[Federal Register Volume 71, Number 155 (Friday, August 11, 2006)]
[Proposed Rules]
[Pages 46177-46180]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-13138]


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EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

29 CFR Part 1625

RIN 3046-AA78


Coverage Under the Age Discrimination in Employment Act

AGENCY: Equal Employment Opportunity Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Equal Employment Opportunity Commission (``EEOC'' or 
``Commission'') proposes to amend its regulations concerning the Age 
Discrimination in Employment Act (the ``Act'' or ``ADEA'') to reflect a 
Supreme Court decision interpreting the Act as permitting employers to 
favor older individuals because of age. This amendment will revise and 
clarify EEOC regulations that currently describe the ADEA as 
prohibiting such age-based favoritism.

DATES: Comments must be received on or before October 10, 2006. The 
Commission will consider any comments received on or before the closing 
date and thereafter adopt final regulations. Comments received after 
the closing date will be considered to the extent practicable.

ADDRESSES: You may submit written comments by mail to Stephen 
Llewellyn, Acting Executive Officer, Executive Secretariat, Equal 
Employment Opportunity Commission, 1801 ``L'' Street, NW., Washington, 
DC 20507. As a convenience to commentators, the Executive Secretariat 
will accept comments transmitted by facsimile (``FAX'') machine to 
(202) 663-4114. (There is no toll free FAX number). Only comments of 
six or fewer pages will be accepted via FAX transmittal, in order to 
assure access to the equipment. Receipt of FAX transmittals will not be 
acknowledged, except that the sender may request confirmation of 
receipt by calling the Executive Secretariat staff at (202) 663-4078 
(voice) or (202) 663-4077 (TTY). (These are not toll free numbers). 
Copies of the comments submitted by the public will be available for 
inspection in the EEOC Library, FOIA Reading Room, by advanced 
appointment only, from 9 a.m. to 5 p.m., Monday through Friday except 
legal holidays, from October 10, 2006 until the Commission publishes 
the rule in final form. To schedule an appointment to inspect the 
comments, contact the EEOC Library by calling (202) 663-4630 (voice), 
(202) 663-4641 (TDD) (These are not toll free numbers).

FOR FURTHER INFORMATION CONTACT: Raymond Peeler, Senior Attorney 
Advisor, Office of Legal Counsel, at (202) 663-4537 (voice) or (202) 
663-7026 (TTY) (These are not toll free numbers). This notice also is 
available in the following formats: Large print, braille, audio tape 
and electronic file on computer disk. Requests for this notice in an 
alternative format should be made to the Publications Information 
Center at 1-800-669-3362.

SUPPLEMENTARY INFORMATION: The ADEA states that employers may not 
discriminate against individuals who are age forty or older ``because 
of such individual's age,'' but does not specify the meaning of the 
term ``age.'' 29 U.S.C. 623(a)(1). When the Supreme Court addressed its 
meaning in General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 581, 
586 (2004), it noted that the term is ambiguous because it is commonly 
used in two different ways: to neutrally refer to the length of

[[Page 46178]]

someone's life, i.e., chronological age, or to refer to old age. If the 
term ``age'' in section 623(a)(1) of the Act were a neutral reference 
to chronological age, then it would be unlawful under the Act for an 
employer \1\ to favor older individuals over younger persons based on 
age, so long as all were at least forty years old. If, however, ``age'' 
is defined as old age, then such preferential treatment does not 
violate the Act.
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    \1\ The prohibitions described in this notice of proposed 
rulemaking apply to employment agencies and labor unions as well as 
employers, see 29 CFR 1625.1. However, for purposes of efficiency, 
the Commission will generically refer to all three with the term 
``employers.''
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EEOC Interpretation of ``Age''

    Until the Cline decision, the Commission had generally construed 
the term ``age'' in section 623(a) of the Act to mean chronological 
age.\2\ This interpretation was based, at least in part, on a statement 
made during a colloquy on the Senate floor by Senator Yarborough, one 
of the Act's sponsors. He explained:
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    \2\ Brief of Amicus Curiae Equal Employment Opportunity 
Commission at 26, General Dynamics Land Systems, Inc. v. Cline, 540 
U.S. 581 (2004) (No. 02-1080). The Department of Labor, which 
originally held enforcement authority over the Act, interpreted 
section 623(a) in the same manner, 33 FR 9172 (June 21, 1968). The 
Commission assumed authority over the Act on July 1, 1979, pursuant 
to Reorganization Plan No. 1, 43 FR 19807 (May 9, 1978). Upon 
obtaining this authority, the Commission reviewed the Department of 
Labor's interpretations of the Act, 44 FR 37974 (June 29, 1979). The 
Commission made no substantive change to the Department of Labor's 
regulations regarding section 623(a)'s reference to ``age,'' see 44 
FR 68858 (Nov. 30, 1979).

    It was not the intent of the sponsors of this legislation * * * 
to permit discrimination in employment on account of age, whether 
discrimination might be attempted between a man 38 and one 52 years 
of age, or between one 42 and one 52 years of age. If two men 
applied for employment under the terms of this law, and one was 42 
and one was 52, * * * [the] employer * * * could not turn either one 
down on the basis of the age factor. * * * The law prohibits age 
being a factor in the decision to hire, as to one age over the 
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other, whichever way his decision went.

113 Cong. Rec. 31,255 (1967). Thus, the Commission's current 
regulations prohibit any age-based preference between persons age forty 
or over, regardless of whether the treatment favors older or younger 
persons. 29 CFR 1625.2. A limited exception permits employers to 
provide additional benefits to older workers to ``counteract problems 
related to age discrimination.'' 29 CFR 1625.2(b). Another provision 
prohibits employment advertising that expresses a preference for older 
applicants at the expense of younger applicants who also were covered 
by the Act, and vice versa. 29 CFR 1625.4. Similarly, the regulations 
inform employers that requests for job applicants to disclose their age 
``may deter older applicants or otherwise indicate discrimination based 
on age.'' 29 CFR 1625.5

Supreme Court Rejects EEOC Interpretation

    In Cline, the Supreme Court rejected claims that favoritism toward 
older workers violated the ADEA.\3\ It concluded that such claims were 
outside the scope of the Act, because Congress only intended ``to 
protect a relatively old worker from discrimination that works to the 
advantage of the relatively young.'' Cline, 540 U.S. at 591. Noting 
that the ``reference to `age' '' in section 623(a) was ambiguous and 
``could be read to look two ways,'' the Court based its conclusion on 
the Act's coverage of only those age forty and above, the ``social 
history'' of the term ``age discrimination,'' the Act's stated 
purposes, and the legislative record as a whole. Cline, 540 U.S. at 
586.
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    \3\ The plaintiffs, a group of employees between the ages of 
forty and fifty, challenged their employer's decision to eliminate 
its future obligation to pay retiree health benefits to any employee 
then under fifty years old, while preserving future entitlement to 
such benefits for employees aged fifty or older, Cline, 540 U.S. at 
584-5. Some courts refer to such claims as ``reverse age 
discrimination claims,'' see, e.g., id. at 585 (noting that the 
district court referred to the plaintiff's ADEA claim as ``one of 
`reverse age discrimination' '').
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    The Court deemed it significant that Congress decided to cover only 
those age forty and above, observing that:

    [i]f Congress had been worrying about protecting the younger 
against the older, it would not likely have ignored everyone under 
40. The youthful deficiencies of inexperience and unsteadiness 
invite stereotypical and discriminatory thinking about those a lot 
younger than 40, and prejudice suffered by a 40-year-old is not 
typically owing to youth, as 40-year-olds sadly tend to find out.

Id. at 591. Similarly, as a matter of social history, the Court found 
that the record surrounding the Act contained no evidence that younger 
workers were suffering while their elders were favored. Noting that 
America is often seen as a ``youth culture'' in which younger is 
better, the Cline majority explained, ``talk about discrimination 
because of age is naturally understood to refer to discrimination 
against the older.'' Id. at 591.
    The Court also concluded that the stated purposes of the Act 
reflect Congress' intent to protect the relatively older from 
discrimination favoring the relatively younger.\4\ The Court noted that 
the only phrase that does not directly refer to protecting older 
employees--prohibiting ``arbitrary age discrimination''--actually is a 
reference ``to age caps that exclude older applicants, necessarily to 
the advantage of younger ones.'' Cline, 540 U.S. at 590.
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    \4\ Cline, 540 U.S. at 589-90. ``It is therefore the purpose of 
this [Act] to promote employment of older persons based on their 
ability rather than age; to prohibit arbitrary age discrimination in 
employment; [and] to help employers and workers find ways of meeting 
problems arising from the impact of age on employment.'' 29 U.S.C. 
621(b).
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    Finally, the Court found that the legislative history as a whole 
shows intent to protect the relatively older and not the relatively 
younger. It noted that the Act was drafted, at least in part, in 
response to a report issued by the Secretary of Labor concerning high 
unemployment rates among older workers (``Wirtz Report'').\5\ The Wirtz 
Report, the Court explained, ``was devoid of any indication that the 
Secretary had noticed unfair advantages accruing to older employees at 
the expense of their juniors.'' Cline, 540 U.S. at 587. Further, the 
Court noted that ``[t]he record [from Congressional hearings concerning 
the Wirtz Report] * * * reflects the common facts that an individual's 
chances to find and keep a job get worse over time; as between any two 
people, the younger is in the stronger position[.]'' Cline, 540 U.S. at 
589.
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    \5\ See Cline, 540 U.S. at 589 (noting that the introductory 
provisions of the ADEA mirrored the statement of purpose in the 
Department of Labor's report). Although Title VII of the Civil 
Rights Act of 1964, 42 U.S.C. 2000e, et seq., did not include 
protection from age discrimination, it required the Secretary of 
Labor to complete a study of age-based employment decisions and 
their consequences, and report its findings to Congress, see Pub. L. 
88-352, 78 Stat. 265 (1964). The Department of Labor issued the 
report in 1965, entitled ``The Older American Worker: Age 
Discrimination in Employment,'' and commonly referred to as the 
``Wirtz Report.'' Subsequently, the Department made a specific 
proposal for legislation, at the request of Congress, Cline, 540 
U.S. at 587, n.2 (citing 113 Cong. Rec. 1377 (1967)).
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    With respect to Senator Yarborough's statement, the Court found it 
to be the only endorsement of protection for younger employees against 
acts that favor their elders in the Act's entire legislative history. 
Cline, 540 U.S. at 599. Even though Senator Yarborough was a sponsor of 
the Act, the Court concluded that his lone statement could not reflect 
the intent of Congress, particularly in light of the clear emphasis 
placed on protecting older workers. Id. For all of the reasons 
described above, the Supreme Court found the Commission's regulation in 
Sec.  1625.2(a) was ``clearly wrong.'' Id. at 600.

[[Page 46179]]

Revisions to Agency Regulations

    Section 1625.2 is being revised as follows. The caption will be 
changed from ``Discrimination between individuals protected by the 
Act'' to ``Discrimination prohibited by the Act'' to reflect the 
Supreme Court's holding that the ADEA permits employers to make age-
based employment decisions that favor relatively older employees. The 
text of the regulation will be similarly revised, and Sec.  1625.2(b), 
which explicitly permits employers to give older employees preferential 
benefits in some circumstances, will be removed as redundant. Thus, the 
new regulation will not have paragraphs (a) and (b), and will simply be 
referred to as Sec.  1625.2. Other language changes in Sec.  1625.2 are 
made for the sake of clarity.
    Although the question examined by the Supreme Court in Cline was 
the meaning of ``because of age'' in section 623(a) of the Act, its 
holding that ``discrimination because of age'' refers only to 
discrimination against relatively older persons unquestionably applies 
to the Act as a whole. When the term ``age'' is used in other contexts 
in the statute, it must be interpreted in a manner consistent with the 
statute's overarching purpose.\6\ Thus, section 623(e)'s prohibition 
against age discriminatory job advertisements \7\ must be construed to 
bar only advertisements that favor younger individuals. Accordingly, 
the portion of 29 CFR 1625.4(a) that prohibited job advertisements 
favoring older persons has been revised to make clear that it is 
permissible to encourage relatively older persons to apply.
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    \6\ In Cline, the Supreme Court explicitly endorsed the use of 
different meanings for the term ``age'' in order to comply with the 
statute's purpose. It noted, for example, ``[f]or the very reason 
that reference to context shows that `age' means `old age' when 
teamed with `discrimination,' the provision of an affirmative 
defense when age is a bona fide occupational qualification readily 
shows that `age' as a qualification means comparative youth.'' 
Cline, 540 U.S. at 596.
    \7\ ``It shall be unlawful for an employer * * * to print or 
cause to be printed or published, any notice or advertisement 
relating to employment by such an employer * * * or any 
classification or referral for employment * * * indicating any 
preference, limitation, specification, or discrimination based on 
age.'' 29 U.S.C. 623(e).
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    In Sec. Sec.  1625.4(b) and 1625.5, which address the fact that 
advertisements or applications that ask job applicants to disclose 
their age may deter older persons from applying for the job, the phrase 
``otherwise indicate discrimination based on age'' has been changed to 
``otherwise indicate discrimination against older individuals.'' Other 
minor revisions have been made to those sections to improve clarity. No 
substantive changes are intended other than those necessary to explain 
that the ADEA permits employers to favor older individuals.

Comments

    The Commission invites comments on this proposed rule from all 
interested parties, and will consider such comments received within the 
previously noted time frames and formats. In proposing this rule, the 
Commission coordinated with other federal agencies in accord with 
Executive Order 12067, 43 FR 28967 (June 30, 1978), and, where 
appropriate, incorporated agency comments into the proposal.

Executive Order 12866, Regulatory Planning and Review

    The proposed rule has been drafted and reviewed in accordance with 
Executive Order 12866, 58 FR 51735 (Sept. 30, 1993), section 1(b), 
Principles of Regulation. It is considered to be a ``significant 
regulatory action'' pursuant to section 3(f)(4) of Executive Order 
12866 in that it arises out of the Commission's legal mandate to 
enforce the Act, and therefore was circulated to the Office of 
Management and Budget for review. This regulation is necessary to bring 
the Commission's regulations into compliance with a recent Supreme 
Court interpretation of the Act, and revise regulatory provisions that 
were explicitly invalidated by the Court as outside the scope of the 
Act. The proposed rule is intended to add to the predictability and 
consistency between judicial interpretations and executive enforcement 
of the Act.
    The proposed rule would apply to all employers with at least 20 
employees. See 29 U.S.C. 630(b).\8\ Nonetheless, the Commission does 
not believe that the proposed rule will have a significant impact on 
small business entities under the Regulatory Flexibility Act, because 
it imposes no economic or reporting burdens on such firms. To the 
contrary, the proposed rule expressly allows employers to make certain 
previously forbidden age-based decisions without fear of liability. 
Further, the proposed rule makes no change to employers' compliance 
obligations under the Act in any manner or form, because employers 
already were bound to follow the Supreme Court's interpretation of the 
Act. For the reasons described above, the Commission also believes that 
the proposed rule also imposes no burden that requires additional 
scrutiny under either the Paperwork Reduction Act, 44 U.S.C. 3501, et 
seq., concerning the collection of information, or the Unfunded 
Mandates Reform Act of 1995, 2 U.S.C. 1501, et seq., concerning the 
burden imposed on state, local, or tribal governments.
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    \8\ According to Census Bureau Information, approximately 
1,976,216 establishments employed 20 or more employees in 2000, see 
Census Bureau, U.S. Department of Commerce, Statistics of U.S. 
Businesses (2000).
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List of Subjects for 29 CFR Part 1625

    Advertising, Aged, Employee benefit plans, Equal employment 
opportunity, Retirement.

    Dated: August 4, 2006.

    For the Commission.
Cari M. Dominguez,
Chair.
    For the reasons discussed in the preamble, the Equal Employment 
Opportunity Commission proposes to amend 29 CFR chapter XIV part 1625 
as follows:

PART 1625--AGE DISCRIMINATION IN EMPLOYMENT ACT

Subpart A--Interpretations

    1. Revise the authority citation for part 1625 to read as follows:

    Authority: 29 U.S.C. 621-634; 5 U.S.C. 301; sec. 2, Reorg. Plan 
No. 1 of 1978, 43 FR 19807; E.O. 12067, 43 FR 28967.

    2. Revise Sec.  1625.2 to read as follows:


Sec.  1625.2  Discrimination prohibited by the Act.

    It is unlawful for an employer to discriminate against an 
individual in any aspect of employment because that individual is 40 
years old or older, unless one of the statutory exceptions applies. 
Favoring an older individual over a younger individual because of age 
is not unlawful discrimination under the Act, even if the younger 
individual is at least 40 years old.
    3. Revise Sec.  1625.4 to read as follows:


Sec.  1625.4  Help wanted notices or advertisements.

    (a) Help wanted notices or advertisements may not contain terms and 
phrases that limit or deter the employment of older individuals. 
Notices or advertisements that contain terms such as age 25 to 35, 
young, college student, recent college graduate, boy, girl, or others 
of a similar nature violate the Act unless one of the statutory 
exceptions applies. Employers may post help wanted notices or 
advertisements expressing a preference for older individuals with terms 
such as over age 60, retirees, or supplement your pension.
    (b) Help wanted notices or advertisements that ask applicants to 
disclose or state their age do not, in

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themselves, violate the Act. But because asking applicants to state 
their age may tend to deter older individuals from applying, or 
otherwise indicate discrimination against older individuals, employment 
notices or advertisements that include such requests will be closely 
scrutinized to assure that the requests were made for a lawful purpose.
    4. Revise the first paragraph of Sec.  1625.5 to read as follows:


Sec.  1625.5  Employment Applications.

    A request on the part of an employer for information such as Date 
of Birth or age on an employment application form is not, in itself, a 
violation of the Act. But because the request that an applicant state 
his age may tend to deter older applicants or otherwise indicate 
discrimination against older individuals, employment application forms 
that request such information will be closely scrutinized to assure 
that the request is for a permissible purpose and not for purposes 
proscribed by the Act. That the purpose is not one proscribed by the 
statute should be made known to the applicant by a reference on the 
application form to the statutory prohibition in language to the 
following effect:
* * * * *
 [FR Doc. E6-13138 Filed 8-10-06; 8:45 am]
BILLING CODE 6570-01-P