine Grady Derewicz 

 Buchanan Ingersoll, P.C. 

 1200 Two Logan Square 
 18th and Arch Streets 

 Philadelphia, PA 19103 

 Attorneys for Amicus 

 Curiae The Pennsylvania 

 Chamber of Business and 

 Industry

 Stephen A. Bokat 

 Robin S. Conrad 

 National Chamber Litigation 

 Center, Inc. 

 1615 H Street N.W. 

 Washington, DC 20062 

 Attorneys for Amicus 

 Curiae Chamber of 

 Commerce of the United 

 States

 Robert E. Williams 

 Douglas S. McDowell 

 Ann Elizabeth Reesman 

 McGuiness & Williams 

 1015 Fifteenth St. N.W. 

 Suite 1200 

 Washington, DC 20005 

 Attorneys for Amicus 

 Curiae Equal Employment 

 Advisory Council

 L. Steven Platt 

 Arnold & Kadjan 

 19 West Jackson Boulevard 

 Chicago, IL 60604 

 Cathy Ventrell-Monsees 

 601 E Street N.W. 

 Washington, DC 20049 

 Paul H. Tobias 

 Tobias, Kraus & Torchia 

 911 Mercantile Library Bldg 

 414 Walnut Street 

 Cincinnati, OH 45202 
 Janette Johnson 

 3614 Fairmont Street 

 Suite 100 

 Dallas, TX 75219 

 Attorneys for Amicus 

 Curiae The National 

 Employment Lawyers 

 Association

 _______________________ 

 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. 

I. INTRODUCTION, FACTUAL BACKGROUND, AND PROCEDURAL HISTORY
 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 

 

1. Unless otherwise noted, we take the facts from the district 

court opinion. DiBiase v. SmithKline Beecham Corp., 847 F. Supp. 

341 (E.D. Pa. 1994). 
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 Age Discrimination 

in Employment Act of 1967, as amended, the 

Civil Rights Act of 1964, the Civil Rights 

Acts of 1866 or 1871, the National Labor 
Relations Act and/or under any other federal, 

state or local human rights, civil rights, or 

employment discrimination statute, rule or 

regulation. 

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 violated the ADEA. The letter reads in pertinent part: 

 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 Fed. R. Civ. P. 12(b)(6). In a Memorandum 

opinion and order filed on September 29, 1993, the district court 

denied the motion. The district court suggested that DiBiase 

might be able to show that even if SmithKline's plan was a 

"facially neutral employment" policy, it "had a significantly 

discriminatory impact." Memorandum Op. at app. 47. 

 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 count 2. Specifically, the court found 

that the separation plan involved discriminatory treatment of 

older persons. Relying on the ADEA section providing a cause of 

action only for persons at least 40 years old, see 29 U.S.C. § 

631(a), the district court observed that "[i]n order for an older 

employee to receive the same enhanced benefit as a younger 

employee, the older employee must release her right to file an 

ADEA claim." DiBiase, 847 F. Supp. at 347. The court further 

observed that "[t]his treatment is patently different because the 

younger employee cannot have an ADEA claim." Id. From these 

observations, the district court concluded that "SmithKline's 

policy facially discriminates" against employees protected by the 

ADEA. Id. at 348. Thus, the court denied SmithKline's motion. 

 

2. Ordinarily, when employment is terminated as part of a RIF, 

the plaintiff need not prove that he or she was replaced by a 

worker outside the protected class. Rather, to demonstrate a 

prima facie case "[i]n RIF cases, the plaintiff must show he was 

in the protected class, he was qualified, he was laid off and 

other unprotected workers were retained." Armbruster v. Unisys 

Corp., 32 F.3d 768, 777 (3d Cir. 1994). Here, the district court 

found that "[p]laintiff cannot make such a showing, however, 

because all three retained employees . . . were within the 

protected class when plaintiff was terminated." DiBiase, 847 F. 

Supp. at 345 n.5. Thus, the district court used the standard for 

establishing a prima facie case in the typical age discrimination 

case. We need not address whether the district court 

appropriately departed from traditional RIF analysis, because 

DiBiase has not appealed from the summary judgment on count 1. 
 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 judgment on 

count 2 concluded the proceedings before the district court. 

SmithKline timely filed a notice of appeal. We have jurisdiction 

pursuant to 28 U.S.C. § 1291 and the district court had subject 

matter jurisdiction pursuant to 29 U.S.C. § 626(c) and 28 U.S.C. 

§ 1331. 

 

3. Technically this motion was not a cross-motion, since it was 

made after the district court's order on the original motion. 

Nonetheless, the district court, the parties and the docket sheet 

describe it as a "cross-motion" and we follow suit. 

4. It is unclear how the parties arrived at this figure. 
 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, 114 S.Ct. 554 (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. 

29 U.S.C. § 623(a).5 With these provisions, "[t]he ADEA 'broadly 

prohibits arbitrary discrimination in the workplace based on 

age.'" Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 

 

5. We generally rely on both ADEA cases and cases arising under 

Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et

seq., because "Title VII and the ADEA have been given parallel 

constructions due to their similarities in purpose and 

structure." Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 

1380, 1385 n.4 (3d Cir. 1994). 
120, 105 S.Ct. 613, 621 (1985) (quoting Lorillard v. Pons, 434 

U.S. 575, 577, 98 S.Ct. 866, 868 (1978)).6 In a "privilege of 

employment" case such as this one, it is irrelevant that 

SmithKline had no obligation to provide the particular benefit to 

its employees, for once an employer decides to grant an 

opportunity to some, "it may not deny this opportunity to others 

because of their age." Thurston, 469 U.S. at 121, 105 S.Ct. at 

621. As the Supreme Court has explained, "'[a] benefit that is 

part and parcel of the employment relationship may not be doled 

out in a discriminatory fashion, even if the employer would be 

free . . . not to provide the benefit at all.'" Id. (alteration 

in original) (quoting Hishon v. King & Spalding, 467 U.S. 69, 75, 

104 S.Ct. 2229, 2233-34 (1984)). 

 SmithKline argues in the first instance that Congress, 

in enacting the Older Workers Benefit Protection Act, Pub. L. No. 

101-43, 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, 

 

6. As noted above, however, the statute provides that "[t]he 

prohibitions in this chapter shall be limited to individuals who 

are at least 40 years of age." 29 U.S.C. § 631(a). 

7. Somewhat inexplicably, at oral argument DiBiase vigorously 

denied that his theory of the case required employers to provide 

extra consideration to older workers signing general releases. 

To the contrary, he said that a provision for extra consideration 

would violate the ADEA as well and that the only way in which 

older people would be treated the same as younger people would be 

to allow older people to sign a release agreeing to waive all 

claims except those under the ADEA. 

 
among other things, specific standards governing whether an 

employee's waiver of ADEA claims is valid. See 29 U.S.C. § 

626(f). SmithKline points out that early drafts of the OWBPA 

provided that a waiver of ADEA claims is valid only when: 

 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. § 289-01, § 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 

(..continued) 

 However, this case has proceeded on the assumption that 

DiBiase was claiming extra consideration. In ruling on 

SmithKline's motion to dismiss, the district court stated that 

DiBiase "argues that an employer could secure a release of ADEA 

claims by offering additional consideration beyond that offered 

for a release of all claims except ADEA claims." Memorandum of 

September 27, 1993, at app. 47. Similarly, the district court 

commented in its opinion that "I have difficulty believing that 

the widespread industry practice of offering enhanced benefits in 

exchange for a release of potential claims is so fragile that a 

decision requiring additional consideration for a valid release 

of ADEA claims will cause the practice to expire." DiBiase, 847 

F. Supp. at 351. In short, the district court certainly believed 

that DiBiase was asking for extra consideration. 

 At any rate, unless DiBiase is arguing that an employer 

never could secure a valid general release from a terminated 

employee protected by the ADEA, we perceive no analytical 

distinction between a claim for extra consideration and a claim 

that DiBiase should have been allowed to waive all claims except 

ADEA claims in exchange for the enhanced benefits. Both 

arguments seek special treatment. In the former situation, the 

older worker receives extra money. In the latter situation, the 

older employee preserves his or her ADEA claims. 
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, ____ U.S. ____, ____, 113 S.Ct. 1701, 

1705 (1993) (first alteration added) (quoting Teamsters v. United 

States, 431 U.S. 324, 335 n.15, 97 S.Ct. 1843, 1855 n.15 (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, ____ U.S. at ____, 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. at , 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 

(1983) (emphasis added) (quoting Furnco Constr. Corp. v. Waters, 

438 U.S. 567, 577, 98 S.Ct. 2943, 2949 (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. 578, 105 S.Ct. 1504 (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. at ____, 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 (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, ____ U.S. at ____, 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 unprotected by the 

statute.8 Thus, on their 40th birthday, workers gain a 

substantive, valuable right. By contrast, nearly all other 

judicially enforceable rights apply to all persons, not to 

 

8. As one court has noted, "[t]he House Report for [the ADEA] 

cited the example of airline stewardesses, who must apparently 

'retire' by the age of 32, as people beset by an obvious age 

discrimination problem, yet who will have no remedy under the 

[ADEA]." Kodish v. United Airlines, Inc., 463 F. Supp. 1245, 

1249 (D. Colo. 1979), aff'd, 628 F.2d 1301 (10th Cir. 1980). 
persons whose immutable characteristic falls in a particular 

category. For example, Title VII of the Civil Rights Act of 1964 

protects not just black workers, but whites as well. Males as 

well as females may bring successful gender-discrimination suits. 

And, in states with statutes prohibiting discrimination on the 

basis of sexual orientation, presumably heterosexuals are 

protected as well as homosexuals. The district court next 

reasoned that, because the ADEA does not protect younger workers, 

while these other rights apply to all, older workers by 

definition hold a total number of rights greater than the total 

number of rights younger workers hold. Hence, if younger workers 

hold rights with the total value of x, older workers have x + 1 

rights. In light of this analysis, the court reasoned that older 

terminated workers have more accrued claims to give up than 

younger workers. Thus, in order to comply with the ADEA, 

SmithKline should have given extra consideration to older workers 

because by signing the release they were giving up more claims 

than younger workers. Accordingly, the court concluded that, by 

treating older workers the same as younger workers, SmithKline 

facially and explicitly discriminated on the basis of age. 

 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, 98 S.Ct. 1370 (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." Id. at 711, 98 S.Ct. at 1377. 

 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 nondiscriminatory policy cannot be transformed into a facially 

discriminatory policy simply because of the existence of the 

ADEA.9

 

9. While our result is not dependent on this point, we observe 

that certain precedents suggest that the premise that only 

employees 40 or over have anything to surrender under the ADEA is 

wrong. Thus, it has been held that employees under the age of 40 

may bring retaliation claims under section 4(d) of the ADEA, see

Anderson v. Phillips Petroleum Co., 722 F. Supp. 668, 671-72 (D. 

Kan. 1989). Moreover, at least two courts have held that, 

despite the statutory provision to the contrary, workers under 

the age of 40 may have standing to sue for substantive age 

discrimination. In Johnson v. Mayor and City Council of 

Baltimore, 515 F. Supp. 1287, 1301 (D.Md. 1981), rev'd on other 

grounds, 731 F.2d 209 (4th Cir. 1984), the court held that a 32- 

year old plaintiff had standing to challenge the company's early 

retirement policy because "[the standing] provision does no more 

than define the acts prohibited by the statute and would not 

deprive plaintiff . . . of standing in this case." Id. In Allen 

v. American Home Foods, Inc., 644 F. Supp. 1553, 1558 (N.D. Ind. 

1986), the court held that employees under 40 had standing to sue 

under the ADEA when they were terminated in the wake of a plant 

closing. Our point is not that these cases were decided 

correctly, a conclusion we neither reach nor reject. Rather, our 

point is that the provisions of the ADEA -- and how they are 

interpreted -- are outside an employer's control. Moreover, the 

30-year old's suit certainly imposes costs upon the company, and 

once the suit is filed, it cannot be said that the costs will be 

contained by an early dismissal. These facts make it even more 

difficult to make the blanket statement that older persons' 
 Thus, DiBiase is left with having to prove both unequal 

treatment and intent to discriminate. See Hazen, ____ U.S. at 

____, 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, 

____ U.S. at ____, 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 

(..continued) 

claims are worth more than younger persons' claims. See

generally Typescript at 21-24. 

10. In Hazen, the Supreme Court held that discrimination based 

on pension eligibility (when pension eligibility was based on 

years of service) does not violate the ADEA despite the strong 

correlation between the two categories. The Court did say, 

however, that "[w]e do not preclude the possibility that an 

employer who targets employees with a particular pension status 

on the assumption that these employees are likely to be older 

thereby engages in age discrimination. Pension status may be a 

proxy for age . . . in the sense that the employer may suppose a 

correlation between the two factors and act accordingly." Hazen, 

___ U.S. at ____, 113 S.Ct. at 1707. Here, there is nothing in 

the record to indicate that SmithKline, by offering the general 

release, intended to target older workers. In fact, its motive 

is quite obvious -- it wanted to protect itself against all 

litigation arising out of the RIF. 

 DiBiase also contends that the intent to discriminate 

can be inferred based on his letter to SmithKline charging 

SmithKline with violating the ADEA. This is preposterous. The 

logical consequence of the argument is that a terminated employee 

can manufacture an illicit intent on the part of the employer 

simply by telling the employer that he or she thinks the employer 

is violating an anti-discrimination law. 

 
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. 

29 U.S.C. § 631(a). But the district court went on to reason 

that all 40-year old employees had accrued ADEA "claims" that 

necessarily rendered their bundle of accrued claims more valuable 

than younger employees' bundles. Thus, the district court's 

reasoning assumes that all terminated employees with races or 

with genders have accrued potential Title VII claims against 

their former employers, and that terminated employees with sexual 

orientations have such potential claims under various relevant 

state laws. The court's reasoning also assumes that all such 

accrued claims are equally valuable. To take the principle where 

it logically leads, it is like saying every person has accrued a 

potential due process claim simply because he or she has been a 

person and hence has been protected by the Fifth and Fourteenth 

amendments. 

 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 claims depends on a myriad 

of factors including, among other things, the employee's work 

performance history, the circumstances surrounding the 

terminations, and the nature -- if any -- of the rehiring. For 

example, a 35-year-old black employee terminated despite a 

stellar work performance record certainly has a more valuable 

claim under Title VII than a 55-year-old, fired because of 

incompetence, has under the ADEA. In theory, if there were a 

market for accrued claims, terminated 40-year old employees would 

not receive automatically the highest bids, as buyers would want 

to know more facts about the circumstances surrounding individual 

terminations. The point, of course, is that the district court's 

assumption, that because of the ADEA all 40-year old employees 

have a more valuable set of claims than younger workers, is 

simply wrong. One cannot say in the first instance that the 50-

year-old's accrued "claims" are by definition worth more than 

others' accrued claims. 
 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, 

____ U.S. at ____, 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." Hazen, ___ U.S. at ____, 113 S.Ct. at 1707. 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 ADEA claims inasmuch as employees do in fact gain 

a substantive right when they turn 40. Thus, assuming no 

knowledge of the circumstances surrounding the termination, the 

possibility that a terminated older employee actually has a 

viable age discrimination claim, is worth something (though 

probably not much) in the abstract. It follows, then, that if 

SmithKline required terminated employees to give up only ADEA 

claims to obtain the enhanced benefits, older employees but not 

younger employees would be forced to give up something of 

value.11 

 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 (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 

 

11. But see footnote 9, supra. 
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. 

 

12. The Supreme Court remanded Westinghouse for reconsideration 

in light of Public Employees Retirement System of Ohio v. Betts, 

492 U.S. 158, 109 S.Ct. 1854 (1989). In Betts, the Supreme Court 

held that the then-existing section 4(f)(2) of the ADEA -- 

exempting from the ADEA's prohibitions "any bona fide employee 

benefit plan . . . which is not a subterfuge to evade the 

purposes of the Act" -- insulates bona fide plans from the 

purview of the ADEA "so long as the plan is not a method of 

discriminating in other, non-fringe-benefit aspects of the 

employment relationship." Id. at 177, 109 S.Ct. at 2866. 

Congress since overruled Betts. We cite Westinghouse solely for 

the proposition that when a company's policy distinguishes 

employees on the basis of a factor analytically indistinct from 

age, we would be faced with a different situation than that in 

this case. 

13. The National Employment Lawyers Association has filed an 

amicus brief relying in part on EEOC v. Board of Governors, 957 

F.2d 424 (7th Cir.), cert. denied, ____ U.S. ____, 113 S.Ct. 299 

(1992). In that case, the Court of Appeals for the Seventh 

Circuit held that "a collective bargaining agreement provision 

that denies employees their contractual right to a grievance 

proceeding whenever the employee initiates a claim, including a 

claim of age-based discrimination, in an administrative or 

judicial forum", id. at 425, violates section 4(d) of the ADEA. 

Id. at 431. Section 4(d) prohibits employers from retaliating 

against an employee "because such individual . . . has made a 

charge, testified, assisted, or participated in any manner in an 

investigation, proceeding or litigation under this chapter." 29 

U.S.C. § 623(d). The company's policy therefore commanded a 

violation of this provision anytime an employee filed an age 
 

 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, U.S. at ____, 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, 849 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 ageprotected 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 

(..continued) 

discrimination charge with the EEOC. This decision does not 

support DiBiase's position. 
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 

 

14. The problem with the district court's analysis probably 

stems from the fact that the court explicitly indicated that it 

need not reach the issue of disparate impact. See DiBiase, 849 

F. Supp. at 348 n.13; Br. Amicus Curiae of National Employment 

Lawyers Association at 7 (acknowledging that district court 

determined that it need not decide whether the severance plan 

constitutes unlawful disparate impact). The language following 

the district court's disclaimer constituted simply a reflection 

on the import of the court's disparate treatment conclusion -- 

once a policy is deemed facially discriminatory, the policy has a 

disparate impact as well. 
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 

disparate impact theory," NELA Br. at 7, but an "amicus may not 

frame the issues for appeal." Swan v. Peterson, 6 F.3d 1373, 

1383 (9th Cir. 1993) (citing Sanchez-Trujillo v. I.N.S., 801 F.2d 

1571, 1581 n.9 (9th Cir. 1986), cert. denied, ____ U.S. ____, 

____ S.Ct. ____, 1004 U.S. LEXIS 7855 (1994). Absent the 

existence of "substantial public interests" calling us to depart 

from the general rule, "we consider only issues argued in the 

briefs filed by the parties and not those argued in the briefs 

filed by interested nonparties." Continental Ins. Cos. v. 

Northeastern Pharmaceutical & Chem. Co., Inc., 842 F.2d 977, 984 

(8th Cir. 1988), cert. denied, 488 U.S. 821, 109 S.Ct. 66 (1988); 

Preservation Coalition, Inc. v. Pierce, 667 F.2d 851, 862 (9th 

Cir. 1982).15 Therefore, because DiBiase is not pursuing a 

disparate impact claim, the issue is not before us. 

 

15. SmithKline addresses disparate impact theory, apparently to 

protect itself lest we conclude that the district court 

adequately reached the issue. 
 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. 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 

disproportionate impact on one group or another. . . . [T]his 

Court has never held . . . that discrimination must always be 

inferred from such consequences." Id. That case, like this one, 

involved an employer's grant of "fringe benefits." There, the 

city argued that it was required to treat people unequally in 

order to treat them equally. Here, DiBiase makes the identical 

argument -- that SmithKline was required to treat employees 

 

16. Judge Becker does not join subsection II(C)(2) and II(C)(3) 

of the opinion. He would say simply that DiBiase clearly abjured 

any intention to proceed under a disparate impact theory, and 

therefore there is no disparate impact claim before us. 
unequally in order to treat them equally. Like in Manhart, the 

disparate treatment is alleged to be justified because older 

people as a group would otherwise pay more for the privilege than 

younger people. 

 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

 

17. Judge McKee does not join subsection II(C)(3) of the 

opinion, as he finds it unnecessary to consider the question of 

whether disparate impact theory liability is viable under the 
 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. Id. at ____, 113 

S.Ct. at 1706, id. at ____, 113 S.Ct. at 1710 (Kennedy, J. 

concurring); Markham v. Geller, 451 U.S. 945, 101 S.Ct. 2028 

(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

(..continued) 

ADEA. Therefore, Judge Greenberg writes this subsection only for 

himself. 

18. In Massarsky v. General Motors Corp., 706 F.2d 111 (3d 

Cir.), cert. denied, 464 U.S. 937, 104 S.Ct. 348 (1983), we noted 

that "this court has never ruled on whether a plaintiff can 

establish a violation of the Act by showing disparate impact 

alone." Id. at 120. In MacNamara v. Korean Air Lines, 863 F.2d 

1135 (3d Cir. 1988), cert. denied, 493 U.S. 944, 110 S.Ct. 349 

(1989), however, we said that "Title VII and ADEA liability can 

be found where facially neutral employment practices have a 

discriminatory effect or 'disparate impact' on protected groups, 

without proof that the employer adopted these practices with a 

discriminatory motive." Id. at 1148. That case is not 

controlling, however. First, there the plaintiffs challenged 
 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, ____ U.S. at ____, 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 

(..continued) 

"the practice of favoring Korean nationals on the ground that it 

has the effect of discriminating against others on grounds of 

race or national origin." Id. Thus, the disparate impact 

allegation involved Title VII only, and the statement about the 

ADEA is pure dicta. Second, the cases relied upon for the 

proposition were Title VII cases, and in light of our express 

statement in Massarsky that Title VII jurisprudence did not 

necessarily apply to the ADEA in this context, it is 

inconceivable that we simply would have applied disparate impact 

theory without analysis -- particularly when the application was 

not relevant to the decision. Third, we decided MacNamara 

before Hazen, and subsequent Supreme Court authority necessarily 

controls. 

19. I am not concerned here with situations in which impact is 

used to prove intent to discriminate. 
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. 1993)); 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, No. 94-3235, F.3d 

(3d Cir. Nov. 28, 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

 

20. Yet several courts of appeal have assumed that disparate 

impact liability applies under the ADEA. See, e.g., Geller v. 

Markham, 635 F.2d 1027, 1032 (2d Cir. 1980), cert. denied, 451 

U.S. 945, 101 S.Ct. 2028 (1981); Abbott v. Federal Forge, Inc., 

912 F.2d 867, 872 (6th Cir. 1990); Rose v. Wells Fargo & Co., 902 

F.2d 1417, 1423-25 (9th Cir. 1990). These cases were decided 

before Hazen, and none of them even purported to conduct any 

analysis of the issue. Rather, they probably relied on the oftcited principle that interpretations of the ADEA parallel 

interpretations of Title VII. Because Hazen, if nothing else at 

least disposes of that assumption, those cases are not 

persuasive. However, even after Hazen, the Court of Appeals for 
 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 . . . ." 

29 U.S.C. § 623(a)(2). However, finding the theory lurking in 

this section requires reading the language "because of such 

individual's age" to modify "adversely affect" rather than to 

modify "limit, segregate, or classify." Because of the placement 

of the commas, this is a grammatically incorrect reading. See

Pamela S. Krop, Note, Age Discrimination and the Disparate Impact 

Doctrine, 34 Stan. L. Rev. 837, 842-43 (1982). Moreover, as Krop 

points out, section (2) parallels the language of section (1), 

which makes it unlawful for an employer -- 

 (1) to fail or refuse to hire or to discharge 

any individual or otherwise discriminate 

(..continued) 

the Eighth Circuit assumed -- again without analysis -- that 

disparate impact liability is cognizable under the ADEA. See

Houghton v. Sipco, Inc., 38 F.3d 953, 958-59 (8th Cir. 1994). 
against any individual with respect to his 

compensation, terms, conditions, or 

privileges of employment, because of such 

individual's age. 

29 U.S.C. § 623(a). "Under this provision, the 'because of such 

individual's age' clause can only modify the description of 

prohibited actions . . . . The parallel wording of section 

4(a)(2) indicates that it too was aimed at disparate treatment. 

An employer may not limit, segregate, or classify employees on 

the basis of age in a manner that would adversely affect an 

employee." Krop at 843. 

 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 (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, ____ 

U.S. at ____, 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 . . 

. ." 29 U.S.C. §623(f)(1). "The sentence is incomprehensible 

unless the prohibition forbids disparate treatment and the 

exception authorized disparate impact." Metz v. Transit Mix, 

Inc., 828 F.2d 1202, 1220 (7th Cir. 1987) (Easterbrook, J. 

dissenting) (quoting Douglas Laycock, Continuing Violations, 

Disparate Impact in Compensation, and Other Title VII Issues, 49 

L. & Contemp. Prob. 53, 55 (Aut. 1986) (referring to identical 

language of Equal Pay Act). In other words, by the statutory 

language itself, Congress recognized that neutral policies not 

motivated by discriminatory intent may be permissible employment 

practices. It is difficult to imagine how Congress could have 

concluded otherwise -- for application of disparate impact theory 

could lead to results which Congress probably did not intend.21

 

21. For example, if an employer set the work week at five days 

per week, eight hours per day, or if it determined to eliminate 
 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 

(..continued) 

medical insurance coverage, its decisions could have a disparate 

impact on older employees. In that circumstance, in an ADEA 

action employers would be forced to justify their business 

practices with older employees then having the opportunity to 

demonstrate that alternative employment practices could fulfill 

the employer's needs. See Abbott v. Federal Forge, Inc., 912 

F.2d 867, 872 (6th Cir. 1990). Such a regime could subject 

employers to unreasonable intrusions by juries into their 

business practices. See Gray v. York Newspapers, Inc., 957 F.2d 

1070, 1083 (3d Cir. 1992). 
1323, 1328 (3d Cir. 1991). Consequently, the order of May 3, 

1994, granting DiBiase summary judgment will be reversed and the 

matter will be remanded to the district court for entry of 

judgment in favor of SmithKline.