Supreme Court Extends Age Discrimination in Employment Act To Political Subdivisions With Less Than 20 Employees

On November 6, 2018, the Supreme Court issued its decision in Mount Lemmon Fire District v. Guido, affirming the Ninth Circuit’s ruling that the 1974 amendments to the Age Discrimination in Employment Act (“ADEA”) extended its coverage to political subdivision of a state, regardless of the number of employees.  This resolves a circuit split about whether such entities were only covered if they had twenty or more employees, and clarifies that the ADEA’s age discrimination provisions apply to all political subdivisions regardless of size.

This case arose when the Mount Lemmon Fire District (the “District”), a political subdivision of Arizona, terminated its two oldest firefighters in response to a budget shortfall.  The firefighters sued, claiming the District had discriminated against them on the basis of their age, in violation of the ADEA.  The District, which had less than 20 employees, moved to dismiss on the basis it was not a covered entity.  Ultimately, the Ninth Circuit sided with the firefighters on appeal, and the Supreme Court granted certiorari.

The case turned on the 1974 amendment to the ADEA, which provides that an “employer” includes “a person engaged in an industry affecting commerce who has twenty or more employees…” in a certain timeframe.  The provision’s second sentence goes on to state that “[t]his term also means (1) any agent of such a person, and (2) a State or political subdivision of a State….” The issue was whether the numerical limitation on the number of employees in the first sentence also applied to the employers listed in the second sentence.

In a unanimous decision (8-0, as Justice Kavanaugh did not participate), the Court held that the provision’s second sentence added additional categories of covered employees that are not subject to the twenty-employee limit in the first sentence.  The Court explicitly rejected the District’s argument that the second sentence was meant to clarify the first, noting that this was inconsistent with their precedent regarding the term “also means.”  The Court similarly rejected the District’s concerns that extending ADEA liability would adversely affect small public employers, noting that the Equal Employment Opportunity Commission has held for decades that the ADEA applies to such entities, and that many state age discrimination laws provide similarly broad coverage.  As such, the Court concluded that all political subdivisions are subject to the ADEA, regardless of the number of employees.

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