November 2018 Issue

Also in this issue: City of Madison Finalizes 100% Renewable Plan     |     City Railroad Ordinance Preempted by Federal Law

ADEA Applies to Local Governments Regardless of Their Size

Brian P. Goodman | 12.07.18

In the recent U.S. Supreme Court decision, Mount Lemmon Fire District v. Guido (Nov. 6, 2018), the Court unanimously held the Age Discrimination in Employment Act (ADEA) covers state and local governments regardless of their size. After Mount Lemmon Fire District laid off its two oldest firefighters, the firefighters sued the Fire District for age discrimination under the ADEA. The ADEA specifies that ​“the term ​‘employer’ means a person engaged in an industry affecting commerce who has twenty or more employees .… The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State .…” The Supreme Court held that the ADEA covers state and local governments regardless of their size because the 20-employee requirement is in a separate sentence from state and local governments, and the sentence including state and local governments begins with the phrase ​“also means.”

In reaching this conclusion, the Court reasoned the use of the phrase ​“also means” indicated that Congress intended to add an additional category to the ADEA’s definition of employer because the word ​“also” ordinarily means ​“in addition” and ​“likewise.” Further, the Court believed that because Congress did not include the ​“twenty or more employees” language in the sentence discussing states and local governments, Congress did not intend to place a minimum employee requirement on state and local governments. Finally, the Court rejected the Fire District’s belief that the ADEA should be read in line with Title VII, which only applies to state and local governments if they have 15 employees. Instead, the Court believed that the ADEA is more similar to the Fair Labor Standards Act (FLSA), which applies to all state and local governments regardless of their size, because Congress based many aspects of the ADEA on this law. The Court recognized that applying the ADEA to the state and local governments regardless of their size made the ADEA’s application broader than Title VII’s application; however, the Court noted that this was a result of the different language Congress used in Title VII and the ADEA.

The Supreme Court’s decision in Mount Lemmon Fire District v. Guido greatly impacts small municipalities because it makes clear that the ADEA applies to all state and local governments regardless of their number of employees. The Wisconsin Fair Employment Act already applied to small municipalities and protected employees from age discrimination. However, this decision provides a federal cause of action for employees who are victims of age discrimination with the opportunity to receive compensatory damages under the ADEA. Additionally, this decision will affect how small municipalities draft separation agreements, agreements whereby the employee waives claims against the municipality in exchange for some type of severance pay or benefit. These agreements must comply with the strict requirements of the Older Worker’s Benefit Protection Act (OWBPA) in order for an employee to waive federal age discrimination claims. The OWBPA is a portion of the ADEA that places very specific requirements on separation agreements, including, among other requirements, providing the employee with 21 days to consider signing the agreement and 7 days to revoke the agreement after signing.