U.S. Supreme Court Declines to Address Scope of ADEA Disparate Impact Claims

Lev Craig

Last week, on June 26, 2017, the U.S. Supreme Court denied plaintiff Richard Villarreal’s petition for a writ of certiorari, declining to review the U.S. Circuit Court of Appeals for the Eleventh Circuit’s decision in Villarreal v. R.J. Reynolds Tobacco Co., a case arising under the Age Discrimination in Employment Act of 1967 (ADEA). In Villarreal, the court was asked to consider whether the ADEA permits job applicants who have been disadvantaged in the hiring process because of their age to bring disparate impact claims. The Eleventh Circuit ruled against Villarreal, holding that the ADEA only creates a disparate impact cause of action for existing employees, not job applicants. The Supreme Court’s refusal to grant certiorari means that the Eleventh Circuit’s decision will stand and, for now, the issue will remain open to interpretation by lower courts and the other Circuits.

In 2007, Richard Villarreal applied for a position as a territory manager at R.J. Reynolds, a large tobacco manufacturer and distributor. R.J. Reynolds rejected Villarreal, who was 49 years old at the time, based on a set of standardized internal guidelines. These guidelines stated that the ideal candidate for the territory manager position would be “2–3 years out of college” and instructed reviewers to “stay away from” applicants whose résumés stated that they had been “in sales for 8–10 years.”

In April 2010, attorneys who had learned of R.J. Reynolds’s hiring guidelines contacted Villarreal, informing him that the company’s refusal to hire him might constitute age discrimination. Villarreal filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) shortly afterward. Over the next two years, Villarreal applied for employment at R.J. Reynolds five more times, always without success.

In 2012, the EEOC issued Villarreal a notice of right to sue. He then filed suit in the U.S. District Court for the Northern District of Georgia, bringing a disparate treatment claim for R.J. Reynolds’s refusal to hire him based on his age, as well as a collective action disparate impact claim on behalf of all individuals over 40 whose employment applications R.J. Reynolds had rejected in similar circumstances. R.J. Reynolds successfully moved to dismiss Villarreal’s disparate impact claim, arguing that the ADEA allows only existing employees, not job applicants, to bring such claims. Villarreal appealed the Northern District of Georgia’s decision to the Eleventh Circuit, which affirmed the district court’s dismissal of the claim.

The Eleventh Circuit’s analysis was rooted in the language of section 4(a)(2) of the ADEA, the provision of the statute addressing disparate impact claims. Section 4(a)(2) states that an employer may not “limit, segregate, or classify his employees in any way 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.” Villarreal brought his disparate impact claim under the theory that the ADEA’s prohibition against “depriv[ing] […] any individual of employment opportunities” protected job applicants, as well as a company’s existing employees, as discriminatory hiring practices deprived those individuals of “employment opportunities.” The Eleventh Circuit, however, held that the provision in question could not cover Villarreal, as a narrow reading of the ADEA restricted disparate impact claims to employees. Section 4(a)(2)’s language refers specifically to an individual’s “status as an employee,” and, the Eleventh Circuit found, “applicants who are not employees when alleged discrimination occurs do not have a ‘status as an employee.’”

Therefore, even though Villarreal had alleged facts which could potentially show that older individuals were disadvantaged by R.J. Reynolds’s hiring practices—for example, that less than 2% of the 1,024 Territory Managers R.J. Reynolds hired between 2007 and 2010 were over the age of 40—the court held that the plain text of the ADEA precluded his disparate impact claim. While Villarreal is still able to bring an individual disparate treatment claim for R.J. Reynolds’s refusal to hire him based on his age, the Eleventh Circuit’s decision blocks him from bringing a disparate impact claim on behalf of other older individuals who may have experienced similar discriminatory treatment in the hiring process.

If an employer has discriminated against you based on your age, including refusing to hire you because of your age, contact The Harman Firm, LLP.