Court Opinion

ID: 75536
Source: CourtListenerOpinion
Date Created: 2010-04-26 23:11:32+00
Date Added: 2024-06-11T09:30:27.484792
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PUBLISH

                  IN THE UNITED STATES COURT OF APPEALS
                                                                                FILED
                            FOR THE ELEVENTH CIRCUIT                  U.S. COURT OF APPEALS
                                                                        ELEVENTH CIRCUIT
                                      _______________                       JULY 05, 2001
                                                                         THOMAS K. KAHN
                                                                              CLERK
                                      No. 99-15306
                                   _______________
                         D. C. Docket No. 95-00123 CV OC-10A

WANDA L. ADAMS, LEO L. FLOYD, et al.,

                                                    Plaintiffs, Counter-defendants,
                                                    Appellants,

       versus

FLORIDA POWER CORP.,
FLORIDA PROGRESS CORPORATION,

                                                    Defendants, Counter-claimants,
                                                    Appellees.

                           ______________________________

                      Appeal from the United States District Court
                          for the Middle District of Florida
                        ______________________________
                                    (July 5, 2001)

Before BIRCH, BARKETT and MAGILL*, Circuit Judges.

BIRCH, Circuit Judge:

       *
        Honorable Frank J. Magill, U.S. Circuit Judge for the Eighth Circuit, sitting by
designation.
       This case presents an issue of first impression in our circuit regarding

whether a disparate impact theory of liability is available to plaintiffs suing for age

discrimination under the Age Discrimination in Employment Act of 1967

(“ADEA”), 29 U.S.C. § 621 et seq. The district court ruled as a matter of law that

disparate impact claims cannot be brought under the ADEA. Because the question

presents a controlling issue of law in the case, and the judge opined that there were

substantial grounds for disagreement over his decision, he certified the question to

us pursuant to 28 U.S.C. § 1292(b).1 We exercise our discretion to take the case

and AFFIRM.

                                     I. BACKGROUND

       Florida Power Corporation (“FPC”) operated as a publicly-regulated electric

utility monopoly until 1992, when Congress opened the industry to competition

through the Energy Policy Act of 1992, 106 Stat. 2776 (1992). Florida Progress

Corporation is its parent corporation. Wanda Adams and several other plaintiffs

(the “Adams class”) were terminated by FPC between 1992 and 1996, during a

series of reorganizations the company states were necessary to maintain its

       1
        Our sister, in her concurring opinion, concludes that we overreach by deciding the
question of whether disparate impact claims are cognizable under ADEA as a matter of law. She
would find that the plaintiffs failed to adequately allege a disparate impact claim. This position
is inconsistent with the posture of the case. The district court expressly made no findings of fact
on the sufficiency of the allegations in the plaintiffs’ complaint. Indeed, because the district
court certified only the question of law to us, a “pronouncement in the abstract” is required.

                                                 2
competitiveness in the newly deregulated market. Members of the Adams class

sued FPC and its parent corporation claiming, inter alia, that FPC discriminated

against them because of their age, in violation of the ADEA.

       In 1996, the district court conditionally certified a class of former FPC

employees claiming age discrimination. In August 1999, the district court

decertified the class and ruled as a matter of law that a disparate impact theory of

liability is not available to plaintiffs bringing suit under the ADEA.2 Because there

is some conflict among the circuits and we had not yet ruled on the availability of

disparate impact claims under the ADEA, the district court certified the question to

us pursuant to 28 U.S.C. § 1292(b).3 The court was careful to note that he made no

findings of fact or assessment of whether the Adams class could produce evidence

sufficient to state a claim for disparate impact. Accordingly, the sole question

       2
         The court also found that the plaintiffs’ disparate treatment claims were not sufficiently
similar to support proceeding as a class. Accordingly, the court held that the Adams class
members would each have to pursue their individual remedies separately.
       3
        The district court’s Order of Certification states the following:

       [W]hether I am right or wrong in ruling that the disparate impact theory of
       liability is unavailable to these Plaintiffs is a critical issue that ought to be
       resolved with finality before the Court can reasonably proceed with the
       management of this litigation toward trial . . . The controlling question of law is
       whether the “disparate impact” theory or method of proving liability is applicable
       to claims brought under the [ADEA].

R3-312, at 2-3 (internal citations omitted).

                                                 3
before us is whether, as a matter of law, disparate impact claims may be brought

under the ADEA.

                                  II. DISCUSSION

      We review the district court’s interpretation of a statute de novo. United

States v. Prosperi, 201 F.3d 1335, 1342 (11th Cir. 2000). As with any question of

statutory interpretation, we begin by examining the text to determine whether its

meaning is clear. “In construing a statute we must begin, and often should end as

well, with the language of the statute itself.” Merritt v. Dillard Paper Co., 120 F.3d

1181, 1185 (11th Cir. 1997). “Where the language Congress chose to express its

intent is clear and unambiguous, that is as far as we go to ascertain its intent

because we must presume that Congress said what it meant and meant what it

said.” United States v. Steele, 147 F.3d 1316, 1318 (11th Cir. 1998) (en banc),

cert. denied, 528 U.S. 933, 120 S. Ct. 335 (1999).

      The language of the ADEA closely parallels that of Title VII. See Lorillard

v. Pons, 434 U.S. 575, 584, 98 S. Ct. 866, 872 (1978) (noting that “the prohibitions

of the ADEA were derived in haec verba from Title VII.”) In fact, the sections

forbidding discrimination are almost identical. Compare 29 U.S.C. § 623(a)(1)

(ADEA) with 42 U.S.C. § 2000e-2(a)(1) (Title VII). The Supreme Court has held

that Title VII supports a cause of action for employment discrimination based on a

                                           4
disparate impact theory.4 See Griggs v. Duke Power Co., 401 U.S. 424, 431, 91 S.

Ct. 849, 853 (1971).

       Several circuits have relied on the holding in Griggs to find that, because the

language of the ADEA parallels Title VII, disparate impact claims also should be

allowed under the ADEA. See Geller v. Markham, 635 F.2d 1027, 1032 (2d Cir.

1980); Smith v. City of Des Moines, 99 F.3d 1466, 1469-70 (8th Cir. 1996);

E.E.O.C. v. Bordens, Inc., 724 F.2d 1390, 1394-95 (9th Cir. 1984). In a case

involving liquidated damages under the ADEA, the Supreme Court explicitly left

open the question of “whether a disparate impact theory of liability is available

under the ADEA.” Hazen Paper Co. v. Biggins, 507 U.S. 604, 610, 113 S. Ct.

1701, 1706 (1993). The Second, Eighth, and Ninth Circuits have read Hazen

literally and continue to allow disparate impact claims. See Criley v. Delta

Airlines, Inc., 119 F.3d 102, 105 (2d Cir. 1997) (per curiam); Lewis v. Aerospace

Cmty. Credit Union, 114 F.3d 745, 750 (8th Cir. 1997); Frank v. United Airlines,

Inc., 216 F.3d 845, 856 (9th Cir. 2000); E.E.O.C. v. Local 350, 998 F.2d 641, 648

n.2 (9th Cir. 1993).

       4
         A disparate impact claim is one that “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.” Hazen Paper Co. v. Biggins, 507 U.S.
604, 609, 113 S. Ct. 1701, 1705 (1993) (quoting Teamsters v. United States, 431 U.S. 324, 335-
36 n. 15, 97 S. Ct. 1843, 1855 n. 15 (1977)).

                                                 5
      In contrast, the First, Third, Sixth, Seventh, and Tenth Circuits have

questioned the viability of disparate impact claims under the ADEA post-Hazen.5

See Mullin v. Raytheon Co., 164 F.3d 696, 700-01 (1st Cir.), cert. denied, 528 U.S.

811, 120 S. Ct. 44 (1999); E.E.O.C. v. Francis W. Parker School, 41 F.3d 1073,

1076-77 (7th Cir. 1994); Ellis v. United Airlines, Inc., 73 F.3d 999, 1006-07 (10th

Cir. 1996); DiBiase v. Smithkline Beecham Corp., 48 F.3d 719, 732 (3d Cir.

1995); Lyon v. Ohio Educ. Ass’n and Prof’l Staff Union, 53 F.3d 135, 139 n.5 (6th

Cir. 1995). These cases rely on language in Hazen and other factors that suggest

that disparate impact claims are not viable under the ADEA.

      First, courts that question the viability of a disparate impact claim under the

ADEA note that the text of the ADEA differs from Title VII in an important

respect. Section 623(f)(1) of the ADEA explicitly provides that an employer may

“take any action otherwise prohibited . . . where the differentiation is based on

reasonable factors other than age.” 29 U.S.C. § 623(f)(1). The First Circuit has

reasoned that

      if the exception contained in section 623(f)(1) is not understood to
      preclude disparate impact liability, it becomes nothing more than a
      bromide to the effect that “only age discrimination is age
      discrimination.” Such a circular construction would fly in the teeth of
      the well-settled canon [of statutory construction].

      5
       The Fourth, Fifth, and D.C. Circuits have not addressed this issue.

                                               6
Mullin, 164 F.3d at 702.

       In addition, the language of § 623(f)(1) is similar to language found in the

Equal Pay Act. Section 206(d)(1) of the Equal Pay Act provides that wage

discrimination on the basis of gender is prohibited, unless the wage “differential

[is] based on any other factor other than sex.” 29 U.S.C. § 206(d)(1)(iv). “The

Supreme Court [has] interpreted section 206(d)(1) of the Equal Pay Act to preclude

disparate impact claims.” Ellis, 73 F.3d at 1008 (citing County of Washington,

Ore. v. Gunther, 452 U.S. 161, 170-71, 101 S. Ct. 2242, 2248-49 (1981)); Mullin,

164 F.3d at 702 (drawing same comparison).6 The text of the ADEA is sufficiently

distinguishable from Title VII as to raise doubts about extending the disparate

impact theory of liability to ADEA cases.

       Turning to the legislative history, the Mullin and Ellis courts note that the

ADEA was enacted after the Secretary of Labor issued a report on age

discrimination. Mullin, 164 F.3d at 702-03; Ellis, 73 F.3d at 1008. The report,

       6
         We note that the ADEA requires that the “other factor” be a reasonable one, while the
Equal Pay Act finds “any other factor” acceptable. Compare 29 U.S.C. § 623(f)(1) with 29
U.S.C. § 206(d)(1)(iv). It could be argued that this difference distinguishes the ADEA from the
Equal Pay Act, and supports the inference that the reasonableness requirement refers to the
business necessity justification that, in Title VII cases, can be used to defend an employment
qualification that has a disparate impact on employees in the protected class. In light of the
differences between the ADEA and Title VII discussed herein, we decline to draw such an
inference.

                                               7
entitled The Older American Worker: Age Discrimination in Employment (1965),

recommended that Congress ban arbitrary discrimination, such as disparate

treatment based on stereotypical perceptions of the elderly, but that factors

affecting older workers, such as policies with disparate impact, be addressed in

alternative ways. Ellis, 73 F.3d at 1008. Thus, the history of the ADEA differs

from the legislative history of Title VII, which the Supreme Court in Griggs relied

on to find a cause of action for disparate impact. See Griggs, 401 U.S. at 432, 91

S. Ct. at 854 (discussing the history of amendments to the bill and noting that for

Title VII, Congress specifically “placed on the employer the burden of showing

that any given requirement must have a manifest relationship to the employment in

question.”).

      Finally, while the Hazen Court left open the question of whether a disparate

impact claim can be brought under the ADEA, language in the opinion suggests

that it cannot. First, the Court noted that “[d]isparate treatment . . . captures the

essence of what Congress sought to prohibit in the ADEA.” Hazen, 507 U.S. at

610, 113 S. Ct. at 1706. In addition, the Court reiterated that, in making

employment decisions, the use of factors correlated with age, such as pension

status, did not rely on “inaccurate and stigmatizing stereotypes” and was

acceptable. Id. at 611, 113 S. Ct. at 1706-07. That position is inconsistent with the

                                            8
viability of a disparate impact theory of liability, which requires no demonstration

of intent, but relies instead on the very correlation between the factor used and the

age of those employees harmed by the employment decision to prove liability.

                                III. CONCLUSION

      The Second, Eighth, and Ninth Circuits allow disparate impact claims under

the ADEA. The First, Third, Sixth, Seventh, and Tenth do not. We find the

reasoning of the Tenth Circuit in Ellis and the First Circuit in Mullin persuasive.

Accordingly, we find that disparate impact claims may not be brought under the

ADEA, and AFFIRM.

                                          9
BARKETT, Circuit Judge, specially concurring:

       I would affirm the district court’s ruling in this case, but for reasons other

than the one relied upon by the district court.1 I do not believe the complaint here

pleads a disparate impact claim sufficient to qualify for class certification. Thus,

because I find that plaintiffs have sufficiently alleged only that they suffered

disparate treatment, and the district court’s denial of certification on the disparate

treatment claim is not at issue on this appeal, I believe it is unnecessary and

premature to address the question of whether disparate impact claims are

cognizable under the ADEA. I think it especially unwise because this question

does not lend itself to a pronouncement in the abstract.

       The decision as to whether a disparate impact claim is available in an age

discrimination case should be made on a case specific basis rather than on an

overreliance on decontextualized language from the Supreme Court’s decision in

Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993). The purposes of the ADEA, the

Supreme Court’s treatment of the issue in Hazen Paper, and consideration of the

various views of our sister courts, lead me to conclude that disparate impact can be

       1
           We may affirm the district court’s decision for reasons different than those stated by
the district court. See Sec. & Exch. Comm’n v. Chenery Corp., 318 U.S. 80, 88 (1943) (stating
that the decision of the lower court must be affirmed if the result is correct even though the lower
court relied upon a wrong ground or gave a wrong reason); see also Turlington v. Atlanta Gas
Light Co., 135 F.3d 1428, 1434 (11th Cir. 1998).

                                                10
pled and proved in an appropriate case under the ADEA, and that it cannot be said

as a matter of law that this theory of recovery can never be used in an age

discrimination case.

      First of all, the purpose of the ADEA, like the purpose of Title VII and the

ADA, is to eradicate employment discrimination based on the stigmatizing

stereotypes of age, race, gender or disability. Disparate impact claims provide an

avenue for members of protected classes to prove that discrimination occurred in

the workplace when proof of motive is difficult or unavailable. Beginning with

Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971), the Supreme Court

recognized that although discriminatory intent could be hidden, even from the

decisionmaker himself, its effects in the workplace could not. Thus, Title VII

“proscribes not only overt discrimination but also practices that are fair in form,

but discriminatory in operation.” Id. at 431. Accordingly, the Supreme Court

interpreted Title VII to permit a member of a protected group to challenge facially

neutral employment practices that perpetuate inequality by disproportionately

burdening a protected class.

      However, pleading a disparate impact case only gets you into the

courthouse. An employer in every statutory context can defend a disparate impact

                                          11
case by citing a legitimate business necessity for the neutral policy at issue.2 Thus,

in those cases where it can be shown that the decision causing the disparate impact

was based on business necessity, the claim will be defeated.3 Disparate impact is

not an easy theory to plead and prove in any context. I believe that it is probably a

more difficult claim to make under the ADEA than in a race or gender context

because the impact of neutral policies which fall disproportionately on class

members protected by the ADEA can be proven to be related to legitimate business

reasons in more instances than those which might impact other protected groups.

See Hazen Paper, 507 U.S. at 610-11.

       The majority, however, concludes that disparate impact claims are simply

not viable because Section 623(f)(1) of the ADEA specifically exempts a decision

based on factors other than age, notwithstanding its similarity to Title VII. 29

       2
          Title VII requires an employer to demonstrate that the challenged practice is a job
related business necessity. 42 U.S.C. § 2000e-2(k)(1)(A)(i). The ADA defines discrimination as
including the use of “selection criteria that screen out or tend to screen out an individual with a
disability or a class of individuals with disabilities” unless such criteria are “shown to be
job-related for the position in question and [are] consistent with business necessity.” 42 U.S.C. §
12112(b)(6).
       3
           See, e.g., Belk v. Southwestern Bell Telephone Co., 194 F.3d 946, 951 (8th Cir. 1999)
(employer in ADA suit could raise business necessity defense to plaintiff’s claim that employer’s
physical performance test has a disparate impact); Davis v. City of Dallas, 777 F.2d 203, 208
(5th Cir. 1985) (finding that city’s requirement that applicants for police officer must have
completed 45 semester hours of college credit with at least C average at accredited college or
university, must not have history of recent or excessive marijuana use, and must not have been
convicted of more than three hazardous traffic violations in preceding 12 months, were job
related).

                                                12
U.S.C. § 623(f)(1). But, as noted, in every statutory discrimination case, a decision

based upon legitimate business necessity will never support a claim for liability.

Griggs itself recognized and repeatedly emphasized that disparate impact is a basis

for relief only if the practice in question is not founded on “business necessity,” or

lacks “a manifest relationship to the employment.” Id. at 431. Section 623(f)(1) of

the ADEA adds nothing new. Therefore, Section 623(f)(1) of the ADEA should

not be interpreted as anything more than a statutory description of the business

necessity defense.

        In fact, the EEOC interpretive guidelines, which are entitled to judicial

deference,4 suggest that the “reasonable factors” defense in the ADEA works in

tandem with the business necessity defense in the disparate impact analysis. These

guidelines indicate that an employer may raise a “reasonable factors” defense to

justify employment practices that “have an adverse impact on individuals within

the protected age group.” See 29 C.F.R. § 1625.7(d) (1999).5 In light of the

       4
         Edwards v. Shalala, 64 F.3d 601, 606 (11th Cir. 1995) (“‘An agency’s interpretation of
an ambiguous provision within a statute it is authorized to implement is entitled to judicial
deference.’”) (quoting Jones v. Runyon, 32 F.3d 1454, 1457-58 (10th Cir. 1994)); see also
Pauley v. BethEnergy Mines, Inc., 501 U.S. 680, 696-98 (1991); Chevron USA, Inc v. Natural
Resources Defense Council,467 U.S. 837, 866 (1984).
       5
          EEOC guidelines interpret the “reasonable factor other than age” defense as limited
only to factors justifiable as a “business necessity”:

              (d) When an employment practice, including a test, is claimed as a
              basis for different treatment of employees or applicants for

                                               13
parallels between the substantive provisions of the ADEA and Title VII, and in

light of the fact that Congress has amended the ADEA several times but has never

explicitly excluded disparate impact claims,6 a reasonable interpretation of Section

              employment on the grounds that it is a “factor other than” age, and
              such a practice has an adverse impact on individuals within the
              protected age group, it can only be justified as a business
              necessity. Tests which are asserted as “reasonable factors other
              than age” will be scrutinized in accordance with the standards set
              forth at Part 1607 of this Title.

              (e) When the exception of “a reasonable factor other than age” is
              raised against an individual claim of discriminatory treatment, the
              employer bears the burden of showing that the “reasonable factor
              other than age” exists factually.

              (f) A differentiation based on the average cost of employing older
              employees as a group is unlawful except with respect to employee
              benefit plants which qualify for the section 4(f) (2) exception to
              the Act.

29 C.F.R. § 1625.7 (2000).
       6
          After the Griggs decision, several courts extended disparate impact analysis to the
ADEA. See, e.g., Leftwich v. Harris-Stowe State College, 702 F.2d 686, 690 (8th Cir. 1983);
Geller v. Markham, 635 F.2d 1027 (2nd Cir. 1980); United Independent Flight Officers, Inc. v.
United Air Lines, Inc., 572 F.Supp. 1494, 1505 (N.D. Ill. 1983). Congress has amended the
ADEA several times since Griggs. See e.g., Age Discrimination in Employment Amendments of
1986, Pub. L. No. 99-592, 100 Stat. 3342 (1986); Omnibus Budget Reconciliation Act of 1986,
Pub. L. No. 99-509, § 9201, 100 Stat. 1874, 1973-75 (1986); Consolidated Omnibus Budget
Reconciliation Act of 1985, Pub. L. No. 99-272, § 9201(b), 100 Stat. 82, 171 (1986); Older
Americans Act Amendments of 1984, Pub. L. No. 98-459, § 802, 98 Stat. 1792 (1984). None of
the amendments have limited or prohibited disparate impact analysis. See also EEOC v.
Governor Mifflin Sch. Dist., 623 F.Supp. 734, 740-41 (E.D.Pa 1985) (analyzing amendments to
the ADEA and finding no prohibition against disparate impact claims). “Congress is presumed
to be aware of an administrative or judicial interpretation of a statute and to adopt that
interpretation when it re-enacts a statute without change.” Lorillard v. Pons, 434 U.S. 575, 580
(1978).

                                               14
623(f)(1) is that it codifies the business necessity exception to disparate impact

claims.

       I am unpersuaded by the majority’s conclusion that the the Supreme Court’s

determination that a similar provision in the Equal Pay Act (“EPA”) precludes

disparate impact claims. See County of Washington, Ore. v. Gunther, 452 U.S.

161, 170-71 (1981). There are several problems with analogizing from the EPA to

the ADEA. First, this case concerns the substantive provisions of the ADEA,

which have been recognized to share common substantive provisions as Title VII,

and not the remedial provisions of the ADEA which are similar to the remedial

provisions of the EPA. Wallace v. Dunn Construction Co., 62 F.3d 374, 378 (11th

Cir. 1995). Second, Section 206(d)(1) of the EPA permits discrepancies in wages

paid to male and female workers for “any other factors other than sex.” 29 U.S.C.

§ 206(d)(1)(iv). The EPA thus merely requires the employer to provide a neutral

explanation for any disparity in pay. The EPA’s broad defense for employers

ensures that the Act targets only intentional purposeful discrimination.7 In

       7
          See Gunther, 452 U.S. at 170 (noting that in comparison to Title VII, which permits
disparate impact claims, the Equal Pay Act “was designed differently, to confine the application
of the Act to wage differentials attributable to sex discrimination . . . . Equal Pay Act litigation,
therefore, has been structured to permit employers to defend against charges of discrimination
where their pay differentials are based on a bona fide use of ‘other factors other than sex.’”);
Varner v. Illinois State University, 226 F.3d 927, 934 (7th Cir. 2000) (“By providing a broad
exemption from liability under the Equal Pay Act for any employer who can provide a neutral
explanation for a disparity in pay, Congress has effectively targeted employers who intentionally

                                                 15
contrast, under section 623(f)(1) of the ADEA, the employer must demonstrate the

reasonableness of the neutral factor. The ADEA’s narrow limitation of liability

ensures that the Act reaches all arbitrary age discrimination.

       Furthermore, I disagree with the majority’s interpretation of Hazen Paper as

precluding disparate impact claims under the ADEA. The Court in Hazen Paper

took great care to say explicitly that that decision should not be read to address a

disparate impact case: “[W]e have never decided whether a disparate impact

theory of liability is available under the ADEA, and we need not do so here.”

Hazen Paper, 570 U.S. at 610. In Hazen Paper, the neutral policy at issue was the

termination of an employee who was close to vesting under his pension plan. As

the Court recognized, the policy could have affected “older” and “younger”

workers alike. The crucial fact underlying the Supreme Court’s decision in Hazen

Paper was that Hazen Paper decided to fire the plaintiff on the basis of his pension

status which, under the company’s policy, was based on years of service, not age.

The Court explained that “an employee’s age is analytically distinct from his years

of service.” Id. at 611.

              An employee who is younger than 40, and therefore
              outside the class of older workers as defined by the
              ADEA, see 29 U.S.C. § 631(a), may have worked for a

discriminate against women.”).

                                          16
             particular employer his entire career, while an older
             worker may have been newly hired. Because age and
             years of service are analytically distinct, an employer can
             take account of one while ignoring the other, and thus it
             is incorrect to say that a decision based on years of
             service is necessarily “age based.”

Id. Accordingly, the claimant could not prevail when he was fired on this basis,

even though he was 62 years old. The Court held that the motivation to avoid the

vesting of pension benefits was insufficient to state a disparate treatment claim

under the ADEA because the evidence did not show that Hazen Paper’s decision

was based on the plaintiff’s age. Id. (“When 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, as pension status typically is.”). However, the Court also made clear that:

             We 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, not in the sense that the ADEA
             makes the two factors equivalent, but in the sense that the
             employer may suppose a correlation between the two
             factors and act accordingly.

Id. at 612-13 (citation omitted). Thus, the Court did not rule out the possibility that

an employer’s purported reliance on an age-proxy could reflect the type of

                                          17
“inaccurate and denigrating generalization about age” that the ADEA was designed

to prohibit. Id. at 612. For example, there is nothing in Hazen Paper that addresses

a disparate impact challenge to an employer’s insurance policy which might

provide coverage for health problems affecting young employees, but exclude

coverage for health problems affecting older employees (for example, a policy

which covered braces but not dentures, or a policy generally covering progressive,

neurodegenerative diseases except for Alzheimer’s disease). See also Arnett v.

California Public Employees Retirement System, 179 F.3d 690 (9th Cir.1999),

vacated and remanded on other grounds, 528 U.S. 1111 (2000) (plaintiffs’ claim

that employer’s disability benefits program which discriminated on the basis of

potential years of service, rather than actual years of service, adversely affected

older workers stated a valid claim of disparate impact under the ADEA).

Furthermore, the Court explicitly stated that it did not consider a situation in which

the employee’s pension status is based on age, rather than years of service:

             [W]e do not 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 and the employer fires the
             employee in order to prevent vesting.

Hazen Paper, 570 U.S. at 613 (citation omitted).

                                          18
      Finally, the majority is of the view that the legislative history of the ADEA

suggests it was not enacted to address disparate impact claims, citing the report

commissioned from the Secretary of Labor, The Older American Worker: Age

Discrimination in Employment (1965). The report recommended that Congress

prohibit “arbitrary discrimination,” but that factors which “affect older workers” be

addressed through programmatic measures to improve opportunities for older

workers. Id. at 21-25. That report differentiated between what it termed “arbitrary

discrimination” based on age and problems resulting from factors that “affect older

workers more strongly, as a group, than they do younger employees.” Id. at 5, 11.

The majority concludes that this precludes disparate impact claims because these

are claims that only address “factors that affect older workers more strongly,” not

arbitrary discrimination. But this begs the question. The very question disparate

impact analysis seeks to answer is whether the challenged policy that

disproportionately impacts older workers is derived from a reasonable business

judgment or whether the policy is the result of arbitrary discrimination. Claimants

should have the opportunity to prove it when it is the latter.

                                          19