No. 95-354 In the Supreme Court of the United States OCTOBER TERM, 1995 JAMES O'CONNOR, PETITIONER v. CONSOLIDATED COIN CATERERS CORPORATION ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT BRIEF FOR THE UNITED STATES AND THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICI CURIAE SUPPORTING PETITIONER C. GREGORY STEWART General Counsel GWENDOLYN YOUNG REAMS Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel ROBERT J. GREGORY BARBARA L. SLOAN Attorneys Equal Employment Opportunity Commission Washington, D.C. 20507 DREW S. DAYS, III Solicitor General DEVAL L. PATRICK Assistant Attorney General PAUL BENDER Deputy Solicitor General PAUL R.Q. WOLFSON Assistant to the Solicitor General Department of Justice Washington, D.C. 20530 (202) 514-2217 ---------------------------------------- Page Break ---------------------------------------- QUESTION PRESENTED Whether a plaintiff alleging that he was discharged in violation of the Age Discrimination in Employment Act, 29 U.S.C. 621 et seq., must show that he was re- placed by someone outside the protected age group to make out a prima facie case of discrimination under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). (I) ---------------------------------------- Page Break ---------------------------------------- II TABLE OF CONTENTS Page Interest of the United States and the Equal Employ- ment Opportunity Commission . . . . 1 Statement . . . . 2 Summary of argument . . . . 7 Argument: I. In a discriminatory discharge suit brought under the Age Discrimination in Employment Act, the age of the replacement employee is not an element of the prima facie case under the McDonnell Douglas framework . . . . 9 II. Special considerations that may be applicable to cases involving reductions in force do not apply to this case . . . . 22 Conclusion . . . . 26 TABLE OF AUTHORITIES Cases: Alphin v. Sears, Roebuck & Co., 947 F.2d 1497 (llth Cir. 1991) . . . . 18 Barnes v. GenCorp, Inc., 896 F.2d 1457(6th Cir.), cert. denied, 498 U. S. 878(1990) . . . . 20 Bashara v. Black Hills Corp., 26 F.3d 820 (8th Cir. 1994) . . . . 22 Bell v. AT&T, 946 F.2d 1507 (10th Cir. 1991) . . . . 22 Chevron U.S.A. Inc. v. Natural Resources. Defense Council, Inc., 467 U.S. 837(1984) . . . . 11 Chippolini v. Spencer Gifts, Inc., 814 F.2d 893 (3d Cir.), cert. denied, 483 U.S. 1052 (1987) . . . . 13 Connecticut v. Teal, 457 U.S. 440 (1982) . . . . 17 Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544 (10th Cir. 1988) . . . . 20 Corbin v. Southland Int'1 Trucks, 25 F.3d 1545 (llth Cir. 1994) . . . . 20 Cuddy v. Carmen, 694 F.2d 853 (D.C. Cir. 1982) . . . . 19 (III) ---------------------------------------- Page Break ---------------------------------------- IV Cases-Continued: Page Cumpiano v. Banco Santander Puerto Rico, 902 F.2d 148 (lst Cir. 1980) . . . . 16, 19 Davenport v. Riverview Gardens School Dist., 30 F.3d 940 (8th Cir. 1994) . . . . 16 Douglas v. Anderson, 656 F.2d 528 (9th Cir. 1981) . . . . 18,20 EEOC v. Arabian American Oil Co., 499 U.S. 244 (1991) . . . . 11 EEOC v. Western Electric Co., 713 F.2d 1011 (4th Cir. 1983) . . . . 20, 22, 23 Freeman v. Packaging Machine Co., 865 F.2d 1331 (lst Cir. 1988) . . . . 18, 19 Furnco Construction Co. v. Waters, 438 US. 567 (1978) . . . . 13, 14, 15, 17,18, 20 Haskell v. Kamen Corp., 743 F.2d 113 (2d Cir. 1984) . . . . 19 Herold v. Hajoca Corp., 864 F.2d 317 (4th Cir. 1988), cert. denied, 490 U.S. 1107 (1989) . . . . 18, 25 International Bhd. of Teamsters v. United States, 431 U.S. 324 (1977) . . . . 14, 17 Jackson v. Richards Medical Co., 961 F.2d 575 (6th Cir. 1992) . . . . 16 Korbin v. University of Minnesota, 34 F.3d 698 (8th Cir. 1994) . . . . 16 Kralman v. Illinois Dep't of Veterans' Affairs, 23 F.3d 150 (7th Cir.), cert. denied, 115 S. Ct. 359 (1994) . . . . 10, 11,20 LaPointe v. United Autoworkers Local 600, 8 F.3d 376 (6th Cir. 1993) . . . . 20 Lee v. Russell Cty. Bd. of Educ., 684 F.2d 769 (llth Cir. 1982) . . . . 16 Lindsey v. Prive Corp., 987 F.2d 324 (5th Cir. 1993) . . . . 19 Loeb v. Textron, Inc., 600 F.2d 1003 (lst Cir. 1979) . . . . 13, 14, 15 Lorillard v. Pens, 434 U.S. 575 (1978) . . . . 13 ---------------------------------------- Page Break ---------------------------------------- V Cases-Continued: Page Lovelace v. Sherwin-Williams Co., 681 F.2d 230 (4th Cir. 1982) . . . . 13,20 Marshall v. Goodyear Tire & Rubber Co., 554 F.2d 730 (5th Cir. 1977) . . . . 20 Maxfield v. Sinclair Int'1, 766 F.2d 788 (3d Cir. 1985), cert. denied, 474 U.S. 1057 (1986) . . . . 12, 19,21 McCorstin v. United States Steel Corp., 621 F.2d 749 (5th Cir. 1980) . . . . 12, 21 McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) . . . . 2, 4, 13, 14, 23 Matthews v. Allis-Chalmers Corp., 769 F.2d 1215 (7th Cir. 1985) . . . . 22 McKennon v. Nashville Banner Pub. Co., l15 S. Ct.879 (1995) . . . . 13 Meiri v. Dacon, 759 F.2d 989(2d Cir. 1985) . . . . 16 Mitchell v. Data General Corp., 12 F.3d 1310 (4th Cir. 1993) . . . . 22 Notari v. Denver Water Dep't, 971 F.2d 585 (10th Cir. 1992) . . . . 16 Oxman v. WLS-TV, 846 F.2d 448 (7th Cir. 1988) . . . . 22, 23 Price v. Maryland Casualty Co., 561 F.2d 609 (5th Cir. 1977) . . . . 20 Rinehart v. City of Independence, 35 F.3d 1263 (8th Cir. 1994), cert. denied, 115 S. Ct. 1822 (1995) . . . . 20, 23 Roper v. Peabody Coal Co., 47 F.3d 925 (7th Cir. 1995) . . . . 22,24 Rush v. McDonald's Corp., 966 F.2d 1104 (7th Cir. 1992) . . . . 16 Schwager v. Sun Oil Co., 591 F.2d 58 (1Oth Cir. 1979) . . . . 13 Seman v. Coplay Cement Co., 26 F.3d 428 (3d Cir. 1994) . . . . 13 ---------------------------------------- Page Break ---------------------------------------- VI Cases-Continued: Page Shah v. General Elec. Co., 816 F.2d 264 (6th Cir. 1987) . . . . 22,24 Simpson v. Midland-Ross Corp., 823 F.2d 937 (6th Cir. 1987) . . . . 22 St. Mary's Honor Center v. Hicks, 113 S. Ct. 2742 (1993) . . . . 15, 16, 19, 21 Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248 (1981) . . . . 15, 20, 22 Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985) . . . . 13 Williams v. General Motors Corp., 656 F.2d 120 (5th Cir. 1981), cert. denied, 455 U.S. 943 (1982) . . . . 22, 23 Williams v. Williams Electronics, Inc., 856 F.2d 920 (7th Cir. 1988) . . . . 22 Statutes and regulation: Age Discrimination in Employment Act, 29 U.S.C. 621 et seq . . . . 1 29 U.S.C. 623(a)(l) . . . . 9 29 U.S.C. 628 . . . . 11 29 U.S.C. 631(a) . . . . 9 Civil Rights Act of 1964, Tit. VII, 42 U.S.C. 2000e et seq . . . . 1, 8, 11, 13, 14, 16 29 C.F.R. 1625.2(a) . . . . 11 Miscellaneous: 113 Gong. Rec. 31,255 (1967) . . . . 10-11 ---------------------------------------- Page Break ---------------------------------------- In the Supreme Court of the United States OCTOBER TERM, 1995 No. 95-354 JAMES O'CONNOR, PETITIONER v. CONSOLIDATED COIN CATERERS CORPORATION ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT BRIEF FOR THE UNITED STATES AND THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICI CURIAE SUPPORTING PETITIONER INTEREST OF THE UNITED STATES AND THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION The Equal Employment Opportunity Commission (EEOC) has primary responsibility for administering and enforcing the Age Discrimination in Employment Act (ADEA), 29 U.S.C. 621 et seq. The EEOC partici- pated as amicus curiae in this case in the court of appeals. In addition, the Attorney General and the EEOC share responsibility for enforcing Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., which prohibits discrimination in employment on the (1) ---------------------------------------- Page Break ---------------------------------------- 2 basis of race, sex, religion, or national origin. In litigation under both the ADEA and Title VII, courts use the order of proof and prima facie case framework set forth by this Court in McDonnell Douglas Corp. v. Gwen, 411 U.S. 792 (1973), the application of which is at issue in this case. The resolution of this case will affect the enforcement responsibilities of the Attorney General and the EEOC. STATEMENT 1. From 1986 to 1990, petitioner was employed as general manager of respondent's "4CS North" sales territory, covering northern North Carolina and southern Virginia. Pet. App. 3. Respondent operates cafeterias and vending machines. Id. at 2. In 1989, petitioner's immediate supervisor, Regional Vice President Ed Williams, gave him a performance rat- ing of "commendable minus" (i.e., slightly less than "commendable") and informed petitioner that he had earned the largest incentive bonus at the company that year. O'Connor Aff. "Par" 4. Later in 1989, respondent reorganized its sales territories. Petitioner, who was then 55 years old, agreed to assume control of respondent's "4CS South" territory, covering southern and western North Carolina and northern South Carolina, which had had financial problems. O'Connor Aff. "Par" 5; Pet. App. 3. Mike Kiser, who was 35 years old, took over peti- tioner's former position as manager of the 4Cs North area. Allen Hunter, age 57, remained the manager of the Greensboro/Raleigh, North Carolina, region, and Ted Finnell, age 40, remained in charge of the Greenville/Spartanburg, South Carolina, region. O'Connor Aff. "Par" 5; Pet. App. 3. ---------------------------------------- Page Break ---------------------------------------- 3 In the summer of 1990, Williams reassigned part of petitioner's 4Cs South territory to Mike Kiser, pur- portedly because petitioner was "slow" in responding to problem accounts. Pet. App. 3-4, At about the same time, Williams began making age-related remarks to and around petitioner. First, while watching a golf tournament on television in June, Williams com- mented to petitioner that petitioner was "too old" to play 18 holes of golf five days in a row. In July, during a discussion in petitioner's office, Williams told, petitioner, "O'Connor, you are too damn old for this kind of work." Finally, in early August, in petition- er's presence but in response to another employee's comment that he would soon be turning 50 years old, Williams remarked, "It's about-time we started to get some young blood in this company." Id. at 17-19. Two days after the last comment, petitioner was terminated. All of his territory was combined with the territory assigned to the 40-year-old Finnell and placed under Finnell's control. (In Finnell's most recent appraisal, made eight months earlier, Williams had given him a "competent minus" performance rat- ing, a lower rating than the "commendable minus" rating received by petitioner. O'Connor Aff. "Par" 10.) At the same time, the 57-year-old Hunter was demoted to a sales position, and all of his territory was combined with the territory assigned to the 35-year-old Kiser and placed under Kiser's management, Pet. App. 4-5. 2. Petitioner filed suit in the United States District Court for the Western District of North Carolina, alleging that he was fired because of his age, in violation of the ADEA. The district court granted summary judgment to respondent. Pet. App. 24-35. The court observed that an age discrimination plaintiff can prove a case of discrimination in at least ---------------------------------------- Page Break ---------------------------------------- 4 two ways: The plaintiff may rely on "direct or indi- rect evidence admissible under the rules of evidence" to demonstrate discrimination. Id. at 27. Alterna- tively, the plaintiff may rely on "the scheme of proof initially applied to Title VII `disparate treatment' cases and known as the McDonnell-Douglas proof scheme. * * * This scheme of proof favors the plaintiff initially by allowing him to rather easily establish a presumption of discrimination that, once established, compels the defendant-employer to dem- onstrate a legitimate, non-discriminatory reason for the unfavorable employment decision." Id. at 27-28 (citing, inter alia, McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). The court concluded that petitioner had failed to demonstrate unlawful discrimination under either method of proof. It read Fourth Circuit precedent to require, under the McDonnell Douglas proof scheme, that petitioner prove "four objective elements": (1) he was in the protected age group class under the Act at the time of the unfavorable employ- ment decision; (2) he was discharged; (3) at the time of his discharge, he was performing his job at a level that met his employer's legitimate ex- pectations; and (4) following the discharge, he was replaced by someone of comparable or lesser qual- ifications outside the protected class. Pet. App. 28. The court ruled that petitioner had failed to produce evidence of the fourth McDonnell Douglas element because his replacement, Finnell, was 40 years old, and was therefore within the class of persons protected by the ADEA. Therefore, it held, ---------------------------------------- Page Break ---------------------------------------- 5 petitioner "cannot rely on the McDonnell-Douglas proof scheme." Id. at 30.] The district court also concluded that petitioner could not withstand summary judgment using "traditional principles of proof." Pet. App. 30. It decided that petitioner's direct evidence of discrim- ination, the three age-related remarks by Williams, was not probative because there was no direct "nexus" between the remarks and the discharge. Id. at 31. It further concluded that petitioner's "in- direct," performance-related evidence, viz., his bonus and his recent receipt of an appraisal superior to Finnell's, was also not probative because the appraisals had been made eight to nine months before petitioner's discharge. Id. at 33-.34. 3. The court of appeals affirmed. Pet. App. 1-23. It concluded, as had the district court, that petitioner could not make out a prima facie case under McDonnell Douglas because his replacement was within the protected age group, albeit substantially younger than petitioner. Id. at 9-10. The court stated that "Fourth Circuit precedent has required a plain- ___________________(footnotes) 1 The district court also noted that, although the Fourth Circuit had indicated that the fourth McDonnell Douglas ele- ment "is not rigidly applicable" in cases involving a reduction in force, the court of appeals had stated that, "even in reduc- tion in force cases, the employee must demonstrate that the employer `did not treat age neutrally in its [employment decisions]'" to establish a prima facie case under McDonnell Douglas. Pet. App. 28 (citations omitted). The district court expressed doubt whether petitioner's discharge was the result " of a reduction in force (id. at 29), but it ruled that, even if it was, petitioner could not prevail because he had presented "no other evidence that [respondent] did not treat age neutrally in deciding to terminate him" (id. at 30), ---------------------------------------- Page Break ---------------------------------------- 6 tiff to demonstrate that his replacement was outside the protected class to satisfy [the fourth McDonnell Douglas] element," although it acknowledged con- trary authority in other circuits. Id. at 10 n.1. The court believed that, because petitioner "can point to his replacement[,] * * * this case is not properly characterized as a reduction-in-force suit ." Pet. App. 9. It nonetheless considered whether petitioner could make out a prima facie case under a "modified version of the McDonnell Douglas" scheme applicable to reductions in force, and decided that he could not. The court described the elements of the modified scheme as follows: (1) the employee was protected by the AREA; (2) he was selected. for discharge from a larger group of candidates; (3) he was performing at a level substantially equivalent to the lowest level of those of the group retained; and (4) the process of selection produced a residual work force of persons in the group[] [retained] containing some unprotected persons who were performing at a level lower than that at which he was performing. Pet. App. 11. The court concluded that petitioner could not satisfy either the third or the fourth element of the modified scheme, As to the third element, it reasoned that, notwithstanding petitioner's favorable perform- ance review in 1989 petitioner "was not performing well in August of 1990, at the time of his termin- ation." Pet. App. 13. And as to the fourth prong, it ruled that petitioner could not show that "persons outside the protected class were retained in the same position or that there was some evidence indicating that the employer did not treat age neutrally." Ibid. ---------------------------------------- Page Break ---------------------------------------- 7 The court believed that petitioner was "not compar- able to Kiser or Finnell since [petitioner's] territory was reduced prior to his termination due to his slow response to problem accounts." Id. at 13-14. Finally, the court of appeals affirmed the district court's decision that petitioner had not produced pro- bative direct evidence of discrimination. It found Williams's remarks to be "innocuous" (Pet. App. 17) and "inane" (id. at 19), amounting only to "stray com- ments that do not establish evidence of age discrim- ination" (ibid.). It also rejected petitioner's evidence based on differential performance reviews as "insuf- ficiently probative," in light of its earlier conclusion that petitioner and Finnell were not similarly situ- ated because petitioner's territory had been reduced. Ibid. Judge Butzner filed an opinion concurring in part and dissenting in part. Pet. App. 20-23. He "reluc- tantly" agreed that circuit precedent required peti- tioner to show that he was replaced by someone out- side the protected age group to satisfy the fourth element of the McDonnell Douglas prima facie case, although he stated that "[s]uch an absolute require- ment has no justification in law or policy." Id. at 21. He believed, however, that petitioner had produced sufficient direct evidence of discrimination to survive summary judgment. Id. at 22-23. SUMMARY OF ARGUMENT The Fourth Circuit erred in concluding that, to establish a prima facie case of age discrimination under McDonnell Douglas, petitioner was required to demonstrate that his replacement was not within the class of persons protected by the ADEA. "The ADEA prohibits age discrimination against "any individual" ---------------------------------------- Page Break ---------------------------------------- 8 age 40 or older, and that prohibition extends to age discrimination among individuals within the protec- ted age group. If the statute did not bar age discrim- ination among persons within the protected age group, it would offer little protection to senior-level employees whose jobs require experience, for even an employer seeking to discriminate against older work- ers would rarely replace such employees with some- one younger than 40. In a discharge case under the ADEA, a plaintiff should be able to make out a prima facie case by showing that he was within the protected age group, that he was discharged from a position for which he was qualified, and that the employer sought or obtained a replacement with similar qualifications. That showing eliminates the two most common non- discriminatory reasons for a discharge, lack of quali- fications in the applicant and lack of available work. It therefore raises an inference of discrimination, even if the plaintiff does not identify the age of the replacement, by presenting the court with the unex- plained termination of a qualified employee in the protected age group who performed a task for which the employer had a need. Such a showing therefore shifts to the employer the burden of articulating a legitimate, nondiscriminatory reason for the termin- ation. A similar approach has been applied in cases arising under Title VII of the Civil Rights Act of 1964. In cases involving reductions in force, where the employer no longer has a need for anyone to perform the discharged employee's functions, a plaintiff alleg- ing age discrimination may have to show that the employer retained younger employees to establish a prima facie ease. This is not a reduction-in-force ---------------------------------------- Page Break ---------------------------------------- 9 ease, however, for petitioner has shown that respond- ent continued to have a need for someone to fulfill the functions that he was performing before, he was fired. Furthermore, even in a reduction-in-force case, a plaintiff should have to show only that similarly qualified and younger employees were retained, not that employees younger than 40 were retained. Peti- tioner in this case has therefore established a prima facie case, and the district court should not have granted summary judgment to respondent. ARGUMENT I. IN A DISCRIMINATORY DISCHARGE SUIT BROUGHT UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THE AGE OF THE REPLACE- MENT EMPLOYEE IS NOT AN ELEMENT OF THE PRIMA FACIE CASE UNDER THE MCDONNELL DOUGLAS FRAMEWORK 1. The Age Discrimination in Employment Act (ADEA) provides, in part: It shall be 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. 29 U.S.C. 623(a)(l). A separate section of the ADEA further provides that "[t]he prohibitions in this chap- ter shall be limited to individuals who are at least 40 years of age." 29 U.S.C. 631(a). The protection against discrimination- afforded by the ADEA is thus limited to individuals "who are at least 40 years of age." 29 U.S.C. 631(a). Nothing in ---------------------------------------- Page Break ---------------------------------------- 10 the ADEA suggests, however, that an employer may discriminate against an older employee in favor of a younger one merely because the younger one is 40 years old. It is "hornbook law" that an ADEA action may be based on discrimination between older and younger members of the protected class. Kralman v. Illinois Dep't of Veterans' Affairs, 23 F.3d 150, 155 (7th Cir.), cert. denied, 115 S. Ct. 359 (1994). Indeed, respondent does not dispute that an ADEA plaintiff may rely on "an intra-protected-group age compari- son" to demonstrate unlawful age discrimination. See Resp. Br. in Opp. 9. The legislative history of the ADEA plainly indi- cates that Congress intended to prohibit age discrim- ination even when the favored younger employee is 40 years old. During the Senate's consideration of the ADEA, Senator Javits made that very point: Section 4 of the bill specifically prohibits discrimination against any "individual" because of his age. It does not say that the discrimination must be in favor of someone younger than age 40. In other words, if two individuals ages 52 and 42 apply for the same job and the employer selected the man age 42 solely * * * because he is younger than the man 52, then he will have violated the act. 113 Cong. Rec. 31,255 (1967). Senator Yarborough, the floor manager of the bill, agreed: It is not the intent of the sponsors of this legis- lation * * * to permit discrimination on account of age, whether discrimination might be attempted between a man of 38 and one 52 years of age, or between one 42 and one 52 years of age. If two men applied for employment under the terms of this ---------------------------------------- Page Break ---------------------------------------- 11 law, and one was 42 and one was 52, * * * [the employer] could not turn either down on the basis of the age factor. Ibid. Consistent with the language and legislative history of the statute, EEOC regulations bar discrim- ination within the protected age group. Under those regulations, "[i]t is unlawful * * * for an employer to discriminate in hiring or in any other way by giving preference because of age between individuals 40 and over. Thus, if two people apply for the same position, and one is 42 and the other 52, the employer may not lawfully turn down either one on the basis of age." 29 C.F.R. 1625.2(a). Because the EEOC is the agency charged with implementation of the ADEA, its interpretation is entitled to "great deference." Kralman, 23 F.3d at 155 (citing Chevron U. S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. - 837,844 (1984)); see 29 U.S.C. 628 (EEOC'S statutory authority to issue rules and regulations to implement ADEA). 2. It would be inconsistent with the policy of the ADEA to exclude employees who suffer age discrim- ination from the ADEA's protective reach merely because those who benefit from the discrimination are also protected by the Act. As the Third Circuit has ___________________(footnotes) 2 The EEOC'S statutory authority to issue regulations "nec- essary or appropriate for carrying out [the ADEA]," includ- ing regulations to establish "reasonable exemptions" from the ADEA (29 U.S.C. 628), distinguishes the ADEA from Title VII, for which the EEOC does not have "authority to promul- gate rules and regulations." EEOC v. Arabian American Oil Co., 499 U.S. 244, 257 (1991) (declining to accord deference to EEOC'S Guideline on extraterritorial application of Title VII). ---------------------------------------- Page Break ---------------------------------------- 12 noted, ''[i]f no intra-age group protection were provid- ed by the ADEA it would be of virtually no use to persons at the upper ages of the protected class whose jobs require experience since even an employer with clear anti-age animus would rarely replace them with someone under 40." Maxfield v. Sinclair Int`1, 766 F.2d 788,792 (3d Cir. 1985), cert. denied, 474 U.S. 1057 (1986). A rule limiting protection to those replaced by employees younger than 40 "fails to take the reality of the working place into account. Because of the value of experience; rarely are sixty-year-olds re- placed by those under forty. The replacement process is more subtle but just as injurious to the worker who has been discharged." McCorstin v. United States Steel Corp., 621 F.2d 749, 754 (5th Cir. 1980). Although an employer may rarely replace a 60-year- old with a 35-year-old, "the sixty-year-old will be replaced by a fifty-five-year-old, who, in turn, is suc- ceeded by a person in the forties[.] * * * Eventually, a person outside the protected class will be elevated but rarely to the position of the one fired." Ibid. 2. a. The ADEA therefore unquestionably prohibits discrimination against individuals who are 40 years old or older, on the basis of age, even when that dis- crimination favors someone who is also 40 years old or older. This case presents the question whether the same conclusion applies to the establishment of a prima facie of age discrimination-whether an age discrimination plaintiff is precluded from establishing a prima facie case under the McDonnell Douglas framework simply because the beneficiary of the discrimination is 40 years old, In our view, the fact that the replacement worker is 40 years old or older ---------------------------------------- Page Break ---------------------------------------- 13 should not prevent a plaintiff from establishing such a prima facie case. 3. The question presented in this case must be considered in light of the purpose of the burden- shifting framework articulated in McDonnell Douglas. The Court designed that framework as "a sensible, orderly way to evaluate the evidence in light of common experience as it bears on the critical question of discrimination." Furnco Construction Corp. v. Waters, 438 U.S. 567, 577 (1978). Because plaintiffs rarely can demonstrate an employer's dis- criminatory intent directly, "[t]he shifting burdens of proof set-forth in McDonnell Douglas are designed to assure that the 'plaintiff [has] his day in court despite the unavailability of direct evidence.'" Tram World Airlines, Inc. v. Thurston, 469 U.S. 111, 121 (1985) ___________________(footnotes) 3 See McDonnell Douglas Corp. v. Green, 411 U.S 792, 802 (1973) (setting out elements of prima facie case of discrim- inatory failure to hire under Title VII of Civil Rights Act of 1964). Although this Court has never decided whether the McDonnell Douglas framework applies to litigation under the ADEA, every court of appeals that has considered the issue has held that it does, and we are not aware of any contrary decision. E.g., Seman v. Coplay Cement CO., 26 F.3d 428, 432 & n.7 (3d Cir. 1994); Lovelace v. Sherwin-Williams Co., 681 F.2d 230, 239 n.8 (4th Cir. 1982); Loeb v. Textron, Inc., 600 F.2d- 1003, 1012-1017 (lst Cir. 1979); Schwager v. Sun Oil Co., 591 F.2d 58, 60-61 (lOth Cir. 1979). Since, Title VII and the ADEA share a common purpose-elimination of discrimination in the work place (see McKennon v. Nashville Banner Pub. CO.,115 S. Ct 879, 884 (1995))-and since many of "the prohibitions of the ADEA were derived in haec verba from Title VII" (Lorillard v. Pens, 434 U.S. 576, 584 (1978)), it is especially appropriate to apply the McDonnell Douglas proof scheme to cases arising under the ADEA. ---------------------------------------- Page Break ---------------------------------------- 14 (quoting Loeb v. Textron, Inc., 600 F.2d 1003, 1014 (lst Cir. 1979)). McDonnell Douglas allows the plaintiff to establish a prima face case of discrimination "by showing (i) that he belongs to a racial minority; (ii) that he applied and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his qualifications, he was rejected, and (iv) that, after his rejection, the position remained open and the em- ployer continued to seek applicants from persons of [the plaintiff's] qualifications." 411 U.S. at 802. That formulation of the prima facie case reflects the Court's recognition that "the two most common legit- imate reasons on which an employer might rely to reject a job applicant" are "absolute or relative lack of qualifications [and] the absence of a vacancy in the job sought." International Bhd. of Teamsters v. United States, 431 U.S. 324, 358 n.44 (1977). The McDonnell Douglas formulation allows the plaintiff to show that those defenses are not at issue in the case by demonstrating that there was a position to be filled for which he was qualified. If the plaintiff makes that showing, then the unexplained failure to hire (or termination of) an applicant or employee who is quali- fied to perform a task that the employer needs to have done gives rise to au inference of unlawful discrim- ination. 4. As the Court in Furnco explained: ___________________(footnotes) 4 "The prima facie case described in McDonnell Douglas did not include proof that some person outside the protected class was hired in complainant's place. Rather the prima facie case there described is based on the notion that, by ruling out the more obvious job-related reasons for not hiring him, a Title VII complainant can create an inference of some tainted reason, i.e., some discriminatory reason, sufficient to require the ---------------------------------------- Page Break ---------------------------------------- 15 A prima facie case under McDonnell Douglas raises an inference of discrimination only be- cause we presume these acts, if otherwise unexplained, are more likely than not based on the consideration of impermissible factors. And we are willing to presume this largely because we know from our experience that more often than not people do not act in a totally arbitrary manner, without any underlying reasons, es- pecially in a business setting. Thus, when all legitimate reasons for rejecting an applicant have been eliminated as possible reasons for the employer's actions, it is more likely than not the employer, who we generally assume acts. only with some reason, based his decision on an impermissible consideration such as race. 438 U.S. at 577 (citation omitted). Establishment of a prima facie case under McDonnell Douglas does not compel a finding of discrimination; it merely shifts to the employer the burden of producing evidence of a non-discriminatory reason or reasons for the personnel action. "Estab- lishment of the prima facie case in effect creates a presumption that the employer unlawfully discrim- inated against the employee," Texas Dep't of Com- munity Affairs v. Burdine, 450 U.S. 248, 254 (1981), and that presumption "places upon the defendant. the burden of producing an explanation to rebut the prima facie case," St. Mary's Honor Center v. Hicks, 113 S. Ct. 2742, 2747 (1993). If the defendant meets its burden of production on rebuttal, then "[t]he presump- tion, having fulfilled its role of forcing the defendant ___________________(footnotes) employer to articulate a legitimate reason for the complainant's rejection." Loeb, 600 F.2d at 1013. ---------------------------------------- Page Break ---------------------------------------- 16 to come forward with some response, simply drops out of the picture" and "the trier of fact proceeds to de- cide the ultimate question: [w]hether plaintiff has proven `that the defendant intentionally discriminated against [him.]' " Id. at 2749. b. In the context of Title VII litigation, the prevail- ing view in the courts of appeals is that a plaintiff is not prevented from establishing a prima facie ease by the fact that the person hired instead of the plaintiff or chosen to replace. the plaintiff is a member of the same minority group as is "the plaintiff, or has the same gender as the plaintiff. 5. This view permits a plaintiff who is a member of a minority group or a woman to establish a prima facie case, and thus to raise an inference that he or she was the victim of prohibited discriminatory treatment, even though another person of the same minority group or gender might have escaped such treatment by the same ___________________(footnotes) 5 See Davenport v. Riverview Gardens School Dist., 30 F.3d 940, 944-945 (8th Cir. 1994); Rush v. McDonald's Corp., 966 F.2d 1104, 1114 (7th Cir. 1992); Jackson v. Richards Medical Co., 961 F.2d 575, 587 n.12 (6th Cir. 1992); Cumpiano v. Banco Santander Puerto Rico, 902 F.2d 148 (1st. Cir. 1990); Meiri v. Dacon, 759 F.2d 989, 995-996 (2d Cir. 1985), There is language in other decisions suggesting that the characteristics of the replacement are part of the prima facie case, but in none of those decisions was the issue squarely presented. See Korbin v. University of Minnesota, 34 F.3d 698, 702 (8th (Cir. 1994); Notari v. Denver Water Dep't, 971 F.2d 585, 590 (10th Cir. 1992); Lee v. Russell Cty. Bd. of Educ., 684 F.2d 769, 775 n.11 (llth Cir. 1982). In Hicks, 113 S. Ct. at 2747, this Court noted that the respondent, a black man, had established a prima facie case by showing (among other things) that he was replaced by a white man, but the Court did not hold there that the race of the replacement was part of the prima facie case. See id. at 2758 n.1 (Souter, J., dissenting). ---------------------------------------- Page Break ---------------------------------------- 17 employer. As the Court stressed in Connecticut v. Teal, 457 U.S. 440, 455 (1982), "Congress never in- tended to give an employer license to discriminate against some employees on the basis of race or sex merely because he favorably treats other members of the employees' group. * * * Title VII does not permit the victim of a facially discriminatory policy to be told that he has not been wronged because other persons of his or her race or sex were hired." See also Teamsters v. United States, 431 U.S. at 342." The lower courts' conclusion that a plaintiff should not be precluded from establishing a prima facie case even when the hired employee is a member of the same minority group reflects a realistic view of the nature of discrimination in the workplace. There are some situations in which an employer might discrim- inate on the basis of (for example) race by refusing to hire a black person, even if another black person is ultimately hired for the same or a similar position. An employer engaging in racial discrimination might hire a few members of racial minority groups to ward off discrimination suits, or might reassign a few minority employees to conceal discrimination. Or an employer might discourage blacks from applying for certain positions through rejection of some black applicants and delay in filling the positions. Such actions would constitute prohibited discrimination, even if the persons eventually chosen to fill the positions were black. The last fact pattern is, indeed, very similar to the facts of Furnco, in which three qualified black applicants for open bricklaying positions were initial- ly rejected, but one of the three was subsequently hired, along with six other black bricklayers. 438 U.S. at 570. The Court agreed with the respondents ---------------------------------------- Page Break ---------------------------------------- 18 in that case that they had established a prima facie case under McDonnell Douglas: "[T]hey were mem- bers of a racial minority; they did everything within their power to apply for employment; Furnco has conceded that they were qualified in every respect for the jobs which were about to be open they were not offered employment, although Smith later was; and the employer continued to seek persons of similar qualifications." Id. at 576. c. These considerations apply with equal force to cases brought under the ADEA. As in the Title VII context, a correct understanding of the function of the McDonnell Douglas framework leads to the conclusion that the characteristics of the replace- ment employee are not an element of the plaintiff's prima facie case. 6. By establishing that he or she fell within the class of persons protected by the ADEA, had the qualifications for a position that the employer needed to fill, and nonetheless was rejected by the employer, an ADEA plaintiff presents the court with an unexplained adverse personnel action and raises an inference of discrimination. The age of the replace- ment employee maybe relevant at a later stage of the ___________________(footnotes) 6 See Freeman v. Packaging Machine Co., 865 F.2d 1331, 1335 n.1 (lst Cir. 1988); Douglas v. Anderson, 656 F.2d 528, 532 (9th Cir. 1981). See also Alphin v. Sears, Roebuck & Co., 940 F.2d 1497, 1501 (llth Cir. 1991) (noting that plaintiff's evidence suggested that he was replaced by someone older "as part of a strategy to eliminate two employees from the protected group"); Herold v. Hajoca Corp., 864 F.2d 317, 320 (4th Cir. 1988) (holding that prima facie case of age discrimination was established even though employer had assigned plaintiff's job duties to an even older worker), cert. denied, 490 U.S. 1107 (1989). ---------------------------------------- Page Break ---------------------------------------- 19 proceedings, but it should not affect the plaintiff's prima facie case. 7. Moreover, the Fourth Circuit's rule, requiring a replacement from outside the protected class as a necessary element of a prima facie case in all cases, is wholly illogical. Under that rule, a 45-year-old plain- tiff who was fired and replaced by a 39-year-old could establish a prima facie case, whereas a 65-year-old plaintiff replaced by a 40-year-old could not, even though the inference, of age bias based on the difference in. ages is much stronger in the second case than in the first. Every court of appeals other than the Fourth Circuit has therefore held that, at a minimum, a plaintiff should be able to make out a prima facie case under the ADEA if (in addition to the other elements of the McDonnell Douglas frame- work) he or she is replaced by a younger employee, irrespective of whether that replacement is older or younger than 40.8 ___________________(footnotes) 7 The replacement of an employee in the protected age group with another employee at least 40 years old may be relevant to demonstrate the lack of discriminatory intent on the part of the employer. See Hicks, 113 S. Ct. at 2753-2754 (once the defendant satisfies its burden of production of a nondiscriminatory reason for its action, the presumption of discrimination disappears, and the trier of fact must then decide "whether the defendant intentionally discriminated against the plaintiff "); see also Cumpiano v. Bunco Santander Puerto Rico, 902 F.2d 148, 155 (lst Cir. 1990) (noting that "the attributes of a successor employee may have evidentiary force in a particular case"). 8 See Cuddy v. Carmen, 694 F.2d 853, 857 (D.C. Cir. 1982); Freeman v. Package Machinery Co., 865 F.2d 1331, 1335 n.2 (lst Cir. 1988); Haskell v. Kamen Corp., 743 F.2d 113, 119 n.1 (2d Cir. 1984); Maxfield, supra, 766 F.2d at 791-792 (3d Cir.); Lindsey v. Prive Corp., 987 F.2d 324, 326-327 (5th Cir. 1993); ---------------------------------------- Page Break ---------------------------------------- 20 A rigid under-age-40 requirement not only lacks logic and common sense, it would run counter to the Court's admonitions that the McDonnell Douglas framework is not "rigid, mechanized or ritualistic" (Furnco, 438 U.S. at 577; Burdine, 450 U.S. at 253 n.6), and that the burden of establishing a prima facie case is "not onerous" (id. at 255). A "Procrustean limitation" restricting the ability to establish a prima facie case to situations in which the replacement is younger than 40 would preclude many older, more experienced employees with meritorious claims from relying on the McDonnell Douglas framework, simp- ___________________(footnotes) Barnes v. GenCorp, Inc., 896 F.2d 1457, 1465 n.9 (6th Cir.), cert. denied, 498 U.S. 878 (1990); Kralman, supra, 23 F.3d at 153-156 (7th Cir.); Rinehart v. City of Independence, 35 F.3d 1263, 1265-1266 (8th Cir. 1994), cert. denied, 115 S. Ct. 1822 (1995); Douglas v. Anderson, 656 F.2d 528, 532-533 (9th Cir. 1981); Cooper v. Asplundh Tree Expert Co., 836 F.2d 1544, 1547 (lOth Cir. 1988); Corbin v. Southland Int'1 Trucks, 25 F.3d 1545, 1549 (11th Cir. 1994). But see .LaPointe v. United Autoworkers Local 600, 8 F.3d 376, 379 (6th Cir. 1993) (seemingly requiring replacement from outside the protected class); Price v. Maryland Casualty Co., 561 F.2d 6091 612 (5th Cir. 1977) (same). The Fourth Circuit's adoption of the "under-age-40" requirement may have been inadvertent. That court first stated that a replacement from outside the protect- ed class was required in EEOC v. Western Electric Co., 713 F.2d 1011, 1014 (4th Cir. 1983), where it cited Lovelace v. Sherwin-Williams Co., 681 F.2d 230 (4th Cir. 1982), for its formulation of the prima facie case. Lovelace in fact rejected an under-age-40 requirement. See id. at 237-238 n.5, 242 n.13. The Western Electric court also cited Marshall V. Goodyear Tire & Rubber Co., 554 F.2d 730 (5th Cir. 1977), but that decision held only that a prima facie case was established when the plaintiff was replaced by someone outside the protected group (id. at 736); it did not hold that replacement by one younger than 40 was essential. ---------------------------------------- Page Break ---------------------------------------- 21 ly because their replacement was age 40 or 41 (rather than 38 or 39), even though that fact alone does not remove the inference of discrimination. See McCorstin, 621 F.2d at 753. There is simply "no reason to engraft [an under-age-40] requirement on to the law." Maxfield, 766 F.2d at 792. 9. It also bears emphasis that, whereas the burden of establishing a prima facie case under McDonnell Douglas is not heavy, the employer's burden of production in rebuttal to that prima facie case is also light, for at the rebuttal stage, the defendant "need not persuade the court that it was actually motivated by the proffered reasons." Hicks, 113 S. Ct. at 2749. The defendant need only " `set forth, through the introduction of admissible evidence,' reasons for its actions which, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the employment action." Id. at 2747 (emphasis omitted). When combined with the evidence produced to establish plaintiff's prima facie case, the employer's proffered reasons for the adverse per- sonnel action and the identity of the replacement employee will "frame the factual issue with sufficient ___________________(footnotes) 9 The inappropriateness of the Fourth Circuit's require- ment is apparent from the facts of this case. Because Hunter's district was assigned to Kiser (age 35), Hunter (age 57) would be able to establish a prima facie case of discrimination based on his demotion, whereas petitioner (age 55), although fired on the same day during the same reorganization, cannot because his replacement was age 40-even though the age difference between the displaced and retained employees is similar in both instances. Petitioner could, however, have established a prima facie case if the reorganization had occurred the previous year, before Finnell turned 40, or if his district had gone to Kiser instead of to Finnell. ---------------------------------------- Page Break ---------------------------------------- 22 clarity so that the plaintiff will have a full and fair opportunity to demonstrate pretext," Burdine, 450 U.S. at 255-256, and the trier of fact can make an informed credibility determination. The Fourth Circuit's rule, on the other hand, would arbitrarily preclude any use of the McDonnell Douglas frame- work in ADEA cases simply because the hired or retained employee is at least 40 years old. II. SPECIAL CONSIDERATIONS THAT MAY BE APPLICABLE TO CASES INVOLVING REDUC- TIONS IN FORCE DO NOT APPLY TO THIS CASE In several cases, lower courts have struggled with the application of the McDonnell Douglas proof scheme to employers' large-scale reductions in force, such as reductions caused by plant closings. 10. The difficulty in applying McDonnell Douglas to reduc- tions in force stems from the fact that, when the workforce is reduced, the employer has often deter- mined for wholly nondiscriminatory reasons that it no longer has an economic need for the functions that ___________________(footnotes) 10 See, e.g., Roper v. Peabody Coal Co., 47 F.3d 925, 927 (7th Cir. 1995) (ADEA); Bashara v. Black Hills Corp., 26 F.3d 820, 823 (8th Cir. 1994) (ADEA); Mitchell v. Data General Corp., 12 F.3d 1310, 1315 (4th Cir. 1993) (ADEA); Bell v. AT&T, 946 F.2d 1507, 1590-1511 (10th Cir. 1991) (Title VII); Williams v. Williams Electronics, Inc., 856 F.2d 920, 922-923 (7th Cir. 1988) (Title VII); Oxman v. WLS-TV, 846 F.2d 448, 453-456 (7th Cir. 1988) (ADEA); Simpson v. Midland-Ross Corp., 823 F.2d 537, 941 (6th Cir. 1987) (ADEA); Shah v. General Elec. Co., 816 F.2d 264, 267-271 (6th Cir. 1987) (Title VII); Matthews v. Allis- Chalmers Corp., 769 F.2d 1215, 1217 (7th Cir. 1985), overruled in part by Oxman, supra; id. at 1221-1224 (Flaum, J., con- curring) (ADEA); Western Electric, 713 F.2d at 1014-1015 (ADEA); Williams v. General Motors Corp., 656 F.2d 120, 129- 131 (5th Cir. 1981) (ADEA), cert. denied, 455 U.S. 943 (1982). ---------------------------------------- Page Break ---------------------------------------- 23 the plaintiff was performing. 11. In such cases, it cannot be said, in the language of McDonnell Douglas, that, after the plaintiffs discharge, "the position remained open and the employer continued to seek applicants from persons of [the plaintiffs] qualifications." 411 U.S. at 802. When a position has been eliminated for economic reasons, it is possible to conclude that "the fact that a protected employee who was performing his job well was fired cannot, by itself, trigger a presumption of discrimination." Oxman v. WLS-TV, 846 F.2d 448, 454 (7th Cir. 1988). Consequently, some courts have concluded that, in cases involving reductions in force, plaintiffs should be required to produce some other evidence, "circum- stantial or direct, from which a fact finder might conclude that the employer intended to discriminate in reaching the decision at issue," in order to establish a prima facie case. 12. In many cases, that requirement will effectively mean that the plaintiff must show how other employees were treated by the employer during the reduction of the work force. The plaintiff might, for example, raise an inference of discrimination by producing evidence that the employer laid off qualified black, female, or older ___________________(footnotes) 11 Thus, in such cases, "the employer's reason for discharg- ing the plaintiff is not `otherwise unexplained.' The reduction- in-force is [itself] an objective, legitimate explanation of the employer's action which the plaintiff does not call into question by establishing a prima facie case under the regular stand- ards." Rinehart, 35 F.3d at 1268. 12 Williams V. General Motors Corp., 656 F.2d at 129; see also Oxman, 846 F.2d at 454 ("an additional showing that creates an inference of discrimination"); Western Electric, 713 F.2d at 1015. ("some other evidence that the employer did not treat age neutrally"). ---------------------------------------- Page Break ---------------------------------------- 24 employees but retained similarly qualified white, male, or younger ones. See,. e.g., Shah. v. General Elec. Co., 816 F.2d 264, 268-269 (6th Cir. 1987). Those considerations do not apply here, since, as the court of appeals observed (Pet. App. 9-10), this case does not involve a reduction in force. Although respondent eliminated a few positions from its work- force, it did not cease to have a need for someone to perform the managerial functions that petitioner had been assigned. "Thus, the 'jobs' were consolidated but the task remained the same; each individual [employ- ee] merely had to work harder to perform that. same task." Shah, 816 F.2d at 269. The reason given for modifying the McDonnell Douglas formulation in reduction-in-force cases is therefore absent here, and the situation is more accurately analyzed as one in which Finnell replaced petitioner, or one in which both Finnell and petitioner were considered for a new position for which both were qualified, Even if considerations applicable to reduction-in- force cases were pertinent here, petitioner should not be precluded from making a prima facie case merely because Finnell, his replacement, was age 40. The differential treatment between petitioner and the much younger Finnell is sufficient to raise an infer- ence of age discrimination, even if Finnell's age is deemed relevant to the existence of a prima facie case. See Roper v. Peabody Coal Co., 47 F.3d 925, 927 (7th Cir. 1995). Although petitioner might not be able to make out a prima facie case of age discrimination if all of the retained comparable employees were the same age as he or older, that is not the situation in this case, in which the favored employee was substantially younger than petitioner. Petitioner therefore estab- lished a prima facie case of age discrimination, and ---------------------------------------- Page Break ---------------------------------------- 25 the district court should not have granted summary judgment to respondent. 13. ___________________(footnotes) 13 Moreover, if this were a reduction-in-force case, it would be appropriate to compare petitioner with Kiser, who was per- forming a similar function, who was retained, and who was younger than 40. That comparison would establish a prima facie case under any formulation of McDonnell Douglas applic- able to reductions in force, for petitioner "was dismissed while younger workers, at least one of whom was under 40 and was therefore outside the ADEA-protected class, were retained." Herold, 864 F.2d at 320. The court of appeals did not hold that petitioner was precluded from establishilng a prima facie case under standards applicable to reductions in force solely because Finnell was age 40. The court of appeals stated that petitioner had not made out a prima facie case because he had not shown that "he was working up to expectations" (Pet. App. 13) and because Willimans's decision to retain Kiser and Finnell, rather than petitioner, was based on "Kiser and Finnell's ability to handle an enlarged geographic territory" (id. at 14). We believe that both bases for the court of appeals' conclusion are erroneous. The factors discussed by the court of appeals are relevant in considering whether respondent rebutted petitioner's showing, not whether petitioner established a prima facie case. Peti- tioner's evidence of his performance review and bonus was sufficient to establish that he was qualified, for the purpose of making out a prima facie case. Neither court below evaluated the strength of respondent's rebuttal case, however, since both courts incorrectly ruled that petitioner had failed to establish a prima facie case. ---------------------------------------- Page Break ---------------------------------------- 26 CONCLUSION The judgment of the court of appeals should be reversed, and the case should be remanded for further proceedings. Respectfully submitted. DREW S. DAYS, III Solicitor General C. GREGORY STEWART General Counsel GWENDOLYN YOUNG REAMS Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel ROBERT J. GREGORY BARBARA L. SLOAN Attorneys Equal Employment Opportunity Commision DEVAL L. PATRICK Assistant Attorney General PAUL BENDER Deputy Solicitor General PAUL R.Q. WOLFSON Assistant to the Solicitor General DECEMBER 1995