Villarreal v. R.J. Reynolds Tobacco Company

U.S. Circuit Court of Appeals for the Eleventh Circuit. Oct. 5, 2016; 2016 WL 5800001

On November 8, 2007, and at the age of 49, Plaintiff Richard M. Villarreal applied for the position of territory manager with Defendant R.J. Reynolds. An R.J. Reynolds contractor screened out Villarreal’s employment application based on guidelines provided by R.J. Reynolds. Those guidelines sought “targeted candidates” just “2-3 years out of college,” who “adjust easily to changes,” but also instructed the contractor to “stay away from” applicants with 8-10 years of sales experience. Villarreal never learned that his application had been rejected and never followed up with R.J. Reynolds.


Over two years later, attorneys contacted Villarreal and informed him that R.J. Reynolds had discriminated against him on the basis of age in regards to his application. In May 2010, Villarreal filed a charge against R.J. Reynolds with the Equal Employment Opportunity Commission (“EEOC”) and subsequently sought employment with R.J. Reynolds five times over the next two years. When he failed to receive employment, Villarreal amended his EEOC complaint to add R.J. Reynolds’ contractor, Pinstripe, Inc. (“Pinstripe”), as a respondent. In April 2012, the EEOC issued a “right to sue” letter to Villarreal, resulting in a proposed class action filed in the U.S. District Court for the Northern District of Georgia. The proposed class action alleged that R.J. Reynolds and Pinstripe had discriminated against those applicants for the territory manager position who were forty years of age or older. The allegations contained two charging counts: (i) disparate treatment under section 4(a)(1) of the ADEA and (ii) disparate impact under section 4(a)(2).


Defendants moved to dismiss both counts. First, the ADEA’s text limited the use of disparate impact analysis to only employees of R.J. Reynolds; second, the statute of limitations precluded prosecution of both counts. The District Court agreed with Defendants, resulting in Villarreal requesting leave to amend. Villarreal, 2016 WL 5800001, at 2. In his proposed amended complaint, Villarreal alleged that we was not an employee of R.J. Reynolds, received no information from Defendants concerning why Villarreal did not obtain employment, and had no knowledge of the screening guidelines and whether his application had been reviewed. Id. The District Court denied Villarreal’s motion for leave to amend, citing futility and Villarreal’s failure to allege misrepresentations, concealment, or his own due diligence in investigating the alleged discrimination, each which might have supported an equitable tolling claim. Id.


On appeal, a divided panel of the Eleventh Circuit Court of Appeals reversed the District Court’s ruling, deferring to the EEOC’s interpretation of section 4(a)(2) and finding that equitable tolling was in fact appropriate. Id. The Court of Appeals, en banc, granted a rehearing of the appeal. In doing so, the Eleventh Circuit reconfirmed its duties to give force to clear and unambiguous legislative text and to read the ADEA as a whole and within the context of its language. The Court of Appeals then analyzed the relevant provisions of section 4(a)(2):


“Section 4(a)(2) of the Act makes it “unlawful for an employer…to limit, segregate, or classify 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)(2).


The Court of Appeals found that the key phrase of section 4(a)(2) was “or otherwise adversely affect his status as an employee.” Id. at 3. According to the Court, and citing numerous other legislative instances of its use, the “or otherwise” verbiage made the “any individual” language of section 4(a)(2) a subset of the more specific and subsequent language of “his status as an employee.” Id. As the Court explained, “[i]n other words, section 4(a)(2) protects an individual only if he or she has a “status as an employee.” Id. Comparing section 4(c)(2) of the ADEA reinforced the Court’s interpretation, because that section specifically included “an applicant for employment” within its protections, rather than relying solely on the word “employee” to encompass employees and applicants. This highlighted for the Court that if Congress wanted job applicants to be covered by section 4(a)(2), it could have done so and was aware how to do so. See Id. at 5.


The same context applied to a comparison of sections 4(a)(1) and 4(a)(2), the former of which making it illegal “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.” Id. (citing 29 U.S.C. § 623 (a)(1))(emphasis is Court’s). Section 4(a)(1) expressly contemplated protections for job applicants by its reference to hiring; whereas, section 4(a)(2) had no such language. Further, section 4(a)(1) made no reference to the individual’s “status as an employee;” whereas, section 4(a)(2) does. Id.


The Court of Appeals also distinguished Villarreal’s argument that the definition of “employee” in section 201 of the Genetic Information Nondiscrimination Act of 2008 included “applicants,” by noting that the ADEA’s definition of “employee” included no such language. Id. at 6 (citing 29 U.S.C. § 630(f)). Thereafter, the Court distinguished the application of Griggs v. Duke Power Co., 401 U.S. 424 (1971) and Dothard v. Rawlinson, 433 U.S. 321 (1977). For Griggs, the Court of Appeals noted that the aggrieved plaintiffs were employees, not job applicants; thus, the disparate impact analysis that was upheld in an analogous Title VII case was permitted by the statutes’ plain language. Villarreal, at 7. By reference to Dothard, Villarreal argued the Supreme Court had later characterized Griggs as an applicant case, but the Court of Appeals again rejected the argument, noting that the Supreme Court had stated in dicta that Griggs would apply to a Title VII action brought by applicants in the present day, because Title VII had been subsequently amended to include applicants within its protection. Id. Further, nothing in Griggs involved the “hiring criteria” for first-time applicants. Id.


Finally, in the less publicized portion of this ruling, the Court of Appeals determined that Villarreal had pled facts that evidenced his lack of due diligence in investigating his claims against the defendants. Id. at 9. Thus, Villarreal could not rely on equitable tolling to save his complaint. Specifically, Villarreal admitted that “he did nothing for more than two years between his initial application and the communication from the lawyers.” Id. at 10. The Court differentiated between a lack of diligence in following up on the status of the employment application, as opposed to investigating the reasons for which the application was rejected. Id. Because Villarreal did not follow up on the application’s status, he failed to learn of the rejection, which according to the Court amounted to a lack of diligence.


It is likely that this case is brought to the U.S. Supreme Court. There were no fewer than three possible interpretations of the ADEA’s section 4(a)(2) presented by the en banc Eleventh Circuit, and at least five judges disagreed on the due diligence standard enunciated by the majority. Plus, for roughly thirty years, through both Republican and Democratic administrations, the EEOC’s interpretation and enforcement of section 4(a)(2) have more closely resembled the dissent’s viewpoint. The stakes are high, and a number of organizations submitted amicus briefs for this appeal. My intuition says there is more to be heard on the application of disparate impact analysis to job applicants under the ADEA.