Villarreal v. R.J. Reynolds Tobacco Co.

• Decision Date: 30 November 2015
• Docket Number: No. 15–10602.,15–10602.
• Citation: 806 F.3d 1288
• Parties: Richard M. VILLARREAL, on behalf of himself and all others similarly situated, Plaintiff–Appellant, v. R.J. REYNOLDS TOBACCO COMPANY, Pinstripe, Inc., Defendants–Appellees, Careerbuilder, LLC, Defendant.
• Court: U.S. Court of Appeals — Eleventh Circuit

806 F.3d 1288

Richard M. VILLARREAL, on behalf of himself and all others similarly situated, Plaintiff–Appellant,

v. R.J. REYNOLDS TOBACCO COMPANY, Pinstripe, Inc., Defendants–Appellees,Careerbuilder, LLC, Defendant.

No. 15–10602.

United States Court of Appeals, Eleventh Circuit.

Nov. 30, 2015.

John J. Almond, Michael L. Eber, Rogers & Hardin, LLP, Kristina M. Jones, Smith Horvath, LLC, Atlanta, GA, Shanon Jude Carson, Sarah R. Schalman–Bergen, Berger & Montague, PC, Philadelphia, PA, Mark T. Johnson, Todd M. Schneider, Joshua G. Konecky, Schneider Wallace Cottrell Brayton Konecky, LLP, Patrick Casey Pitts, James Michael Finberg, Altshuler Berzon, LLP, San Francisco, CA, for Plaintiff–Appellant.

Eric S. Dreiband, Alison B. Marshall, Nikki Lynn McArthur, Jones Day, Washington, DC, Deborah A. Sudbury, Jones Day, Atlanta, GA, for Defendants–Appellees.

Opinion

MARTIN, Circuit Judge:

Richard Villarreal appeals the District Court's dismissal of his Age Discrimination in Employment Act (ADEA) lawsuit. He alleges that RJ Reynolds Tobacco Company discriminated against him on the basis of age when it rejected his application for employment. This appeal raises two important questions. The first is a question of first impression in this Circuit: whether § 4(a)(2) of the ADEA, 29 U.S.C. § 623(a)(2), authorizes disparate impact claims by applicants for employment. We hold that it does, though not because the language of the statute plainly requires this reading. In fact, the statute is unclear on this question. However, the Equal Employment Opportunity Commission (EEOC), the agency charged with enforcing the ADEA, has reasonably and consistently interpreted the statute to cover claims like Mr. Villarreal's. We must defer to that reading rather than venture our own guess about what the statute means. The second question is whether Mr. Villarreal is entitled to equitable tolling of the ADEA's limitations period. We conclude that he is, and reverse the judgment of the District Court for both of these reasons.

I.

RJ Reynolds employs regional sales representatives known as Territory Managers. With the assistance of recruiting services, the company used a set of “resume review guidelines” in screening applicants for these positions. These guidelines list a number of characteristics RJ Reynolds wanted in its new hires, some of which relate to age. For example, the guidelines tell hiring managers to target candidates who are “2–3 years out of college” but to “stay away from” candidates with “8–10 years” of prior sales experience. As it turns out, RJ Reynolds's hiring statistics suggest a pattern of hiring younger applicants. Of the 1,024 people hired as Territory Managers from September 2007 to July 2010, only 19 were over the age of 40.

Mr. Villarreal first applied for a Territory Manager position in November 2007 by submitting an online application. He was 49 years old at the time. RJ Reynolds never responded to his application. Over two years later, on May 17, 2010, Mr. Villarreal filed a charge of unlawful discrimination with the Equal Employment Opportunity Commission (EEOC), alleging that RJ Reynolds had discriminated against him on the basis of his age. The timing of this charge is relevant to Mr. Villarreal's federal lawsuit because the ADEA requires a person to file a charge of discrimination within 180 days of the discriminatory act.¹29 U.S.C. § 626(d)(1)(A). Compliance with this 180–day limitations period is a “prerequisite” to bringing a federal suit. McClinton v. Ala. By–Prods. Corp.,743 F.2d 1483, 1485 (11th Cir.1984).

While his charge of discrimination was pending before the EEOC, Mr. Villarreal applied for a Territory Manager position five more times, and was rejected each time. He amended his charge of discrimination to add these applications and rejections. Finally, on April 2, 2012, the EEOC declined to take further action against RJ Reynolds, and issued Mr. Villarreal a right-to-sue notice.

Mr. Villarreal next filed this lawsuit, raising both disparate treatment (discriminatory intent) and disparate impact (discriminatory result) claims under the ADEA on behalf of himself and all other similarly situated applicants. The complaint acknowledged that Mr. Villarreal's charge of discrimination had been filed more than 180 days after his initial November 2007 application. However, Mr. Villarreal says the limitations period should be equitably tolled until April 2010 because “[t]he facts necessary to support [his] charge of discrimination were not apparent to him, and could not have been apparent to him, until less than a month before he filed his May 17, 2010 EEOC charge.”

The District Court granted RJ Reynolds's partial motion to dismiss. First, it dismissed Mr. Villarreal's disparate impact claim entirely, finding that the ADEA only allows suits for disparate impact claims brought by current employees, as opposed to applicants for employment like Mr. Villarreal. Second, it dismissed all claims related to hiring decisions before November 19, 2009, as untimely.²The District Court found that Mr. Villarreal was not entitled to equitable tolling for his November 2007 allegations because “[t]he Complaint does not specify which facts Plaintiff came to know in 2010, or how Plaintiff came to know them.”

Following the District Court's ruling, Mr. Villarreal moved to amend his complaint to add facts in support of his equitable tolling argument. Mr. Villarreal's proposed amended complaint alleged that he had not known about RJ Reynolds's process for reviewing applications or its use of the resume review guidelines until he spoke with lawyers from Altshuler Berzon in April 2010. Indeed, RJ Reynolds never responded one way or the other to Mr. Villarreal's 2007 application, so “[h]e did not even know whether his application had been reviewed at all, much less whether it had been rejected or screened out.”

The District Court found that the amendment would be futile and denied Mr. Villarreal leave to amend his complaint. It explained that Mr. Villarreal's amended complaint had not stated a claim for equitable tolling for two reasons. First, Mr. Villarreal did not diligently pursue his rights because he did not contact RJ Reynolds to find out why his application had been rejected. And second, he failed to allege any misrepresentation or concealment by RJ Reynolds.

Mr. Villarreal voluntarily dismissed his remaining claim and filed this appeal, challenging the District Court's rulings on both his disparate impact claim and equitable tolling. We consider each argument in turn.

II.

We first address whether § 4(a) of the ADEA authorizes disparate impact claims by people applying for jobs. Unlawful discrimination takes two forms: disparate treatment and disparate impact. In the employment context, disparate treatment happens when an employer treats some people less favorably because of a protected characteristic, such as race, religion, sex, or in our case, age. To prove this type of claim, a plaintiff must establish that the employer had the intent to discriminate.Int'l 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). In contrast, disparate impact happens when an employer uses “practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another.” Id.No proof of discriminatory intent is required for disparate impact claims. Id.

In Smith v. City of Jackson, Miss.,544 U.S. 228, 125 S.Ct. 1536, 161 L.Ed.2d 410 (2005), the Supreme Court held for the first time that the ADEA authorizes disparate impact claims. Smithwas a case in which older employees had received smaller salary increases than their younger colleagues. Id.at 230, 125 S.Ct. at 1539. Because Smithinvolved only claims of current employees, it did not answer the question we face here: whether job applicants may bring disparate impact claims as well.

A.

As always, statutory interpretation begins with the language of the statute. If the statutory language is clear, then our inquiry ends. King v. Burwell,––– U.S. ––––, ––––, 135 S.Ct. 2480, 2489, 192 L.Ed.2d 483 (2015). If the language is unclear, we see if the agency that enforces the statute has interpreted the ambiguity. If the agency has interpreted the ambiguity reasonably, then we defer to its view. See id.

Section 4(a) of the ADEA makes it unlawful for an employer:

(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age; [or]

(2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's age

29 U.S.C. § 623(a). Smithnoted “key textual differences” between these two provisions. Smith,544 U.S. at 236 n. 6, 125 S.Ct. at 1542 n. 6(plurality opinion). First, the two provisions treat motive differently. Subsection (a)(1) makes it unlawful to “discriminate against any individual ... because of such individual's age.” This provision focuses on the employer's (discriminatory) motives, and is the part of § 4(a) that authorizes disparate treatment claims. See Smith,544 U.S. at 236, 125 S.Ct. at 1542. Subsection (a)(2) targets employer conduct that “would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee.” This provision “focuses on the effectsof the action on the employee rather than the motivation for the action of the employer,” so it is the part of § 4(a) that authorizes disparate impact claims. Id. Smithidentified only this difference between the two sections of the statute. See id.at 236 & n. 6, 125 S.Ct. at 1542 & n. 6.

However another possible difference is the description of who can sue under each section. Both...