E.E.O.C. v. Francis W. Parker School, 93-3395

• Decision Date: 18 November 1994
• Docket Number: No. 93-3395,93-3395
• Citation: 41 F.3d 1073
• Parties: 66 Fair Empl.Prac.Cas. (BNA) 85, 65 Empl. Prac. Dec. P 43,301, 63 USLW 2265, 96 Ed. Law Rep. 77 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. FRANCIS W. PARKER SCHOOL, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1073

41 F.3d 1073

66 Fair Empl.Prac.Cas. (BNA) 85, 65 Empl.

Prac. Dec. P 43,301,

63 USLW 2265, 96 Ed. Law Rep. 77

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. FRANCIS W. PARKER SCHOOL, Defendant-Appellee.

No. 93-3395.

United States Court of Appeals Seventh Circuit.

Argued April 20, 1994.

Decided Oct. 21, 1994.

Rehearing and Suggestion for Rehearing

En Banc Denied Nov. 18, 1994. ^*

Gail S. Coleman (argued), E.E.O.C., Office of Gen. Counsel, Washington, DC, Sharon A. Seeley, John C. Hendrickson, Gordon Waldron, E.E.O.C., Chicago, IL, for plaintiff-appellant.

Don Sampen (argued), Gayle M. Meadors, Charles L. Michod, Jr., Martin, Craig, Chester & Sonnenschein, Chicago, IL, for defendant-appellee.

Steven S. Zaleznick, Cathy Ventrell-Monsees, Thomas W. Osborne, American Ass'n of Retired Persons, Washington, DC, for American Ass'n of Retired Persons, amicus curiae.

Before BAUER, and CUDAHY, Circuit Judges, and GRANT, District Judge. ^**

BAUER, Circuit Judge.

The United States Equal Employment Opportunity Commission ("EEOC") brought an action against the Francis W. Parker School ("Parker") alleging that in its 1989 hiring of a drama teacher, the school violated the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. Secs. 621-634. The district court granted summary judgment in favor of Parker. We affirm.

I.

Parker is a private primary and secondary school located in Chicago's Lincoln Park area. The principal of the school has ultimate authority as to decisions on hiring and firing of teachers. Incumbent teachers' salaries are determined by a twenty-two-step system which links salary to work experience. As a matter of policy, Parker has also used the step system to determine the salaries it will pay new teachers by crediting them for prior teaching experience they have had elsewhere.

When a teacher left Parker's drama department in the fall of 1988, Paul Druzinsky, the head of the department, was asked to search for a replacement. Because of fiscal constraints, Parker's principal, John Cotton, told Druzinsky that the position would pay an annual salary of no more than $28,000. The list of candidates was narrowed to three, all of whom were interviewed between March 14 and March 24 of 1989. On March 27, Parker hired Nancy Bishop as the school's new full-time drama teacher. Bishop had at the time a year of experience and was to start at an annual salary of $22,000.

In the meantime, on March 13, after Druzinsky had announced the three finalists for the position, one of Parker's music teachers asked Druzinsky if he would review the resume of a drama teacher named Harold Johnson. Johnson was sixty-three years old and claimed to have thirty years of experience. Druzinsky called Johnson a week later to inform him that he would not be hired. One of the reasons given for the decision was that Johnson qualified for a salary higher than Parker could afford. Druzinsky claims that he also told Johnson that he was not considered for the position because Druzinsky had received Johnson's resume after the search process was over and the final candidates had been chosen. Johnson denies that Druzinsky ever mentioned this.

On Johnson's behalf, the EEOC filed this lawsuit alleging that Parker's conduct constituted disparate treatment and disparate impact in violation of the ADEA. Parker's first motion for summary judgment was denied on August 27, 1992. In light of the Supreme Court's decision in Hazen Paper Co. v. Biggins, --- U.S. ----, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993), Parker requested that the court reconsider its ruling. The court granted the request, and on June 14, 1993, granted Parker's motion for summary judgment on the EEOC's disparate treatment claim. Parker followed up with a motion for summary judgment on the EEOC's disparate impact claim, and again relying on Hazen Paper, the court granted this motion. The EEOC appeals only the decision on its claim of disparate impact.

II.

We review a decision granting summary judgment de novo. Doe v. Allied Signal Inc., 925 F.2d 1007, 1008 (7th Cir.1991). Summary judgment is appropriate when the record, viewed in a light most favorable to the nonmoving party, reveals that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

Drafters of the ADEA relied to a large extent on the language of Title VII of the Civil Rights Act of 1964. 42 U.S.C. Sec. 2000e. As a result, "disparate treatment" and "disparate impact," terms traditionally used to describe theories of relief under Title VII have been incorporated into the ADEA lexicon. The theories can briefly be described as follows.

Disparate treatment occurs when an employee is treated less favorably simply because of race, color, sex, national origin, or in our case, age. This is the most obvious form of discrimination. To be successful on this type of claim, proof of discriminatory motive is critical. International Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n. 15, 97 S.Ct. 1843, 1854 n. 15, 52 L.Ed.2d 396 (1977).

Disparate impact is the result of more subtle practices, which on their face are neutral in their treatment of different groups but which in fact fall more harshly on one group than another. No proof of discriminatory motive is necessary, but if the practice is found to be justified by business necessity, the claim will fail. The EEOC claims that due to the statistically significant relationship between age and work experience, by setting a low maximum salary limit, Parker excluded a disproportionate percentage of applicants over the age of forty from consideration for the teaching position. ¹ Because no business justification was offered in defense of this policy, the EEOC concludes that Parker's process in hiring a new drama teacher violated the dictates of the ADEA.

We begin our analysis with a brief discussion of the Supreme Court's decision in Hazen Paper. Walter Biggins, a sixty-two year old technical director for the Hazen Paper Company was fired from his position in 1986. Hazen Paper's pension liability vested after an employee completed ten years of service. Biggins's pension benefits would have vested had he worked a few more weeks. As an alternative to his release, Hazen Paper offered to retain Biggins as a consultant, a position which would not have allowed Biggins's pension benefits to vest. Biggins brought an ERISA and ADEA claim against Hazen Paper. The jury held in his favor on both counts, and the Court of Appeals affirmed both findings of liability. The Supreme Court granted certiorari to decide whether discharge of an employee motivated by the employer's desire to avoid the vesting of pension benefits is sufficient to state a disparate treatment claim under the ADEA. Hazen Paper, --- U.S. at ----, 113 S.Ct. at 1704. Because the evidence did not show that Hazen Paper's decision was based on Biggins's age, the Court held that his disparate treatment claim was deficient. Id. at ----, 113 S.Ct. at 1708.

Hazen Paper was, by its own terms, a disparate treatment case only. Id. at ----, 113 S.Ct. at 1706. Nevertheless, the Court's examination of the ADEA is instructive here. Critical to the Court's analysis was its belief that inaccurate stereotyping of the elderly was, "the essence of what Congress sought to prohibit in the ADEA." Id. The ADEA "requires the employer to ignore an employee's age ... it does not specify further characteristics that an employer must also ignore." Id. at ----, 113 S.Ct. at 1707. Hence, when an employer denies a worker an employment opportunity based on the belief that older employees are less efficient or less productive, the ADEA provides the worker with a cause of action. On the other hand, "[w]hen the employer's decision is wholly motivated by factors other than age, the problem of inaccurate and stigmatizing stereotypes disappears. This is true even if the motivating factor is correlated with age, as pension status typically is." Id. at ----, 113 S.Ct. at 1706. Nevertheless, "[b]ecause age and years of service are analytically distinct, an employer can take account of one while ignoring the other, and thus it is incorrect to say that a decision based on years of service is necessarily 'age-based.' " Id. at ----, 113 S.Ct. at 1707.

Because the decision to fire Biggins was not based on misperceptions about the competence of older workers, Hazen Paper did not violate the ADEA. The Court's discussion makes clear that the ADEA prevents employers from using age as a criterion for employment decisions. On the other hand, decisions based on criteria which merely tend to affect workers over the age of forty more adversely than workers under forty are not prohibited. Anderson v. Baxter Healthcare Corp., 13 F.3d 1120 (7th Cir.1993).

Our reading of Hazen Paper and the ADEA is supported by subsection (f) which reads:

It shall not be unlawful for an employer, employment agency or labor organization--

(1) to take any action otherwise prohibited under subsection [ ] (a), ... 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.

29 U.S.C. Sec. 623(f).

The exception for differentiation based on "reasonable factors other than age" is particularly noteworthy. It suggests that decisions which are made for reasons independent of age but which happen to correlate with age are not actionable under the ADEA. Anderson v. Baxter Healthcare Corp., 13 F.3d 1120 (7th Cir.1993); Metz v. Transit Mix, Inc., 828 F.2d 1202, 1220 (7th Cir.1987) (Easterbrook, J., dissenting). A similar provision in the Equal Pay Act which permits discrepancies in wages paid to male and female workers for "factors other than sex," has been construed to preclude disparate impact claims. County of Washington v. Gunther, 452 U.S....