ADEA Now Applies to All Governmental Entities, Regardless of Size

by: Allison L. Davis and Brittany K. Taylor

On November 6, 2018, the United States Supreme Court issued an opinion holding that all state and local governments are covered employers under the Age Discrimination in Employment Act (“ADEA”), regardless of size. Mount Lemmon Fire Dist. v. Guido, ___ U.S. ____, 2018 WL 5794639, at *5 (Nov. 6, 2018). In doing so, the Supreme Court overruled several Circuit Court opinions, dating back to the 1980s, finding that the ADEA applied to only those state and local governments with twenty or more employees.

Two former employees of an Arizona fire district filed age discrimination claims against their former employer, a small public employer, after they were laid off. In the lawsuit, the two oldest employees of the Fire District claimed their terminations violated the ADEA. In response, the Fire District claimed it was not subject to the ADEA because it was too small to meet the ADEA’s definition of “employer,” which generally requires employment of twenty or more people.

However, on appeal, the Supreme Court considered the plain language of the ADEA’s definition of “employer” and, specifically, the fact that Congress failed to include the “twenty or more employee” requirement immediately before the section addressing state and local governments. Reading the definition in such a plain way, the Supreme Court found that the ADEA applies to all state and political subdivisions, regardless of the number of employees.

Prior to the Supreme Court’s opinion, several federal circuit courts, including the Sixth, Seventh, Eighth and Tenth Circuits, held that the ADEA did not apply to governments with fewer than twenty employees. Now, all state and local governments will be required to comply with the ADEA.

This new opinion will obviously have the largest impact on small state and local governments that, until now, were treated as exempt from the ADEA’s requirements. Prior to Guido, employers, courts, and governmental agencies alike operated under the assumption that the ADEA applied only to those employers with twenty or more employees, regardless of whether the employer was a private entity or public employer.

Now, only private employers with fewer than twenty employees are exempt from the ADEA. In practice, this means public employers with less than twenty employees must ensure that they are in full compliance with the ADEA. This is particularly important in the following states, as federal appellate courts governing law in these states previously held the opposite: Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Utah, Wisconsin, and Wyoming.

Allison L. Davis, J.D. and Brittany K. Taylor, J.D. are members of Brown & Fortunato’s Labor and Employment law team, where Allison is a shareholder. They represent clients in a wide range of employment litigation, pre-litigation, and counseling matters, including employment discrimination, non-competition disputes, wage and hour issues, and business disputes. The Employment Law team at Brown & Fortunato can be reached at 806-345-6300. Or contact Allison directly at adavis@bf-law.com or Brittany at btaylor@bf-law.com.