Butler Williams & Skilling Blog

WellPoint Age Discrimination Collective Action (Class) Moves Forward

On January 15, 2009, Judge James R. Spencer, United States Federal Judge for the Eastern District of Virginia, overuled WellPoint's Motion to Dismiss claims alleging that WellPoint layoffs from January, 2005 though the present violate the Age Discrimination in Employment Act (ADEA).  Judge Spencer's 14 page opinion considers, and rejects, WellPoint's arguments that the plaintiffs had not stated both actionable disparate treatment claims and disparate impact claims of age discrimination.  The case is Merritt v. WellPoint, Inc. d/b/a Anthem Health Plans of Virginia, Inc., and/or Anthem Blue Cross and Blue Shield, Civil Action No. 3:08-cv-272.

The lawsuit seeks 'collective action' status for the three filing plaintiffs to represent a group of "persons age 40 and older who were employed in WellPoint's Virginia operations and whose discharge, forced separation, or other involuntary separation from WellPoint during the period from January 2005 through the present resulted from WellPoint's policy or practice treating age (and its related characteristics) as negative factors in determining which employees to retain and which to terminate (variously described by WellPoint as "reductions in force," "position eliminations," "resignations," "retirements," and "cause" terminations) and/or from the adverse age impact of WellPoint's use of subjective termination selection processes and/or the use of analytics/metrics in the termination selection process."

The lawsuit also asserts that the WellPoint terminations were a result of a wide-spread termination of older employees while retaining younger employees.  The suit alleges that WellPoint, in an effort to avoid being sued by older workers, inasmuch forced terminated employees to sign Releases which included release of age discrimination claims. The three plaintiffs who filed the lawsuit did not sign such releases, but argued that the releases were unenforceable [under the Older Worker Benefit Protection Act (OWBPA)] as to other persons who did sign releases of age claims.

The Court's opinion recognized that age discrimination under the ADEA may be proven by either disparate treatment theory (whether age actually motivated WellPoint or played a role in the decision-making process) or by disparate impact theory (whether facially neutral employment practices fall more heavily on older employees than is justified by business necessity).  Citing a recent federal court case from Maryland finding a case of properly alleged disparate age impact discrimination, the Court noted the Complaint's reliance on several WellPoint "arrangements" which had a disparate impact on older workers, including "analytical models," a "selection process which considered age, and age related characteristics, as negative factors," including medical care or leave, the use of "metrics," which disproportionately evaluated and/or impacted older workers and a consideration of "age and/or age related characteristics in the 'cost' of maintaining an older workforce." 

The Court's ruling directs the Plaintiffs to amend the definition of the group of former WellPoint employees they seek to represent.  Because none of the plaintiffs before the Court at that time actually signed the challenged age discrimination releases, the OWBPA claim was dismissed, but the Court indicated that the claim may be again raised should a former employee join the suit who did sign such a release.  Another plaintiff has now joined the suit by filing an "opt in" form and that claim challenging the validity of age releases is again before the Court.  

Our firm and attorneys from AARP Foundation Litigation have joined together to represent the plaintiffs as co-counsel in this case.  The federal courts in the Eastern District of Virginia are referred to as the "Rocket Docket" due to its reputation for quickly moving matters through to trial or resolution.  In late March, 2009 the Court is expected to hear arguments on the plaintiffs' motion for court facilitated notice to the collective or group of similarly situated persons terminated as part of the reductions in force.