_______________________________________________________ No. 09-1688 _______________________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT _______________________________________________________ Equal Employment Opportunity Commission, Plaintiff – Appellant, v. Baltimore County, et al., Defendants – Appellees. _______________________________________________________ On Appeal from the United States District Court for the District of Maryland _______________________________________________________ REPLY BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS APPELLANT _______________________________________________________ JAMES L. LEE Acting General Counsel CAROLYN L. WHEELER Acting Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel PAUL D. RAMSHAW Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St., NE, Room 5SW18K Washington, DC 20507 (202) 663-4737 Paul.Ramshaw@eeoc.gov TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . .iii ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . 20 CERTIFICATE OF COMPLIANCE WITH RULE 32(a). . . . . . . . . . . 21 CERTIFICATE OF SERVICE TABLE OF AUTHORITIES CASES Carter v. DecisionOne Corp., 122 F.3d 997 (11th Cir. 1997) . . . . 13–14 Chevron U.S.A., Inc. v Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . .7 City of L.A. Dep't of Water & Power v. Manhart, 435 U.S. 702 (1978) . . . . . . . . . . . . . . . . . . . . . . . .17–18 EEOC v. Board of Governors, 957 F.2d 424 (7th Cir. 1992). . . . . . . .17 EEOC v. Seafarers Int'l Union, 394 F.3d 197 (4th Cir. 2005) . . . . . .8 Enlow v. Salem-Keizer Yellow Cab Co., 389 F.3d 802 (9th Cir. 2004) ..4, 14, 16 Epter v. New York City Transit Auth., 127 F. Supp. 2d 384 (E.D.N.Y. 2001) . . . . . . . . . . . . . . . . . 17 Gross v. FBL Fin. Servs., Inc., 129 S. Ct. 2343 (2009). . . . . . . . .16 International Union, UAW v. Johnson Controls, Inc., 499 U.S. 187 (1991). . . . . . . . . . . . . . . . . . . . . . . . . .17 Karlen v. City Colleges of Chicago, 837 F.2d 314 (7th Cir. 1988). . . .14 Kentucky Retirement Systems v. EEOC, 128 S. Ct. 2361 (2008) . . . .passim Minnesota Dep't of Econ. Sec. v. Riley, 107 F.3d 648 (8th Cir. 1997). . . . . . . . . . . . . . . . . . . . . .7 Mistretta v. Sandia Corp., 639 F.2d 588 (10th Cir. 1980) . . . . 3, 11–12 Mona Shores Bd. of Educ. v. Mona Shores Teachers Educ. Ass'n, No. 271592, 2008 WL 3009890 (Mich. App. Aug. 5, 2008) . . . . . . .11–12 Mueller v. Reich, 54 F.3d 43 (7th Cir. 1995) . . . . . . . . . . . . . .7 O'Regan v. Arbitration Forums, Inc., 121 F.3d 1060 (7th Cir. 1997). . 14 Phillips v. Martin Marietta Corp., 400 U.S. 542 (1971). . . . . . . . .13 Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000). . . . .16 Solon v. Gary Cmty. Sch. Corp., 180 F.3d 844 (7th Cir. 1999) . . . 4, 16 Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985). . . .3-4, 11 Walker v. Monsanto Co. Pension Plan, 636 F. Supp. 2d 774 (S.D. Ill. 2009) . . . . . . . . . . . . . . . . .15 STATUTES 29 U.S.C. § 623(a) . . . . . . . . . . . . . . . . . . . . . .1–2, 5–6, 9 29 U.S.C. § 623(f)(2) . . . . . . . . . . . . . . . . . . . . . . .5–7, 9 29 U.S.C. § 628 . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 REGULATIONS 29 C.F.R. § 1625.10. . . . . . . . . . . . . . . . . . . . . . . . . .7–8 29 C.F.R. § 1625.10(a) . . . . . . . . . . . . . . . . . . . . . . .6, 9 29 C.F.R. § 1625.10(b) . . . . . . . . . . . . . . . . . . . . 5–7, 9–10 29 C.F.R. § 1625.10(d)(4)(i). . . . . . . . . . . . . . . . . . 5–7, 9–10 ARGUMENT Section 4(a)(1) of the ADEA makes it unlawful for an employer to "discriminate against any individual with respect to his compensation . . . because of such individual's age." 29 U.S.C. § 623(a)(1). The Commission alleges that Baltimore County violates this provision by deducting a larger amount from the paychecks of employees who were older when they enrolled in the County's pension plan than from the paychecks of employees who were younger at enrollment, thereby giving the employees who were older at enrollment lower take-home pay. The district court granted the County's motion for summary judgment, holding that this case is controlled by Kentucky Retirement Systems v. EEOC, 128 S. Ct. 2361 (2008). In our opening brief, we pointed out that Kentucky Retirement is distinguishable from this case for two independent reasons. First, Kentucky Retirement addressed disparate treatment based on pension status, while the Commission challenges here disparate treatment based explicitly and directly on age. EEOC br. at 19–21. Second, Kentucky Retirement dealt with discrimination in pension benefits, while the EEOC's claim here alleges discrimination in current compensation. EEOC br. at 22–23. We also argued that, even if the Kentucky Retirement analysis were applicable to a case like this one, it would support the conclusion that the County's practice is unlawful because five of the six Kentucky Retirement factors counsel against relieving Baltimore County of liability for the express age discrimination challenged here. EEOC br. at 23–28.<1> 1. In its brief as appellee, the county does not directly respond to the Commission's argument that Kentucky Retirement is distinguishable from this case. Instead, the County's principal argument is that the Commission has not demonstrated a violation of § 4(a) because it has failed to prove that the county's "decision" was "‘actually motivated' by age." Baltimore County Brief ("BC br.") at 23–24. But the EEOC does not need to offer additional evidence that the county was actually motivated by age, because the code provision that the EEOC is challenging discloses on its face that the lower compensation is based on the employees' ages. The county concedes that "the ERS require[s] that older enrollees contribute a higher percentage of their wages than [is] required for employees who enrolled at younger ages." BC br. at 5<2> These larger member-contribution deductions result, of course, in lower take-home pay. The employees on whose behalf the Commission is suing receive less take-home pay than similarly situated employees who were younger when they enrolled in the ERS, and the relevant county-code provision bases this disparate treatment explicitly on each employee's age at enrollment. Baltimore County Code ("BCC") § 5-1-203(1), Addendum p. 8 ("Add-8") ("The rate of contribution of the employee shall be determined by the employee's age at the time the employee actually joins the system . . . .") (emphasis added); JA-65 (Aug. 2000 letter from plan actuaries to plan officer, showing that the percentage deducted from an employee's gross salary [column 2] is determined by the employee's age at enrollment [column 1]). Paying employees over 40 less because of their age than similarly situated younger employees violates the ADEA.<3> Indeed, any policy or provision that on its face relies on age to treat employees over 40 less favorably than younger employees violates the act.<4> The county suggests that Kentucky Retirement has created an exception to these rules whenever the lower pay or disparate treatment is connected to a reasonable objective in the employer's pension system. But as we pointed out in our opening brief, EEOC br. at 19–23, Kentucky Retirement did not create such a broad exception to the traditional rules. The Kentucky Retirement Court addressed a retirement plan that computed an employee's disability-retirement benefit differently depending on whether the employees was, when he became disabled, already eligible for normal service retirement. The challenged provision did not use the employee's age as the criterion for the disparate treatment, but rather the employee's "pension status" or pension eligibility — whether he was eligible for normal service retirement. 128 S. Ct. at 2867. The Court "emphasiz[ed]" that it was "dealing with the quite special case of differential treatment based on pension status," and that its decision "in no way unsettles the rule that a statute or policy that facially discriminates based on age suffices to show disparate treatment under the ADEA." Id. at 2369–70 (emphasis in original). Thus Kentucky Retirement itself makes it clear that cases like this one, where the lower pay is based expressly on age, are governed by the traditional rule — that such a policy is a violation on its face — and not by the Kentucky Retirement exception. 2. In addition to violating § 4(a)(1) on its face, the code provision challenged here clearly violates 29 C.F.R. § 1625.10(b) & (d)(4)(i). The Commission's regulation states: "[N]either section 4(f)(2) nor any other section of the [ADEA] excuses the payment of lower wages or salary to older employees on account of age." 29 C.F.R. § 1625.10(b).<5> The regulation goes on to address in detail the issue of employee contributions to employee benefit plans. If the plan is one that the employee is required to participate in as a condition of employment, as is the case here, [a]n older employee within the protected age group may not be required as a condition of employment to make greater contributions than a younger employee in support of an employee benefit plan. Such a requirement would be in effect a mandatory reduction in take-home pay, which is never authorized by section 4(f)(2), and would impose an impediment to employment in violation of the specific restrictions in section 4(f)(2). 29 C.F.R. § 1625.10(d)(4)(i). The ERS violates this regulation because it requires employees who enrolled in the system when they were over 40 "to make greater contributions" to the ERS than are required of employees who were younger when they enrolled. See BCC § 5-1-203(1), Add-8; EEOC br. at 14–15, 17–18. The county does not – and cannot – assert that it complies with § 1625.10(b) & (d)(4)(i). Instead, the county maintains that it complies with § 1625.10(a)(2), and that this Court should rule the quoted statements in § 1625.10(b) & (d)(4)(i) invalid or irrelevant. Section 1625.10(a)(2) states: Where an employer under an employee benefit plan provides the same level of benefits to older workers as to younger workers, there is no violation of section 4(a), and accordingly the practice does not have to be justified under section 4(f)(2). § 1625.10(a)(2). This sentence restates § 4(f)(2) in general terms and notes that a plan that provides equal benefits does not violate § 4(f)(2) with respect to its provision of benefits. That does not mean that there is no violation elsewhere in the plan. If § 1625.10 contained only subsection (a), the county would have a stronger case. But the regulation also contains subsection (b) and subsection (d), quoted supra. The county's compliance with a statement in one subsection does not relieve the county of its duty to comply with the other subsections of the regulation. Cf., e.g., Minnesota Dep't of Econ. Sec. v. Riley, 107 F.3d 648, 650 (8th Cir. 1997) (reaffirming earlier ruling that the defendant federal agency "must comply with every provision of the [relevant statute]"); Mueller v. Reich, 54 F.3d 438, 441 (7th Cir. 1995) (agreeing with federal agency that defendant state "must . . . comply with all parts of the [relevant] regulation") (emphasis in original), vacated on other grounds, 519 U.S. 1144 (1997). The county's principal argument with respect to the above-quoted statements in § 1625.10(b) and (d)(4)(i) is that they impose new obligations on employers, obligations that the EEOC has no authority to impose, and that they are therefore entitled to no deference under Chevron U.S.A., Inc. v Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). BC br. at 34–35. In arguing that this Court should not defer to the quoted statements, the county conveniently ignores the fact that we are dealing here not with an ordinary regulation, whose authority is grounded on the fact that an administrative agency has promulgated it as the agency's interpretation of its governing statute. Rather, we deal here with a regulation that Congress itself has adopted as the authoritative interpretation of § 4(f)(2)'s equal-cost defense. 29 U.S.C. § 623(f)(2) (allowing employers to "observe the terms of a bona fide employee benefit plan where . . . the actual amount of payment made or cost incurred on behalf of an older worker is no less than that made or incurred on behalf of a younger worker, as permissible under section 1625.10, title 29, Code of Federal Regulations (as in effect on June 22, 1989)") (emphasis added). Thus the normal rules governing the validity of a regulation are not applicable here. This Court need not decide whether to "defer" to the EEOC's interpretation of the ADEA, because Congress has already adopted that interpretation as its own. Assuming arguendo that this Court needs to test the validity of § 1625.10 by the normal rules, the county's discussion of those rules is flawed first because it fails to cite EEOC v. Seafarers International Union, 394 F.3d 197, 200–07 (4th Cir. 2005), the most recent decision in which this Court addressed the validity of an EEOC regulation. As this Court recognized in Seafarers, Congress has delegated to the EEOC the power to "‘issue such rules and regulations as it may consider necessary or appropriate for carrying out [the ADEA].'" Id. at 200 (quoting 29 U.S.C. § 628). The first step in applying Chevron is to utilize the traditional tools of statutory construction to determine whether Congress has prohibited the challenged agency interpretation. Id. at 202. The county has pointed to no provision of the ADEA that bars the EEOC from regulating employee contributions, and we know of none. The second step is to decide whether the agency's rule is a permissible interpretation of the statute. Id. at 205. Here, the Commission's regulation of employee contributions is not only a permissible interpretation of the ADEA, but an interpretation that Congress itself has endorsed. See supra. In addition, the challenged provisions are essential to fulfilling the purpose of § 4(f)(2). Congress's objective in enacting § 4(f)(2) was "to permit age-based reductions in employee benefit plans [only] where such reductions are justified by significant cost considerations." 29 C.F.R. § 1625.10(a). One cannot meaningfully compare the benefits the employees receive with the costs the employer incurs without taking into account whether the older employees — whom the ADEA is meant to protect — are being required to pay more for the benefits they receive than the younger employees are. For example, suppose an employer offers the same level of health-insurance benefits to all its employees, but requires employees over 40 to pay $100 more per month for that coverage than employees under 40 pay. The older employees are paying more for the same benefit, and therefore are receiving, dollar for dollar, a lower level of health coverage as a benefit of their employment than the younger employees are.<6> 3. The county maintains that this case should be governed by Kentucky Retirement Systems v. EEOC, 128 S. Ct. 2361 (2008), because all six of the Kentucky Retirement factors apply here. The Commission argued in its opening brief that five of the six factors in fact weigh against applying Kentucky Retirement's special rule to this case, and we stand by that discussion. EEOC br. at 23–28. We restrict ourselves here to comments on the county's arguments. In discussing the first factor, the county states that the EEOC is arguing that "the ERS focuses on years of service until retirement." BC br. at 24–25. That is not our argument. On page 21 of our brief we were responding to the district court's analysis, which defined "pension status" — erroneously — as the number of years remaining until normal retirement age. The Commission's position is not that the ERS focuses on the number of years remaining until normal retirement age. Rather, our position is that the ERS focuses directly and explicitly on how old the employees were when they enrolled in the system. EEOC br. at 13 ("[T]he ERS expressly bases the deduction from an employee's paycheck on the employee's age."). We did argue, in responding to the district court's analysis, that the number of years between enrollment and normal retirement age is not analytically distinct from age, because the former is inevitably the arithmetical reciprocal of the latter. EEOC br. at 21. The county's brief fails to address this argument. The county's discussion of the second Kentucky Retirement factor is flawed for reasons already addressed. The county claims that "what the EEOC is characterizing as discrimination based on net wages [?] is in fact a provision designed to equalize the funding of pension benefits." BC br. at 25. As stated supra pp. 2–4 and infra pp. 15–17, a code provision that lowers the take-home pay of older employees based on their age is a facially discriminatory provision, and the county council's subjective intent in enacting that provision is not relevant to whether the provision violates the ADEA. Moreover, Kentucky Retirement was expressly limited to cases where pension benefits varied depending on an employee's eligibility for normal retirement, and the decision did not change the rule prohibiting unequal pay based explicitly on age. See supra pp. 4–5. The county contends that the Commission's reliance on Mistretta v. Sandia Corporation, 639 F.2d 588 (10th Cir. 1980), overruled on other grounds, Thurston, 469 U.S. at 126–28 (1985), and Mona Shores Board of Education v. Mona Shores Teachers Education Association, No. 271592, 2008 WL 3009890 (Mich. App. Aug. 5, 2008), is misplaced because in those cases the courts "concluded . . . that the employer intentionally discriminated based on age." BC br. at 26 n.5. One portion of the Mistretta decision reviewed a district court ruling finding intentional discrimination based on statistical and other evidence, 639 F.2d at 595, but the portion we cited, EEOC br. at 13, citing 639 F.2d at 596, focused on a claim that the defendant's previous "stretch-out" promotion policy violated the ADEA. The challenged policy required older employees to wait longer between promotions than younger employees did, and the policy was based directly on the employees' ages. The court of appeals affirmed the district court's ruling that this policy violated the ADEA on its face, reasoning that "[a]n employee who received 5% salary increases every 21 or more months because of his age being over 46, was treated far less favorably than an employee of 29 or under who could receive a 5% increase every 12 months." 639 F.2d at 596. Nor was Mona Shores a case where the court found intentional discrimination based on statistical or testimonial evidence. Mona Shores was another case in which the court found a violation of the ADEA because the employer's policies, on their face, relied on the older employees' ages in treating them less favorably. Mona Shores, 2008 WL 3009890, at *4–5. Both cases are therefore on point here. In discussing the third factor, the county states that the issue here should be "whether [a] rule that is correlated with age has a purpose independent of discriminating on the basis of age." BC br. at 27. If we faced here a rule that were merely "correlated with age," we may well have needed to address the issue that the county articulated. But here the rule requires disparate treatment based expressly on age, and the Kentucky Retirement Court "emphasiz[ed] . . . that a statute or policy that facially discriminates based on age suffices to show disparate treatment under the ADEA." 128 S. Ct. at 2369.<7> And where the challenged policy discriminates on its face on the basis of age, it does not matter whether the defendant had a non-age-based motive for adopting the policy. See infra pp. 15–17. With respect to the fourth factor, the county points out that the ERS does not give all older employees lower take-home pay because of their age. It is true that not all older employees receive lower take-home pay, but that hardly relieves Baltimore County of liability for age discrimination. The county is discriminating against some older employees because of their age and is therefore violating the ADEA even if the county is not discriminating against all older employees because of their age. We cited Phillips v. Martin Marietta Corp., 400 U.S. 542, 544 (1971) (per curiam), for this proposition in our opening brief. EEOC br. at 29. See also Carter v. DecisionOne Corp., 122 F.3d 997, 1002–04 (11th Cir. 1997) (female sales representative fired at age 42 alleged sex and age discrimination; jury found age discrimination and court found sex discrimination; court of appeals ruled that plaintiff offered sufficient evidence of age discrimination, even though the evidence suggested that the age discrimination was directed only at women); O'Regan v. Arbitration Forums, Inc., 121 F.3d 1060, 1065 (7th Cir. 1997) (female manager over 40 alleged that defendant's female president was discriminating against older women and favoring younger men; court of appeals held that district court erred in dismissing her age claim).<8> Finally, the county claims that the sixth factor also militates in favor of applying Kentucky Retirement here. BC br. at 28–29. The Kentucky Retirement Court found no age discrimination in the challenged retirement plan in part because it would have been extraordinarily difficult to change the plan in a way that would have cured the alleged age discrimination and yet still allowed the state to achieve its legitimate objective of providing disabled employees with a sufficient retirement income. Kentucky Retirement, 128 S. Ct. at 2369. We argued in our opening brief that to the extent that the county seeks to meet its objective (of making relatively equal contributions on behalf of all members) by requiring older employees to contribute a higher percentage of their salary, the objective is not a legitimate or lawful objective. EEOC br. at 27–28. More importantly, the county has no basis for arguing that it would be extraordinarily difficult to remedy the challenged discrimination here while at the same time meeting the county's legitimate objectives. We know it would not be difficult for the county to remedy the challenged discrimination because the county has already remedied it with respect to employees hired after June 2007. All it need do now is extend to the employees it hired before July 2007 the same policy it has already adopted with respect to its more-recently-hired employees. 4. In addition to relying on Kentucky Retirement, the county cites other cases. BC br. at 21–23. Many of these cases address challenges to particular employment decisions, as opposed to challenges to an employer's policy or a plan or code provision.<9> They are therefore irrelevant here. An employee challenging a particular employment decision must naturally offer evidence that the decision was motivated by discriminatory intent.<10> This requirement to demonstrate the defendant's state of mind is not applicable when the plaintiff is challenging a policy or provision that discloses on its face that the disparate treatment is based on the employees' ages.<11> Nor does the requirement make sense from an evidentiary viewpoint. The Commission's claim here is that the relevant county- code provision violates — and is therefore pre-empted by — the ADEA. The provision constitutes a current and ongoing violation of the act. The state of mind of the members of the county council that enacted the original version of this provision is not relevant to the EEOC's claim that the current provision is a current violation.<12> As the Supreme Court stated in International Union, UAW v. Johnson Controls, Inc., 499 U.S. 187, 199 (1991): [T]he absence of a malevolent motive does not convert a facially discriminatory policy into a neutral policy with a discriminatory effect. Whether an employment practice involves disparate treatment through explicit facial discrimination does not depend on why the employer discriminates but rather on the explicit terms of the discrimination. See also EEOC v. Board of Governors, 957 F.2d 424, 429 (7th Cir. 1992) ("In discriminatory policy cases the employer's reasons for adopting the challenged policy are irrelevant to the policy's legality."). In sum, the comments of the court in Epter v. New York City Transit Auth., 127 F. Supp. 2d 384 (E.D.N.Y. 2001), are precisely on point here: When an employer is relying on "a formal, facially discriminatory policy requiring adverse treatment of employees" based on their age, "the issue of whether or not intentional discrimination is present cannot be appropriately described as an elusive factual question," and "the McDonnell–Douglas framework is [therefore] wholly inapplicable." Id. at 387. The Epter court continued: For this reason, [the defendant's] insistent claims that "[p]laintiff overlooks the fact that he has produced no evidence that the defendant intended to ‘discriminate' against plaintiff because of his age" . . . are beside the point. The policy itself is facial evidence of intentional discrimination. Id. (first brackets added; second brackets in original). The county also argues that this case is distinguishable from City of Los Angeles, Department of Water & Power v. Manhart, 435 U.S. 702 (1978), because in Manhart "women bore the consequences of a rule that negatively impacted them without any assurance that any individual woman would actually fit the generalization on which the rule was based," while that is not a problem here because "it is a mathematical certainty that an employee who enrolls in the ERS at an older age will fund a smaller portion of his/her pension [than an employee who enrolls at a younger age] unless the contribution rate is increased [for the former]." BC br. at 30–31 (brackets added). But it is far from a mathematical certainty that employees older at enrollment will fund a smaller portion of their pensions than employees younger at enrollment. The county's calculations assume that every employee will retire at his or her normal retirement age, and that assumption is false. Some employees work beyond their normal retirement age, as Officer Bosse did. Assume that employees A and B were both general employees subject to a normal retirement age of 60 and earned the same salary, that employee A started working when he was 55, and that employee B started working when he was 50. If employee B retired at 60 (with ten years of service) and employee A continued working until he was 66 (having earned eleven years of service), employee A funded a greater portion of his pension than employees B did, because employee A contributed a higher percentage of his salary every paycheck (because of his age at enrollment) and he contributed for a longer period of time. It is therefore as uncertain here as it was in Manhart that a particular employee who enrolls when older will contribute less to his or her pension than a comparator who enrolls when younger. Finally, the county argues that the EEOC is ignoring the time value of money. BC br. at 33. But the time value of money is irrelevant here because the Commission is challenging the county's practice of discriminating in current compensation.<13> The county gave Officer Bosse, for example, less take-home pay, based on his age, than it gave other officers who were doing the same work at the same time, but were younger at enrollment. Officer Bosse and his comparators received their paychecks on the same dates, and the time value of the money they received is therefore not relevant — or, if relevant, was identical to the paycheck amounts. CONCLUSION The EEOC therefore respectfully urges this Court to rule that the district court erred in granting summary judgment to Baltimore County and in denying summary judgment to the Commission. Respectfully submitted, JAMES L. LEE Acting General Counsel CAROLYN L. WHEELER Acting Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel /s/ Paul D. Ramshaw PAUL D. RAMSHAW Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St., NE, Room 5SW18K Washington, DC 20507 (202) 663-4737 Paul.Ramshaw@eeoc.gov UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 09-1688 EEOC v. Baltimore County, et al. CERTIFICATE OF COMPLIANCE WITH RULE 32(a) I certify that this brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because it contains 5,049 words (as counted by MS Word 2003), excluding the parts of the brief exempted by Rule 32(a)(7)(B)(iii). The brief complies with the typeface requirements of Rule 32(a)(5) because it has been printed in Times New Roman 14-point type. /s/ Paul D. Ramshaw Paul D. Ramshaw October 21, 2009 CERTIFICATE OF SERVICE I certify that that on October 21, 2009, I electronically filed the foregoing brief with the Clerk of Court using the CM/ECF system, which will send notice of such filing to the following registered CM/ECF users: John Edward Beverungen James Joseph Nolan, Jr. Baltimore County Office of Law Old Courthouse 400 Washington Ave., 2nd floor Towson, MD 21204-0000 jnolan@baltimorecountymd.gov I further certify that on October 21, 2009, I served the foregoing brief by electronic transmission on the following non-CM/ECF participants, each of whom has agreed to electronic service: Linda D McKeegan Kahn Smith and Collins PA 201 N. Charles St., 10th floor Baltimore, MD 21201 mckeegan@kahnsmith.com Bernard Ilkhanoff Ilkhanoff and Silverstein PC 249 S. Main St. Shrewsbury, PA 17361 bernard@islawyers.com John West Jennifer Hunter Bredhoff and Kaiser PLLC 805 15th St., NW, Ste. 1000 Washington, DC 20005 jwest@bredhoff.com jhunter@bredhoff.com /s/ Paul D. Ramshaw Paul D. Ramshaw October 21, 2009 *********************************************************************** <> <1> We also argued in our opening brief that the district court properly rejected the county’s request to dismiss the case on the ground of laches. EEOC br. at 30–33. The county did not address laches in its brief and has therefore waived that argument. <2> The county’s brief misleadingly implies that the ERS required these higher contributions only in the past. BC br. at 5 (“[P]rior to June 30, 2007, the ERS required that older employees . . . .”). In fact, it is undisputed that the ERS still requires all employees who were hired before July 2007 and were older at enrollment to contribute at the higher rates. See Baltimore County motion for summary judgment, R.92 at 9 (“[A]n older new hire contributes, as a percentage of earnings, a greater amount than an otherwise similarly situated younger new hire.”). <3> See, e.g., Mistretta v. Sandia Corp., 639 F.2d 588, 596 (10th Cir. 1980) (district court properly awarded damages under the ADEA based on employer’s policy requiring older employees to wait longer between raises than younger employees), overruled on other grounds, Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 126–28 (1985); cf. City of L.A. Dep’t of Water & Power v. Manhart, 435 U.S. 702, 705-09 (1978) (where employer required female employees to make higher contributions to pension plan than male employees, resulting in lower take-home pay for female employees, employer violated § 703(a) of Title VII, even though the higher contributions were based on accurate actuarial considerations). <4> See, e.g., Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 121–22 (1985) (TWA’s policy allowed pilots displaced for other reasons to remain employed by bumping a less senior flight engineer, but barred pilots displaced because of age from doing so, and it was therefore “discriminatory on its face”); Enlow v. Salem–Keizer Yellow Cab Co., 389 F.3d 802, 811–13 (9th Cir. 2004) (where 73-year-old taxicab driver offered evidence that defendant terminated him because it had switched to a cheaper insurance policy that did not cover drivers over 70, this was direct evidence of age discrimination under Thurston, and district court erred in requiring him to offer additional evidence of discriminatory intent); Solon v. Gary Cmty. Sch. Corp., 180 F.3d 844, 855 (7th Cir. 1999) (where the defendant’s early-retirement policy relied expressly on age in reducing the early-retirement benefits available to older employees, the district court acted properly in ruling the policy facially discriminatory and in not requiring plaintiffs to submit additional evidence of discriminatory intent). <5> The county maintains that the EEOC has waived any argument based on § 1625.10(b), “since it has never before cited it.” BC br. at 35. This is simply not true. The Commission relied on § 1625.10(b) three times in its cross-motion for summary judgment. R.93 at 19-21. <6> The county also contends that this Court should ignore § 1625.10(b) and (d)(4)(i) because § 1625.10 is a regulation interpreting § 4(f)(2) of the ADEA and it is therefore irrelevant here where, the county alleges, it has not violated § 4(a)(1) in the first place. BC br. at 32. The Commission of course disputes the latter claim, but the county’s argument fails for the additional reason that § 1625.10 is not limited to interpreting and applying § 4(f)(2). The regulation refers to other sections of the ADEA several times, including in the statement in § 1625.10(b) quoted supra p. 5 (“[N]either section 4(f)(2) nor any other section of the [ADEA] excuses the payment of lower wages . . . .”) (emphasis added). See also §§ 1625.10(a)(2) & 1625.10(b) (definition of “employee-pay-all” plans). <7> The county also states that “to allow older new enrollees to contribute at the same rate as younger new enrollees, but nevertheless be entitled to the same level of benefits, would confer an enormous windfall on older new enrollees.” CB br. at 27. The county implies this would be an unfair result. But this is not only what the ADEA requires; it is also what the county itself is doing with respect to employees hired after June 2007. <8> Moreover, it is common for courts to find policies facially discriminatory on the basis of age even when the policy discriminates against only a relatively small subset of the employees whom the statute protects. See, e.g., Enlow, 389 F.3d at 812 (defendant’s facially discriminatory policy discriminated only against employees over 70); Karlen v. City Colleges of Chicago, 837 F.2d 314, 318 (7th Cir. 1988) (defendant’s facially discriminatory policy discriminated only against employees between 64 and 69 years old); disapproved on other grounds, Public Employees Ret. Sys. v. Betts, 492 U.S. 158, 177 (1989). <9> Walker v. Monsanto Co. Pension Plan, 636 F. Supp. 2d 774 (S.D. Ill. 2009), is the only decision the county cites that addresses a policy allegedly dictating disparate treatment based on age. But Walker is distinguishable from the instant case on several grounds. This case addresses current compensation, while Walker focused on the value of the benefits the employees would receive at retirement. More important, in Walker there simply was no disparate treatment. The value of an employee’s cash-balance account (measured by the annuity benefit available at retirement) did not, in the court’s view, vary with one’s age: it was maintained at the same level both for employees under 55 (who were receiving “interest credits”) and for employees over 55 (who were not). Id. at 780–81, 783–84. Here, in contrast, there is clear disparate treatment: employees who were older at enrollment are receiving less take-home pay than employees who were younger at enrollment but are otherwise similarly situated. <10> See, e.g., Gross v. FBL Fin. Servs., Inc., 129 S. Ct. 2343, 2351 (2009) (plaintiff challenging specific employment decision “must prove by a preponderance of the evidence . . . that age was the ‘but–for’ cause of the challenged employer decision”); Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 141 (2000) (age-discrimination plaintiff must prove that his age “‘actually played a role in [the employer’s decisionmaking] process and had a determinative influence on the outcome’”) (brackets in Reeves) (quoting Hazen Paper Co. v. Biggins, 507 U.S. 604, 610 (1993)). <11> See Enlow, 389 F.3d at 811–13; Solon, 180 F.3d at 855. <12> The record does not reveal when the challenged provision was first enacted. We know that the provision was in effect in 1977, JA-64, but the relevant statement there — “The last time these [member-contribution] rates were set was in 1977 . . . .” — strongly suggests that the provision was adopted long before 1977, and possibly as part of the original retirement plan enacted in 1945. <13> We assume here, for purposes of argument, that the time value of money is a relevant consideration with respect to some age discrimination claims, but we do not concede that. Baltimore County points to no provision in the ADEA or in the Commission’s regulations that requires considering the time value of money, and we know of none.