RUDOLPH A. KARLO; MARK K. MCLURE; WILLIAM S. CUNNINGHAM; JEFFREY MARIETTI; DAVID MEIXELSBERGER, Appellants
PITTSBURGH GLASS WORKS, LLC
November 9, 2016
Appeal from the United States District Court for the Western
District of Pennsylvania District Court No. 2-10-cv-01283
District Judge: The Honorable Terrence F. McVerry
J. Cordes [ARGUED] Bruce C. Fox Andrew J. Horowitz Obermayer
Rebmann Maxwell & Hippel Counsel for Appellant
E.A. Atterberry David S. Becker [ARGUED] Jennifer L.
Fitzgerald Tina C. Wills Freeborn & Peters Robert B.
Cottington Cohen & Grigsby Counsel for Appellee
D. Mollen [ARGUED] Paul Hastings Counsel for Amicus Appellee
Chamber of Commerce of the United States of America
Michael P. Bracken NT Lakis Counsel for Amicus Appellee Equal
Employment Advisory Council
N. Occhialino [ARGUED] Equal Employment Opportunity
Commission Counsel for Amicus Appellant Equal Employment
Before: SMITH, Chief Judge, McKEE, and RESTREPO, Circuit
Discrimination in Employment Act ("ADEA") protects
only those individuals who are at least forty years of age.
The question in this case is whether a disparate-impact claim
is cognizable where a "subgroup" of employees at
the upper end of that range-in this case, employees aged
fifty and older- were alleged to have been disfavored
relative to younger employees.
answer in the affirmative. Our decision is dictated by the
plain text of the statute as interpreted by the Supreme
Court. In particular, the ADEA prohibits disparate impacts
based on age, not forty-and-older identity. A rule
that disallowed subgroups would ignore genuine statistical
disparities that could otherwise be actionable through
application of the plain text of the statute. Although
several of our sister circuits have ruled to the contrary,
their reasoning relies primarily on policy arguments that we
do not find persuasive.
therefore reverse the judgment of the District Court based on
its interpretation of the ADEA. We will also vacate the
District Court's order excluding the testimony of
plaintiffs' statistics expert and remand for further
Daubert proceedings. We will affirm in all other
Pittsburgh Glass Works, LLC ("PGW") manufactures
automotive glass in Harmarville, Pennsylvania. PGW also owns
(1) GTS Services, a software business, (2) PGW Auto Glass, an
automotive replacement-glass distribution business, (3) LYNX
Services, an insurance claims administrator, and (4) Aquapel,
a glass treatment supplier.
2008, the automobile industry began to falter. PGW engaged in
several reductions in force ("RIFs") to offset
deteriorating sales. The RIF of relevance to this case
occurred on March 31, 2009, and terminated the employment of
approximately one hundred salaried employees in over forty
locations or divisions. Individual unit directors had broad
discretion in selecting whom to terminate. PGW did not train
those directors in how to implement the RIF. Nor did PGW
employ any written guidelines or policies, conduct any
disparate-impact analysis, review prospective RIF terminees
with counsel, or document why any particular employee was
selected for inclusion in the RIF.
Rudolph A. Karlo, William S. Cunningham, Jeffrey Marietti,
David Meixelberger, Mark K. McLure, Benjamin D. Thompson, and
Richard Csukas worked in PGW's Manufacturing
Technology division. They were terminated as part of the
March 2009 RIF by their supervisor, Gary Cannon. Each was
over fifty years old at the time.
January 2010, plaintiffs filed charges of employment
discrimination with the Equal Employment Opportunity
Commission ("EEOC"). Thereafter, they received a
Dismissal and Notice of Rights from the EEOC, and this
lawsuit followed. Plaintiffs brought a putative ADEA
collective action, asserting three claims: (1) disparate
treatment, (2) disparate impact, and (3) retaliation as to
only Karlo and McLure.
plaintiffs' motion for conditional certification, the
District Court ruled that ADEA subgroups are cognizable, and
conditionally certified a collective action to be comprised
of employees terminated by the RIF who were at least fifty
years old at the time. See Karlo v. Pittsburgh Glass
Works, LLC, 880 F.Supp.2d 629 (W.D. Pa. 2012). In
addition to the named plaintiffs, eleven individuals opted
in. Three voluntarily dismissed their claims and four
settled. Four opt-ins remained: Michael Breen, a former
production supervisor at a plant in Crestline, Ohio; Matthew
Clawson, a former Project Engineer in Evansville, Indiana;
Stephen Shaw, a former marketing manager in Pittsburgh,
Pennsylvania; and John Titus, a former Area Services Manager
in Irving, Texas.
26, 2013, the case was transferred to another district judge.
PGW filed a motion to decertify the collective action. On
March 31, 2014, the District Court granted the motion,
concluding that the collective action should be decertified
because the opt-in plaintiffs' claims are factually
dissimilar from those of the named plaintiffs. See
Karlo, 2014 WL 1317595.
then filed motions to exclude plaintiffs' experts. Of
relevance to this appeal, PGW sought to exclude three areas
of expert testimony. First, Dr. Michael Campion was prepared
to offer statistical evidence in favor of plaintiffs'
disparate-impact claim. Second, Dr. Campion intended to offer
his expert opinion on "reasonable" human-resources
practices during a RIF. And third, Dr. Anthony G. Greenwald
proposed to testify as to age-related implicit-bias studies.
By Order dated July 13, 2015, the District Court excluded the
testimony of each. See Karlo, 2015 WL 4232600.
moved for summary judgment on each claim. On September 3,
2015, the District Court ruled on the motions, granting them
in part and denying them in part. See Karlo, 2015 WL
5156913. As to plaintiffs' disparate-impact claims, the
District Court granted summary judgment on two grounds: (1)
plaintiffs' fifty-and-older disparate-impact claim is not
cognizable under the ADEA; and (2) plaintiffs' lack of
evidence to support their claim of disparate impact following
the exclusion of Dr. Campion's statistics-related
testimony. The District Court also granted summary judgment
as to plaintiffs' disparate-treatment claims. That ruling
has not been appealed. Finally, the District Court denied
summary judgment as to Karlo's and McLure's
individual retaliation claims.
October 2, 2015, the District Court certified the
disparate-impact and disparate-treatment claims for final
judgment pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure. See Karlo, 2015 WL 5782062. This appeal
followed. Plaintiffs seek reversal of the District
Court's summary judgment decision and statistics-related
Daubert ruling regarding their disparate-impact
claims. Plaintiffs also appeal the District Court's other
Daubert rulings and its order decertifying the
District Court had jurisdiction pursuant to 28 U.S.C. §
1331. We have jurisdiction pursuant to 28 U.S.C. § 1291.
parties dispute whether our jurisdiction extends to one or
all named plaintiffs. PGW concedes that Karlo perfected an
appeal, but argues that the other remaining named
plaintiffs-Cunningham, Marietti, and Meixelberger-were not
identified in the Notice of Appeal, and therefore did not
preserve their appellate rights under Rule 3(c) of the
Federal Rules of Appellate Procedure. See Torres v.
Oakland Scavenger Co., 487 U.S. 312, 317
(1988). We conclude that plaintiffs complied with
Rule 3(c) with respect to all named plaintiffs.
3(c)(1)(A) requires a notice of appeal to "specify the
party or parties taking the appeal by naming each one in the
caption or body of the notice, " but that rule is
relaxed where "an attorney [is] representing more than
one party." Fed. R. App. P. 3(c)(1)(A). The attorney
"may describe those parties with such terms as 'all
plaintiffs, ' 'the defendants, ' 'the
plaintiffs A, B, et al., ' or 'all defendants except
Notice of Appeal here states, "Plaintiffs in
the above-captioned case hereby appeal . . . an order . . .
entering judgment against Plaintiffs . . . on
Plaintiffs' discrimination claims . . . ."
A.1 (emphases added). The use of "Plaintiffs" is
equivalent to "the defendants" in the example
provided by the Rule. We have observed that "[t]he purpose
of Rule 3(c)'s identification requirement is to provide
notice to the court and the opposing parties of the identity
of the appellants." In re Cont'l Airlines,
125 F.3d 120, 129 (3d Cir. 1997). Because all of the
remaining named plaintiffs were identically situated as to
this appeal, were represented by the same counsel, and were
each identified by name in the District Court's
"order . . . entering judgment against [all named]
Plaintiffs, " as referenced on the face of the Notice,
Rule 3(c)'s purpose is amply served, and "the intent
to appeal is otherwise clear from the notice." Fed. R.
App. P. 3(c)(4); see United States v. Carelock, 459
F.3d 437, 441 (3d Cir. 2006) ("The Supreme Court has
stated that courts should 'liberally construe the
requirements of Rule 3.'" (quoting Smith v.
Barry, 502 U.S. 244, 248 (1992))).
central question in this case is whether so-called
"subgroup" disparate-impact claims are cognizable
under the ADEA. We hold that they are.
claims in ADEA cases ordinarily evaluate the effect of a
facially neutral policy on all employees who are at least
forty years old-that is, all employees covered by the ADEA.
In this case, plaintiffs claim to have identified a policy
that disproportionately impacted a subgroup of that
population: employees older than fifty. But because the
policy favored younger members of the protected class, adding
those individuals to the comparison group washes out the
statistical evidence of a disparity.
claim is cognizable under the ADEA. Specifically, we hold
that an ADEA disparate-impact claim may proceed when a
plaintiff offers evidence that a specific, facially neutral
employment practice caused a significantly disproportionate
adverse impact based on age. Plaintiffs can demonstrate such
impact with various forms of evidence, including
forty-and-older comparisons, subgroup comparisons, or more
sophisticated statistical modeling, so long as that evidence
meets the usual standards for admissibility. A contrary rule
would ignore significant age-based disparities. Where such
disparities exist, they must be justified pursuant to the
ADEA's relatively broad defenses.
begin with an overview of the statutory scheme. The Age
Discrimination in Employment Act of 1967, 81 Stat. 602, as
amended, 29 U.S.C. § 621 et seq., makes it
unlawful for an employer:
(1) 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;
(2) to limit, segregate, or classify his 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;
(3) to reduce the wage rate of any employee in order to
comply with this chapter.
29 U.S.C. § 623(a). "Except for substitution of the
word 'age, ' for the words 'race, color,
religion, sex, or national origin, ' the language of that
provision in the ADEA is identical to that found in §
703(a)(2) of the Civil Rights Act of 1964 (Title VII)."
Smith v. City of Jackson, 544 U.S. 228, 233 (2005).
But unlike Title VII, which protects individuals of every
race, color, religion, sex, and national origin, the
ADEA's protection is "limited to individuals who are
at least 40 years of age." 29 U.S.C. § 631(a).
claims may proceed under a disparate-impact or
disparate-treatment theory. See Smith, 544 U.S. at
231-32. Disparate treatment is governed by § 623(a)(1);
disparate impact is governed by § 623(a)(2).
Id. at 235 (plurality opinion); cf. Watson v.
Fort Worth Bank & Trust, 487 U.S. 977, 991 (1988);
Connecticut v. Teal, 457 U.S. 440, 446-47 (1982).
disparate-impact theory of recovery was first recognized in
Griggs v. Duke Power Co., 401 U.S. 424 (1971), a
Title VII case. Unlike claims of disparate treatment,
disparate-impact claims do not require proof of
discriminatory intent. Disparate impact redresses policies
that are "fair in form, but discriminatory in
operation." Id. at 431. To that end,
disparate-impact claims "usually focus on statistical
disparities . . . ." Watson, 487 U.S. at 987.
state a prima facie case for disparate impact under
the ADEA, a plaintiff must (1) identify a specific, facially
neutral policy, and (2) proffer statistical evidence that the
policy caused a significant age-based disparity. Cf.
NAACP v. N. Hudson Reg'l Fire & Rescue, 665 F.3d
464, 476-77 (3d Cir. 2011). Once a plaintiff establishes a
prima facie case, an employer can defend by arguing
that the challenged practice was based on "reasonable
factors other than age"-commonly referred to as the
"RFOA" defense. 29 U.S.C. § 623(f)(1); 29
C.F.R. § 1625.7.
scope of disparate-impact liability under the ADEA is
narrower than under Title VII" because of "[t]wo
textual differences" between the statutes.
Smith, 544 U.S. at 240. First, the RFOA defense
imposes a lighter burden on the employer than its Title VII
counterpart, the "business necessity" defense.
Under the ADEA, the employer only needs to show that it
relied on a "reasonable" factor, not that
"there are [no] other ways for the employer to achieve
its goals . . . ." Smith, 544 U.S. at 243.
Congress's decision to impose a relatively light burden
on employers "is consistent with the fact that age,
unlike race or other classifications protected by Title VII,
not uncommonly has relevance to an individual's capacity
to engage in certain types of employment." Id.
at 240. The second textual difference requires ADEA
plaintiffs to "isolat[e] and identify the
specific employment practices that are allegedly
responsible for any observed statistical disparities."
Id. at 241 (quoting Wards Cove Packing Co. v.
Atonio, 490 U.S. 642, 656 (1989)). Congress stripped
that requirement from Title VII when it amended the statute
in 1991, but it remains operative under the ADEA.
Id. at 240; see 42 U.S.C. §
ADEA's disparate-impact provision makes it unlawful for
an employer "to adversely affect [an employee's]
status . . . because of such individual's age." 29
U.S.C. § 623(a)(2). This plain text supports the
viability of subgroup claims. See Hardt v. Reliance
Standard Life Ins. Co., 560 U.S. 242, 251 (2010)
("We must enforce plain and unambiguous statutory
language according to its terms."). Two aspects of the
text guide our decision in this case: (1) the focus on
age as the relevant protected trait, as interpreted
by O'Connor v. Consolidated Coin Caterers Corp.,
517 U.S. 308 (1996), and (2) the focus on the rights of
individuals, as interpreted by Connecticut v.
Teal, 457 U.S. 440 (1982). Our interpretation is further
supported by the ADEA's remedial purpose.
begin with the Supreme Court's unanimous opinion in
O'Connor v. Consolidated Coin Caterers Corp.,
517 U.S. 308 (1996), an ADEA disparate-treatment case.
O'Connor clarified that the ADEA proscribes
age discrimination, not forty-and-over
discrimination. The same interpretation applies to identical
operative language in the ADEA's disparate-impact
plaintiff in O'Connor was fifty-six years old
when he was fired and replaced with a younger worker. 517
U.S. at 309. The plaintiff's replacement, however, was
over the age of forty, and therefore within the class of
individuals protected by the ADEA. Id. The Fourth
Circuit held that the ADEA prima facie case requires
the replacement to be younger than forty years old.
Id. at 310. The Supreme Court reversed.
Supreme Court began its analysis with the plain text of the
statute: "The discrimination prohibited by the ADEA is
discrimination 'because of [an] individual's age,
' though the prohibition is 'limited to individuals
who are at least 40 years of age.'" 517 U.S. at 312
(alteration in original) (citations omitted). On the basis of
that text, the Court held that the ADEA
does not ban discrimination against employees because they
are aged 40 or older; it bans discrimination against
employees because of their age, but limits the protected
class to those who are 40 or older. The fact that one person
in the protected class has lost out to another person in the
protected class is thus irrelevant, so long as he has lost
out because of his age.
Id. Although the ADEA protects a class of
individuals at least forty years old, it "prohibits
discrimination on the basis of age and not class membership .
. . ." Id. at 313. It is therefore
"utterly irrelevant" that the beneficiary of age
discrimination was also over the age of forty. Id.
at 312. Accordingly, the proposed limitation on the prima
facie case-replacement by an employee younger than
forty- lacked a "logical connection" to the plain
text of the ADEA. Id. at 311-12. As the Supreme
Court later reaffirmed, "[it] is beyond reasonable
doubt that the ADEA was concerned to protect a relatively
old worker from discrimination that works to the advantage of
the relatively young." Gen. Dynamics Land Sys., Inc.
v. Cline, 540 U.S. 581, 590-91 (2004).
Supreme Court's reasoning ineluctably leads to our
conclusion that subgroup claims are cognizable. Simply put,
evidence that a policy disfavors employees older than fifty
is probative of the relevant statutory question: whether the
policy creates a disparate impact "because of such
individual[s'] age." 29 U.S.C. § 623(a)(2).
Requiring the comparison group to include employees in their
forties has no "logical connection" to that
prohibition. O'Connor, 517 U.S. at 311.
insight from O'Connor is that the
forty-and-older line drawn by § 631(a) constrains the
ADEA's general scope; it does not modify or define the
ADEA's substantive prohibition against
"discriminat[ion] . . . because of such individual's
age." § 623(a)(1). The ADEA protects against
"age discrimination as opposed to ...