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Adapting McDonnell Douglas to the But-For Standard. Why don’t employers seem to be faring better in the federal courts under the new higher standard?

In 2009, the U.S. Supreme Court held in Gross v. FBL Financial Services, Inc. that a plaintiff asserting a disparate-treatment claim under the Age Discrimination in Employment Act (ADEA) must prove that age was the but-for cause of the challenged employment action. The Court’s decision took many employment lawyers by surprise, in part, because that was not the issue on which certiorari had been granted. The Court had granted certiorari on the issue of whether a plaintiff was required to present direct evidence to obtain a mixed-motive jury instruction in an ADEA case. But addressing the “‘subsidiary’” question of the general standard of liability under the statute, the Court held that a mixed-motive jury instruction is never proper in an ADEA case. More specifically, the Court held that the burden of persuasion never shifts to the employer to show that it would have made the same adverse employment decision regardless of age – even after a plaintiff has produced evidence that age was a motivating factor in that decision.

In the wake of Gross, a recurring issue related to the but-for standard was whether the federal courts should continue to utilize the circumstantial-evidence framework first set out in McDonnell Douglas Corp. v. Green, and thereafter applied, in various forms, to many other anti-discrimination statutes, including the ADEA. The Supreme Court observed in Gross that it had never held that the McDonnell Douglas framework was applicable to ADEA cases. But because the Supreme Court did not expressly reject the McDonnell Douglas framework as applicable to but-for claims, most federal courts continued to defer to their own long-standing circuit precedent of using McDonnell Douglas to analyze ADEA claims, albeit while purporting to give effect to the new liability standard announced in Gross.

During its recently-concluded term, the Supreme Court addressed the but-for standard once again in University of Texas Southwestern Medical Center v. Nassar. Using Gross as its guidepost, the Nassar Court held that a plaintiff asserting retaliation claims under Title VII of the Civil Rights Act of 1964 must likewise prove liability according to traditional principles of but-for causation, and not the “lessened causation” standard applicable to discrimination claims under Title VII. Therefore, a Title VII retaliation plaintiff must prove that his or her statutorily-protected activity was the but-for cause of the challenged employment action. In light of the Supreme Court’s clarifying decision in Nassar, the federal courts of appeal should reconsider their current application of the but-for standard within the McDonnell Douglas framework.

Is McDonnell Douglas Appropriate for But-For Claims?

Some federal courts appeared surprised by the observation in Gross that the Supreme Court had never held the McDonnell Douglas framework to be applicable to ADEA claims. But the Court had made that same observation at least twice before, dating back to O’Connor v. Consolidated Coin Caterers Corp. in 1996. It is impossible to know the Court’s intentions in declining to definitively address this issue. Nevertheless, until the Supreme Court does so, the circuit courts appear intent on continuing to use some variant of the McDonnell Douglas analytical framework even in cases governed by the but-for causation standard.

The difficulty with the current application of McDonnell Douglas to ADEA claims following Gross, however, has been the tendency of some courts to treat that analytical framework as an alternative to (or as otherwise indistinguishable from) the but-for standard. Most of those courts have continued to treat a showing of pretext as satisfying the but-for standard. But that application effectively dilutes the but-for standard, which the Court in Nassar clarified was “more demanding” than the “lessened causation” standard applicable to Title VII discrimination cases, to which the pretext-focused McDonnell Douglas framework indisputably still applies.

Some employment lawyers have argued that the McDonnell Douglas framework is simply not applicable to cases governed by the but-for standard. Adopted before jury trials were available under Title VII, the McDonnell Douglas framework undoubtedly made easier the appellate review of the ultimate findings of discrimination – or not – made by individual district judges nationwide. Arguably, then, that framework provided a certain uniformity of analysis, which, in turn, has promoted a greater consistency in results. These are solid arguments in favor of a continued application of that framework to ADEA cases and Title VII retaliation cases – albeit in a form true to the new legal standard adopted in Gross and Nassar. Especially in light of the federal circuit courts’ reluctance to abandon their own longstanding precedent applying McDonnell Douglas to Title VII retaliation cases and ADEA cases, the better argument would appear to be to “mend it, not end it.”

What does “but for” mean?

The Court in Gross gave some indication as to the meaning of the but-for standard. Citing its earlier opinion in Hazen Paper Co. v. Biggins, the Court held that the “ordinary meaning” of the ADEA’s statutory requirement that the employer took the adverse action “because of” the plaintiff’s age is “that age was the ‘reason’ that the employer decided to act.” In support of its conclusion, the Court cited common dictionary and legal hornbook definitions, as well as general causation precedent. The Court’s opinion suggested that the but-for standard might be satisfied in an ADEA case by a showing that the adverse employment action was “based on” and happened “‘by reason of’” or “‘on account of’” the plaintiff’s age, and would not “‘have occurred without it.’”

Repeatedly distinguishing the but-for standard from the “lessened causation” standard applicable to Title VII discrimination claims, the Nassar Court distilled the various legal phrasings in Gross into the following formula for Title VII retaliation claims: “proof that the unlawful retaliation would not have occurred in the absence of the alleged wrongful action or actions of the employer.” Nassar provides no reason to believe that this same formulation would not be suitable, as modified, for ADEA claims, as well.

How then should the federal courts incorporate the “more demanding” but-for standard into the McDonnell Douglas analysis? As applied to Title VII discrimination claims, the McDonnell Douglas framework provides that if a plaintiff establishes a prima facie case, and the employer produces a legitimate, non-discriminatory reason for the challenged employment action, the plaintiff bears the burden of persuasion of showing the employer’s reason to be pretext. The federal courts have treated that showing as the equivalent of the plaintiff’s statutory burden of demonstrating that a statutorily-protected trait “was a motivating factor for [the] employment practice.” If the plaintiff carries his or her burden, the defendant is afforded the opportunity to prove, as an affirmative defense, that it “would have taken the same action in the absence of the impermissible motivating factor.”

But Nassar and Gross make clear that there is no such burden shifting in either Title VII retaliation cases or ADEA cases. Nevertheless, those two burdens neatly summarize the possible universe of reasons upon which an employer might act in any disparate-treatment case: (1) a statutorily-prohibited reason(s); and/or (2) any and all other reasons, which, because of their omission from the relevant statute, are thus not unlawful. Importantly, Gross did not remove the question of whether a defendant would have made the “same decision” from whatever analytical framework might properly apply to but-for cases. Instead, the Court effectively assigned the burden of persuasion on that final question to the plaintiff by holding that it never shifts to the defendant, even when the plaintiff has shown that the protected trait or conduct was a motivating factor.”

Should the federal courts continue to apply McDonnell Douglas to but-for discrimination claims after Nassar and Gross, the last stage of the burden-shifting framework must be modified to require that the plaintiff bear the burden of persuasion on the “more demanding” but-for standard – and not merely the “lessened causation” standard of pretext that is synonymous with the motivating-factor standard. To do otherwise in but-for cases would violate Supreme Court precedent requiring that the federal courts apply the same substantive legal standard to pretrial and post-trial motions as they do at any trial.

Therefore, the federal courts should replace the McDonnell Douglas pretext element with a requirement that the plaintiff’s evidence demonstrate both that his or her protected trait or conduct was a motivating factor in his challenged employment action, and that the defendant would not have made the same decision but-for the prohibited trait or conduct – including, but not limited to, the legitimate, non-discriminatory reason offered by the defendant.

Of course, the 1991 amendments to Title VII’s anti-discrimination provision did not invalidate the earlier holdings of the federal circuit courts that an employer is not liable for discrimination simply because its reasons are subsequently shown to be mistaken. Even under those amendments to Title VII’s anti-discrimination provision, an employer is not liable for an adverse employment action taken for a good reason, a bad reason, or no reason at all, so long as the reason is not the statutorily-proscribed reason(s).

Employing the McDonnell Douglas framework in the above fashion in but-for cases would permit the federal courts of appeal to continue to give respect to long-standing circuit precedent while at the same time giving actual effect to the Supreme Court’s holdings in Gross and Nassar.