Pain and Suffering and Punitive Damages Not Available Under the ADEA: Fifth Circuit

Practical Law Legal Update w-006-5087 (Approx. 5 pages)

Pain and Suffering and Punitive Damages Not Available Under the ADEA: Fifth Circuit

by Practical Law Labor & Employment

Background

Susan Vaughan was employed by Anderson Regional Medical Center (Medical Center). The Medical Center terminated Vaughan's employment. Vaughan sued in federal district court alleging:

Wrongful termination.
That she was discharged in retaliation for raising an age discrimination complaint.
That her claim invoked the ADEA for damages for pain and suffering and punitive damages.

The federal district court dismissed Vaughan's claims for pain and suffering and punitive damages, citing Dean v. Am. Sec. Ins. Co. as precedent for barring such recovery under the ADEA (559 F.2d 1036 (5th Cir. 1977)). Vaughan petitioned for interlocutory appeal.

Outcome

The Fifth Circuit:

Affirmed the district court's dismissal of Vaughan's claims for pain and suffering and punitive damages.
Held that:
- all "private actions posited upon the ADEA" including an employee's ADEA retaliation claim, may not invoke the ADEA as a basis for compensatory damages for pain and suffering or punitive damages;
- the district court's reliance upon Dean was proper; and
- the holding in Dean controls this case.

The Fifth Circuit noted that:

There is a circuit split regarding the availability of pain and suffering and punitive damages in ADEA retaliation cases.
When there is a split in authority, the court adheres to a "rule of orderliness" under which a panel may not overturn a controlling precedent "absent an intervening change in law, such as by a statutory amendment, the US Supreme Court, or the en banc court" (Spong v. Fidelity Nat'l Property & Cas. Ins. Co., 787 F.3d 296, 305 (5th Cir. 2015)).
Even if a panel's interpretation of the law appears flawed, the rule of orderliness prevents a subsequent panel from declaring it void (see Spong, 787 F.3d at 305).
To determine if the rule of orderliness applies, the court must analyze whether:
- Dean is distinguishable from this case; or
- an intervening change in law justifies setting Dean aside.
In Dean, the Fifth Circuit held unequivocally that "neither general damages (compensatory damages for pain and suffering) nor punitive damages are recoverable in private actions posited upon the ADEA" (559 F.2d 1036 (5th Cir. 1977)).
ADEA age discrimination and retaliation claims are equally "private actions posited upon the ADEA," and the ADEA has contained a prohibition on employer retaliation since its inception (29 U.S.C. §623(d)).
The district court relied upon Dean as the controlling case.
In Dean, the court concluded that the ADEA "patently encouraged and preferred . . . administrative remedies and suits brought by the Secretary of Labor . . . to private actions" (559 F.2d at 1039).
Vaughan's efforts to undermine Dean rely heavily upon the 1977 FLSA amendments that incorporated remedial language that was substantively identical to passages already provided in the ADEA.

The Fifth Circuit concluded that:

The court issued its decision in Dean on September 23, 1977, more than a month prior to when the 1977 FLSA amendments were incorporated.
The FLSA amendments only added language to the FLSA that the court had already construed in the context of the ADEA in Dean (559 F.2d at 1036; Fair Labor Standards Amendment of 1977, 29 U.S.C. §§ 201 – 219).
The 1977 FLSA amendments' borrowing of the ADEA's remedial language did not constitute an intervening change in the ADEA warranting a departure from Dean.
The EEOC's belief that the ADEA permits pain and suffering and punitive damages also does not constitute an intervening legal change sufficient to displace Dean. Even if the court found the EEOC's interpretation persuasive, it would not provide sufficient basis for departing from an established precedent.
The ADEA's transfer of functions from the Secretary of Labor to the EEOC did not constitute an intervening change in law sufficient to displace Dean's precedent since it did not create any significant differences for ADEA plaintiffs.

Practical Implications

The Fifth Circuit's decision in Vaughan rejected the EEOC's interpretation of the ADEA regarding a plaintiff's ability to seek compensatory damages for pain and suffering and punitive damages. Any employee that seeks to bring a private action in the Fifth Circuit will have a challenging time overcoming this presumption.

Employers should:

Keep the Dean precedent in mind when defending against a private action brought by an employee.
Be prepared to submit reasons why their case is similar to Dean and establish that there has been no intervening change in the law.

Pain and Suffering and Punitive Damages Not Available Under the ADEA: Fifth Circuit | Practical Law