Kennedy v. McDonald

Filing 133

OPINION AND ORDER re availability of business necessity defense under the ADEA. Signed by Honorable Margaret B Seymour on 7/30/2018. (mdea )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION

Richard M. Kennedy, III,

)
)
Plaintiff,
)
)
v.
)
)
David J. Shulkin, in his official capacity
)
as Secretary of the U.S. Department of
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Veterans Affairs,
)
)
Defendant.
)
__________________________________________)

C/A No. 3:15-cv-1844-MBS

OPINION AND ORDER

Plaintiff Richard M. Kennedy, III is a staff anesthesiologist employed at the William
Jennings Bryan Dorn Veterans Affairs Medical Center (hereinafter “Dorn Medical Center”) in
Columbia, South Carolina. On April 30, 2015, Plaintiff filed this action against Defendant David
J. Shulkin, in his official capacity as Secretary of the United States Department of Veterans Affairs
(“VA”), alleging claims under the Age Discrimination in Employment Act (hereinafter “ADEA”),
29 U.S.C. § 623. Plaintiff brings this action under the federal-sector provision of the ADEA, 29
U.S.C. § 633a, which extends the ADEA to federal employees over the age of forty. 1 In the court’s
prior order dated March 29, 2017 (the “March order”), the court concluded that sovereign
immunity has been waived as to disparate impact claims under the ADEA’s federal-sector
provision. ECF No. 81. 2 This matter is now before the court as to the availability of the reasonable
factors other than age (“RFOA”) affirmative defense to Defendant as a federal-sector employer.
Both parties submitted pretrial briefs for the court’s consideration.

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The federal sector provision of the ADEA provides that “all personnel actions affecting employees or
applicants for employment who are at least 40 years old of age . . . shall be made free from any
discrimination based on age.” 29 U.S.C. § 633a.
2
Plaintiff’s other causes of action have been abandoned or disposed of. ECF Nos. 81, 114.

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I.

STATEMENT OF THE CASE

A detailed recitation of this matter’s relevant factual and procedural background can be
found in the court’s March order. ECF No. 81. Summarily, Plaintiff alleges that Dorn Medical
Center has engaged in a pattern of age discrimination in determining the market pay for
anesthesiologists employed at the Medical Center. ECF No. 102, Amended Complaint. Plaintiff
claims that “although [Dorn Medical Center’s practices and policies are] facially neutral in their
treatment of staff anesthesiologists, their impact falls more harshly on older staff anesthesiologists,
including [Plaintiff].” Id. at ¶ 39. Plaintiff seeks damages against Defendant in the form of back
pay, future pay, lost retirement benefits and other benefits, consequential damages, attorney’s fees,
and costs. Id. ¶ 42.
II.

DISCUSSION

The RFOA defense provides that, “[i]t shall not be unlawful for an employer, employment
agency, or labor organization . . . to take any action otherwise prohibited under subsection (a)(b)(c),
or (e) of this section where age is a bona fide occupational qualification reasonably necessary to
the normal operation of the particular business, or where the differentiation is based on reasonable
factors other than age, . . . compliance with such subsections would cause such employer, or a
corporation controlled by such employer, to violate the laws of the county in which such workplace
is located.” 29 U.S.C. § 623(f)(1). Congress included the RFOA defense under the ADEA’s
private-sector provision, but not in the ADEA’s federal-sector provision. See 29 U.S.C. § 623
(private sector provision), 29 U.S.C. § 633a (federal sector provision). The question before the
court is whether Defendant as a federal-sector employer may assert the RFOA defense against
Plaintiff’s disparate impact claim under the ADEA federal-sector provision.

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A. Parties’ Arguments
Plaintiff argues that “Congress intended exactly what it expressed and what it excluded –
per the non-incorporation provision of § 633a(f) – from the statutory language of the federal-sector
provision.” (Plaintiff’s Supplemental Trial Brief at pg. 3). In other words, Plaintiff asserts that
while § 633a has been interpreted to allow him to bring a disparate impact claim, the statutory
language cannot similarly be construed to incorporate the RFOA affirmative defense. Plaintiff
contends that “[i]f consequently, there is no defense to the broad prohibition of age discrimination
in federal employment, particularly regarding discrimination in compensation, that is an issue for
Congress to address.” Id.
Defendant argues, as it has throughout this litigation, that the RFOA defense is related to
the issue of subject matter jurisdiction. (Defendant’s Updated Trial Brief p. 3). Defendant asserts
that the absence of the RFOA provision under the ADEA’s federal sector provision is evidence
that Congress never intended for the federal government to be subject to disparate impact claims.
Id. at 4. Alternatively, Defendant contends, that if the matter proceeds to trial based on the court’s
prior determination that Defendant has waived sovereign immunity, the federal government should
be able to assert the RFOA defense. Id. at 4-5.
For the reasons set forth below, the court disagrees with both positions.
B. Court’s Analysis
Neither the Supreme Court nor the Court of Appeals for the Fourth Circuit has addressed
the issue of whether the RFOA defense is applicable to the ADEA’s federal-sector provision. In
Gomez-Perez v. Potter, 553 U.S. 474 (2008), upon which the court relied to establish the viability
of disparate impact claims in federal-sector ADEA litigation, the Supreme Court observed that
“the ADEA federal-sector provision was patterned ‘directly after’ Title VII’s federal-sector

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discrimination ban.” Id. at 487. The Supreme Court explained that “like the ADEA’s federal-sector
provision, Title VII’s federal-sector provision contains a broad prohibition of ‘discrimination,’
rather than a list of specific prohibited practices.” Id. (comparing 42 U.S.C. § 2000e-16(a),
“personnel actions affecting federal employees ‘shall be made free from any discrimination based
on race, color, religion, sex, or national origin,” with 29 U.S.C. § 633a(a) “personnel actions
affecting federal employees who are at least 40 years of age ‘shall be made free from any
discrimination based on age’”). Utilizing analogous cases from Title VII federal-sector
discrimination claims, the Supreme Court recognized the availability of retaliation claims under §
633a. Likewise in this case, the court adopted the Magistrate Judge’s reliance on Smith v. City of
Jackson, 544 U.S. 228 (2005), noting the similarities between Title VII and the ADEA to establish
the cognizability of ADEA federal-sector disparate impact claims. See ECF Nos. 67, 81.
The federal-sector provisions of the ADEA have been construed as self-contained
provisions and “shall not be subject to, or affected by, any provision of this chapter, other than the
provisions of sections 626(d)(3) 3 and 631(b), 4” which are not relevant here. See 29 U.S.C. §

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Recordkeeping, Investigation, and Enforcement, 29 U.S.C. § 626(d)(3) provides that “for purposes of this
section, an unlawful practice occurs, with respect to discrimination in compensation in violation of this
chapter, when a discriminatory compensation decision or other practice is adopted, when a person becomes
subject to a discriminatory compensation decision or other practice, or when a person is affected by
application of a discriminatory compensation decision or other practice, including each time wages,
benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.”
The court adopted the Magistrate Judge’s Report and Recommendation analyzing § 626(d)(3) in this case.
See ECF No. 67 at 23 (noting that “while there is no question that federal-sector ADEA now expressly
includes § 626(d)(3) – a section relating to compensation discrimination – it does not automatically follow
that such a section adds any additional substantive avenue of relief.” ECF No. 67 at 23 (citing Lilly
Ledbetter Fair Pay Act of 2009. PL. 111-2, Jan. 29, 2009, 123 Stat. 5.). The Magistrate Judge noted that §
626(d)(3), “rather than create a new substantive cause of action, the Lilly Ledbetter Act clarified limitations
issues as to compensation claims by setting out when an unlawful practice is considered to have ‘occurred.’”
Id. at 23 (citing to Rodriguez-Torres v. Gov’t Dev. Bank of Puerto Rico, 704 F. Supp. 2d 81, 96 n.6 (D.P.R.
2010) (holding that “the [Ledbetter] Act does not create substantive rights, but instead clarifies the point of
commencement of the statute of limitations in instances of wage discrimination”); see also Jones v.
Richland Cnty., C/A No. 3:16-cv-0466-MBS, 2016 WL 5402862, at *2 (noting that “Lilly Ledbetter Act
does not provide a substantive cause of action, but simply amends Title VII”).

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633a(f). Consequently, the RFOA defense cannot be incorporated into the federal-sector ADEA
claim. However, the Gomez-Perez analysis compels the conclusion that affirmative defenses
available to the federal government under Title VII should also be available to the federal
government in ADEA discrimination claims.
The court in Figueroa v. Tillerson, 289 F. Supp. 3d 212, 220 (D.D.C. 2018), set forth the
standard for disparate impact claims and defenses under Title VII’s federal-sector provision. See
also Watson v. Fort Worth Bank and Trust, 487 U.S. 977, 994-98 (1988) (citing Griggs v. Duke
Power Co., 401 U.S. 424, 432 (1971)). The Figueroa court explained that “evidence of
discriminatory intent or illicit motive is not required to make out a claim for disparate impact.” Id.
at 220 (citing Segar v. Smith, 738 F.2d 1249, 1266 (D.C. Cir. 1984)). The Figueroa court found
that “a plaintiff must generally ‘demonstrate with statistical evidence that the [challenged] practice
or policy has an adverse effect on the protected group.”’ Id. (citing Greater New Orleans Fair
Hous. Action Ctr. v. U.S. Dep’t of Hous. & Urban Dev., 639 F.3d 1078, 1086 (D.C. Cir. 2011)).
The court further explained that “if the plaintiff meets that burden, then the burden shifts to the
defendant to ‘demonstrate that the challenged practice is job related for the position in question
and consistent with business necessity . . . [s]hould that burden be met, the plaintiff must then
‘demonstrate that an alternative employment practice could meet the employer’s legitimate needs
without a similar discriminatory effect.’” Figueroa, 289 F. Supp. 3d at 220; see also Anderson v.
Duncan, 20 F. Supp. 3d 42 (D.D.C. Sept. 30, 2013) (concluding that while “the Secretary would
not have access to an RFOA defense, [it] might be able to utilize the business necessity defense as
conceptualized by Wards Cove Packing v. Atonio, 490 U.S. 642 (1989), i.e., a defense in which

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Age Limits, 29 U.S.C. § 631(b) provides, “in the case of any personnel action affecting employees or
applicants for employment which is subject to the provisions of section 633a of this title, the prohibitions
established in section 633a of this title shall be limited to individuals who are at least 40 years old.”

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‘the employer carries the burden of producing evidence of a business justification for his
employment practice but the burden of persuasion remains with the disparate-impact plaintiff.”);
Abdus-Shahid v. Mayor and City of Council of Baltimore, 674 F. App’x 267, 273 (4th Cir. 2017)
(noting the availability of the business necessity defense in disparate impact cases under Title VII’s
private-sector provision).
The court having found that Plaintiff may bring a disparate impact claim under the federalsector provisions of the ADEA, also finds that Defendant may assert the business necessity defense
recognized in Figueroa and Anderson.
III.

CONCLUSION

The court concludes that the presence of a business necessity defense in Title VII federalsector disparate impact claims suggests that the same defense is available for disparate impact
claims under the ADEA.

__/s/ Margaret B. Seymour_______
Margaret B. Seymour
Senior United States District Judge
Dated: July 30, 2018
Columbia, South Carolina

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