Thursday, December 28, 2017

Villalobos v. TWC Administration LLC: Is firing someone for having a disability a defense to an allegation of age discrimination?

In Villalobos v. TWC Administration LLC, No. 16-55288 (Dec. 26, 2017), the Ninth Circuit held that the defendant could not rebut Ralph Villalobos's prima facie case of age discrimination under the California Fair Employment and Housing Act based on evidence that it fired him because of "his repeated, prolonged leaves of absence." In the court's view, because the absences were the result of
Villalobos's disability, an adverse action based on the absences was also based on disability. Because the employer's asserted reason for terminating Villalobos was "neither legitimate nor non-discriminatory," it was insufficient to rebut his prima facie case of age discrimination.

As I see it, the court's analysis reflects a fundamental misunderstanding of how discrimination is established under the McDonnell Douglas framework, which is the indirect method of proof that Villalobos relied upon to try to establish his age discrimination claim. Under the McDonnell Douglas framework: 1) the plaintiff establishes a prima facie case, which is essentially a weak inference that an adverse employment decision was based on a prohibited characteristic, such as age as in the case at hand; 2) the defendant produces evidence that the adverse employment decision was based on a nondiscriminatory reason, such as job performance; and 3) the plaintiff proves that the employer's asserted reason in prong 2 was a pretext for discrimination based on the prohibited characteristic identified in prong 1. Here, the court concluded that the defendant failed to rebut the plaintiff's prima facie case of age discrimination by asserting that it had engaged in disability discrimination. Although the court recognized that the employer's reason did not reflect discrimination based on age, it explained that "an otherwise unlawful proffered reason cannot satisfy the employer's burden at step two even if it is not facially discriminatory toward the particular protected class on which the claim is based."

The Ninth Circuit's analysis is contrary to the Supreme Court's decision in Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993). In Hazen Paper, the Supreme Court looked at whether an employer would be in violation of the federal Age Discrimination in Employment Act if it were to fire an employee in order to prevent his pension benefits from vesting. The Court concluded that, while such a practice would be actionable under the Employee Retirement Income Security Act, it would not by itself violate the ADEA:
That law requires the employer to ignore an employee's age (absent a statutory exemption or defense); it does not specify further characteristics that an employer must also ignore. Although some language in our prior decisions might be read to mean that an employer violates the ADEA whenever its reason for firing an employee is improper in any respect, see McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973) (creating proof framework applicable to ADEA) (employer must have "legitimate, nondiscriminatory reason" for action against employee), this reading is obviously incorrect. For example, it cannot be true that an employer who fires an older black worker because the worker is black thereby violates the ADEA. The employee's race is an improper reason, but it is improper under Title VII, not the ADEA.
Similarly, if an employee alleges age discrimination, then evidence that the employer has engaged in disability discrimination may be relevant to a claim of disability discrimination, but it is not sufficient by itself to establish that the employer also engaged in age discrimination. Logically speaking, it's obvious that if evidence of disability discrimination is per se evidence of age discrimination, then it's also per se evidence of sex discrimination, race discrimination, and so on ad infinitum. This would be patently absurd. The only kind of reason that fails to rebut a claim of age discrimination is an age-based reason, such as asserting that a worker was fired because older workers tend to be less reliable.

The error of the Ninth Circuit's ways is even starker if we look at its decision in Santillan v. USA Waste of California, Inc., 853 F.3d 1035 (9th Cir. 2017). In that decision, the court held that the defendant could not rebut Gilberto Santillan's prima facie case of age discrimination under the California Fair Employment and Housing Act by asserting that it failed to reinstate him because he lacked proper work authorization under the federal Immigration Reform and Control Act. Because the court concluded that IRCA exempted Santillan from this requirement, the employer's reliance on IRCA was not a legitimate reason for failing to reinstate Santillan and therefore not a defense to his assertion of age discrimination. 

Little reflection is needed to see that this analysis makes no sense. If an employer's assertion that it failed to reinstate an employee because he lacked work authorization rebuts a claim of age discrimination when the employer is correct, then why does it fail to do so when it is an honest mistake? In either case, the employer has not engaged in age discrimination. As noted in Hazen Paper, an employer may violate ERISA by firing an employee to prevent his pension benefits from vesting, but that does not mean it has violated the ADEA. Likewise, an employer may violate IRCA by requiring certain documents, but how does that establish that it engaged in age discrimination? Under the analysis followed by the Ninth Circuit in Santillan and Villalobos, a violation of one statute is also essentially a violation of any other statute. And if the need for a "legitimate" reason requires more than merely a lawful reason, then employers may be subject to courts second-guessing their business decisions even when they are not specifically prohibited by statute. 

You may wonder, however, what's the harm? If disability discrimination is unlawful, then how can it be a defense to a claim of age discrimination. In Villalobos's case, it might not make any real difference since, pursuant to the California law under which he brought his claim, it is unlawful for an employer to discriminate based on age or disability. However, federal law has two distinct statutes prohibiting age and disability discrimination, and these have somewhat different requirements for coverage. And in Hazen Paper and Santillan, the employers' asserted reasons were arguably unlawful, but they were potentially violations of entirely different laws unrelated to discrimination. Different laws have different coverage requirements, different procedures, and different remedies, so an employee must bring his claim under the specific statute that applies to the employer's action.

Notably, Villalobos and Santillan both involve claims under the California Fair Employment and Housing Act, so maybe there's something peculiar about that law. But if so, I'm not sure what distinguishes it from federal law. Both decisions also purport to be applying the McDonnell Douglas framework, so there's no reason to think that the Ninth Circuit would have rejected the claims had they been brought under federal law. More likely, the Ninth Circuit is just wrong.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.