In a ruling applauded by employers, the United States Supreme Court ruled in Gross v. FBL Financial Services Inc., No. 08-441 (June 18, 2009), that an employee must demonstrate that age is the decisive, “but-for” cause of the employer’s adverse employment decision in order to prevail in age discrimination claims brought under the federal Age Discrimination in Employment Act (“ADEA”). Prior Court holdings required employees to establish that age was only a “motivating factor” in the employer’s decision and gave the employer the opportunity to show that it would have taken the same action regardless of age.

In Gross, Gross claimed that FBL discriminated against him because of his age when it reassigned him, at age 54, to a different position and transferred many of his responsibilities to a new position created for a woman in her early forties. During trial, he presented evidence that FBL was motivated in carrying out its action, at least in part, by his age. The company denied this claim and maintained that his demotion was part of a larger corporate restructuring. Relying on the burden-shifting framework set forth in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), the trial court held that Gross had to prove by a preponderance of the evidence that his age was a “motivating factor” in the Company’s decision to demote him. See Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) (addressing burden of proof in “mixed motive” cases where employer is motivated by both illicit and lawful reasons). The jury then returned a verdict for Gross. On appeal, the U.S. Court of Appeals for the Eighth Circuit held that the trial court failed to properly instruct the jury about the Price Waterhouse burden-shifting framework, and sent the case back to the trial court.

In reviewing this case, the Supreme Court surprised employers and employees alike in vacating application of the Price Waterhouse framework for ADEA cases, although lower federal courts had applied this framework to such cases for years. The Court found a distinction between Title VII cases, to which the Price Waterhouse framework clearly applies, and ADEA cases. Reading the text of each statute, Justice Clarence Thomas noted that Title VII itself provides that an unlawful employment practice is established where an employee proves that an unlawful criterion was a “motivating factor” in the employer’s decision. Dissimilarly, the ADEA does not have any such “motivating factor” language. Based on the ADEA’s clear terms, the Court held that application of the Price Waterhouse framework is not appropriate in ADEA cases.

Practically, and because typically plaintiffs lack any direct evidence of age discrimination, the Gross decision will make it increasingly difficult for employees to prevail in ADEA claims. It remains to be seen whether Congress will amend the ADEA to address Gross, as it did in response to the Lilly Ledbetter case.