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HYMAN v. FIRST UNION CORP.

September 26, 1997

SONDRA W. HYMAN, et al., Plaintiffs,
v.
FIRST UNION CORP., et al., Defendants.



The opinion of the court was delivered by: LAMBERTH

 This matter comes before the court on defendants' Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). This is an action for age discrimination brought under the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. §§ 621 et seq., by 93 terminated employees permitted to proceed collectively by this court against defendants. Plaintiffs contend, in part, that defendants' selection procedures, though neutral on their face, resulted in the discharge of a disproportionate number of workers over the age of forty and thus, assert a disparate impact claim under the ADEA. Upon consideration of the written submissions of parties, oral arguments, and the relevant law, this court grants defendants' motion to dismiss since this court concludes that a claim of liability based on a disparate impact theory is not cognizable under the ADEA.

 I. Background

 The factual and procedural background of this case is as follows. In 1992 and 1993, defendant First Union *fn1" acquired three banking institutions in Virginia, Maryland, and Washington, D.C. Two of the institutions employed plaintiffs bringing this action: First American Metro Corp. and its subsidiary Meritor Savings, F.A. Plaintiffs allege that as part of the acquisition process, First Union relied on selection procedures resulting in the termination of a disproportionate number of individuals over forty years of age, black, and of foreign origin. Plaintiffs further contend that First Union promised the displaced employees "priority consideration" for other positions, but subsequently disregarded that promise and severed most of these employees. Finally, plaintiffs allege that the employees selected to replace those laid off were almost exclusively under forty years of age and white.

 In a memorandum opinion issued August 12, 1997 ("Hyman I"), this court granted plaintiffs' motion to maintain two collective actions, but reserved ruling upon the proposed class actions. In another such opinion issued August 27, 1997 ("Hyman II"), this court granted summary judgment for defendants on plaintiffs' state law breach of contract claims, and denied as moot plaintiffs' motion to maintain the contract claims as a class. In a memorandum opinion issued September 2, 1997 ("Hyman III"), this court granted defendants' motion for summary judgment on plaintiffs' Reston Servicenter ethnic discrimination claims and denied as moot plaintiffs' motion to maintain the Reston Servicenter claims as a class action. In that same opinion, the court also granted plaintiffs' motion to maintain a consolidated action for all black branch managers alleging employment discrimination and reserved ruling on defendants' remaining motions for summary judgment. On August 7, 1997, defendants moved to dismiss claims of age discrimination brought by plaintiffs based on a disparate impact theory of liability under the ADEA. Presently, the court turns its attention to the issue presented in this motion.

 II. Discussion

 Motion to Dismiss

 As stated, plaintiffs allege a violation of the ADEA based, in part, on a disparate impact theory of liability. Defendants have moved to dismiss this claim pursuant to Rule 12(b)(6), asserting that the disparate impact theory of liability is not available under the ADEA. When asserting a motion to dismiss under Rule 12(b)(6), plaintiffs' factual allegations must be presumed true and should be liberally construed in favor of plaintiffs. Phillips v. Bureau of Prisons, 192 U.S. App. D.C. 357, 591 F.2d 966, 969 (D.C. Cir. 1979) (citing Miree v. DeKalb County, Ga., 433 U.S. 25, 27 n.2, 53 L. Ed. 2d 557, 97 S. Ct. 2490 (1977)). In addition, plaintiffs must be given every favorable inference that may be drawn from the allegations of fact. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). The complaint should be dismissed only if it appears beyond doubt that no set of facts proffered in support of plaintiffs' claim would entitle them to relief. EEOC v. St. Francis Xavier Parochial Sch., 326 U.S. App. D.C. 67, 117 F.3d 621, 624 (D.C. Cir. 1997) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)).

 Application of Disparate Impact in ADEA Cases

 The ADEA makes it unlawful for an employer to discriminate against any employee or potential employee on the basis of age except "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. § 623(f)(1). The ADEA draws its coverage and substantive provisions predominantly from Title VII. As the Supreme Court has recognized, "the prohibitions of the ADEA were derived in haec verba from Title VII." Lorillard v. Pons, 434 U.S. 575, 584, 98 S. Ct. 866, 55 L. Ed. 2d 40 (1978). *fn2"

 In contrast, a disparate impact claim exists when an employment practice, though neutral on its face in its treatment of different groups, falls more harshly on one group than another and cannot be justified by business necessity. Unlike a disparate treatment claim, plaintiffs asserting a disparate impact claim need not establish a discriminatory motive on the part of the employer. The theory of disparate impact liability has its roots in the Supreme Court's decision in Griggs v. Duke Power Co., 401 U.S. 424, 28 L. Ed. 2d 158, 91 S. Ct. 849 (1971), decided seven years after the passage of Title VII and four years after the passage of the ADEA. In Griggs, the court held that the use of a facially neutral objective test that tended disproportionately to exclude African-Americans from the employment pool but did not measure skills demonstrably related to job performance violated Title VII's anti-discrimination provisions. Id. at 436. Congress later codified the disparate impact theory of liability with respect to Title VII when it enacted the Civil Rights Act of 1991. See Pub. L. No. 102-166, § 3, 105 Stat. 1071 (1991) (listing as one of its purposes "to confirm statutory authority and provide guidelines for the adjudication of disparate impact suits under Title VII"). No similar amendments recognizing disparate impact liability have been made to the ADEA.

 Although Title VII analysis has been applied to cases brought under the ADEA in numerous contexts, whether the disparate impact theory should be extended to claims under the ADEA remains an open question. The Supreme Court has noted that "there are important similarities between [Title VII and the ADEA], . . . both in their aims-the elimination of discrimination in the workplace-and their substantive prohibitions." Lorillard, 434 U.S. at 584. However, in Hazen Paper Co. v. Biggins, the Court expressly stated that it has "never decided whether a disparate impact theory of liability is available under the ADEA." 507 U.S. 604, 610, 113 S. Ct. 1701, 123 L. Ed. 2d 338 (1993). See also Markham v. Geller, 451 U.S. 945, 948, 68 L. Ed. 2d 332, 101 S. Ct. 2028 (1981) (Rehnquist, J. dissenting from a denial of certiorari) (indicating that "this court has never held that proof of discriminatory impact can establish a violation of the ADEA").

 Additional language in the Court's opinion in Hazen Paper, though, casts considerable doubt on the availability of a disparate impact theory of liability under the ADEA. In that case, the plaintiff alleged that his termination violated the ADEA under a disparate treatment theory of discrimination, in part, because it interfered with the vesting of his pension benefits. In discussing liability under the ADEA, the Court stated that "disparate treatment . . . captures the essence of what Congress sought to prohibit in the ADEA." 507 U.S. at 610. Furthermore, the Court noted that "it is the very essence of age discrimination for an older employee to be fired because the employer believes that productivity and competence decline with age." Id. Justice Kennedy's concurrence in Hazen Paper, joined by Chief Justice Rehnquist and Justice Thomas, cautioned against extending disparate impact liability to the ADEA. "Nothing in the Court's opinion ...


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