Legal Corner – Recent U.S. Supreme Court Decision: Mount Lemmon Fire District v. Guido
The first opinion of the new Supreme Court term was issued earlier this month and the Court unanimously affirmed the Ninth Circuit’s judgment against the Mount Lemmon Fire District. This Arizona case has immediate repercussions for state and local governments, especially small public bodies.
Case History
This case began during the recession in 2009 when the Fire District terminated the two oldest full-time employees. The employees sued the Fire District and alleged age discrimination. The Equal Employment Opportunity Commission found reasonable cause to believe the Fire District violated the federal Age Discrimination in Employment Act (“ADEA”), which prohibits employers from taking certain actions on the basis of age, including discharging an individual, discriminating with respect to compensation or conditions of employment, classifying employees to deprive an individual of employment opportunities, or reducing the wage rate of an employee. See 29 U.S.C. § 623.
The employees then filed a lawsuit in April 2013. The federal district court granted the Fire District’s motion for summary judgment, agreeing with their interpretation that the eleven-member Fire District is not covered by ADEA because the Fire District does not fit within the definition of “employer” since it had less than twenty employees. The plaintiffs appealed, and the Ninth Circuit Court of Appeals reversed the decision. The Court found that the Fire District meets the definition of “employer” and a political subdivision of the State does not require twenty or more employees to meet the definition under the ADEA. The Fire District appealed. On November 6, 2018, the U.S. Supreme Court affirmed the Ninth Circuit’s decision. The Court analyzed the statutory construction of the ADEA “employer” definition in 29 U.S.C. § 630(b) and held that the twenty-employee minimum applies to private sector employers. The state or political subdivision of the state is a separate category under the definition, which means the numerosity specification is not required for state and local governments to be considered an “employer” under ADEA. Therefore, the underlying lawsuit alleging age discrimination can move forward against the Fire District.
Impact of the Case on Local Governments
Small government bodies relied on the previous interpretation of the law, which excluded local governments from the ADEA if the public body had twenty employees or fewer. With this new direction from the U.S. Supreme Court all state and local government entities, no matter how large or small, are subject to the ADEA’s requirements.
An amicus brief filed by organizations representing state and local government, including the International Municipal Lawyers Association, highlighted concerns about the challenge for smaller jurisdictions to bear the cost of increased liability since there is no means to route these costs to larger State entities. Additionally, these increased costs may lead to an increase in insurance premiums. The overall concern by these organizations is that the increased liability and potential costs may force smaller jurisdictions to undergo more budget cuts or to discontinue vital public services.
The amicus brief also argued that the States are in the best position to set these liability thresholds according to the varying needs across the country. In Arizona, A.R.S. § 41-1461 exempts small employers (including state and local governments) from age discrimination claims if the employer has a minimum of fifteen employees for each working day for twenty or more weeks in a current or preceding calendar year. While this may be the threshold under Arizona law, local governments must now be cognizant that federal age discrimination claims may be brought against them regardless of their size under the ADEA.
