Anderson v. Spellings

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
RICHARD ANDERSON, et al., )
)
Plaintiffs, )
)
v. ) Civil Action No. 06-1565 (RMC)
)
ARNE DUNCAN, in his official capacity )
as the Secretary of the U.S. Department of )
Education, )
)
Defendant. )
)
MEMORANDUM OPINION
This protracted litigation presents two novel legal issues concerning application of
the Rehabilitation Act and the Age Discrimination in Employment Act to a federal employer.
Over seven years ago, the regional offices of the Rehabilitation Services Administration, a
division within the Department of Education, were defunded by the White House budget for
fiscal year 2006, which led to office closings and consolidation into the Department’s
Washington, D.C., headquarters. Disabled and older employees in the regional offices lost their
jobs and sued. The subsequent litigation resulted in lengthy discovery, and now, cross-motions
for partial summary judgment on Plaintiffs’ disparate impact theories of liability. Plaintiffs
single out the decision to defund the regional offices, claiming that it constituted age and
disability discrimination because of its disparate impact on older and disabled employees. In
doing so, Plaintiffs challenge a management decision by officials in the Executive Branch that
was designed to achieve a centralized organizational structure, direct supervision, and cost
savings, and accordingly is protected by the “business necessity” test. Partial summary judgment
will be entered in favor of the Secretary of Education.
I. FACTS
Eighteen current and former employees of the Rehabilitation Services
Administration (RSA), a division of the Department of Education’s Office of Special Education
and Rehabilitative Services (OSERS), filed this suit against Secretary Margaret Spellings in her
official capacity. 1 See Compl. [Dkt. 1]. Richard Anderson, Bryan Bashin, Joseph Cordova,
Loerance Deaver, Michael Evans, Joseph Farrell, Marian Fuller, Martha Garber, Diana Koreski,
Seymour Levy, Jeffrey Mitchell, John Nelson, Kathleen Niemi, Noel Nightingale, Ralph
Pacinelli, Bruce Rose, Janette Shell, and Jacquelyn Tellier (collectively, Plaintiffs) 2 assert
various claims against the Secretary in connection with the decision to cut funding for RSA’s
regional offices. Id. ¶¶ 1-12. The cross-motions for partial summary judgment address one of
Plaintiffs’ theories of liability as to the Secretary’s alleged discrimination on the basis of
disability, in violation of the Rehabilitation Act of 1973 as amended (Rehab Act), 29 U.S.C.
§ 701 et seq., and on the basis of age, in violation of the Age Discrimination in Employment Act
(ADEA), 29 U.S.C. §§ 621 et seq. The relevant material facts are undisputed.
A. Organizational Structure of RSA
The Department of Education (Department) is a multilayered agency comprised
of several principal offices and nine program offices. OSERS is a program office charged with
1
Arne Duncan was sworn in as Secretary of the Department of Education (Department) in
January 2009; he is automatically substituted for former Secretary Spellings. See Fed. R. Civ. P.
25(d).
2
Former Plaintiff Charles Linster withdrew on August 25, 2009. See Aug. 25, 2009 Minute
Order.
2
implementing programs that support individuals with disabilities. OSERS has three components,
of which RSA is one. See Def.’s Reply [Dkt. 88], Ex. 22 [Dkt. 89-5] at 1-2.
As its name implies, Congress established RSA to implement statutory provisions
relating to individuals with disabilities. Def.’s Mot. Summ. J. [Dkt. 75], Ex. 6 [Dkt. 76-7] at
Attach. C. With the stated mission of “provid[ing] leadership and resources to assist state and
other agencies in providing vocational rehabilitation . . . , independent living . . . and other
services to individuals with disabilities to maximize their employment, independence, and
integration into the community and the competitive labor market,” Pls.’ Mot. Summ. J. [Dkt. 74-
1], Ex. 2 [Dkt. 74-5] at 1, RSA oversees grant programs to state agencies that provide direct
vocational rehabilitation services to individuals, id., Ex. 1 [Dkt. 74-4] at 1. Prior to October 1,
2005, RSA maintained ten regional offices. See id., Ex. 6 [Dkt. 74-9]. No other division within
OSERS operated regional offices. Def.’s Mot. Summ. J. ¶¶ 24-25. Today, only the
Department’s Office of the Inspector General, Office of Civil Rights, and Office of Federal
Student Aid maintain regional offices. Def.’s Reply ¶ 3.
B. Decision to Defund RSA Regional Offices
In February 2005, President George W. Bush released his fiscal year 2006 budget
proposal (FY06 budget) for the federal government. With respect to the Department, the FY06
budget reflected a slight decrease in funding for full-time equivalent (FTE) positions. Def.’s
Mot. Summ. J., Ex. 1 [Dkt. 76-2] at X-2. The reduction in FTE stemmed from changes in
several of the Department’s principal offices, including OSERS. The FY06 budget specified that
OSERS would achieve a net decrease of 66 FTE through the consolidation of RSA regional
offices into headquarters. Id. at X-3.
3
Reorganizing RSA by ending funding for regional offices and consolidating them
into headquarters was not a novel idea. Regional offices for other programs in the Department
had been eliminated in the past, and prior administrations had considered consolidating RSA. 3
Pls.’ Mot. Summ. J., Ex. 29 (Dep. of Edward Anthony, delegated authority to perform functions
of RSA Commissioner) [Dkt. 74-32] at 43; Def.’s Reply, Ex. 27 [Dkt. 89-10] at 2. Within the
Bush Administration, the idea was considered as early as 2001 by Troy Justesen 4 and C. Todd
Jones, who at that time were both assigned to the White House Task Force on Special Education.
Pls.’ Mot. Summ. J ¶ 37; id., Ex. 27 (Dep. of Troy Justesen) [Dkt. 74-30] at 59-60.
In 2004, the idea picked up steam. Mr. Justesen was then serving as the Deputy
Commissioner of RSA and Acting Deputy Assistant Secretary for OSERS. Pls.’ Opp’n [Dkt. 82]
¶ 10. He presented the idea to the White House Domestic Policy Council, which included future
Secretary Spellings, as a way to achieve efficiency through centralization in accord with how the
Bush Administration managed other programs. Id.; Def.’s Mot. Summ. J. ¶ 5; id., Ex. 2 (Dep. of
3
It appears that at least one study was commissioned in the 1990s on the issue of consolidating
RSA. According to Plaintiffs’ testimony, that study ultimately recommended against eliminating
RSA regional offices. Pls.’ Mot. Summ. J., Ex. 14 (Dep. of Loerance Deaver, Plaintiff) [Dkt. 74-
17] at 72-73; Id., Ex. 36 (Dep. of Marian Fuller, Plaintiff) [Dkt. 74-39] at 30-31.
4
Mr. Justesen has held numerous positions within the White House and Department. From 2002
to 2003, he staffed the White House’s Domestic Policy Council, serving as the Associate
Director for Domestic Policy and Associate Director for Native American Policy Issues. Mr.
Justesen became the Deputy Commissioner of RSA in October 2003, while at the same time
serving as the Acting Deputy Assistant Secretary for OSERS. For eleven months in 2004, Mr.
Justesen was delegated the authority to perform the functions of the Assistant Secretary of
OSERS as well. In March 2005, Mr. Justesen began serving as the Acting Commissioner of
RSA. Two months later, in May 2005, he was named the Acting Director of the Office of
Special Education Programs (OSEP), and officially became the Deputy Assistant Secretary of
OSERS the next month. Troy Justesen Biography, Archive of Resources for President George
W. Bush’s Leadership Team, http://georgewbush-whitehouse.archives.gov/results/leadership/
bio_960.html (last visited September 26, 2013). To minimize confusion, the Court will refer to
Mr. Justesen by his last name rather than his assorted titles unless Mr. Justesen’s title is
particularly relevant to the issue under discussion.
4
David Dunn, senior education advisor to President Bush) [Dkt. 76-3] at 22, 26-28; id., Ex. 3
(Dep. of Secretary Spellings) [Dkt. 76-4] at 51. At some point, the idea was “vetted by the
Secretary’s office” and presented to the Office of Management and Budget (OMB) during an
October 2004 meeting concerning the Department’s preliminary budget for fiscal year 2006.
Justesen Dep. at 105-06. At the suggestion of Mr. Jones, who was then serving as the
Department’s Associate Deputy Secretary for Budget, id. at 108; Pls.’ Mot. Summ. J. ¶ 38, Mr.
Justesen suggested to OMB that closing RSA regional offices would result in savings that could
fund other programmatic initiatives, id., Ex. 28 (Dep. of Carol Cichowski, official with
Department’s Budget Service) [Dkt. 74-31] at 38-39. 5
By December 2004, the Administration had decided to defund RSA regional
offices in its FY06 budget, id., Ex. 30 (Dep. of John Hager, Assistant Secretary for OSERS)
[Dkt. 74-33] at 28; id., Ex. 31 [Dkt. 74-34] at 1, although the RSA Commissioner was not
informed until January 2005, id., Ex. 33 (Dep. of Joanne Wilson, RSA Commissioner) [Dkt. 74-
36] at 19-20. As of December 2004, RSA’s ten regional offices employed sixty-five individuals
on a full-time basis and two assistive readers with conditional appointments. See id., Ex. 7
[Dkt. 74-10]; id. ¶ 6. The Department was aware that twenty-five of the full-time employees
were disabled, see id. ¶ 10, and fifty-eight would be over the age of forty by the end of 2004, see
id. ¶ 11.
Although the FY06 budget was not set for release until February 2005, OSERS
executive leadership learned in late January that some RSA regional offices already had
informed their staff of the planned closures, prompting staff members to call human resources
5
The savings ultimately achieved through consolidation was calculated to be “approximately
$7.6 million, including $6.5 million from a reduction of 66 FTEs and $1.1 million in savings
from rent, information technology, and other overhead.” Def.’s Mot. Summ. J., Ex. 20 [Dkt. 76-
22] at 5.
5
offices for information. Id., Ex. 23 [Dkt. 74-26] at 3. As a result, OSERS prepared an email to
inform RSA staff of the reorganization before the FY06 budget was released. In a January 29,
2005 email concerning the latest draft of the RSA staff notice, OSERS Executive Officer
Andrew Pepin wrote to several OSERS officials, including Assistant Secretary Hager and Mr.
Justesen, and asked whether the email notice should mention that the consolidation was part of
the FY06 budget. He noted that “[a]t this stage [the budget] is out anyway among many folks
and by February 7 everyone will know about it anyway,” and suggested that “[t]his has to be
introduced . . . [as] something the Administration supports for positive reasons which all of you
will think up on Monday.” Id. at 1. Mr. Justesen responded on the same day, opining: “[W]e
should not mention the budget––they don’t like us to even mention budget issues before the
public date. I think we should treat this as an Administration/Hager action to improve
management and not even tie it to the budget in an email.” Id. Three days later, on February 1,
2005, the RSA Commissioner sent an email to all RSA staff announcing the consolidation. Id.,Ex. 11 [Dkt.74-14] at 1. In her email, the Commissioner stated that the reorganization would
streamline resources and ensure uniform implementation of programs, id., and during a
subsequent conference call with union officials representing the affected workforce, Assistant
Secretary Hager explained the consolidation as “a straight business decision,” Def.’s Mot.
Summ. J., Ex. 4 [Dk.76-5] at 10.
C. Communication of the Consolidation to the Relevant Stakeholders
Released in February 2005, the FY06 budget provided, as relevant:
Office of Special Education and Rehabilitative Services – a net
decrease of 66 FTE resulting from the consolidation of the
functions of the regional offices of the . . . RSA . . . into the central
office and the reallocation of staff to reflect program workload.
Analysis of 2004 workload data . . . shows that 81.5 FTE have
been working directly on the Rehabilitation Services State Grant
6
programs while other similar, but larger, formula grants
administered by the Department are operating with 50 to 70
percent fewer staff. (Other HQ staff work indirectly on these
programs.) RSA is the only office within the Department that
manages State formula grant programs from the regional offices.
The consolidation of the regional offices’ functions into the central
office and the reallocation of staff will result both in staffing levels
more comparable to other Department offices and in improvements
in the administration of the Vocational Rehabilitation program
through greater program efficiencies, consistent program
implementation, and integrated program planning.
Id., Ex. 1 at X-3. Following the release of the FY06 budget, the Department explained the
decision to defund RSA regional offices to Congress and RSA staff.
Congress asked Secretary Spellings, who had assumed that office in January
2005, for more information on the reorganization, expressing concern that the office closures
would have a deleterious effect on RSA programs. Pls.’ Mot. Summ. J, Ex. 38 [Dkt. 74-41] at 1;
see also id., Ex. 39 [Dkt. 74-42] at 189; id., Ex. 40 [Dkt. 74-43] at 289. In a letter dated April 8,
2005, Secretary Spellings explained that advancements in electronic communications and data
technologies had rendered RSA regional offices an inefficient use of resources. She stated that
reorganization also would rectify two issues with the RSA regional offices: (1) difficulties with
issuing timely reports on monitoring state agencies; and (2) overstaffing as shown by a
workforce analysis, especially in comparison to such programs as the IDEA Special Education
Grants to States, 20 U.S.C. § 1411, which had a federal appropriation several times larger than
the RSA State Grants program but approximately fifty percent fewer assigned FTE. See id., Ex.
41 [Dkt. 74-44]. 6 Thus, by centralizing RSA programs––as “nearly all Education Department
6
RSA Regional Commissioners objected to Secretary Spelling’s rationale for closing the
regional offices in a letter to the RSA Commissioner. They attributed RSA’s inability to issue
timely monitoring reports to OSERS’s changes in requirements for the reports and new policies
7
programs” had been already––the Department would achieve greater coordination,
accountability, and efficiency. Id. at 1.
OSERS’s internal communications regarding the regional office closures
paralleled Secretary Spelling’s explanation to Congress. Agency emails and memoranda
described the consolidation as a “business decision” that was the product of protracted
consideration and accorded with the President’s management goals for improving the
performance of federal agencies. See Def.’s Mot. Summ. J., Ex. 5 [Dkt. 76-6] at 2 (April 1, 2005
email from Assistant Secretary Hager to RSA staff stating that consolidation was “consistent
with the President’s Management Agenda goals of improving the way government works and
generating real results” and had been considered “for several years”); id., Ex. 6 [Dkt. 76-7] at 2
(April 21, 2005 memorandum from Assistant Secretary Hager to the Executive Director of
OSERS describing the RSA reorganization as a way “to more effectively serve the Department
and align RSA in a manner that will assist [OSERS] in meeting the President’s management
initiatives and the Secretary’s priorities”). During a telephone conference with RSA regional
staff on March 8, 2005, Mr. Justesen responded to a question concerning a prior meeting at
which Assistant Secretary Hager had promised to disseminate the plan on which the RSA
reorganization was based. Mr. Justesen stated that, to his knowledge, no such plan existed. Pls.’
Mot. Summ. J., Ex. 34 [Dkt. 74-37] at 21-24. He added that the consolidation was “purely a
management decision” that did not require congressional approval and was based on a decision
when reviewing them. Pls.’ Mot. Summ. J., Ex. 42 [Dkt. 74-45] at 1-2. The Regional
Commissioners also contended that RSA grant programs could not be compared to those
administered by OSEP or the Office of Elementary and Secondary Education (OESE). Id. at 3.
They argued that OSEP’s and OESE’s grant programs are administered by state agencies
receiving the grants for distribution to local providers under state oversight but RSA grants are
distributed to state agencies that directly provide services. Id. at 2. In other words, “RSA
monitors the compliance of direct service delivery with applicable laws, rather than monitoring a
state education agency that oversees local service delivery.” Id.8
by “the entire chain of command,” including OMB, on the “belief in the elected and appointed
officials of [the Bush] Administration that the best manner to serve consumers under RSA [was]
for a consolidation of regional functions to the central office.” 7 Id. at 24-25. Later in that same
call, OSERS’ Executive Officer added that “[t]here may be a different surgical way to do this,
but we’re faced with the language in the President’s budget which . . . . doesn’t say go ahead and
make surgical decisions by cutting [from other divisions]. It says by closing the regional
offices.” Id. at 39.
D. Closure of the Regional Offices
By the beginning of March 2005, the Department was actively working to
implement the FY06 budget’s directive. OSERS convened a “Workplace Committee” to analyze
the “work in the regions and headquarters to determine how Regional Office functions can best
be consolidated into headquarters and how the RSA headquarters staff will be reorganized and
re-energized to accomplish these functions.” Id., Ex. 74 [Dkt. 74-77] at 1. As Acting
Commissioner of RSA, Mr. Justesen started weighing reassignment options. In a March 7 email,
he asked Acting RSA Deputy Commissioner Jennifer Sheehy to “find out who exactly directly
answers to the commissioner and who answers to the deputy and what [are] their essential
(clearly self declared) functions of their jobs” so that he could determine where to locate those
functions. Id., Ex. 75 [Dkt. 74-78] at 1. Secretary Spellings requested authority from the Office
7
In answering Plaintiffs’ March 16, 2012 interrogatories, Secretary Duncan stated that “[t]he
federal employees . . . involved in the decision to eliminate the RSA regional offices were”
Secretary Spellings, Assistant Secretary Hager, Mr. Dunn, and Mr. Justesen. Def.’s Mot. Summ.
J., Ex. 20 [Dkt. 76-22] at 6. Secretary Duncan also stated that the Boston Consulting Group
(BCG) was not involved in the decision to defund RSA regional offices, as the parties had
believed at one point in discovery, but “was involved with looking at the Department as a whole
to determine how best to effectuate the Administration’s program initiatives.” Id. Secretary
Duncan opined that “[t]he elimination of RSA’s Regional Offices in general was in-line with
BCG’s overall recommendations to the Department.” Id.9
of Personnel Management (OPM) to offer 85 buyouts and 26 early outs in RSA regional offices
and headquarters. Def.’s Mot. Summ. J., Ex. 7 [Dkt. 76-8] at 1; id., Ex. 10 [Dkt. 76-11] at 1.
RSA employed 138 people as of April 13, 2005, and the Department calculated that all but
twelve RSA employees were eligible for a buyout or early out. Id., Ex. 10 at 1. The
Department’s Office of Equal Employment Opportunity (EEO) completed an expedited review
of the proposed reorganization in which it concurred with the decision but expressed “serious
reservations,” because “the proposed closure of . . . [RSA’s] regional offices will have a
disproportionate adverse impact on employees with disabilities currently employed at those
offices.” Pls.’ Mot. Summ. J., Ex. 63 [Dkt. 74-66] at 1.
On May 10, 2005, OPM granted authority for voluntary separation incentive
payments and voluntary early retirement buyouts for all RSA employees in OSERS, both
regional and headquarters. See Def.’s Mot. Summ. J., Ex. 7. The Department’s Director of
Human Resources sent a memo to all RSA staff on May 20, 2005, advising them of these
incentives. See id., Ex. 8. In a follow up email dated May 27, 2005, Assistant Secretary Hager
warned RSA staff that a Reduction in Force (RIF)––that is, involuntary separation––might be
necessary if there were not enough buyouts and early outs to allow OSERS to close RSA
regional offices by September 30, 2005. Pls.’ Mot. Summ. J., Ex. 53 [Dkt. 74-56] at 1. A RIF
proved necessary and was instituted. RSA regional offices were closed effective September 30,
2005.
E. The Present Litigation
On September 6, 2006, Plaintiffs filed the instant, eight-count Complaint. Long
and laborious discovery ensued in which both sides searched warehouses of documents and took
numerous depositions covering a multitude of topics. Most relevant to the cross-motions for
10
partial summary judgment were the depositions of Secretary Spellings, Mr. Justesen, and Mr.
Dunn. Through these depositions, Plaintiffs sought to establish that (1) the officials had an
incomplete understanding of RSA regional offices’ responsibilities and (2) the decision to defund
RSA regional offices was based on personal belief rather than rational judgment. The record
supports the first thesis if Plaintiffs, in their roles as opponents to the Department’s motion and
not as movants, are given the benefit of some small uncertainty in the record. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (“The evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in his favor.”). It does not support the
second.
For instance, Plaintiffs pressed Mr. Justesen on whether RSA regional offices
conducted annual, on-site reviews of all state vocational rehabilitation agencies. Mr. Justesen
unequivocally stated that the regional offices never performed such monitoring. Justesen Dep. at
148-49. Plaintiffs contend that the RSA did monitor all 80 state vocational rehabilitation
agencies on an annual basis. Pls.’ Mot. Summ. J. at 40. The evidence from which Plaintiffs
draw support is not as clear as their argument. See id., Ex. 7 (regional staffing rosters from
2004); id., Ex. 8 [Dkt. 74-11] (job description of program specialist to oversee “two or more”
state agencies); Ex. 9 [Dkt. 74-12] (same); Ex. 42 (no mention of number of state agencies
subject to annual review); id., Ex. 44 [Dkt. 74-47] (memorandum from RSA regional
commissioners to state agency directors on changes to monitoring reviews without stating the
number to be conducted). 8
8
Plaintiffs accuse Secretary Spellings of not “know[ing] what RSA actually does,” citing her
“disturbingly clear . . . testimony.” Pls.’ Mot. Summ. J. at 38. Plaintiffs’ counsel asked
Secretary Spellings about the services RSA provides to individuals (even though it does not
provide such services). Contrary to Plaintiffs’ argument, Secretary Spellings never agreed that
RSA provides direct services to individuals. While she indicated that RSA “direct[ly]
11
Asked to recall the rationale for defunding RSA regional offices, each former
official testified that the decision was based on a desire to serve taxpayers better by streamlining
services and ensuring greater accountability and monitoring. Secretary Spellings acknowledged
that the Administration did not commission any research or studies regarding the consolidation
but testified that the prevailing “belief was that [they] could save money and provide high quality
oversight” through centralization. Id., Spellings Dep. at 116. Mr. Justesen testified that although
he was “bothered” that closing the RSA regional offices could “negative[ly] impact” disabled
employees, the consolidation achieved uniformity in policy implementation and what he believed
was “the intent of [C]ongress” for “a better use of [RSA’s] existing [salary and expenses] money
. . . .” 9 Justesen Dep. at 246-47. Mr. Dunn similarly testified that “streamlining programs and
providing more central control to provide greater transparency and consistency across regions”
was “consistent with overall administration policy.” Dunn Dep. at 28.
interface[d] with clients or customers about their needs and support services required,” Secretary
Spelling “use[d] that language for students [and] for school districts,” because she thinks “of
those as the users or clients or customers of [the Department’s] services.” Pls.’ Mot. Summ. J.,
Ex. 37 (Dep. of Margaret Spellings) [Dkt. 74-40] at 55. Plaintiffs are disturbed because the
former Secretary considered the Department’s “clients or customers” to be students and school
districts, but her phrasing did not omit students at vocational rehabilitation training programs.
9
When Plaintiffs’ Counsel probed further, the following exchange occurred:
Q. Is there any other way to enforce uniform policy across the
country besides firing all the regional employees?
A. I don’t know, and it’s been six years. I don’t know.
Justesen Dep. at 248. Plaintiffs urge the Court to construe this response as proof that
consolidating RSA regional offices into headquarters was not necessary to achieve uniformity in
policy. See Pls.’ Mot. Summ. J. at 39. However, it is not at all clear from this exchange whether
Mr. Justesen could not recall the necessity of consolidation vis-à-vis policy uniformity (i.e., “it’s
been six years”) or was admitting that the Secretary could have achieved policy uniformity
through other means (i.e., “I don’t know.”). Plaintiffs’ counsel might have resolved this
ambiguity by asking additional questions but did not.
12
Plaintiffs and the Secretary have moved for partial summary judgment. Both
parties ask the Court to determine whether Plaintiffs have claims under the Rehab Act and the
ADEA for disparate impact discrimination. Plaintiffs are clear that the only adverse employment
action they challenge is the decision to cut funding for RSA regional offices and not any of the
later implementation measures or impacts of that decision. Although some of the eight counts
alleged in their Complaint ostensibly regard employment actions taken after the decision was
made, Plaintiffs now expressly limit those counts insofar as they allege a disparate impact theory
of liability. See Compl. ¶¶ 70-77. Plaintiffs insist:
[o]nce and for all . . . [they] do not allege that the 2005 RIF had a
disparate impact. Nor do [Plaintiffs] allege that the reorganization
which became necessary after their jobs were eliminated had a
disparate impact. They are complaining about the fact that their
jobs were eliminated in one fell swoop when funding for them was
cut from the FY2006 budget.
Pls.’ Opp’n at 34-35 (internal citations omitted). Each party opposes the other’s motion for
partial summary judgment. For the reasons discussed below, the Court will deny Plaintiffs’
motion and grant the Secretary’s motion.
II. LEGAL STANDARDS
A. Party Standing and Federal Question Jurisdiction
This litigation has been complicated by the difficulties of necessary discovery and
disputes therefrom. Despite the passage of time, Plaintiffs have standing because they have
articulated an actual, concrete and particularized injury-in-fact that is fairly traceable to the
Secretary’s challenged action which likely will be redressed by a favorable decision. See
Friends of the Earth, Inc. v. Laidlaw Envtl. (TOC) Servs., 528 U.S. 167, 180-81 (2000).
Plaintiffs aver that the Secretary’s decision to defund RSA regional offices resulted in their
13
retirement, buyout, or separation from federal service; they demand several remedies, including
monetary damages and reinstatement. Although their current job statuses are unclear, Plaintiffs
need not “maintain a concrete interest in the sought-after employment throughout all stages of
the litigation.” See Cleveland Branch, NAACP v. City of Parma, 263 F.3d 513, 529 (6th Cir.
2001). Further, Plaintiffs’ injury-in-fact is redressable. RSA is still in operation, and there is no
indication that positions comparable to those in the regional offices no longer exist at its
headquarters. See Gaddy v. Abex Corp., 884 F.2d 312, 319 (7th Cir. 1989) (“Reinstatement with
the defendant employer is warranted absent exceptional circumstances demonstrating that the
position is no longer available or where a continued reduction in forces occurs.”). An injunction
that requires the reinstatement of one or more Plaintiffs is a possible outcome, with or without
monetary damages, should the Court find the Secretary liable. The potential for monetary
damages, reinstatement, or general injunctive relief supports standing for all Plaintiffs. See Ry.
Labor Execs.’ Ass’n v. United States, 987 F.2d 806, 810 (D.C. Cir. 1993) (per curiam) (“[I]f one
party has standing in an action, a court need not reach the issue of standing of other parties when
it makes no difference to the merits of the case.”).
The Court has jurisdiction over the case because it arises under federal law. See
28 U.S.C. § 1331. The Secretary does not dispute that Plaintiffs have exhausted their
administrative remedies before the Equal Employment Opportunity Commission (EEOC). See
29 U.S.C. §§ 794, 794a; 42 U.S.C. 2000e-16(c); 29 C.F.R. pt. 1614.
B. Summary Judgment
In their respective cross-motions, each party contends that it is entitled to partial
summary judgment as a matter of law. Under Rule 56 of the Federal Rules of Civil Procedure,
summary judgment shall be granted “if the movant shows that there is no genuine dispute as to
14
any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a); accord Anderson, 477 U.S. at 247. On summary judgment, the burden on a moving party
who does not bear the ultimate burden of proof in the case may be satisfied by making an initial
showing that there is an absence of evidence to support the nonmoving party’s case. Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986). This burden “may be discharged by ‘showing’––that
is, pointing out to the district court––that there is an absence of evidence to support the
nonmoving party’s case.” Id.The burden then shifts to the nonmovant to demonstrate the existence of a
genuine issue of material fact. The nonmovant may not rest on mere allegations or denials, but
must instead by affidavit or otherwise, present specific facts showing that there is a genuine issue
for trial. See Fed. R. Civ. P. 56(c); Celotex, 477 U.S. at 324; see also Greene v. Dalton, 164 F.3d
671, 675 (D.C. Cir. 1999) (nonmovant must present specific facts that would enable a reasonable
jury to find in its favor).
In ruling on a motion for summary judgment, the court must draw all justifiable
inferences in the nonmoving party’s favor. Anderson, 477 U.S. at 255. A nonmoving party,
however, must establish more than “the mere existence of a scintilla of evidence” in support of
its position. Id. at 252. In addition, if the evidence “is merely colorable, or is not significantly
probative, summary judgment may be granted.” Id. at 249-50 (citations omitted). Summary
judgment is properly granted against a party who “after adequate time for discovery and upon
motion . . . fails to make a showing sufficient to establish the existence of an element essential to
that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 477
U.S. at 322.
15
Further, “[w]hen opposing parties tell two different stories, one of which is
blatantly contradicted by the record, so that no reasonable jury could believe it, a court should
not adopt that version of the facts for purposes of ruling on a motion for summary judgment.”
Scott v. Harris, 550 U.S. 372, 380 (2007); see Reetz v. Jackson, 176 F.R.D. 412, 414-15 (D.D.C.
1997) (a plaintiff cannot create a genuine issue of material fact by contradicting her own
deposition testimony).
III. ANALYSIS
A. Plaintiffs’ Disparate Impact Theory of Rehab Act Liability
Section 501 of the Rehab Act provides the exclusive cause of action for a federal
employee alleging disability discrimination by a federal agency. 29 U.S.C. § 791; see Taylor v.
Small, 350 F.3d 1286, 1291 (D.C. Cir. 2003). Where, as here, a complaint alleges
“nonaffirmative action employment discrimination,” the Rehab Act expressly incorporates Title I
of the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. §§ 12111 et seq., so that
violations of the Rehab Act are judged by the standards of the ADA, see 29 U.S.C. § 791(g);
Taylor v. Rice, 451 F.3d 898, 905 (D.C. Cir. 2006). 10 Title I of the ADA prohibits employers
from “discriminat[ing] against a qualified individual on the basis of disability,” 42 U.S.C. §
12112(a), which includes “utilizing standards, criteria, or methods of administration . . . that have
the effect of discrimination on the basis of disability,” id. § 12112(b)(3). Accordingly, “[b]oth
disparate-treatment and disparate-impact claims are cognizable under the ADA,” Raytheon Co. v.
Hernandez, 540 U.S. 44, 52 (2003), and the Rehab Act.
10
Section 501(g) of the Rehab Act, 29 U.S.C. § 791(g), also incorporates ADA sections 501
through 504 and 510, 42 U.S.C. §§ 12201-04 and 12210, as they relate to employment. These
provisions are not relevant to this litigation.
16
Claims of disparate impact are distinct from claims of disparate treatment. The
latter are premised on employer action that “treats some people less favorably than others
because of their race, color, religion, sex, or national origin” and require proof of discriminatory
intent. 11 Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n.15 (1977). Conversely,
disparate impact actions “involve employment practices that are facially neutral in their
treatment of different groups but that in fact fall more harshly on one group than another and
cannot be justified by business necessity.” Id. Such claims do not require proof that the
employer had a discriminatory motive in adopting the challenged employment practice. Hazen
Paper Co. v. Biggins, 507 U.S. 604, 609 (1993).
Because the Rehab Act incorporates the ADA, which is comparable for purposes
of disparate impact to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e to 2000e-17,
analyzing Rehab Act claims premised on disparate impact is like unpacking a nesting doll. The
analysis of a disparate impact claim under the Rehab Act requires a study of the ADA’s
interaction with Title VII. For purposes of disparate impact, the ADA and Title VII inquiry is
similar. See Gonzales v. City of New Braunfels, 176 F.3d 834, 839 n.26 (5th Cir. 1999)
(“Recognized as an actionable form of discrimination under Title VII, the disparate impact
theory has been adopted entirely by the ADA” (citing 42 U.S.C. § 12112(b)(3) & (6)); 1 Barbara
T. Lindemann et al., Employment Discrimination Law 13-200 (5th ed. 2012) (“The requirements
for a prima facie disparate impact case under the ADA and Title VII are similar but not
identical.”). A prima facie case of disparate impact requires the identification of a specific
employment practice that, while facially neutral, nonetheless had a disproportionate adverse
effect on a protected class of individuals, and a demonstration of causation through “statistical
11
Whether Plaintiffs can assert a violation of the Rehab Act under the theory of disparate
treatment is an issue which this Opinion does not resolve.
17
evidence of a kind and degree sufficient to show that the practice in question . . . caused”
individuals to suffer the offending adverse impact “because of their membership in a protected
group.” Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 994 (1988). Once a prima facie case
is established, the burden of production shifts to the defendant to assert, if available, a “business
necessity defense.” 12
The business necessity doctrine was developed by the Supreme Court in Griggs v.
Duke Power Co., 401 U.S. 424 (1971). Disagreeing with the Court’s later narrowing of
employer liability in Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989), Congress codified
a modified version of the defense into Title VII in 1991. P.L. No. 102-166, 150 Stat. 1071; see
Smith v. City of Jackson, 544 U.S. 228, 240 (2005). The defense is also embedded in the ADA
in part. Section 12112(b)(6) of the ADA proscribes the use of:
qualification standards, employment tests, or other selection
criteria that screen out or tend to screen out an individual with a
disability or a class of individuals with disabilities unless the
standard, test or other selection criteria, as used by the covered
entity, is shown to be job-related for the position in question and is
consistent with business necessity . . . .
42 U.S.C. § 12112(b)(6) (emphasis added). Plaintiffs’ Complaint, however, does not allege that
the decision to defund RSA regional offices violated this provision, focused as it is on selection
criteria, or, for that matter, any specific provision of the ADA as the Rehab Act incorporates it.
See Def.’s Mot. Summ. J. at 25. Further, neither party argues that the “business necessity”
12
Plaintiffs argue that the Secretary has waived a business necessity defense to their Rehab Act
claims because the Secretary’s Opposition fails to make any such argument. Plaintiffs misread
the docket. The Secretary’s Opposition expressly argues that “a legitimate business reason”
existed “for the 2005 [r]eorganization of RSA” and incorporates in full the business necessity
arguments set forth in the Secretary’s own summary judgment motion. Def.’s Opp’n [Dkt. 83] at
12.
18
applicable to selection criteria, as codified in subsection 6 of § 12112(b), should apply
throughout subsection (b), and the Court finds no support in the law for such a construction of
the ADA as it applies to the Rehab Act.
Accordingly, the Court’s analysis and application of the business necessity
doctrine will follow the Griggs/Wards Cove analysis. As applied to the private sector (before the
1991 amendments to Title VII), the Supreme Court instructed that an employer must show that a
challenged employment practice “serves, in a significant way, the legitimate employment goals
of the employer.” Wards Cove, 490 U.S. at 659. “The touchstone of [the business necessity]
inquiry is a reasoned review of the employer’s justification for his use of the challenged practice.
. . . [T]here is no requirement that the challenged practice be ‘essential’ or ‘indispensable’ to the
employer’s business to pass muster . . . .” Id. If a defendant successfully puts forward a business
necessity defense, then the plaintiff must persuade the trier of fact that alternative practices
would have achieved the same business ends without “‘a similarly undesirable . . . effect’” on the
protected class of individuals. Id. at 660 (quoting Albemarle Paper Co. v. Moody, 422 U.S. 405,
425 (1975)). Despite shifting burdens of production, the burden of persuasion remains with the
plaintiff. Id. at 659.
The nature and proper application of the business necessity defense is at the heart
of the present case. Plaintiffs contend that their statistical evidence shows adverse impact based
on disability (a point the Secretary strongly contests and which the Court does not reach 13), but
their argument is moot if the Secretary can successfully assert a business necessity defense.
Hence, the question on which this case turns is: How does a “business necessity” defense apply
to a disparate impact claim when the federal government is the employer? Surprisingly, there
13
The Court therefore assumes, for purposes of deciding the Secretary’s motion for partial
summary judgment, that Plaintiffs could prove an adverse impact.
19
appears to be no precedent on the question, and the parties avoid the issue. After expending
much energy arguing over statistical analyses, they mechanically apply “business necessity” as
though it has the same contours in the federal-sector as in the private-sector. The Court does not
agree in full.
The Supreme Court has explained that “[p]recisely what constitutes a business
necessity cannot be reduced, of course, to a scientific formula, for it necessarily involves a case-
specific judgment which must take into account the nature of the particular business and job in
question.” Watson, 487 U.S. at 1005. If the “touchstone” of business necessity lies in a
“reasoned review” of an employer’s “legitimate employment goals,” Wards Cove, 490 U.S. at
659, then the particular facts and circumstances of the employer must inform the analysis; what
may be a reasonable and legitimate goal for one employer may not support another’s actions.
The need for an analysis specific to the circumstances is particularly acute when comparing
private-sector employer goals with those that are legitimate for policy makers in the federal
government. Although the federal government may at times act like a business, its undertakings
generally are not directed to the maximization of profits or satisfaction of shareholders, which
can be easier metrics to measure.
Hence, the alleged adverse employment action that Plaintiffs have identified
informs the analysis of the Secretary’s business necessity defense. The manner in which
Plaintiffs have framed their motion by way of their Opposition (and thus narrowed their
Complaint) is significant. They do not assert a typical adverse employment action for purposes
of their theory of disparate impact liability, such as the way in which buyouts were offered, or
the manner in which the RIF was carried out, or even the subsequent consolidation of the
regional office functions into headquarters, in which the analyses for private and public
20
employers may be analogous. Instead, Plaintiffs stress that the adverse action that they challenge
is limited to the decision to defund RSA regional offices.
The Plaintiffs’ construction of their disparate impact claim is important because it
is clear from the uncontested facts and circumstances that the decision to cut funding for RSA
regional offices was a high-level management judgment. First, the multiple decision makers
involved in the determination to defund RSA regional offices makes this reorganization atypical.
It was not a decision made exclusively within OSERS or even the Department, as made obvious
by the fact that the RSA Commissioner was not notified of the determination until January 2005.
The decision instead was made in consultation with the White House, the Secretary, and OMB,
and included in the FY06 budget. Second, the determination to defund RSA regional offices was
not driven primarily by the anticipated cost savings. Although reflected in the FY06 budget and
suggested to OMB by Mr. Justesen as a mechanism for cost reduction, the testimony from those
involved in the decisionmaking process is clear that whether the closure and consolidation of
RSA regional offices would actually save money was a secondary consideration. The principal
motivation for defunding RSA regional offices, and thus centralizing RSA, was the management
goal of improving the performance of federal agencies, promoting efficiencies, and achieving
greater supervision over the regions.
The record before the Court suggests that advocates can readily debate whether
defunding RSA regional offices was the best policy for RSA. But that is not the domain of the
business necessity analysis as conceptualized by the Supreme Court. The question in the
confines of this litigation is whether, upon a “reasoned review,” Wards Cove, 490 U.S. at 659,
the decision to defund the RSA regional offices evidenced a legitimate business necessity.
“[T]here is no requirement that the challenged practice be ‘essential’ or ‘indispensable’ to the
21
employer’s business to pass muster . . . .,” id., and it cannot be said that defunding RSA regional
offices in order to achieve the policy goal of greater efficiency and central oversight was an
illegitimate employment goal.
Plaintiffs’ argument that the articulated goals of the defunding are invalid and
insufficient does not alter the Court’s conclusion. Plaintiffs accuse Secretary Spellings and Mr.
Justesen of not understanding the functions, staffing, and importance of the regional offices.
Yet, this supposed misapprehension of the duties of RSA regional offices only serves to suggest
that a different decision may also have been justified, not that the preference for central oversight
and reduced cost was an illegitimate judgment. Equally unpersuasive is Plaintiffs’ contention
that the federal government should have hired consultants and ordered longitudinal studies
before acting. Just as “[t]he Constitution ‘does not enact Mr. Herbert Spencer’s Social Statics,’”
Sorrell v. IMS Health Inc., 131 S. Ct. 2653, 2665 (2011) (quoting Lochner v. New York, 198 U.S.
45, 75 (1905) (Holmes, J., dissenting)), neither do the Rehab Act nor the ADA require elected
officials to undertake organizational analyses before implementing their management
philosophies.
Similarly, the January 2005 email from Mr. Pepin, which asked senior OSERS
managers to come up with “positive reasons” to tell employees for the decision to defund RSA
regional offices, does not support Plaintiffs’ case. Plaintiffs highlight the email as proof that the
decision was made without forethought and that any rationale provided now is post hoc
reasoning to be ignored. What is clear is that Mr. Pepin wanted to put the onus on OMB and
apparently wanted some “spin” to the message to make it more palatable to RSA regional
offices. Mr. Justesen’s response is telling: he advised frankly informing the regions that the
defunding was an “action to improve management,” Ex. 23 at 1, which is exactly as Assistant
22
Secretary Hager described it soon thereafter, Ex. 4 at 10 (“[W]hat we’re talking about is the
consolidation of work at the regional office. It has nothing to do with personality. It has nothing
to do with the past. . . . What it is is a straight business decision that is a way to save on overhead
and to consolidate the . . . work . . . .”).
In short, the way in which the decision to defund RSA regional offices developed
(i.e., vetted across agencies and ratified by high-ranking Executive Branch officials) and its
purpose (i.e., streamlining an agency program to gain greater efficiency and central oversight,
reflecting the operation of other agency programs) demonstrates that Plaintiffs in actuality
challenge a policy judgment. And, contrary to Plaintiffs’ argument, the Secretary’s business
necessity defense has been consistent throughout. The only remaining question then is whether
Plaintiffs can establish the existence of alternatives that would have achieved the same business
ends but with less impact on disabled employees. See Smith v. City of Jackson, 544 U.S. 228,
242 (2005) (noting that “the business necessity test . . . 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”).
Plaintiffs propose three alternatives: the Secretary could have (1) allowed telecommuting; (2)
eliminated sixty-five positions across OSERS, rather than just RSA regional offices, through
buyouts and attrition; or (3) identified non-essential positions and eliminated only those jobs.
These suggestions, however, miss the point. Not only do they wrongly focus on the manner in
which defunding was achieved, but they directly contradict the purposes of consolidation.
Plaintiffs fail to explain how any of their proposed alternatives would have achieved a more
efficient and streamlined RSA with greater central oversight. Each of their proposals would
have maintained a dispersed RSA. Plaintiffs’ perspective on how the Department could be
23
organized is not objectively “wrong.” But the challenged decision was vested in political
appointees who implemented the President’s management goals, not Plaintiffs’.
Right or wrong, presidential appointees in 2004-05 believed that a dispersed RSA
suffered from program inefficiencies and redundancies and that streamlining RSA would reduce
these problems while affording greater supervision. Plaintiffs argue that later developments
demonstrate that eliminating funding for RSA regional offices actually harmed RSA, the
taxpayers who rely on its services, and disabled individuals employed in RSA regional offices.
To be sure, the Court’s analysis would change if the Executive had articulated arbitrary or
pretextual reasons for centralizing RSA regional offices. But the Secretary did not do so here.
The decision was driven by a policy judgment on how to conduct the business of the federal
government. In the context of the specific facts and claims presented by the parties’ motions for
partial summary judgment, the Court concludes that the decision to defund RSA regional offices
was a “business necessity” that served the federal government’s objectives in a reasonable way,
and could not have achieved those objectives in a manner that would have had less impact on
disabled employees in the regional offices. The Court accordingly will enter summary judgment
in favor of the Secretary with respect to Plaintiffs’ allegations that there has been a violation of
the Rehab Act under a disparate impact theory of liability.
B. Plaintiffs’ Disparate Impact Theory of ADEA Liability
Plaintiffs also assert a cause of action under a disparate impact theory in violation
of the ADEA. Specifically, they contend that the Secretary’s decision to defund RSA regional
offices had a disparate impact on regional employees forty years and older. The Secretary
counters with an argument that no federal appellate court has yet addressed on its merits.
24
Under existing case law, it is clear that the ADEA subjects private and federal
employers to disparate treatment liability, see Aliotta v. Bair, 614 F.3d 556, 561 (D.C. Cir.
2010), and the ADEA authorizes disparate impact claims against private employers, see City of
Jackson, 544 US. at 239-40. The outstanding question is whether disparate impact claims
against the federal government also are cognizable under the ADEA. The Secretary urges the
Court to answer this question in the negative, as many Judges of this District have concluded.
See Allard v. Holder, 840 F. Supp. 2d 269, 278-80 (D.D.C. 2012) (Leon, J.); Am. Fed’n of Gov’t
Emps. TSA Local 1 v. Hawley, 481 F. Supp. 2d 72, 91-92 (D.D.C. 2006) (Kollar-Kotelly, J.);
Silver v. Leavitt, Civ. No. 05-0968, 2006 WL 626928, at *13 (D.D.C. Mar. 13, 2006) (Bates, J.);
Evans v. Atwood, 38 F. Supp. 2d 25, 28-30 (D.D.C. 1999) (Urbina, J.). But see Breen v. Peters,
474 F. Supp. 2d 1, 6-7 (D.D.C. 2007) (Roberts, J.) (finding that the portion of the ADEA
applicable to federal employers “encompasses both disparate treatment and disparate impact
cases, as both methods of proof seek redress for illegal discrimination”).
As an initial matter, the Court notes the absence of substantive analysis of this
issue by the federal appellate courts. Neither the Supreme Court nor the D.C. Circuit has
confronted the issue directly. See Aliotta, 614 F.3d at 561 n.4 (recognizing an open question as
to whether federal employees may assert disparate impact claims under the ADEA, but declining
to decide because plaintiffs “failed to demonstrate any adverse effect on older employees”);
Koger v. Reno, 98 F.3d 631, 639 & n.2 (D.C. Cir. 1996) (assuming without deciding that
disparate impact claims may proceed against federal employers and finding that plaintiffs could
not establish a prima facie case of disparate impact); Arnold v. U.S. Postal Serv., 863 F.2d 994,
998 (D.C. Cir. 1988) (same). Although decisions in the Ninth and Tenth Circuits have
entertained claims of disparate impact against federal employers, see Lujan v. Walters, 813 F.2d
251051 (10th Cir. 1987); Palmer v. United States, 794 F.2d 534 (9th Cir. 1986), neither Circuit has
explained its analysis, see Walters, 813 F.2d at 1057-58; Palmer, 794 F.2d at 536-39. 14 Without
clear guidance, the Court starts its analysis with language of the statute.
1. The ADEA Federal-Sector Provision
Whether a statute provides a cause of action is a question of statutory
construction. Touche Ross & Co. v. Redington, 442 U.S. 560, 568 (1979). Accordingly, the
appropriate starting place is the language of the ADEA. Barnhart v. Sigmon Coal Co., 534 U.S.
438, 450 (2002) (“As in all statutory construction cases, [courts] begin with the language of the
statute.”). Section 633a(a) of Title 29 of the U.S. Code is the ADEA federal-sector provision: it
states that all federal “personnel actions affecting employees or applicants for employment who
are at least 40 years of age . . . shall be made free from any discrimination based on age.” The
ADEA does not define the phrase “any discrimination based on age.” 15
Plaintiffs contend that the statute is clear on its face. Reasoning that courts
commonly define the term “discrimination” to include both intentional and disparate impact
14
These opinions are not binding in this jurisdiction and their precedential value is undermined
because they were decided before City of Jackson, in which the Supreme Court analyzed the
ADEA at length. 544 US. at 232-41. The same is true of Lumpkin v. Brown, 898 F. Supp. 1263(N.D. Ill. 1995), which Plaintiffs cite for its analysis of ADEA disparate impact liability against
the federal government, see id. at 1270-71. Indeed, Plaintiffs have identified only four decisions
post-City of Jackson––all non-binding district court opinions––that permit ADEA claims against
federal employers based on disparate impact. See Rucker v. Vilsack, Civ. No. 08-6150-HO, 2009
WL 1422580 (D. Or. May 19, 2009); Sanders v. Potter, Civ. No. C06-1288-TSZ, 2009 WL
57540 (W.D. Wash. Jan. 8, 2009); Breen, 474 F. Supp. 2d (D.D.C. 2007); Lagerstrom v. Mineta,
408 F. Supp. 2d 1207 (D. Kan. 2006). None of these decision substantively addressed City of
Jackson. See Rucker, 2009 WL 1422580, at *2 (omitting any discussion of City of Jackson);
Sanders, 2009 WL 57540, at *12 (same); Breen, 474 F. Supp. 2d at 7 n.3 (limited consideration
of City of Jackson’s applicability); Lagerstrom, 408 F. Supp. 2d at 1213 (indirect analysis of City
of Jackson).
15
Because the Court grants partial summary judgment to the Secretary on other grounds, it does
not address the Secretary’s further argument that the phrase “based on age” is demonstrative of
Congress’s intent to subject federal employers only to disparate treatment liability.
26
claims, see, e.g., Lagerstrom, 408 F. Supp. 2d at 1212, Plaintiffs argue that the phrase “any
discrimination based on age” must necessarily import both disparate treatment and disparate
impact claims into the ADEA federal-sector provision. However, statutory construction does not
occur in a vacuum, and determining whether statutory language is plain and unambiguous
depends not just on the language itself but also on “the specific context in which that language is
used, and the broader context of the statute as a whole.” Robinson v. Shell Oil Co., 519 U.S.
337, 341 (1997). Consequently, the Court will consider the legislative history and structure of
the ADEA.
2. Legislative History and Structure of the ADEA
The federal-sector provision is an add-on to the ADEA. When enacted in 1967,
the ADEA applied only to private-sector employers. Congress expanded its scope in 1974 as
part of a statute aimed primarily at amending the Fair Labor Standards Act (FLSA). FLSA
Amendments of 1974 § 28, 88 Stat. 74. The 1974 bill made two notable changes to the ADEA:
(1) it revised the ADEA’s definitions of “employer” and “employee” to include state and local
governments and their employees for some claims, see 29 U.S.C. §§ 630(b), 630(f); and (2) it
inserted a separate provision adding coverage over certain federal employers, 29 U.S.C. § 633a.
See Kimel v. Fl. Bd. of Regents, 528 U.S. 62, 68 (2000) (discussing ADEA’s passage and
subsequent amendment). In grafting the federal-sector provision onto the ADEA, “Congress
deliberately prescribed a distinct statutory scheme applicable only to the federal sector . . . .”
Lehman v. Nakshian, 453 U.S. 156, 166 (1981); id. at 166 nn. 14-15 (summarizing the legislative
history of the 1974 amendments to the ADEA). Congress could have simply slotted the federal
government into the existing provisions of the ADEA (as it did for state and local governments),
or modeled the ADEA federal-sector provision on 29 U.S.C. § 623(a) (the private-sector
27
provision). Instead, it imposed a “broad, general ban on ‘discrimination based on age’” that
“was patterned ‘directly after’” the federal-sector discrimination ban in Title VII of the Civil
Rights Act, Gomez-Perez v. Potter, 553 U.S. 474, 487 (2008) (quoting Nakshian, 453 U.S. at 167
n.15), which requires that personnel actions affecting federal employees “be made free from any
discrimination based on race, color, religion, sex, or national origin,” 42 U.S.C. § 2000e-16(a).
Section 2000e-16(a) therefore is informative when interpreting the ADEA
federal-sector provision. The immediate question is to what degree. Using a series of
syllogisms, 16 Plaintiffs ask the Court to apply Title VII unquestioningly to the ADEA. They
reason that: (1) the Supreme Court has interpreted Title VII’s private-sector provision, 42 U.S.C.
§ 2000e-2, to include disparate impact claims, see Griggs, 401 U.S. at 431-32; and (2) the D.C.
Circuit has extended Griggs to federal employers in Title VII cases, Coopersmith v. Roudebush,
517 F.2d 818, 821 n.7 (D.C Cir. 1975); so that (3) the ADEA federal-sector provision must
necessarily encompass disparate impact claims. The hinge on which this argument rests is the
traditional tenet of statutory construction that Congress is presumed to be familiar with Supreme
Court precedent. See Gomez-Perez, 553 U.S. at 488. On this basis, Plaintiffs propound a second
syllogism: (1) because Congress extended Title VII to cover the federal government by adding
16
Although William Faulkner would appreciate the use of “a word that might cause the reader to
check with a dictionary to see if it is properly used,” M. Thomas Inge, Conversations with
William Faulkner 71 (University Press of Mississippi 1999), the Court wishes to be more
immediately helpful. A syllogism is a:
logical scheme or analysis of a formal argument that consists of a
major premise, a minor premise, and a conclusion and that may be
used either to prove a conclusion by showing that it follows from
known premises or to test the truth of premises by showing what
follows from them (as in ‘every virtue is laudable; kindness is a
virtue; therefore kindness is laudable’).
Webster’s Third New International Dictionary Unabridged 2315 (3d ed. 2002).
28
§ 2000e-16 to the statute in 1972, only one year after Griggs; and (2) the language of § 2000e-16
parallels § 2000e-2 by which Title VII covers the private sector; then (3) Congress must have
expected that § 2000e-16 “would be interpreted in conformity with that [private-sector]
precedent,” Gomez-Perez, 553 U.S. at 488 (internal quotations and citations omitted), as indeed
this Circuit did in Coopersmith. Plaintiffs then extrapolate one step further with yet another
syllogism: (1) since the ADEA federal-sector provision was enacted three years after Griggs; and
(2) since the language of the ADEA federal-sector provision corresponds to that used in § 2000e-
16 of Title VII; then (3) Congress must have intended to subject federal employers to age-based
disparate impact liability under the ADEA. 17
Accepting Plaintiffs’ textual argument would require the Court to disregard
subsequent amendments to Title VII. As previously discussed, Congress amended Title VII in
1991, overruling Wards Cove in part, Pls.’ Opp’n at 9 n.2; see also Nakshian, 453 U.S. at 166-
17
As further evidence Plaintiffs cite an EEOC regulation, which states:
[a]ny employment practice that adversely affects individuals
within the protected age group on the basis of older age is
discriminatory unless the practice is justified by a ‘reasonable
factor other than age.’ An individual challenging the allegedly
unlawful practice is responsible for isolating and identifying the
specific employment practice that allegedly causes any observed
statistical disparities.
29 C.F.R. § 1625.7(c). Plaintiffs identify several EEOC decisions in which the agency “applied
and enforced the disparate impact theory of discrimination against the federal government,
including in age cases . . . .” Pls.’ Opp’n at 15. Although in appropriate circumstances deference
is due to an agency’s interpretation of its enabling statute, see Chevron, U.S.A., Inc. v. Natural
Res. Def. Council, Inc., 467 U.S. 837, 844 (1984), this is not such a time. First, EEOC appears to
have assumed the availability of a “reasonable factor other than age” defense under the ADEA
federal-sector provision, but the Court finds that assumption doubtful. See infra Part III.B.4.
Second, concerns about sovereign immunity discussed infra cannot be assuaged by mere agency
proclamations, for “waiver of the Federal Government’s sovereign immunity must be
unequivocally expressed in statutory text . . . .” Lane v. Pena, 518 U.S. 187, 192 (1996)
(emphasis added).
29
67. But Congress did not amend the ADEA. Plaintiffs gloss over this inconvenient
congressional silence and argue that the ADEA federal-sector provision must be construed in
strict conformity with Title VII, as amended. The Court declines to do so. However similar the
federal-sector provisions in Title VII and the ADEA may be, see Nakshian, 453 U.S. at 166-67(right to trial by jury); Gomez-Perez, 553 U.S. at 488 (retaliation), these two statutes also have
important differences that cannot be ignored.
3. The Supreme Court’s Interpretation of the ADEA
In fact, the differences between the ADEA and Title VII were essential to the
holding in City of Jackson that age-based disparate impact claims are cognizable under the
private-sector provision of the ADEA. City of Jackson noted that “the scope of disparate-impact
liability under ADEA is narrower than under Title VII” because “age, unlike race or other
classifications protected by Title VII, not uncommonly has relevance to an individual’s capacity
to engage in certain types of employment.” 544 U.S. at 240. As a result, the ADEA private-
sector provision, but not the equivalent Title VII provision, permits any “otherwise prohibited”
action “where the differentiation is based on reasonable factors other than age [(RFOA)].” 29
U.S.C. § 623(f)(1). City of Jackson explained that:
[i]n most disparate-treatment cases, if an employer in fact acted on
a factor other than age, the action would not be prohibited under
[§ 623(a)] in the first place. In those disparate-treatment cases, . . .
the RFOA provision is simply unnecessary to avoid liability under
the ADEA, since there was no prohibited action in the first
place. . . .
In disparate-impact cases, however, the allegedly “otherwise
prohibited” activity is not based on age. It is, accordingly, 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.”
30
544 U.S. at 238-39 (internal citations omitted). RFOA is an affirmative defense that must be
proved by the employer, see Meacham v. Knolls Atomic Power Laboratory, 554 U.S. 84, 94
(2008), and its availability was significant to the Court’s finding that the ADEA permits
disparate impact liability against private-sector employers. “Rather than support an argument
that disparate impact is unavailable under the ADEA, the RFOA provision actually supports the
contrary conclusion.” City of Jackson, 544 U.S. at 239.
4. The Theory of Disparate Impact Is Unavailable Here
Applied to the instant matter, the logic of City of Jackson dictates that this Court
find that disparate impact claims are not cognizable under the ADEA federal-sector provision.
In stark contrast to the ADEA’s private-sector provision, there is no RFOA defense for the
federal government provided in the statute’s federal-sector provision. From this absence,
Plaintiffs argue that the ADEA federal-sector provision does not allow any defense to age-based
disparate impact claims against the federal government. See Pls.’ Opp’n at 25 (“[T]he plain
language of . . . [the ADEA federal-sector provision] makes the affirmative defenses available to
private sector employers unavailable to federal employers like Defendant.” (citing 29 U.S.C.
§ 633a(f) (“Any personnel action of any department, agency, or other entity referred to in
[§ 633a(a)] . . . shall not be subject to, or affected by, any provision of this chapter . . . .”))). The
Court is persuaded that Plaintiffs are correct that an RFOA defense is not available to the federal
government in an ADEA disparate impact case. Section 633a(f) expressly states that personnel
actions subject to the ADEA federal-sector provision are not subject to any other section of the
ADEA. 18 29 U.S.C. § 633a(f). Because the ADEA federal-sector provision is thus “self-
18
Section 633a(f)’s limitations do not apply to §§ 626(d)(3) and 631(b). The former, which
regards discrimination in compensation, is irrelevant to this litigation, and the latter simply states
that “[i]n the case of any personnel action affecting employees or applicants for employment
31
contained and unaffected by other sections, including those governing . . . actions against private
employers,” Nakshian, 453 U.S. at 168, the only statutory defenses available to the federal
government are those set forth in the ADEA federal-sector provision. In other words, none. 19
See 29 U.S.C. § 633a. Consequently, assuming Plaintiffs could bring a disparate impact claim,
an RFOA affirmative defense would not be available to the Secretary.
But Plaintiffs prove too much. The absence of an RFOA affirmative defense, or
any other statutory defense for the federal government, undercuts their argument that the
government can be per se liable for the disparate impact of neutral, non-discriminatory policy
decisions. Congress extended the ADEA to federal employees in order to place them on equal
footing with private employees, see Special S. Comm. on Aging, 93rd Cong., Improving the Age
Discrimination Law 17 (Comm. Print 1973) (“Federal, State, and local government employees
are not covered by [the] ADEA and it is difficult to see why one set of rules should apply to
private industry and varying standards to government.”), not to prevent the federal government,
alone among covered employers, from defending its actions.
Moreover, the absence of the RFOA affirmative defense in the ADEA federal-
sector provision buttresses the sovereign immunity analysis in which this Court’s colleagues
have engaged. See Allard, 840 F. Supp. 2d at 280 (finding the ADEA federal-sector provision
insufficiently clear to constitute an express waiver of sovereign immunity for disparate-impact
which is subject to the provision of section 633a of this title, the prohibitions established in
section 633a . . . shall be limited to individuals who are at least 40 years of age.” 29 U.S.C. §
631(b).
19
The Court cannot simply import the statutory defenses from the ADEA private-sector
provision into the federal-sector provision as is permissible in the context of Title VII. See
George v. Leavitt, 407 F.3d 405, 411 (D.C. Cir. 2005) (“‘Title VII places the same restrictions on
federal and District of Columbia agencies as it does on private employers, and so [the Circuit]
may construe the latter provision in terms of the former.’”). Such a solution would directly
contravene § 633a(f).
32
claims against federal employers); Silver, 2006 WL 626928, at *13 (finding no waiver of the
federal sovereign’s immunity from disparate impact liability under ADEA, especially
considering that City of Jackson “carefully limited its holding” to the ADEA private-sector
provision). It is a bedrock principle of American law that, as Sovereign, the United States is
immune from suit unless Congress has expressly waived that immunity. See, e.g., FAA v.
Cooper, 132 S.Ct. 1441, 1448 (2012) (“[A] waiver of sovereign immunity must be
‘unequivocally expressed’ in a statutory text.” (citations omitted)). “Any ambiguities in the
statutory language are to be construed in favor of immunity, so that the Government’s consent to
be sued is never enlarged beyond what a fair reading of the text requires.” Id. (citations omitted).
To find that Congress waived federal sovereign immunity here would require the Court to accept
a bizarre premise: Congress subjected the United States to a theory of liability for which private
employers, but not the federal government, enjoy a statutory affirmative defense, but failed to
express its intent explicitly.
Plaintiffs counter that the ADEA federal-sector provision sufficiently waived
federal sovereign immunity. They advocate the adoption of the Supreme Court’s sovereign
immunity analysis in Gomez-Perez. There, having found that the ADEA federal-sector provision
encompasses retaliation claims against federal employers, the Supreme Court determined that the
provision, which permits “[a]ny person aggrieved . . . [to] bring a civil action in any Federal
district court of competent jurisdiction for such legal or equitable relief as will effectuate the
purposes of this chapter,” see 29 U.S.C. § 633a(c), “unequivocally waives sovereign
immunity . . . to remedy a violation of 633a.” 553 U.S. at 491. Plaintiffs correspondingly renew
their textual argument, claiming that if “any discrimination” as used in the ADEA federal-sector
provision is broad enough to encompass retaliation claims as in Gomez-Perez, then it also should
33
be read expansively to cover disparate impact claims. By virtue of such a reading, sovereign
immunity would be waived pursuant to § 633a(c). Cf. Forman v. Small, 271 F.3d 285, 297 (D.C.
Cir. 2001) (determining prior to Gomez-Perez that the ADEA waived the federal sovereign
immunity for retaliation claims based “on the sweeping language used by Congress”).
Plaintiffs’ textual analysis does not support their sovereign immunity waiver
argument. Essential to Gomez-Perez was the congruity between the ADEA federal-sector
provision and Title VII. See 553 U.S. at 487-88 (emphasizing that the ADEA federal-sector
provision more closely resembled § 2000e-16 of Title VII than the ADEA private-sector
provision because the ADEA federal-sector provision and § 2000e-16 “contain[] a broad
prohibition of ‘discrimination,’ rather than a list of specific prohibited practices” and
“incorporate[] certain private-sector provisions but . . . not . . . the provision prohibiting
retaliation in the private sector”). Yet, when City of Jackson considered the applicability of
disparate impact liability under the ADEA private-sector provision, the Court found that the
ADEA and Title VII are incongruous because the ADEA private-sector provision has a narrower
scope of liability. While it is true that this conclusion turned on the presence of an RFOA
defense for private-sector employers, which is not repeated for federal employers, there is no
basis in law or reason for believing that Congress, having recognized the need for an RFOA
affirmative defense for age claims of disparate impact, would have subjected the federal
government to disparate impact liability under the ADEA and withheld a RFOA defense––or any
other defense as Plaintiffs argue––all without expressing its intentions clearly. Agreeing with its
colleagues for their reasons and these, the Court concludes that the ADEA does not permit
claims of age-based disparate impact against the United States.
34
5. The Secretary’s Motion Succeeds Even If Disparate Impact Is Cognizable
Were claims of age-based disparate impact viable under the ADEA, the Court
would still find in favor of the Secretary. This is because, contrary to Plaintiffs’ assertion, the
Secretary may not be entirely defenseless. Although the Supreme Court in Meacham held that
“the business necessity test should have no place in ADEA disparate-impact cases,” 554 U.S. at
97, the force of that pronouncement is uncertain in litigation under the ADEA federal-sector
provision since Meacham involved a suit against a private employer. Further, a remark in City of
Jackson that “Wards Cove’s pre-1991 interpretation of Title VII’s identical language remains
applicable to the ADEA” suggests that federal employers could have at their disposal the
business necessity defense, as it existed prior to 1991. 20 544 U.S. at 240. The Court concludes
that the Secretary would not have access to an RFOA defense but might be able to utilize the
business necessity defense as conceptualized by Wards Cove, i.e., a defense in which “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.” Ward
Cove, 490 U.S. at 659. City of Jackson also noted that the business necessity defense is more
demanding than a RFOA defense because it “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,” which is not a
requirement of the “reasonableness inquiry” called for by RFOA. 544 U.S. at 243.
In the alternative to its holding above, the Court thus considers whether the
Secretary produced evidence of a business necessity to rebut the instant charges of disparate
20
Congress amended Title VII but not the ADEA to overrule the holdings in Wards Cove
regarding “the defendant’s burden of proof and the plaintiff’s burden of proving pretext.”
George Rutherglen, Major Issues in the Federal Law of Employment Discrimination 32 (Kris
Markarian ed., 5th ed. 2012), available at http://www.fjc.gov/public/pdf.nsf/lookup/
empldis5.pdf/$file/empldis5.pdf.
35
impact age discrimination. Since the parties focused on an RFOA defense to the ADEA claim,
which the Court finds is not available to the federal government, they did not expressly litigate
whether a business necessity would succeed or fail in this part of the case. However, the parties
fully litigated the Secretary’s asserted business necessity defense in the context of Plaintiffs’
Rehab Act claim and the Secretary’s defense is the same as to both protected classes.
If a claim of age-based disparate impact were viable against the federal
government, the Court concludes that the manner in which Plaintiffs have framed their
Complaint would prove as fatal to that as it did to their claim of disparate impact under the
Rehab Act. As already discussed, Plaintiffs challenge a policy preference: the decision to defund
RSA regional offices and consolidate functions at headquarters to increase oversight and reduce
costs as a matter of management philosophy. Plaintiffs’ theory of disparate impact liability
under the ADEA would not survive summary judgment in the face of the Secretary’s business
necessity defense for the reasons analyzed above.
The Court will grant the Secretary’s motion for summary judgment as to
Plaintiffs’ ADEA claims premised on disparate impact liability.
III. CONCLUSION
For the foregoing reasons, the Court will grant the Secretary’s Motion for Partial
Summary Judgment and deny Plaintiffs’ Motion for Partial Summary Judgment. A
memorializing Order accompanies this Memorandum Opinion.
/s/
ROSEMARY M. COLLYER
Date: September 30, 2013 United States District Judge
36