[Senate Report 107-142]
[From the U.S. Government Publishing Office]
Calendar No. 345
107th Congress Report
SENATE
2d Session 107-142
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OLDER WORKERS' RIGHTS RESTORATION ACT OF 2001
_______
April 15, 2002.--Ordered to be printed
_______
Mr. Kennedy, from the Committee on Health, Education, Labor, and
Pensions, submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany S. 928]
The Committee on Health, Education, Labor, and Pensions, to
which was referred the bill (S. 928) to amend the Age
Discrimination in Employment Act of 1967 to require, as a
condition of receipt or use of Federal financial assistance,
that States waive immunity to suit for certain violations of
that Act, and to affirm the availability of certain suits for
injunctive relief to ensure compliance with that Act, having
considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
CONTENTS
Page
I. Purpose and summary..............................................2
II. Background and history of the legislation........................3
III. Section-by-section analysis......................................3
IV. Explanation of the bill and committee views......................6
V. Cost estimate...................................................10
VI. Regulatory impact statement.....................................11
VII. Application of law to the legislative branch....................11
VIII.Minority views..................................................12
IX. Changes in existing law.........................................16
I. Purpose and Summary
Age discrimination is a serious and persistent problem
nationally, including among State agencies. The Federal
prohibition against age discrimination in employment by the
States was established by the 1974 amendments to the Age
Discrimination in Employment Act of 1967 (ADEA), and has been
upheld by the Supreme Court.
In Kimel v. Florida Board of Regents, the Supreme Court
held that Congress lacked the power to subject States to suit
under the ADEA. As a result of this decision, state employees
who are victimized by age discrimination cannot sue to
vindicate their Federal rights. States are immune from suit
under the ADEA unless they have explicitly consented to be sued
or unless the Equal Employment Opportunity Commission brings
suit on behalf of the victim.
Kimel created a serious loophole in existing civil rights
protections. Unlike similar victims of age discrimination
employed by the private sector and local and Federal Government
agencies, State employees after Kimel lack a right of private
action under Federal law to redress age discrimination against
them. While most States do have State laws prohibiting age
discrimination, these laws do not replace the consistency of
the protections, rights and remedies afforded by Federal law.
For example, the substance of some State laws is less
protective than the ADEA; some States provide less generous
remedies.
S. 928, the Older Workers' Right Restoration Act of 2001,
is designed to address this loophole. The bill provides that
State programs and activities that accept Federal funds will
thereby waive their immunity to Federal suit by employees of
those programs who claim that they have been the victims of age
discrimination. The Act also confirms that actions for
equitable relief against State officials in their official
capacity remain available for all State employees under the
ADEA.
S. 928 does not create new duties for States. States are
now--and have been for more than 25 years--prohibited from
discriminating against their employees on the basis of age. S.
928 simply restores the remedies that State employees were
afforded before the Kimel decision and that all other employees
protected by the ADEA enjoy. S. 928 was modeled on numerous
other civil rights statutes, including Title VI of the Civil
Rights Act of 1964 and the Rehabilitation Act of 1973, that use
similar approaches to guarantee that Federal funds will not be
used to subsidize discrimination.
S. 928 is intended to ensure that State workers--like all
other workers covered under the Age Discrimination in
Employment Act--have adequate remedies when they are the
victims of unlawful conduct. The committees believes that no
one should be subjected to discriminatory hiring, firing or
other job action based on age or any other characteristic that
is unrelated to job performance. Age discrimination wastes
valuable talent and hurts morale. S. 928 will afford to State
employees the full range of remedies and procedures available
to redress such discrimination when it occurs.
II. Background and History of the Legislation
In 1967, Congress outlawed age discrimination in employment
in the private sector by passing the Age Discrimination in
Employment Act. In 1974, recognizing that employees of State
government agencies were also often subject to pervasive and
arbitrary age discrimination, Congress extended the Act to
cover State governments. For more than 25 years, State
employees were protected from age discrimination, and had the
same remedies as all other employees covered by the law.
But in Kimel v. Florida Board of Regents, decided last
year, the Supreme Court held, 5-4, that Congress lacked the
constitutional authority to subject States to suits by
individuals claiming violations of their rights under the ADEA.
This decision reversed the long-standing interpretation of the
law--including by 6 of the 8 Federal circuit courts to have
considered the question--that State employees were entitled to
the remedies and procedures provided to all other employees
protected under the ADEA.
The constitutional underpinnings--as well as the impact--of
the Kimel decision were addressed in detail at a hearing held
by this committee on April 4, 2001. At that hearing, entitled
``States' Rights and Federal Remedies: When Are Employment Laws
Constitutional?,'' committee members heard from Dr. J. Daniel
Kimel, a professor at Florida State University and the
plaintiff in the Kimel case; Michael H. Gottesman, Professor of
Law at Georgetown University Law Center; Marci A. Hamilton,
Visiting Professor of Law at New York University School of Law;
and David Strauss, Harry N. Wyatt Professor of Law at the
University of Chicago Law School. Each of the witnesses
confirmed that the approach taken by S. 928 is constitutional.
S. 928 was introduced on May 22, 2001 and is virtually
identical to S. 3008, the version of the bill introduced by
Senators Jeffords, Kennedy and Feingold in the 106th Congress.
On September 13, 2001, the Senate Committee on Health,
Education, Labor, and Pension, acting in Executive Session,
ordered S. 928 reported by a vote of 12 to 9.
III. Section-by-Section Analysis
Section 1. Short title
Section 1 provides that the Act may be cited as the ``Older
Workers' Rights Restoration Act of 2001.''
Section 2. Findings
Section 2 sets forth Congressional findings.
Section 2(1) states that the Age Discrimination in
Employment Act has prohibited States from discriminating on the
basis of age since 1974, more than 25 years ago. The Supreme
Court has upheld Congress' constitutional authority to apply
these prohibitions to the States.
Section 2(2) states that age discrimination in employment
remains a serious problem both nationally and among State
agencies. The section further addresses the invidious effects
that such discrimination has on its victims, including
increasing the risk of unemployment, preventing the best use of
available labor resources, adversely affecting morale and
productivity, and perpetuating unwarranted stereotypes about
the abilities of older workers.
Section 2(3) states that private civil suits by victims of
employment discrimination have been a crucial tool for
enforcement of the Age Discrimination in Employment Act, and
further states that the Supreme Court's Kimel decision cut back
on the availability of those suits against State employers.
Section 2(3) also sets forth the Federal Government's interest
in ensuring that Federal financial assistance is not used to
subsidize or facilitate violations of the Age Discrimination in
Employment Act.
Section 2(4) examines the effects of the Kimel decision,
and finds that, although age-based discrimination by State
employers remains unlawful, State employees lack important
remedies for discrimination that are available to all other
employees covered under the Age Discrimination in Employment
Act. The section states that State employees will have no
adequate Federal remedies for violations of that Act unless a
State chooses to waive sovereign immunity or the Equal
Employment Opportunity Commission brings a suit on their
behalf. Without the deterrent effect of such suits, the
committee finds that there is a greater likelihood that Federal
funds will be used to subsidize or facilitate violations of the
Act.
Section 2(5) finds that Federal law has long treated
nondiscrimination obligations as a core component of programs
or activities that, in whole or in part, receive Federal
financial assistance and that that assistance should not be
used in any way to subsidize invidious discrimination. The
committee finds that assuring nondiscrimination in employment
is a crucial aspect of assuring nondiscrimination in federally
supported programs and activities.
Section 2(6) describes the Age Discrimination Act of 1975,
which does not apply to employment discrimination. The section
states that that limitation was originally intended only to
avoid duplication with the Age Discrimination in Employment
Act, but has, in the wake of Kimel, become a serious loophole
in Federal age discrimination law.
Section 2(7) finds that the Supreme Court has upheld
Congress' authority to condition receipt of Federal financial
assistance on acceptance by the recipients of conditions on the
use of that assistance, including a requirement that States
waive their sovereign immunity to suits for a violation of
Federal law. The section states that it is necessary to require
such a waiver in this case in order to assure compliance with,
and to provide effective remedies for violations of, the Age
Discrimination in Employment Act.
Section 2(8) states that a State's receipt or use of
Federal financial assistance in any program or activity of the
State will constitute a limited waiver of sovereign immunity
under the Age Discrimination in Employment Act, to suits
brought by employees within that program or activity. The
waiver will not eliminate a State's immunity with respect to
programs or activities that do not receive or use Federal
financial assistance. Where a program or activity is covered by
the waiver, State employees will be accorded only the same
remedies that are available to other employees under the Age
Discrimination in Employment Act.
Section 2(9) makes clear that State sovereign immunity does
not bar suits for prospective injunctive relief brought against
State officials. It is the committee's intent to clarify that
the Age Discrimination in Employment Act authorizes such suits,
for the same injunctive relief that was available to State
employees before the Kimel decision and that is available to
other employees under the Act.
Section 3. Purposes
Section 3 sets forth the purposes of S. 928: to provide to
State employees in programs or activities that receive or use
Federal financial assistance the same rights and remedies that
are available to other employees under the Age Discrimination
in Employment Act; to provide that the receipt or use of
Federal financial assistance for a program or activity
constitutes a State waiver of sovereign immunity from suits
under the Act by employees of that program or activity; and to
affirm that suits for injunctive relief under the Act are
available against State officials in their official capacities.
Section 4. Remedies for State employees
Section 4 amends Section 7 of the Age Discrimination in
Employment Act (29 U.S.C. 626) by adding sections (g)(1)(A),
(g)(1)(B) and (g)(2).
Section (g)(1)(A) states that a State's receipt or use of
Federal financial assistance for any program or activity of the
State will constitute a waiver of sovereign immunity to suit by
an employee of that program or activity under the Age
Discrimination in Employment Act, for relief as authorized in
that Act.
Section (g)(1)(B) makes clear that the term ``program or
activity'' has the meaning given the term in Section 309 of the
Age Discrimination Act of 1975.
Section (g)(2) confirms that a State official may be sued
in his/her official capacity, for violations of the Age
Discrimination in Employment Act, by any employee who has
complied with the requisite procedures of that Act and who
seeks injunctive relief authorized in the Act. This section
authorizes a court to award costs to the prevailing party, as
authorized by section 722 of the Revised Statutes.
Section 5. Severability
Section 5 states that if any provision, amendment made by,
or the application of any provision, of S. 928 is held to be
invalid, it will not affect the remaining provisions of the
bill, the amendments made by the bill, or the application of
those provisions or amendments.
Section 6. Effective date
Section 6(a) provides that, as to each program or activity,
the provisions of this bill will apply to conduct occurring on
or after the day, after the date of enactment of the bill, on
which a State first receives or uses Federal financial
assistance for that program or activity.
Section 6(b) states that section 7(g)(2) of the Age
Discrimination in Employment Act, as added by S. 928, applies
to any suit pending on or after the date of enactment of S.
928.
IV. Explanation of the Bill and Committee Views
The committee seeks to respond to the Supreme Court's
decision in Kimel v. Florida Board of Regents, and to restore
to employees of State government agencies the rights and
remedies that they enjoyed prior to the Kimel decision and that
are accorded to all other workers protected under the Age
Discrimination in Employment Act. These rights and remedies are
necessary to ensure that State employees will be effectively
protected against employment discrimination on the basis of
age. S. 928 will also ensure that State employees will be
treated in the same way, and be entitled to the same recourse,
as workers in other sectors of the economy who are victimized
by age discrimination. The committee believes that S. 928
achieves these goals in a reasonable, moderate, and lawful way.
Section 2. Findings
Section 2 sets forth the committee's findings with regard
to the background of, the need for, and the lawfulness of, S.
928. These include the following:
The committee believes that age discrimination remains a
serious problem for State employees. For example, the committee
heard testimony from J. Daniel Kimel, a professor of physics at
Florida State University, who has no recourse for the age-based
salary discrimination to which he believes he has been
subjected.
The committee is also aware of the numerous cases in which
courts were forced to reverse judgments against State
employers, who were found to have discriminated on the basis of
age, in the wake of the Kimel decision. See, e.g., McGinty v.
State of New York, 193 F.3d 64 (2d Cir. 1999), dismissed on
remand in light of Kimel, 184 F. Supp. 2d 314, 2000 WL 132720
(N.D.N.Y. Jan. 19, 2000) (death benefits reduced on the basis
of age; court found willful violation of ADEA); Wichmann v.
Board of Trustees, 180 F.3d 791 (7th Cir. 1999), vacated and
remanded in light of Kimel, 120 S.Ct. 929 (Jan. 18, 2000) (48
year old employee terminated because his employer wanted ``to
cut down the old, big trees so the little trees underneath can
grow''); Arnett v. California Public Employees Retirement
System, 179 F.3d 690 (9th Cir. 1999), vacated and remanded in
light of Kimel, 120 S.Ct. 930 (Jan. 18, 2000) (younger
employees received greater disability retirement benefits than
older workers with same length of service); Mete v. New York
State Office of Mental Retardation and Developmental
Disabilities, 984 F. Supp. 125 (N.D.N.Y. 1997), aff'd, 162 F.3d
770 (2d Cir. 1998), vacated and remanded in light of Kimel, 120
S.Ct. 928 (Jan. 18, 2000). Because there are more than 5
million State employees across the country and based on the
committee's careful examination of this issue and the testimony
received, the committee does not believe that these are
isolated problems; a significant component of the Nation's
workforce is at risk.
Absent this bill, State workers affected by this type of
discrimination will lack important Federal procedures and
remedies to redress it. These procedures and remedies, which
are available to all other employees covered under the Age
Discrimination in Employment Act--including in the private
sector and in the Federal and Local Governments--serve
important deterrent purposes, as well as providing compensation
and make-whole relief to the victims of unlawful conduct.
Without such remedies, it is more likely that State programs
and activities that receive Federal financial assistance will
use that assistance to violate the law.
Congress has long endorsed the core principle that Federal
monies should not be used to subsidize or facilitate invidious
discrimination. This principle is reflected in some of the
Nation's most important civil rights laws, including Title VI
of the Civil Rights Act of 1964 (prohibiting race and national
origin discrimination in programs and activities receiving
Federal financial assistance); the Rehabilitation Act of 1973
(comparable provisions prohibiting discrimination based on
disability); and Title IX of the Education Amendments of 1972
(prohibiting sex discrimination in education programs that
receive Federal funds). It is reflected in the Age
Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), which
prohibits age discrimination in federally subsidized programs.
Because Congress believed that the Age Discrimination in
Employment Act of 1967 adequately prohibited age discrimination
in employment, it decided, in 1975, not to include employment
in the universe of activities covered by the Age Discrimination
Act of 1975. In the wake of the Kimel decision, and its
devastating impact on remedies for age discrimination in
employment, that choice has created a serious loophole in the
constellation of Federal protections. It is the purpose of S.
928 to close that loophole.
The committee believes that a crucial aspect of ensuring
nondiscrimination in federally assisted programs and activities
is to ensure that there is no discrimination against those who
carry out those programs and activities. Because it affects the
people who carry out a program or activity's mission,
employment is inextricably linked to the implementation of
federally assisted programs and activities, whether those
programs and activities concern transportation, education or
the environment. Where a federally assisted program
discriminates against its workers on a prohibited basis, that
program has violated not only fundamental notions of fairness
but also the commitment that Congress has made to ensure the
nondiscriminatory expenditure of Federal funds.
The Supreme Court has consistently upheld Congress'
authority to condition receipt of Federal financial assistance
on acceptance by recipients of conditions related to the use of
that assistance. See, e.g., South Dakota v. Dole, 483 U.S. 203
(1987). Furthermore, even while invalidating certain
Congressional efforts to abrogate States' sovereign immunity,
the Court has noted that Congress retains the power, within
limits set forth in Dole, to convince States to voluntarily
waive their sovereign immunity as a condition attached to
acceptance of specified Federal funds. College Savings Bank v.
Florida Prepaid Postsecondary Education Expense Board, 527 U.S.
666, 686-87 (1999); Alden v. Maine, 527 U.S. 706, 755 (1999).
S. 928 satisfies the criteria stated in Dole for
determining the validity of conditioning Federal grants to
States. In Dole, the Court upheld the conditioning of certain
highway funds upon a State's prohibition of the purchase or
public possession of alcoholic beverages by persons under
twenty-one years of age. 483 U.S. at 205-06. The Dole Court
recognized five limits on such an exercise of Congress'
Spending Power. Id. at 207-11. First, the Spending Power must
be utilized in pursuit of the general welfare. Id. at 207.
Second, the condition attached to the funds must be expressed
clearly and unambiguously. Ibid. Third, the condition must be
germane to the Federal interest in a particular program. Id. at
207-08. Fourth, the power may not be used to induce the States
to engage in activity that would be itself unconstitutional.
Id. at 208-11. Fifth, the financial inducement offered by
Congress may not be ``so coercive as to pass the point at which
pressure turns into compulsion.'' Id. at 211 (internal
quotation marks omitted).
These conditions are amply met. First, the funds in
question are intended to serve valid public purposes. Second,
the conditions attached to the funds are expressed
unambiguously. Third, the condition is germane to the Federal
interest in each program affected by the condition. The
condition simply furthers Congress' interest in ensuring that
all intended beneficiaries of the program funded by Congress
are in fact able to participate in that program, and that they
may do so on fair and equal terms. The connection between the
Federal assistance and the condition imposed on that assistance
by S. 928--ensuring that the intended beneficiaries actually
benefit--is even tighter than the connection upheld in Dole. In
Dole, the Court upheld a connection that required States, in
order to receive certain Federal funds, to take action that was
entirely separate from the operations of any Federally funded
program. The spending condition of S. 928, by contrast, applies
only on a program-by-program basis--requiring a waiver of
immunity only as to the particular programs or activities that
actually receive Federal funds--and does not require the State
to take any external action. Fourth, S. 928 does not induce
States to engage in any unconstitutional activity. Fifth, the
financial inducement cannot be described as coercive. The
inducement--the promise of Federal funds for a State program--
is no more coercive than similar program-wide inducements
offered by Congress in a variety of civil rights statutes that
condition Federal funds upon a State's agreement to refrain
from discriminating on various grounds: the Age Discrimination
Act of 1975, Title VI of the Civil Rights Act of 1964, Title IX
of the Education Amendments of 1972, and the Rehabilitation Act
of 1973. No court has ever found such an inducement to be
unconstitutionally coercive. The additional condition that a
State must waive its sovereign immunity from suits brought by
an employee of a program or activity receiving Federal funds
does not affect the coercion analysis, which, as was made clear
in Dole, 483 U.S. at 211, inquires only whether the benefit
threatened to be withheld is so substantial as to constitute
coercion. Furthermore, S. 928 merely follows the approach taken
by Section 1003 of the Rehabilitation Act Amendments of 1986
(42 U.S.C. 2000d-7), which provided that a State shall not be
immune from suit for violations of any Federal statute
prohibiting discrimination by recipients of Federal funds.
Section 1003 therefore adds an additional condition--waiver of
sovereign immunity--to the non-discrimination condition imposed
by the four civil rights statutes cited above. These dual
conditions, which are the same as the conditions imposed by S.
928, have been upheld repeatedly by courts of appeals. See
Douglas v. California Department of Youth Authority, 271 F.3d
812, 819-21 (9th Cir. 2001); Nihiser v. Ohio Environmental
Protection Agency, 269 F.3d 626, 628 (6th Cir. 2001); Jim C. v.
Arkansas Department of Education, 235 F.3d 1079, 1080-82 (8th
Cir. 2000) (en banc); Pederson v. Louisiana State University,
213 F.3d 858, 875-76 (5th Cir. 2000); Stanley v. Litscher, 213
F.3d 340, 344 (7th Cir. 2000); Sandoval v. Hagan, 197 F.3d 484,
493-94 (11th Cir. 1999), rev'd on other grounds sub nom.
Alexander v. Sandoval, 532 U.S. 275 (2001); Litman v. George
Mason University, 186 F.3d 544, 551-57 (4th Cir. 1999).\1\
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\1\ Although the Second Circuit has reached a different conclusion
with respect to the Rehabilitation Act, its decision rests on grounds
not applicable here. In dismissing a suit against the State University
of New York under the Rehabilitation Act, the Second Circuit held that
New York had not waived its sovereign immunity from such suits, despite
the fact that the State university had received Federal funds, because
at the time of the actions that gave rise to the suit, Title II of the
Americans with Disabilities Act of 1990--whose proscriptions are
virtually identical to the Rehabilitation Act--was reasonably
understood to abrogate New York's sovereign immunity under Congress'
Commerce Clause authority. Therefore, ``a state accepting conditional
federal funds could not have understood that in doing so it was
actually abandoning its sovereign immunity from private damages suits,
since by all reasonable appearances state sovereign immunity had
already been lost.'' Garcia v. S.U.N.Y. Health Sciences Center of
Brooklyn, 280 F.3d 98 (2d Cir. 2001) (citation omitted).
The Second Circuit's reasoning in Garcia is not applicable to S.
928. In the wake of Kimel, it is clear that States do possess sovereign
immunity from private damages suits brought under the Age
Discrimination in Employment Act of 1967. Therefore, a State that
chooses to accept conditioned Federal funds will unquestionably
``underst[an]d that in doing so it [is] actually abandoning its
sovereign immunity from private damages suits.''
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For the foregoing reasons, S. 928 is a constitutional,
narrowly tailored exercise of Congress' spending power that
allows States to decide, on a program-by-program basis, whether
they are willing to accept the Federal conditions in return for
Federal money. Each of the witnesses at the committee's hearing
on this issue on April 4, 2001 endorsed the constitutionality
of this approach.
Section 4. Remedies for State employees
Section 4 contains the core operative language of the bill.
It provides that a State's receipt or use of Federal financial
assistance for any program or activity of that State will
constitute a waiver of sovereign immunity to suits under the
Age Discrimination in Employment Act brought to employees of
that program or activity.
This language fully meets constitutional standards. A
State's waiver of immunity is limited to those programs and
activities that receive or use Federal funds; those programs
and activities that do not receive or use such funds will be
unaffected by this bill. Any waiver of immunity extends only to
suits brought under the Age Discrimination in Employment Act by
employees of that program or activity.
The bill also does not impose new substantive obligations
on the States. For more than 25 years, States have been
prohibited from discriminating in employment on the basis of
age. S. 928 thus does not require any change in State actions.
Where States abide by their longstanding anti-discrimination
obligations, there will be no reason for suits to be brought
against them.
This bill is necessary because State employees currently
have no Federal remedy where States violate the anti-
discrimination requirements of Federal law. Although most
States have laws that prohibit age discrimination in
employment, those laws do not provide the consistency necessary
to ensure that all State workers will be adequately protected.
For example, the law in one State does not cover public sector
employees. Nine States do not allow State employees to bring
private lawsuits. Five States do not permit jury trials. Eight
States cut off protection for employees at age 70. And 30
States do not require that prevailing parties be reimbursed for
their attorney fees. The committee believes that the protection
of Federal rights should not be left to this patchwork of State
law.
The committee intends the term ``program or activity'' to
have the same meaning given the term in Section 309 of the Age
Discrimination Act of 1975 (42 U.S.C. 6107). This will make S.
928 consistent with the other civil rights in which this term
is used, including not only the Age Discrimination Act, but
Title VI of the Civil Rights Act of 1964, Title IX of the
Education Amendments of 1972, and the Rehabilitation Act of
1973, as well.
V. Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 27, 2001.
Hon. Edward M. Kennedy,
Chairman, Committee on Health, Education, Labor, and Pensions, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 928, the Older
Workers' Rights Restoration Act of 2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Lanette J.
Walker (for federal costs), and Leo Lex (for the state and
local government impact).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
S. 928--Older Workers' Rights Restoration Act of 2001
S. 928 would deem the receipt of federal funds for any
program or activity as a waiver of state sovereign immunity
with regard to legal liability under the Age Discrimination in
Employment Act when a suit is brought by an employee of that
program or activity. Because federal funds provide a
significant portion of revenues for state governments (roughly
one-quarter), CBO expects that generally states would continue
to accept those funds even with the requirement that they waive
their sovereign immunity. Therefore, CBO estimates that
implementing S. 928 would have no significant impact on the
federal budget.
The bill could affect direct spending; therefore, pay-as-
you-go procedures would apply. CBO expects that any change in
direct spending would be insignificant, however, because it is
unlikely that states would choose to not receive federal funds
that they collect under current law.
Because the waiver of sovereign immunity under this bill
would be a condition for the receipt of federal funds, it would
not be an intergovernmental mandate as defined in the Unfunded
Mandates Reform Act (UMRA). States that continue to accept
federal assistance may face significant additional costs due to
lawsuits brought under the Age Discrimination in Employment
Act. CBO has no basis for estimating either the likelihood,
number, or outcome of such lawsuits. S. 928 contains no
private-sector mandates as defined in UMRA.
The staff contacts for this estimate are Lanette J. Walker
(for federal costs), and Leo Lex (for the state and local
government impact). The estimate was approved by Peter H.
Fontaine, Deputy Assistant Director for Budget Analysis.
VI. Regulatory Impact Statement
The committee believes that it is impractical to prepare a
regulatory impact statement at this time because the number of
States affected will depend on which States accept the
conditions of aid imposed by this bill.
VII. Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1, the Congressional
Accountability Act, requires a description of the application
of the bill to the legislative branch. S. 928 applies to State
programs and activities that accept Federal financial
assistance. It does not apply to the legislative branch.
VIII. MINORITY VIEWS
The relationship between the Federal and State Governments
has changed in recent decades, and the undersigned members
believe that Federal legislation and federal lawsuits are not
necessarily the only answer to the concern shared by all
members of the committee that workers are protected from age
discrimination.
The impetus for the proposed legislation is the Supreme
Court decision in Kimel v. Florida Board of Regents (2000).
That case was the most recent in a series defining what is
being called the ``New Federalism,'' in which the Court
recognizes that the Eleventh Amendment restricts the power of
Congress to impose Federal workplace laws on the States as
employers. Specifically in the Kimel case, the Court ruled that
State employees do not have a private right of action under the
Age Discrimination in Employment Act because the States did not
waive their sovereign immunity. S. 928 is designed to overturn
the outcome of the Kimel decision and grant most State
employees a private right of action in Federal court to sue
their employers.
background
The rulings of the Supreme Court in this and other recent
cases clarify the scope of Congressional authority. A general
understanding of the parameters is useful in considering the
legislative options raised by S. 928.
To varying degrees, Congress can regulate non-federal
workplaces through three separate sets of powers. The Commerce
Clause is used very broadly to control behavior in the private
sector and at the local government level.
Congress' power over the States is restricted by the
Eleventh Amendment; in most cases a State's sovereign immunity
cannot be abrogated by Congress and States in most instances
cannot be sued in Federal court by individuals. The exception
is found in the Enforcement Clause (Section 5) of the
Fourteenth Amendment, which allows suits against the States in
Federal courts for constitutional violations of the Equal
Protection clause. The post-Civil War amendment to the
Constitution was designed to remedy state-sanctioned
discrimination and to ensure fair trials in Federal courts in a
region of the country where State courts had a history of
denying the civil rights and protections to blacks and other
minorities.
In the Kimel decision, the Supreme Court ruled that age is
not automatically a suspect class and Congress did not make the
case that age discrimination by State governments was so
pervasive and irrational as to rise to the level of a
constitutional violation. As a result, Congress improperly
relied on the Enforcement Clause of the Fourteenth Amendment to
justify suits by State employees against the State in Federal
court.
This leaves Congress' Spending Clause powers as the last
avenue for creating a Federal cause of action against the
States. The Supreme Court has held that Congress has wide
latitude in fixing the conditions for the voluntary receipt of
Federal money.
S. 928 utilizes the Spending Clause power and requires that
``receipt or use of Federal financial assistance for a program
or activity constitutes a State waiver of sovereign immunity
from suits by employees within that program or activity for
violations of the Age Discrimination in Employment Act of
1967.''
The operative language of the legislation defining
``program or activity'' utilizes the definition and scope of
spending power exercised in the provision of the Age
Discrimination Act of 1975 (42 U.S.C. Sec. 6107) which extends
the right to sue to beneficiaries of federally assisted
programs run by the States. This language was added to that law
in the Civil Rights Restoration Act of 1987 (29 U.S.C. Sec.
794). Commonly known at the time as the Grove City bill, the
legislation also added the ``program or activity'' language to
the Title IX of the Educational Amendments Act of 1972, to the
Rehabilitation Act, and to Title VI of the Civil Rights Act of
1964.
ARGUMENTS IN OPPOSITION
The Supreme Court has ruled that age discrimination is
beyond the scope of Congressional authority when it comes to
regulating the affairs of the States. Deference to federalism
principles and to States' rights argue in favor of leaving this
issue to the States themselves to resolve. Deference to a
state's sovereign immunity is not a partisan issue. In the
recent case, Laro v. State of New Hampshire (1st Cir., August,
6, 2001), the Democrat Governor and Attorney General staunchly
and successfully defended the State's sovereign immunity under
the Family & Medical Leave Act.
It is equally important that 48 States already have age
discrimination laws on their books and have procedures for
their enforcement. This point was stressed by Justice O'Connor
in her majority decision in Kimel. The officials of each those
States, who are elected directly by the people affected by the
laws, have chosen to tailor their laws and procedures to the
needs and cultures of the states. S. 928 ignores the good faith
efforts of the officials of those States and imposes a
different set of rules. No evidence has been presented to the
committee that State causes of action are inadequate, or that
the rights of State employees are regularly being denied.
Except for a statistical comparison of State laws, the majority
report makes no effort to prove such a case. The pending
legislation improperly relies on the blanket and unfounded
assumption that the right to sue in Federal court under Federal
law is always preferred. We reject this assumption.
The Kimel majority ruled that age discrimination is not the
same thing as race discrimination and does not require the same
level of Federal enforcement. That was also the view of
Congress when it passed the Age Discrimination Act of 1975, the
law on which S. 928 relies to exercise Congress' Spending
Clause authority. The Senate committee report accompanying that
bill stressed the difference: ``Distinguishing among
individuals on the basis of race * * * is per se unfair
treatment and violative of the Constitution * * *. But age may
often be a reasonable distinction for these purposes * * *.''
It follows that States should be allowed to make the
determination of whether policies are reasonable and to enforce
those policies.
It can also be said that S. 928 creates yet another
opportunity for trial lawyers to shop for the friendliest forum
to bring suit and recover large monetary judgments. While
subjecting businesses to crippling lawsuits should always be of
concern, even greater care should be given to legislation that
opens up a public treasury to individual gain.
For all of the foregoing reasons, the undersigned dissent
to the majority report accompanying S. 928.
STATE RESPONSIBILITY ALTERNATIVE
At the markup on S. 928 conducted on September 14, 2001,
Senator Gregg was prepared to offer an alternative that would
not have imposed a one-size-fits-all approach to State employee
coverage under the ADEA. The Gregg amendment would have
provided a middle ground position that ensures a remedy for
State employees while preserving the sovereign immunity of the
States. Senator Gregg's ``State Responsibility'' amendment
would have limited the application of S. 928 only to those
States that have no age discrimination law with remedies and
enforcement procedures in State court equal to those provided
in the Age Discrimination in Employment Act.
This approach is similar to the enforcement scheme under
the Occupational Safety and Health Act. The OSH Act provides
for State control and enforcement of safety and health issues
where the State standards ``are or will be at least as
effective in providing safe and healthful employment as the
standards promulgated'' by OSHA. State plans must also have a
safety and health program that is ``applicable to all employees
of public agencies of the State and its political
subdivisions'' and that applies standards that are ``as
effective as the standards contained in the approved [State]
plan.'' (29 U.S.C. Sec. 667(c)). Like the OSH Act, a State
Responsibility provision would adopt the modern appreciation of
the competence of the States in dealing with the workplace
needs of their citizens.
Also, it is more than likely that a state law applies to
more employees than S. 928 which relies on Congressional
Spending Clause powers. The proposed definition of ``program or
activity'' found in S. 928 is limited to ``the entity of such
State and local government that distributes such assistance and
each such department or agency * * * to which the assistance is
extended.'' This means that for ``State and local governments,
only the department or agency which receives the aid is covered
* * *,'' according to the Senate Labor and Human Resources
committee report accompanying the Civil Rights Restoration Act
of 1987. As acknowledged in the majority report, gaps in
federal coverage under S. 928 will no doubt exist. For example,
Federal money for a ``program or activity'' does not typically
reach the legislature or judiciary of a State, and employees of
those branches of State government would not be covered under
S. 928. State age discrimination laws are free to apply more
broadly and cover workers missed by the ADEA as amended by S.
928. A State responsibility approach would give States the
incentive to expand coverage of their age discrimination laws,
thus better serving the State employees than the approach taken
in S. 928.
CONCLUSION
The undersigned members of the committee are committed to
purposes of the Age Discrimination in Employment Act and share
the concern of the majority for the protection of State
employees. We dissent from S. 928 for the reasons that the bill
is unnecessarily proscriptive of States' rights and fails to
consider less disruptive alternatives. For these reasons we
respectfully dissent.
Judd Gregg.
Michael B. Enzi.
John Warner.
Jeff Sessions.
Mike DeWine.
Bill Frist.
Tim Hutchinson.
Kit Bond.
Pat Roberts.
IX. Changes in Existing Law
In compliance with rule XXVI, paragraph 12, of the Standing
Rules of the Senate, the following provides a print of the
statute or the part or section thereof to be amended or
replaced (existing law proposed to be omitted is enclosed in
black brackets, new matter is printed in italic, existing law
in which no change is proposed is shown in roman):
AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967
* * * * * * *
RECORDKEEPING, INVESTIGATION, AND ENFORCEMENT
Sec. 7. (a) * * *
* * * * * * *
(g)(1)(A) A State's receipt or use of Federal financial
assistance for any program or activity of a State shall
constitute a waiver of sovereign immunity, under the 11th
amendment to the Constitution or otherwise, to a suit brought
by an employee of that program or activity under this Act for
equitable, legal, or other relief authorized under this Act.
(B) In this paragraph, the term ``program or activity'' has
the meaning given the term in section 309 of the Age
Discrimination Act of 1975 (42 U.S.C. 6107).
(2) An official of a State may be sued in the official
capacity of the official by any employee who has complied with
the procedures of subsections (d) and (e), for injunctive
relief that is authorized under this Act. In such a suit the
court may award to the prevailing party those costs authorized
by section 722 of the Revised Statutes (42 U.S.C. 1988).