Court Opinion

ID: 8410173
Source: CourtListenerOpinion
Date Created: 2022-11-02 17:56:00.431626+00
Date Added: 2024-06-11T16:46:54.132220
License: Public Domain

POOLER, Circuit Judge,
dissenting:
I respectfully dissent because I do not agree that Smith v. City of Jackson, 544 U.S. 228, 125 S.Ct. 1536, 161 L.Ed.2d 410 (2005) requires vacatur of the district court judgment. The concerns animating my disagreement with the majority are (1) the majority improperly conflates the analysis of proof of a reasonable factor other than age (“RFOA”) with the legitimate business justification analysis as it is used in a disparate impact analysis; (2) the majority errs by assigning to plaintiffs the burden of proving that a RFOA does not exist; and (3) the majority improperly reaches the asserted RFOA error because, although defendants pleaded an affirmative RFOA defense, they did not seek a charge or a verdict sheet question on that defense, thus requiring that we find fundamental error, which does not exist, to reach the claimed error.
I. Impact of City of Jackson on ADEA Disparate Impact Analysis.
City of Jackson has a three-fold impact on ADEA disparate impact analysis. First, the Supreme Court held 23 that disparate impact claims can be proven under the ADEA. 544 U.S. at 240, 125 S.Ct. 1536. Second, it held that the disparate impact analysis contained in Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989), continued to apply in ADEA cases, albeit not in Title VII cases. See City of Jackson, 544 U.S. at 240, 125 S.Ct. 1536 ("Wards Cove’s pre-1991 interpretation of Title VIPs identical language remains applicable to the ADEA.”). Third, the Court held that an employee could not defend against proof of a RFOA by showing that another reasonable method to reach the employer’s goals existed. See id. at 243 (“While there may have been other reasonable ways for the City to achieve its goals, the one selected was not unreasonable. Unlike the business necessity test, which asks whether there are other ways for the employer to achieve its goals that do not result in a disparate impact on a protected class, the reasonableness inquiry includes no such requirement.”).
As indicated in the majority opinion, City of Jackson’s first holding is consonant with our precedent and needs no further analysis. The second holding — that a Wards Cove disparate impact analysis remains applicable — does require further examination. The Wards Cove Court analyzed the judicially created burdens of proof for disparate impact analysis under Title VII. See 490 U.S. at 656-661, 109 S.Ct. 2115. The Court held that after the plaintiffs establish a prima facie case, the analysis shifts to the legitimacy of the business justification proffered by the employer, and that “the dispositive issue [at that stage] is whether a challenged practice serves, in a significant way, the legitimate employment goals of the employer.” Id. at 659, 109 S.Ct. 2115. The Court then held that plaintiff retained the ultimate burden of proving discrimination and added that if the “[employees] cannot persuade the trier of fact on the question of petitioners’ business necessity defense, [the employees] may still be able to prevail.” Id. at 660, 109 S.Ct. 2115. To succeed at this stage, the employees must persuade the factfinder that “ ‘other tests or selection devices, without a similarly undesirable racial effect would also serve the employer’s legitimate [hiring] inter*148est[s].’ ” Id. (quoting Albemarle Paper Co. v. Moody, 422 U.S. 405, 425, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975)). The City of Jackson Court’s adherence to Wards Cove in the ADEA disparate-impact analysis does not change the law of this circuit because we have long used the Wards Cove analysis in ADEA disparate impact cases. See, e.g., Meacham v. KAPL, 381 F.3d 56, 71-76 (2d Cir.2004).
At trial, the district court correctly stated the Wards Cove burdens in its charge, and defendants did not object. The jury then found that plaintiffs satisfied their burden of proving disparate-impact discrimination. Although the district court set aside the jury’s finding that defendants did not proffer a legitimate business justification, see Meacham, 381 F.3d at 74, it refused to set aside the verdict — and we affirmed — because plaintiffs had identified an alternative that would equally well serve KAPL’s business purpose, id. at 75. Therefore, both the district court and this court performed exactly the analysis required by Wards Cove. As a result, the second holding of City of Jackson does not require vacatur of the district court judgment.
I turn, then, to the third holding in City of Jackson — that the RFOA exemption of 29 U.S.C. § 623(f)(1) cannot be defeated by a showing that other equally effective alternatives that do not have an adverse impact on older workers are available. In vacating the district court’s judgment and directing the dismissal of the complaint, the majority holds that “[i]n light of City of Jackson, it is clear that [Smith v. Xerox Corp., 196 F.3d 358 (2d Cir.1999)] is no longer good law insofar as it holds that the ‘business necessity’ test governs ADEA disparate impact test claims.” It is here that the majority, in my view, impermissi-bly conflates the Supreme Court’s holding on an age discrimination disparate impact analysis with its holding on the RFOA defense. The Supreme Court held that the Wards Cove analysis continues to govern ADEA disparate impact claims. See City of Jackson, 544 U.S. at 240, 125 S.Ct. 1536. It did not state or imply that the “business necessity” part of the Wards Cove analysis — on which plaintiffs bear the burden of proof — no longer exists as part of the disparate impact analysis.
We should not make the leap between a disparate-impact analysis and a RFOA analysis — which the Supreme Court did not make explicitly or implicitly in City of Jackson — because the Wards Cove disparate impact analysis and RFOA are very different doctrines. Throughout the entire Wards Cove analysis, the plaintiffs continue to bear the burden of persuasion with respect to disparate impact. See 490 U.S. at 659, 109 S.Ct. 2115. However, in a RFOA analysis, as I argue below, the employer bears the burden of proof. Further, the Wards Cove analysis is a judicially created1 doctrine setting forth what *149employees must demonstrate to prevail on a disparate impact claim under, the ADEA, see Wards Cove, 490 U.S. at 650-661, 109 S.Ct. 2115, while the RFOA is a statutory exemption to liability otherwise established by plaintiffs under a disparate impact analysis, see 29 U.S.C. § 623(f)(1); City of Jackson, 544 U.S. at 239, 125 S.Ct. 1536 (reasoning that “[i]t is. in cases involving disparate-impact claims that the RFOA provision plays its principal role by precluding liability if the adverse impact was attributable to a nonage factor that was ‘reasonable.’ ”). The majority implicitly suggests that because the RFOA provision does not require that an employer use the most reasonable alternative or even an equally reasonable alternative, the plaintiffs’ demonstration of equally effective practices that would serve the employer’s legitimate goal no longer serves any purpose. This logic is sound only if one accepts two premises: (1) that “legitimate business justification” means the same thing as “reasonable factor other than age,” and (2) that the employee bears the burden of proof under the RFOA provision. As outlined in the next section, existing cases, legislative history, and statutory structure overwhelmingly support the view that employers bear the burden of establishing a RFOA. In addition, I am not at all certain that “legitimate business justification” and “reasonable factor other than age” should be construed to mean the same thing. Therefore, I believe the district court and this court applied Wards Cove correctly to plaintiffs’ disparate-impact claim.
II. Burden of Proof
To determine whether a claim that an employment determination rests on a “reasonable factor other than age,” within the meaning of 29 U.S.C. § 623(f)(1), (1) is properly characterized as an affirmative defense, placing the burden of proof on the employer, or (2) must be negated as part of plaintiffs overall burden of proving age discrimination within a Wards Cove disparate impact analysis, I look first to the language of the statute that creates both liability and exemptions from liability for age discrimination, 29 U.S.C. § 623. See Gottlieb v. Carnival Corp., 436 F.3d 335, 337 (2d Cir.2006) (“Statutory analysis begins with the text and its plain meaning, if it has one.”) Only if the statute is ambiguous, is resort to canons of construction permitted. 9 ambiguity, legislative history may be examined to determine congressional intent. See id. at 338.
The ADEA provides that “It shall be unlawful for an employer ... to limit, segregate, or classify his employees in any manner 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). Section 623(f) creates five exceptions to liability that would otherwise exist under Section 623(a). In Section 623(f)(1), Congress exempted from unlawfulness “any action otherwise prohibited” if age was a “bona fide occupational qualification reasonably necessary to the normal operation of the particular business”; the “otherwise prohibited” action was based on reasonable factors other than age; or the action was required by a law in the country in which the workplace was located. With limitations, Section 623(f)(2), exempts an action “otherwise prohibited under [this section]” if it is taken “to observe the terms of a bona fide seniority system ... not intended to evade the purposes of this chapter” or “to observe the terms of a bona fide benefit plan.” The consistent use of the words, “otherwise prohibited,” suggests that Section 623(f) creates affirmative defenses because the various fact patterns listed are exceptions to liability that would otherwise exist.
*150However, even assuming that Section 623(f)(1) is ambiguous, at least two key canons of construction support placing the burden of proof on the employer. First, we must construe the meaning of Section 623(f)(2) in light of Section 623 as a whole. See Gottlieb, 436 F.3d at 338. The architecture of Section 623 is simple. Section 623(a), (b), (c), (d), and (e) define unlawful practices. Then, Section 623(f) creates exemptions to liability for certain actions prohibited by Section 623(a), (b), (c), and (e).2 If plaintiffs were required to show that no RFOA existed, Congress logically would have included this provision within the liability sections, rather than within the exemption sections.
The second rule of construction favoring the interpretation of Section 623(f) as creating affirmative defenses is the doctrine of in pari materia. Where two sections are in the same statute and “share the same purpose,” they “can, as a matter of general statutory construction, be interpreted to be in pari materia,” that is, as having the same meaning. United States v. Carr, 880 F.2d 1550, 1553 (2d Cir.1989). All five of Section 623(f)’s exemptions are expressed in parallel fashion: conduct that would be “otherwise prohibited” is rendered lawful if certain facts exist. Further, the first of the Section 623(f)(1) exemptions — the bona fide occupational qualification (“BFOQ”) defense — is an affirmative defense. See City of Jackson, 544 U.S. at 233 n. 3, 125 S.Ct. 1536. The principle of in pari mate-ria leads me to believe that, because the RFOA provision is in the same section as the BFOQ defense and uses the same words — “otherwise prohibited” — Congress likewise intended the RFOA provision as an affirmative defense.
Interpreting the RFOA provision and other Section 623(f) exemptions as affirmative defenses is also supported by Congress’s enactment of the Older Workers Benefit'Protection Act (“OWBPA”), Pub.L. No. 101-433, 104 Stat. 978 (1990) (codified in relevant part at 29 U.S.C. § 623(f)(2)), after the Supreme Court held that the benefit plan exemption of Section 623(f)(2) did not create an affirmative defense, see Public Employees Retirement System of Ohio v. Betts, 492 U.S. 158, 181, 109 S.Ct. 2854, 106 L.Ed.2d 134 (1989). Prior to 1990, the Section 623(f)(2) exceptions— bona fide seniority systems and benefit plans' — did not include language specifying that these exemptions apply to conduct “otherwise prohibited.” See 29 U.S.C. § 623(f)(2) (1990). In 1989, the Supreme Court held that the bona-fide-benefit plan exception “is not so much a defense to a charge of age discrimination as it is a description of the type of employer conduct that is prohibited in the employee benefit plan context” and that plaintiffs were required to show that a benefit plan was a subterfuge in order to prevail. Betts, 492 U.S. at 181, 109 S.Ct. 2854. Congress responded by enacting OWBPA, which modifies the ADEA in significant respects. In its findings, Congress indicated that Betts required “legislative action ... to' restore the original congressional intent in passing and amending the [ADEA].” Pub.L. 101-133 § 101. For our purposes, the relevant change was the insertion of “any action otherwise prohibited” into Section 623(f)(2). See id. § 103.
A detailed report of the Senate Labor and Human Resources Committee concerning OWBPA states that Congress inserted “otherwise prohibited,” “language ... that is commonly understood to signify *151an affirmative defense” into Section 623(f)(2) to make it clear “that the employer bears the burden to plead and prove the defenses and exceptions established in that section.” S.Rep. No. 101-263, as reprinted in 1990 U.S.C.C.A.N. 1509, 1535. The Committee added that it endorsed “the uniform body of federal court decisions” holding that the BFOQ exception was an affirmative defense as well as circuit court decisions imposing the burden of proving the reasonable — factors defense on the employer. Id. (citing Criswell v. Western Airlines, 709 F.2d 544, 552-553 (9th Cir.1982), affirmed on other grounds, 472 U.S. 400, 105 S.Ct. 2743, 86 L.Ed.2d 321 (1985); Laugesen v. Anaconda Co., 510 F.2d 307, 315 (6th Cir.1975), Cova v. Coca-Cola Bottling Co. of St. Louis, 574 F.2d 958, 959-60 (8th Cir.1978)).
Of course, the OWBPA’s legislative history is not relevant to determining the intent of the legislators who enacted Section 623(f)(1), which was not changed by OWBPA. See Pittston Coal Group v. Sebben, 488 U.S. 105, 118-19, 109 S.Ct. 414, 102 L.Ed.2d 408 (1988). However, the legislative history discussed is probative of the meaning Congress normally assumes will be ascribed to the words “otherwise prohibited” when they preface exemptions to liability.
Finally, several circuits have characterized the RFOA provision and other Section 623(f) exemptions as affirmative defenses. See Jankovitz v. Des Moines Indep. Cmty. Dist., 421 F.3d 649, 651 (8th Cir.2005) (characterizing as an affirmative defense employer’s claim of a bona fide voluntary early retirement incentive plan pursuant to 29 U.S.C. § 623(f)(2)(B)(ii)); Erie County Retirees Assoc. v. County of Erie, Pa., 220 F.3d 193, 199 (3d Cir.2000) (characterizing the RFOA exemption as an “affirmative defense”); Baker v. Delta Air Lines, Inc., 6 F.3d 632, 639 (9th Cir.1993) (stating that “[o]nce the plaintiff establishes a prima facie ease that age was a determining factor in the employment decision, the defendant-employer can rebut the prima facie case and/or assert any number of affirmative defenses [including] the RFOA defense.”); Heiar v. Crawford Co., Wis., 746 F.2d 1190, 1197-99 (7th Cir.1984) (requiring employer to prove that age was a BFOQ); Cova, 574 F.2d at 959-60 (holding that if the plaintiff makes out a prima facie case of age discrimination, the employer must “show[] that the discharge was ‘based on reasonable factors other than age,’ ” and, if the employer meets that burden, the plaintiff must show that “age was a determining factor in the discharge”) (quoting 29 U.S.C. § 623(f)(1)); Laugesen, 510 F.2d at 313 (stating in dicta that the BFOQ exemption is an affirmative defense).3 The majority cites only one case, Pippin v. Burlington Resources, 440 F.3d 1186, 1200 (10th Cir.2006), holding that an employee bears the burden of disproving an asserted RFOA. Because Pippin contains no analysis, it does not disturb my conclusion that the weight of authority indicates that Congress intended that the. employer bear the burden of proving a RFOA.
Based on the language and structure of the statute, the weight of authority, and the legislative history of the OWBPA, I *152conclude that the RFOA exemption is an affirmative defense. The majority, however, holds that the employees must disprove the employer’s claim of a RFOA because (1) the City of Jackson court “nowhere suggested that the burden of persuasion with respect to the legitimacy of the business justification was being shifted to the employer”; (2) City of Jackson holds that “ ‘Wards Cove’s pre-1991 interpretation of Title VII’s identical language remains applicable to the ADEA,’ ” and “Wards Cove explained that the plaintiff bears the burden of persuasion to defeat the employer’s ‘business necessity’ justification because the plaintiff bears the ultimate burden under Title VII to ‘prove that it was “because of [his] race, color,” etc., that he was denied a desired employment opportunity,’ ” Majority op. at 141-142 (quoting City of Jackson, 544 U.S. at 240, 125 S.Ct. 1536, and Wards Cove, 490 U.S. at 660, 109 S.Ct. 2115); and (3) City of Jackson acknowledged that age — as opposed to race and sex — does sometimes correlate with reasonable performance factors and thus the ADEA has a narrower scope that Title VII, id. at 142.
My first problem with the majority’s reasoning is that the Wards Cove Court did not analyze the “identical language” at issue in this case. At issue in this cáse is U.S.C. § 623(f)(1), a statute that was not construed in Wards Cove. The burden of proving a disparate impact claim remains exactly as it is described in Wards Cove, but that does not mean that the burden of proving the statutory RFOA exemption has been changed by Wards Cove or by City of Jackson. After City of Jackson, it remains necessary for a court interpreting Section 623(f)(1) to adhere to the ordinary principles of statutory interpretation applied above. - Further, City of Jackson’s acknowledgment that age does sometimes correlate with ability or inability to do a job explains why Congress did not amend the ADEA — as it did Title VII — to change certain aspects of Wards Cove and why Congress enacted the RFOA provision but not why the RFOA provision should be read to impose the burden of proof on a particular party. See City of Jackson, 544 U.S. at 240-41, 125 S.Ct. 1536. Therefore, the possible correlation between age and certain work-related factors has no bearing on where the RFOA burden should rest. Rather, an appropriate statutory analysis mandates construing the RFOA provision as imposing the burden on the employer to prove that a RFOA exists.
III. Waiver and Fundamental Error
Where a claim of error has its genesis in the charge or the verdict sheet and the party relying on the error for reversal or a new trial did not object at trial, the error is waived and can be reached only if fundamental error occurred. See Patrolmen’s Benevolent Assoc. of the City of New York v. City of New York, 310 F.3d 43, 54 (2d Cir.2002). “Fundamental error is more egregious than the ‘plain’ error that can excuse a procedural default in a criminal trial, and is so serious and flagrant that it goes to the very integrity of the trial.” Jarvis v. Ford Motor Co., 283 F.3d 33, 62 (2d Cir.2002) (internal citation and quotation marks omitted).
Defendants, who, in my view, bear the burden of proving a RFOA, included RFOA as an affirmative defense to liability in their answer. However, the charge did not include an instruction on the RFOA exemption. Defense counsel did not object to the court’s charge in any respect. Nevertheless, defendants argue that they did not waive any aspect of a disparate impact analysis because City of Jackson “represents a change in the prevailing law under the ADEA, and where there has been an intervening change ... no waiver may be found.” Appellants’ Reply Br. at 9. This argument is not valid. Since the RFOA *153was enacted, it has been clear that employers can defend against disparate impact liability by showing that employees were selected for termination based on a reasonable factor other than age. Further, courts construing Sections 623(f)(1) and (2) have generally found that they create affirmative defenses to liability. See Jankovitz, 421 F.3d at 651; Erie County Retirees Assoc., 220 F.3d at 199; Baker, 6 F.3d at 639; Cova, 574 F.2d at 959-60; Laugesen, 510 F.2d at 313. Finally, defendants themselves pleaded RFOA as an affirmative defense. Under these circumstances, there can be no claim that changes in the law excused defendants’ waiver, and defendants must demonstrate that the court’s failure to include a RFOA instruction in the charge and a RFOA question in the verdict sheet constituted fundamental error.
I see no fundamental error. Parties, as the masters of their cases, should and usually will request the charges that they believe their evidence supports and should object when those charges are omitted. From all that appears in the record before us, defendants may have made a strategic decision not to press the RFOA defense, believing that it would be easier to require plaintiffs to establish disparate impact under the Wards Cove analysis than for defendants themselves to prove a reasonable factor other than age. In addition, I do not consider that a jury that had been properly charged that defendants bear the burden of proving a RFOA would necessarily find for defendants. Such a jury could permissibly find that defendants had not established a RFOA based on the unmonitored subjectivity of KAPL’s plan as implemented.
CONCLUSION
For the reasons discussed above, we should adhere to our prior decision and reinstate-the vacated judgment. I therefore respectfully dissent.

. The majority quarrels with the phrase, "judicially created,” because "Albemarle Paper Co. v. Moody, 422 U.S. 405, 425, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975) located the source of the 'business necessity’ test in Title VII § 703(h), 42 U.S.C. § 2000e-2(h), which provides that” the administration of professionally developed ability tests not designed, intended, or used to discriminate on a prohibited ground is not an unlawful employment practice. Majority op. at 141 n. 5. However, the Supreme Court has applied its disparate impact analysis in situations far removed from the tests and practices listed in Section 2000e-2(h). See, e.g., Wards Cove, 490 U.S. at 657, 109 S.Ct. 2115 (nepotism, separate hiring halls, rehire preferences, and subjective decision making). The use of disparate impact analysis in areas not covered by Section 2000e-2(h) is certainly judicially created. Further — and more important — Section 2000e-2(h) does not contain the words, "otherwise prohibited,” which, as I explain below at 138-141 are important in establishing that the RFOA provision is an affirmative defense.

. Section 623(d) is the ADEA's retaliation provision. Thus thé Section 623(f) exemptions would not be relevant.

. The majority characterizes these decisions as "inapt,” Majority op. at 143 n. 7 because they are disparate treatment cases and were decided prior to City of Jackson. The majority’s position provokes two questions: (1) Is there any evidence that Congress intended different burdens of proof for the RFOA provision depending on whether it is employed in a disparate treatment or a disparate impact case? and (2) Is it logical to assume that the Supreme Court rejected existing interpretations of the RFOA provision sub silentio and without analysis?