Enforcement Guidance on O'Connor v. Consolidated Coin Caterers Corp.

EEOC NOTICE
Number 915.002
Date 9-18-96

1.     SUBJECT:  Enforcement Guidance on O'Connor v. Consolidated 
Coin Caterers Corp.

2.     PURPOSE:  This enforcement guidance analyzes the impact on 
EEOC enforcement activities of the Supreme Court's ADEA decision 
in O'Connor v. Consolidated Coin Caterers Corp., 116 S. Ct. 1307 
(1996), holding that a prima facie showing of age discrimination 
in discharge does not require the plaintiff's replacement to be 
outside the protected age group.1

3.     EFFECTIVE DATE:  Upon issuance.

4.     EXPIRATION DATE:  As an exception to EEOC Order 205.001, 
Appendix B, Attachment 4, Section a(5), this Notice will remain 
in effect until rescinded or superseded.

5.     ORIGINATOR:  ADEA Division, Office of Legal Counsel.

6.     INSTRUCTIONS:  File after the last Enforcement Guidance in 
the 800 series of Volume II of the EEOC Compliance Manual.

7.     SUBJECT MATTER:  

     I.     Background and Holding of Decision

     On April 1, 1996, the U.S. Supreme Court issued its decision 
in O'Connor v. Consolidated Coin Caterers Corp., 116 S. Ct. 1307 
(1996).2  The O'Connor decision addressed the narrow question of 
whether, in order to make out a prima facie case, a plaintiff 
alleging that he was discharged in violation of the Age 
Discrimination in Employment Act of 1967, as amended (ADEA), 29 
U.S.C. § 621 et seq., must show that he was replaced by 
someone outside the protected age group (i.e., someone under the 
age of 40).  A unanimous Court held that replacement by someone 
under 40 was not a necessary element of an ADEA prima facie case.
 
     The plaintiff in O'Connor, who was 56 years old at the time 
he was discharged, had filed suit in federal district court 
alleging that he had been dismissed by the defendant corporation 
because of his age.  The district court granted the defendant's 
motion for summary judgment.  On appeal, the Court of Appeals for 
the Fourth Circuit affirmed the district court's dismissal of the 
case.

       Applying the McDonnell Douglas3 framework, the Fourth 
Circuit stated that the plaintiff in a non-reduction-in-force 
case could establish a prima facie case of age discrimination 
only if he showed that: (1) he was in the ADEA protected age 
group (PAG); (2) he was discharged or demoted; (3) at the time of 
his discharge or demotion, he was performing his job at a level 
that met his employer's legitimate expectations; and (4) 
following his discharge or demotion, he was replaced by someone 
of comparable qualifications outside the PAG.  The court 
concluded that the plaintiff had failed to make out a prima facie 
case because the plaintiff's replacement was 40 years old and, 
thus, was in the PAG.  The Supreme Court reversed.           

     The Supreme Court initially noted that it had never had 
occasion to decide whether the basic evidentiary framework set 
forth in McDonnell Douglas applied to the ADEA.  However, since 
the parties did not contest that point and since the Fourth 
Circuit, like every other federal court of appeals, had applied 
some variant of McDonnell Douglas to ADEA disparate treatment 
cases, the Court assumed for purposes of the decision that it did 
apply.

     Thus viewing the prima facie case from the perspective of 
the McDonnell Douglas framework, the Court stated that there must 
be "at least a logical connection between each element of the 
prima facie case and the illegal discrimination for which it 
establishes a 'legally mandatory, rebuttable presumption.'"  116 
S. Ct. at 1310 (citation omitted).  The Court found that the 
element of replacement by someone under 40 failed to meet this 
requirement.  Id.  The Court reasoned that no greater inference 
of age discrimination (as opposed to PAG discrimination) could be 
drawn when a 40-year-old is replaced by a 39-year-old (i.e., 
someone outside the PAG) than when a 56-year-old is replaced by a 
40-year-old (i.e., someone within the PAG).  Id.  The Court 
concluded that, "[b]ecause it lacks probative value, the fact 
that an ADEA plaintiff was replaced by someone outside [the PAG] 
is not a proper element of the McDonnell Douglas prima facie 
case."  Id.  

     In reaching its conclusion, the Court emphasized that the 
ADEA prohibits discrimination "because of [an] individual's age."  
The statutory language "does not ban discrimination against 
employees because they are aged 40 or older [i.e., in the PAG]; 
it bans discrimination against employees because of their age, 
but limits the protected class to those who are 40 or older."  
116 S. Ct. at 1310.  The Court observed:  "The fact that one 
person in the [PAG] has lost out to another person in the [PAG] 
is thus irrelevant, so long as he has lost out because of his 
age."  Id. (emphasis in original).          

     The Court further remarked, in dicta, that a prima facie 
case requires "'evidence adequate to create an inference that an 
employment decision was based on a[n] [illegal] discriminatory 
criterion,'" 116 S. Ct. at 1310 (quoting Teamsters v. United 
States, 431 U.S. 324, 358 (1977)), and that such an inference 
cannot be drawn by the replacement of one worker with another 
worker who is "insignificantly younger."  Id.  Because the ADEA 
prohibits discrimination based on age rather than on class 
membership, the Court suggested that, in the age-discrimination 
context, "the fact that a replacement is substantially younger 
than the plaintiff is a far more reliable indicator of age 
discrimination than is the fact that the plaintiff was replaced 
by someone outside the [PAG]."  Id.


     II.     Questions and Answers

     The following questions and answers set forth the 
Commission's position on issues that arise in relation to the 
O'Connor decision.

1.     Q.     What is the basic holding of O'Connor?

     A.     The O'Connor decision holds that a prima facie 
showing of age discrimination does not require the plaintiff's 
replacement (if any) to be younger than the PAG minimum age 
(i.e., 40 years old).

2.     Q.     Does the O'Connor decision change the way in which 
investigators should process age discrimination charges?

     A.     No.  O'Connor is consistent with the Commission's 
long-standing position that an ADEA charge should never be 
rejected or dismissed on the merits solely because a charging 
party states that his or her replacement (or comparator) is an 
individual within the ADEA's protected age group (40 and older).

          Indeed, it is the Commission's view that the 
characteristics of the comparator are not a necessary element of 
the prima facie case under the ADEA, Title VII, the Americans 
with Disabilities Act (ADA), or the Rehabilitation Act of 1973.4 

3.     Q.     Is it possible after O'Connor to establish a prima 
facie case and, ultimately, a violation of the ADEA where the 
respondent does not hire a replacement for the charging party?

     A.     Yes.  The decision's holding is not dependent upon 
the respondent's hiring a replacement for the charging party.  
O'Connor holds only that, when the age of a replacement is made a 
part of the prima facie case, that case is not defeated solely 
because the replacement happens to be within the protected age 
group.  


4.     Q.     In dicta, the O'Connor Court uses the terms  
"insignificantly younger" and "substantially younger" in 
referring to a plaintiff's replacement.  Does the decision define 
these terms?

     A.     No.  In discussing the strength of an inference of 
age discrimination that might be drawn from the facts of a 
particular case, the Court merely offers the example of a 68-
year-old replaced by a 65-year-old and suggests that such facts 
might amount to "creating a prima facie case on the basis of very 
thin evidence."  116 S. Ct. at 1310.

5.     Q.     Is it necessary to make a specific determination 
regarding whether the charging party's replacement/ comparator is 
"insignificantly" or "substantially" younger than the charging 
party?  If so, since the O'Connor decision does not define these 
terms, how will the Commission make that determination?

     A.     It is not necessary to specifically categorize that 
age difference as "insignificant" or "substantial."  As in the 
past, however, the relative ages of the charging party and his/ 
her replacement/comparator may be relevant evidence as to the 
merits of the case.  Where a specific determination on this point 
must be made, the Commission will make it on a case-by-case 
basis.

          We emphasize, moreover, that there is no "bright line" 
test for determining whether the age difference can be considered 
either "insignificant" or "substantial." Whether the age 
difference is sufficient to support a finding of age 
discrimination is simply one of the issues to be considered in 
assessing the case.  (See discussion below.)

6.     Q.     Does the O'Connor decision require a "no cause" 
dismissal of a charge where it is determined that the charging 
party was replaced by a person who is only slightly younger?  For 
example, should a charge alleging discharge because of age be 
dismissed if the charging party's replacement is only two or 
three years younger than the charging party? 

     A.     No.  Under no circumstances should a charge be 
dismissed without investigation solely because the charging 
party's replacement is only slightly younger.  Field offices have 
the discretion to consider this point along with all other facts 
and circumstances when making a decision on appropriate resource 
commitment and a determination on the merits.   


7.     Q.     Under what circumstances might a field office issue 
a cause determination even though the comparator is only slightly 
younger than the charging party?

     A.     There may be a number of circumstances in which such 
a cause determination is proper.  The fact that the age 
difference between the charging party and his/her comparator is 
not "substantial" is simply one piece of evidence that must be 
weighed along with all other evidence in determining whether 
there is reasonable cause.  For example:

          (1)     If the evidence showed that the slightly 
younger comparator was selected for the purpose of disguising age 
discrimination, the relatively slight difference in age would not 
defeat the charging party's case.  Such might be the case where, 
for instance: 

               *     Despite the slight difference in age, the 
comparator looks appreciably younger, more vigorous, and robust, 
and the employer has commented favorably on the comparator's 
"youthful" appearance.      

               *     The replacement is someone who is nearing 
retirement age and who has expressed an interest in retiring -- 
thus clearing the way for the employer to hire a considerably 
younger replacement.   

          (2)     An employer's history of taking action against 
its oldest workers would support an inference of age 
discrimination where the comparator was only slightly younger 
than the charging party.  

          (3)     Evidence that age-based comments were made in 
connection with the allegedly discriminatory action would 
buttress an inference of age discrimination despite a relatively 
slight age difference.    

          (4)     Even if the comparator is only slightly younger 
than the charging party, his/her being less qualified for the job 
would also support an inference of age discrimination.

          (5)     If the slightly younger replacement was hired 
by someone other than, and outside the control of, the person who 
fired the charging party, the inference of age discrimination 
would not be undermined by the relatively small age difference 
(since the firing and hiring were separate and independent acts 
by two different individuals).    


          Where the comparator is only slightly younger than the 
charging party, but the totality of the evidence is adequate to 
create an inference of age discrimination, the field should issue 
a cause determination whenever the respondent fails to articulate 
a legitimate, non-discriminatory reason for its action, or 
whenever it is determined that the articulated reason is a 
pretext for illegal discrimination.

8.     Q.     Is it appropriate after the O'Connor decision for 
the Commission to continue to apply the McDonnell Douglas prima 
facie case framework in age cases?

     A.     Yes.  Although that framework was developed under 
Title VII, the Commission and virtually all federal courts have 
applied some variant of the basic evidentiary framework developed 
in McDonnell Douglas to ADEA disparate treatment cases.5  Indeed, 
the Supreme Court used  McDonnell Douglas in O'Connor.

9.     Q.     Is the McDonnell Douglas framework the exclusive 
means of assessing the evidence in a disparate treatment case?

     A.     No.  The McDonnell Douglas model is simply one way of 
assessing the evidence.  For example, where there is direct 
evidence of discrimination, a determination on the merits can be 
made without relying on the McDonnell Douglas framework.  For 
EEOC investigative purposes, however, the important consideration 
is that a  determination on the merits should be made on the 
basis of whatever evidence has been obtained, without rigid or 
inflexible adherence to a prescribed "formula."  As noted by the 
Seventh Circuit in Carson v. Bethlehem Steel Corp., regarding a 
Title VII prima facie case:  "Any demonstration strong enough to 
support a judgment in the plaintiff's favor if the employer 
remains silent will do, even if the proof does not fit into a set 
of pigeonholes."  82 F.3d at 159.
 
10.     Q.     Does the O'Connor decision address the 
applicability of the adverse impact theory of discrimination in 
age cases?

     A.     No.  The case deals solely with the disparate 
treatment theory of discrimination.  While the Supreme Court has 
never ruled on the applicability of the adverse impact theory to 
age cases,6 the majority of federal appellate courts have either 
held or assumed that the theory applies in age cases.  

          The Commission applies the adverse impact analysis in 
age cases unless the law of the circuit prohibits such 
application.  See 29 C.F.R. § 1625.7(d).  


11.     Q.     Does the holding in O'Connor apply to pending 
cases?  If a case is pending in a field office in the Fourth 
Circuit involving the replacement of one member of the protected 
age group by another member of the protected age group and the 
facts arose before the Supreme Court's decision, how should the 
field office proceed?

     A.     The O'Connor decision does apply to pending cases.  
Therefore, field offices (including those in the Fourth Circuit) 
should apply the law as stated by the Supreme Court.7

     If there are any questions concerning this memorandum or its 
application to a specific charge, EEOC investigative staff should 
contact their legal unit.

 9/18/96				
__________       ______________________________________________  
Date             Gilbert F. Casellas, Chairman                 


1.     Although this enforcement guidance addresses this issue in 
the context of private sector discrimination charges, the 
principles and considerations discussed herein are equally 
applicable to federal sector complaints.  

     With respect to the applicability of the guidance to 
charges/complaints brought under Title VII of the Civil Rights 
Act of 1964, as amended, 42 U.S.C. § 2000e et seq.; the 
Americans with Disabilities Act of 1990, as amended, 42 U.S.C. 
§ 12101 et seq.; and the Rehabilitation Act of 1973, as 
amended, 29 U.S.C. § 791 et seq., see discussion below at 
Question and Answer 2.
 
2.     67 EPD & 43,927, 70 FEP Cases 486 (1996).

3.     In McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) 
(Title VII), the Court held that a plaintiff can establish a 
prima facie case of disparate treatment in hiring by showing 
that:  (i) he/she belongs to a protected class; (ii) he/she 
applied and was qualified for the job at issue; (iii) despite 
these qualifications, he/she was rejected; and (iv) after his/her 
rejection, the position remained open and the employer continued 
to seek applicants having the plaintiff's qualifications.  411 
U.S. at 802.  Courts have adjusted these criteria in analyzing 
the particular issue in dispute.  For example, the prima facie 
case criteria for analyzing a hiring case differ slightly from 
those for analyzing a discharge or a denial of transfer case.

4.     We note with approval that, in a recent post-O'Connor 
decision under Title VII, the Court of Appeals for the Seventh 
Circuit held that a plaintiff alleging racial discrimination in 
discharge need not show that her replacement was of a different 
race.  Carson v. Bethlehem Steel Corp., 82 F.3d 157 (7th Cir.), 
68 EPD & 44,009, 70 FEP Cases 921 (1996).

5.     Relevant appellate court decisions applying McDonnell 
Douglas in an ADEA disparate treatment context are cited in 
O'Connor at 116 S. Ct. 1309-10 n.2.    

6.     See Hazen Paper Co. v. Biggins, 507 U.S. 604, 610 (1993).

7.     For a discussion of the criteria that would preclude 
application of a Supreme Court decision to pending cases and, 
thus, limit it to prospective application, see Chevron Oil v. 
Huson, 404 U.S. 97, 106 (1971).