Court Opinion

ID: 2971692
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:38:50.952795+00
Date Added: 2024-06-11T15:29:56.921417
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 04a0149n.06
                           Filed: December 7, 2004

                                            No. 03-1236

                           UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT

CHARLES SLENZKA, et al.,                                 )
                                                         )
       Plaintiffs-Appellants,                            )
                                                         )   ON APPEAL FROM THE
v.                                                       )   UNITED STATES DISTRICT
                                                         )   COURT FOR THE EASTERN
LANDSTAR RANGER, INC.,                                   )   DISTRICT OF MICHIGAN
                                                         )
       Defendant-Appellee.                               )

BEFORE:        KEITH and CLAY, Circuit Judges; OBERDORFER, District Judge*

       OBERDORFER, District Judge. Nearly fifty current and former employees of Defendant

Landstar Ranger, Inc. (“Landstar”), a long-distance freight haul trucking company, appeal the

dismissal of their employment discrimination claims. Plaintiffs brought their claims on a disparate

impact theory under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621 et seq.

The district court chose not to rest its dismissal of their claims on its resolution of the question --

arguably open in this Circuit1 -- of whether disparate impact claims are viable under the ADEA.

       *
               The Honorable Louis F. Oberdorfer, United States District Court for the District of
Columbia, sitting by designation.
       1
                Although we held in Abbott v. Federal Forge, Inc., 912 F.2d 867, 872 (6th Cir. 1990),
that a disparate impact theory is available under the ADEA, we have since noted that the Supreme
Court’s subsequent decision in Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), cast “considerable
doubt” on this question. Gantt v. Wilson Sporting Goods Co., 143 F.3d 1042, 1048 (6th Cir. 1998);
Lyon v. Ohio Educ. Ass’n & Prof. Staff Union, 53 F.3d 135, 139 n.5 (6th Cir. 1995). The Supreme
Court heard argument on November 3, 2004 in Smith v. City of Jackson, No. 03-1160, on the
question of whether disparate impact claims may be brought under the ADEA. We do not reach that
issue in the instant case.
No. 03-1236
Slenzka v. Landstar Ranger
Page 2

Instead, it resolved another issue of first impression, holding that Plaintiffs did not state a claim

because they did not allege that Landstar caused their injuries directly but that they were harmed by

a third party’s response to a discriminatory Landstar policy. We need not reach either of these

potentially controversial issues. We affirm because we find that Plaintiffs failed as a matter of law

to state a claim of age discrimination.

                                 I.   FACTUAL BACKGROUND

       Plaintiffs are interstate truck drivers who own and operate trucks that they lease to Landstar.

All Plaintiffs are at least fifty years old and have worked for Landstar or its predecessor for at least

twenty years. Plaintiffs work for Landstar pursuant to collective bargaining agreements negotiated

by locals of the International Brotherhood of Teamsters (the “Union”). Those agreements require

Landstar to make payments on behalf of Plaintiffs to third-party employee benefit plans, the Central

States Pension Plan and the Central States Health & Welfare Plan (“Central States” or the “Benefit

Plans”).

       Beginning in 1985, Landstar adopted a policy of classifying new -- and thus, on the whole,

younger -- hires as “independent contractors” rather than employees. The Union agreed to this

policy, which prevented the new hires from becoming union members and kept them from enjoying

union rights, including participation in the Benefit Plans.
No. 03-1236
Slenzka v. Landstar Ranger
Page 3

        Plaintiffs claim that Central States “warned defendant on multiple occasions that defendant’s

failure to permit younger workers to participa[te] in the funds would result in the defendant’s

termination from the funds to the detriment of its employees.” Appellants’ Br. at 11.2

        On September 19, 2000, Central States notified Plaintiffs and the other Landstar employees

covered by the Benefit Plans that their participation in the plans would be terminated, effective

October 2000, “as a result of defendant Landstar’s deliberate policy of ‘adverse selection.’” First

Amended Complaint (“FAC”) ¶ 22. Central States informed plan participants that they would need

to retire within six months of the notice to retain certain benefits. Some of the Plaintiffs retired,

while others did not. Plaintiffs who were eligible to retire and felt they could not afford to lose their

benefits, or whose eligibility for retirement depended on benefits that would be lost, claim they were

“forced to retire immediately, resulting in the loss of future pension credits for higher pensions.”

FAC ¶ 24. Plaintiffs who could not retire, or chose not to, lost various benefits.

        Six Plaintiffs filed the original complaint as a class action on April 16, 2001. The First

Amended Complaint, filed on July 1, 2002, listed forty-nine named Plaintiffs and again sought class

relief. On September 16, 2002, the parties filed a Stipulation of Partial Dismissal that narrowed the

        2
               This issue apparently led to a requirement in the 1995-99 collective bargaining
agreement that Landstar maintain a union workforce of, and make benefit contributions on behalf
of, 175 union drivers. Plaintiffs allege that Landstar violated this agreement by allowing the number
of union drivers to fall below 175 due to its hiring new drivers as “independent contractors,” and
then attempted to make up for this shortfall by making contributions on behalf of fictitious
employees. Landstar denies violating the agreement. Because this is an appeal from a motion to
dismiss, we must accept Plaintiffs’ allegations at this stage. The question of whether Landstar
complied with its contractual obligations, however, is not directly relevant to Plaintiffs’ age
discrimination claims, which are the only claims raised here.
No. 03-1236
Slenzka v. Landstar Ranger
Page 4

issues in a number of ways, including dismissing the class allegations and dropping some claims and

individual Defendants.3

       The sole remaining claim was an age discrimination claim brought under a disparate impact

theory. Defendant moved to dismiss this claim, primarily on the ground that disparate impact claims

are not viable under the Age Discrimination in Employment Act. Landstar also argued that

Plaintiffs had not stated a cause of action since their alleged injuries were the result of an

independent decision by the third-party Benefit Plans.

       The district court granted the motion to dismiss on January 16, 2003. It recognized the

existence of a circuit split regarding the viability of disparate impact theory for age discrimination

claims, noting that this Circuit has yet to take a firm position on the issue in the wake of Hazen

Paper Co. v. Biggins, 507 U.S. 604 (1993). The district court concluded that it need not resolve that

issue. Instead, the court based its decision on the second ground Landstar raised, holding that

“Plaintiffs take the disparate impact theory beyond its logical boundaries when they suggest it can

be used to hold employer[s] liable under the ADEA for actions taken by independent third parties

over whom they have no control.” The district court held that neither it nor Plaintiffs had “found

any legal support for Plaintiffs’ position” that employers could be liable even where “the agency of

the coup de grace is a third[] party.”

                                           II. Analysis

       3
             Although Plaintiffs at times refer to this suit as being on behalf of a “class” or “class
members,” they have not made any request to reinstate the class claims.
No. 03-1236
Slenzka v. Landstar Ranger
Page 5

        We review de novo a decision granting a motion to dismiss. We may affirm “on any ground

supported by the record, even if it is different from the grounds relied on by the district court.”

Lawrence v. Chancery Ct. of Tennesee, 188 F.3d 687 (6th Cir. 1999) (emphasis added). This is so

regardless of whether the parties have raised the issue. See, e.g., Hutcherson v. Lauderdale County,

326 F.3d 747, 756 (6th Cir. 2003) (citing United States Nat’l Bank of Or. v. Indep. Ins. Agents of

Am., Inc., 508 U.S. 439, 445-448 (1993) to demonstrate “the power of appellate courts to consider

an issue not raised by the parties”); Rybarczyk v. TRW, Inc., 235 F.3d 975, 984 (6th Cir. 2000).

        The district court dismissed this case on the ground that it was not Landstar’s policy but the

independent act of the third-party Benefit Plans that “had a disproportionate adverse impact on

Plaintiffs.” Plaintiffs allege that the Benefit Plans’ action was not truly “independent” because the

Plans, having repeatedly warned Landstar that its “adverse selection” policy put its employees’

coverage at risk, acted in response to, and because of, that policy. Thus, Plaintiffs claim, Landstar’s

discriminatory policy proximately caused the harm they suffered. Landstar responds that an age

discrimination claim can be viable only where the alleged “adverse impact has been the direct result

of the employer’s action or practice, not the independent decision or action of a third party.”

Appellee’s Br. at 16. Although Landstar argues that Plaintiffs’ reliance on proximate cause analysis

is “misguided,” id. at 17, it cites no case supporting its claim that an employer can be liable only for

injuries it causes directly and not for the foreseeable consequences of its discriminatory policies.

        We are troubled by the conclusion urged here (and reached below) that an employer can

never be liable when its discriminatory action or policy triggers third-party actions that in turn injure

its employees. Under Landstar’s theory, even if Plaintiffs are right that Landstar adopted an illegal
No. 03-1236
Slenzka v. Landstar Ranger
Page 6

and discriminatory policy that caused, and that Landstar knew would cause, Central States to

terminate Plaintiffs’ benefits, Landstar could not be liable because it did not cause Plaintiffs’ injuries

directly. Such a conclusion is especially troubling where the purportedly independent party is acting

on behalf of or in place of the employer. Here, for example, Landstar in effect “outsourced” its

employee benefit program by contracting with the Benefit Plans to have them provide and

administer those benefits. It is difficult to see why an employer should escape responsibility for any

harm its discriminatory policies caused its employees merely because it placed an intermediary

between such policies and their foreseeable harmful consequences to the terms and conditions under

which its employees were working.

        We need not, however, resolve this novel issue or assess its application to the facts alleged

here. Nor need we reach the question of whether disparate impact claims remain viable under the

ADEA. We find that Plaintiffs have not stated a claim upon which relief can be granted, under a

disparate impact theory or otherwise, albeit not for the reasons suggested.

        Plaintiffs claim that Landstar’s policy of not providing benefits to a group comprised mainly

of younger employees ultimately deprived Plaintiffs, as older employees, of some of those same

benefits. Thus, Plaintiffs allege, Landstar discriminated against its older employees by depriving

them of benefits that were not even available to the younger employees. This is a strange claim of

“discrimination” indeed. By arguing that Landstar’s policy deprived its older employees of an

advantage they previously enjoyed over younger employees, Plaintiffs are, in effect, arguing that

the older employees were entitled to better treatment than the younger employees. The ADEA,

however, “does not require an employer to accord special treatment to employees over forty years
No. 03-1236
Slenzka v. Landstar Ranger
Page 7

of age[, but to treat] an employee’s age . . . in a neutral fashion.” Parcinski v. Outlet Co., 673 F.2d
34, 37 (2d Cir. 1982) (citing Williams v. General Motors Corp., 656 F.2d 120, 129 (5th Cir. 1981)).

“The ADEA was not intended to protect older workers from the often harsh economic realities of

common business decisions and the hardships associated with corporate reorganizations . . . .” Allen

v. Diebold, 33 F.3d 674, 677 (6th Cir. 1994).4

       Although Plaintiffs rely on a disparate impact theory, the facts they allege do not show that

Landstar’s policy had a “disparate impact” on them. Disparate impact theory may be available

where “employment practices that are facially neutral in their treatment of different groups . . . in

fact fall more harshly on one group than another and cannot be justified by business necessity.”

Hazen Paper Co. v. Biggins, 507 U.S. 604, 609 (1993). Here, Landstar’s practice of hiring new

truckers as independent contractors rather than union employees cannot fairly be said to “fall more

harshly” on employees protected by the ADEA than on the generally younger independent

contractors. The challenged policy precluded independent contractors from participating in the

Benefit Plans at all. That it ultimately deprived older employees of continued participation --

leaving them in no worse a position than the new hires -- does not constitute “more harsh[]”

treatment of the older workers.

       4
               That the ADEA did not require Landstar to continue providing its (generally) older,
unionized workers with benefits it was not providing its other employees does not mean Landstar
was free to deprive Plaintiffs of the benefits for which the union had bargained. Cf. Hazen Paper,
507 U.S. at 612 (fact that employer did not violate ADEA by firing employee to prevent his benefits
from vesting did not imply that termination was lawful, merely that any illegality must derive from
some other source). The question of whether Landstar honored its obligations to Plaintiffs under
the governing collective-bargaining agreements is not, however, at issue in this proceeding. This
decision is without prejudice to the union members’ ability to pursue relief through other avenues
that may be available to them.
No. 03-1236
Slenzka v. Landstar Ranger
Page 8

       In rejecting a claim that an early retirement offer violated the ADEA, the Seventh Circuit

explained that employees are better off when given the option to take or reject such offers. Henn

v. Nat’l Geographic Soc’y, 819 F.2d 824, 826 (7th Cir. 1987). Whether they retire to accept the

offered benefits or continue to work and forfeit them, they are better positioned than those whose

only option is to continue to work without the benefits. “An employee to whom [an early

retirement] offer has been extended . . . is the beneficiary of any distinction on the basis of age [and

cannot] claim to be adversely affected by discrimination in the design or offer of the early retirement

package.” Id. at 827 (emphasis added). Similarly, here, the employees who were told they would

have to retire within six months to preserve certain benefits were surely in a better position than

those who had never had those benefits. Under the circumstances, Plaintiffs’ allegations do not

amount to a claim that Landstar’s policy has had a disproportionate adverse impact on older

workers.

       Plaintiffs’ claims also suffer from the lack of any evidence suggesting that the alleged

deprivation of benefits is “because of” their age, as it must be to violate the ADEA. This Court has

rejected previous attempts to equate an employer’s shift away from union labor or attempt to avoid

costs associated with union labor with age discrimination. In Allen v. Diebold, 33 F.3d 674 (6th Cir.

1994), we rejected a claim that the closure of two unionized manufacturing plants (where a high

proportion of employees were over forty) to open two non-union plants in other states (where the

vast majority of those hired were under forty) was age discrimination. We held that the challenged

switch from union to non-union labor was not something “the ADEA was . . . intended to protect
No. 03-1236
Slenzka v. Landstar Ranger
Page 9

older workers from.” Id. at 677. Stating that plaintiffs had to show they were discriminated against

“because they were old, not because they were expensive,” id., we concluded that:

       The heart of plaintiffs’ allegation--that defendant replaced them with younger
       workers because they were too costly--does not state a claim under the ADEA.
       Plaintiffs allege that Diebold downsized its Ohio operations and hired younger,
       cheaper, non-union employees in Virginia and South Carolina in order to increase
       its profitability. They argue that their salaries and benefits were a burden to the
       company whose management believed it could make more money by moving to a
       “right to work” state, hiring fewer workers and paying them lower wages. . . . This
       allegation--that Diebold’s decision to restructure was driven by financial
       considerations based on the profit motive--does not state a claim under the ADEA.
       The ADEA does not bar the discharge of older employees but only prohibits
       employers from discriminating against them.

Id. at 679. There is no suggestion here that Plaintiffs’ alleged injury was caused by anything other

than Landstar’s shift to non-union labor to save money.

       This Court similarly rejected a claim that an employer discriminated on the basis of age by

imposing a moratorium on hiring former employees (who tended to be older than those actually

hired) pending grievance proceedings to determine whether the former employees were entitled to

additional benefits if hired. Abbott v. Federal Forge, Inc., 912 F.2d 867 (6th Cir. 1990). There, as

here, the group claiming to be adversely affected by the challenged policy contained a higher

percentage of older employees than the group that was not affected. In rejecting the Abbott

plaintiffs’ disparate impact analysis, we reasoned that, were an employer willing to “offer[] the job

to older employees on the same terms as younger, [it] would demonstrate that the employment

practice is the cost-saving measure it purports to be and not a pretext for age discrimination.” Id.

at 876 (emphasis added). Thus, discrimination could be shown only if the defendant were unwilling

to hire its former employees even if they were “in exactly the same position as other workers,” that
No. 03-1236
Slenzka v. Landstar Ranger
Page 10

is, if they were not seeking additional compensation because of their status. Id. (emphasis added).

Here, it is undisputed that Landstar was willing to employ the allegedly older workers on the same

terms as the allegedly younger workers as to these benefits. Indeed, that is the very complaint made

here: that the generally older union employees were being forced to accept the same lack of benefits

as the generally younger non-union employees.

                                          CONCLUSION

       For the foregoing reasons, the court affirms the district court’s dismissal of Plaintiffs’ claims.