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Federal Court May Decide If Employers Can Reject Older Job Seekers to Protect ‘Image’

A major bias case against the Texas Roadhouse chain stems from an aggressive government strategy that may not survive the Trump administration.

BOSTON — Texas Roadhouse is a nationwide chain of steakhouses with a casual vibe, a partner in country singer Willie Nelson and, according to federal officials, a history of labeling workers over 40 such things as “Old ‘N Chubby” and rejecting them for jobs where the customers see them.

A lawsuit being heard by a federal district court jury in Boston has broad implications beyond the allegation that the Louisville, Kentucky-based company has engaged in a “pattern and practice” of discriminating against older job applicants since 2007.

For one thing, the scope and origins of the suit are unusual for the U.S. Equal Employment Opportunity Commission, which is responsible for enforcing the nation’s job discrimination laws.

Covering almost 500 stores and thousands of workers, it is the largest age discrimination case the EEOC has brought to trial in more than three decades. And in bringing it, the agency has resurrected a legal tool against systemic bias that it made little use of for years — conducting its own investigations and filing suit, rather than waiting for individuals to submit complaints, then giving them permission to sue for the most part on their own.

The defense not only argues the discrimination charges against the company are wrong, but that EEOC has no authority under the law to bring systemic cases. Moreover, the court battle is coming to a head just as the agency faces a new, aggressively pro-business, anti-regulatory administration in Washington that may not endorse such tactics.

The details of the EEOC suit illustrate many of the complexities of combating age bias, which scholars and activists say remains widespread — and accepted — decades after passage of the Age Discrimination in Employment Act (ADEA), posing a danger to millions of Americans who find themselves economically ill-prepared for their later years.

“Research studies indicate that age discrimination remains a serious problem a half-century after Congress acted to eliminate it,” said Alicia H. Munnell, a Boston College economist and head of the school’s Center for Retirement Research. “Many older job seekers face a substantial hurdle in large parts of the American economy.”

While the nation has made measurable strides against race, gender and many other forms of discrimination, progress against age bias is less clear. One reason is that cases that appear to pit the interests of older workers against those of younger ones have been notoriously unpopular with juries and the public.

EEOC filed the case in 2011, reportedly after one of the agency’s officials had dinner at a Texas Roadhouse and began asking about its hiring policies.

Among the evidence the agency has presented: job applications from 38 restaurants in 20 states, on which company officials posted yellow stickers with comments. Besides “Old “N Chubby” they included “OLD,” “little older lady,” and “middle age ... Doesn’t really fit our image.” Also included: statistics showing that, of the almost 200,000 people Texas Roadhouse hired over the years for so-called front-of-the-house jobs, fewer than 3,000 were over 40 — a disparity so great the government’s expert witness estimated the odds of it happening absent discrimination at one in 781 billion.

Asked whether the company did discriminate on the basis of age, according to one employee’s court filings, Texas Roadhouse’s then-human resources director, Dee Shaughnessy, allegedly replied: “Did we do it? Of course we did it. All you have to do is walk in the front door of our restaurants and see what people look like.”

In their own filings and testimony, Texas Roadhouse executives have vehemently denied the allegations. The chain has its own expert who has testified that the government’s numbers are wrong.

The EEOC’s legal tactic — known as a “directed investigation” that targets an employment practice widely used in a company or industry, rather than an individual complaint — has been roundly attacked by politicians as well as by the restaurant chain. Sen. Rand Paul, the Kentucky Republican and former GOP presidential contender whose state is home to Texas Roadhouse’s corporate headquarters, criticized the commission during a 2014 Senate hearing, calling directed investigations “snooping” and “entrapment” that were designed to “persecute American business.”

Apparently referring to the Texas Roadhouse case, Paul said, “I imagine you going into a business where there’s been no complaint … and you keep asking another question, another question, another question, and you finally get to a question where the guy says ‘Oh yeah, I’m tired of old people coming in here.’ And then all of a sudden … ‘Oh my goodness, now we can do something!’”

Paul told P. David Lopez, until recently the EEOC’s general counsel, that such “unlimited” investigations would unfairly damage businesses “How can you show up to work with a straight face?” the senator demanded of Lopez. “I don’t understand why you wouldn’t resign immediately and say, ‘This is abhorrent! This is so against everything America stands for!’”

Sens. Lamar Alexander of Tennessee and Tim Scott of South Carolina, both Republicans, used subsequent hearings to directly question the commission’s decision to pursue the case.

Although President Trump and key aides have been otherwise occupied during their early days in office, the new administration may take a similarly dim view of the commission’s action. That’s especially so because the president’s labor secretary nominee, Andrew Puzder, is himself a restaurant chain CEO with a deep dislike of what he sees as government meddling in the employee-employer relation.

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As secretary, Puzder would have control over one of the commission’s sister agencies that enforces discrimination laws among federal contractors, and broad influence over workplace regulations that are crucial to its work.

But both the current lawsuit and the age discrimination issue could pose complicated problems for Trump. His political base is skewed toward older people and lower middle-class workers who often must depend on the kinds of jobs that restaurant chains have to offer while being promised by the new president that their work lives will improve.

The EEOC’s authority to investigate bias stems largely from the 1964 Civil Rights Act, in case of race, gender and several other kinds of discrimination, and the 1967 ADEA, which, in the words of the law, aims “to promote employment of older persons based on their ability rather than age; to prohibit arbitrary age discrimination in employment; to help employers and workers find ways of meeting problems arising from the impact of age on employment.” Congress subsequently gave the agency the power to file lawsuits under both laws even in the absence of individual complaints as a means of combatting systemic discrimination.

A 2006 task force established by appointees of President George W. Bush found that while the commission once had specialized regional staffs that pursued directed investigations during the 1970s and 1980s it had largely disbanded the staffs and reduced the probes by the late 1990s. The task force recommended reconstituting the groups and beefing up investigations.

“Congress empowered the EEOC to eradicate discrimination, and didn’t limit their ability to do so simply to where there’s an individual complaint,” said Michael C. Subit, a lawyer with the Seattle firm of Frank Freed Subit & Thomas. “It’s like the police; no one would say the police can’t take action against something suspicious or dangerous until somebody’s complained about it.”

During the Boston trial, now in its fourth week, lawyers for Texas Roadhouse have argued that the EEOC has wrongly turned some negative comments on yellow stickers, stray comments by managers and hiring imbalances at a few restaurants into a broad claim of bias. They have mounted a defense that has mixed homespun with high law.

The lawyers have sought to portray the company and its CEO-founder, W. Kent Taylor, as so folksy and plain-spoken it would be hard to imagine either committing systematic discrimination.

Taylor, whose compensation was listed as $8.6 million in the company’s 2015 annual report, opened his first Texas Roadhouse in a small Indiana town in the early 1990s as a place to get an inexpensive meal in an informal setting. Almost 500 restaurants and $2 billion a year in revenue later, the restaurants are still informal. Customers drop their peanut shells on the floor. The country music is loud. Servers periodically break into line dances. And for years, Willie Nelson, as the company’s national spokesman, would show up at store openings to sing and sign autographs.

(Nelson’s stint as spokesman appears to have ended. The company’s public relations director Travis Doster said as recently as last August that the singer remains a “longtime partner” and owner of two Roadhouse outlets in Austin. Every U.S. outlet has a “Willie’s Corner” booth dedicated to him. The 83-year-old singer’s manager and publicist declined to comment about their client’s relationship to the firm or the age-discrimination case. Calls to Doster about Nelson and the lawsuit went unreturned.)

Against this backdrop, the EEOC’s lawyers have often appeared stiff and their questions strained, a contrast that Taylor sought to drive home during his testimony. He told the business-dressed attorneys that he hadn’t put on the suit he was wearing for his court appearance in a decade. Asked to explain a discrepancy between his testimony and a prior deposition, he said he had been fed “a lot of lawyer sandwiches,” a remark that elicited a quiet laugh from a juror.

In parallel with their too-downhome-to-discriminate defense, the lawyers for the company have introduced a raft of corporate documents, training manuals and employee newsletters that carry explicit prohibitions against age, and other forms, of discrimination.

“The question you’re going to be asked,” Rebecca Weinstein Bacon, a lawyer with the firm of Bartlit Beck Herman Palenchar & Scott representing the company, told the jury at the start of the case, “is whether Texas Roadhouse had an intentional, company-directed standard operating procedure of discrimination?

“The answer to that question is ‘No,’’’ said Bacon. “We did not discriminate. In fact, Texas Roadhouse had a very strong anti-discrimination policy.”

EEOC lawyers have countered that the anti-discrimination language that Texas Roadhouse distributed to employees was undercut by photographs that the firm used to illustrate who fit its “image” and ideal of “legendary service.” Virtually all were of young people, according to the EEOC.

“The recipe for ‘legendary service’ is this: Hire young,” said commission lawyer Sara E. Smolik. The hiring statistics, she said, show that “it isn’t a fluke. It isn’t an accident. It happened for a reason.”

The company and the commission have fought over those statistics, with Texas Roadhouse’s expert telling the jury that his government counterpart masked individual restaurants without hiring imbalances by presenting numbers for the company as a whole.

The company has argued that individual restaurants make independent hiring decisions while EEOC lawyers have contend that corporate headquarters is firmly in charge, pointing out that Taylor is so involved in business details that he sometimes climbs onto the roofs of restaurants to inspect their exhaust fans.

However, the most important fight between the two sides may not be any of those they’ve had before the jury, but the one they’ve repeatedly had before the presiding judge, Denise J. Casper, an Obama appointee.

Texas Roadhouse’s lawyers have vehemently argued that the commission can’t charge the company as it has because the age law doesn’t give it the right to bring systemic discrimination cases of any sort. The judge has twice rejected this argument, but that hasn’t stopped the company repeating it in motions filed as recently as late last week and again yesterday (Monday, Jan. 30).

The lawyers’ insistence is the product of a quarter-century-long re-reading of the ADEA that has shifted age discrimination from being essentially identical to race, gender and other forms of employment bias to being something lesser that requires greater legal proof before it is accepted as having occurred.

The divergence has occurred in stages. One step came in the early 1990s, when Congress amended the civil-rights law to make it easier to prove discrimination, but did not make the same changes to the age law. Defendants in age cases began citing the fact as showing that Congress intended that the two laws, which until then had operated in tandem, should be treated differently, a position that has driven some legal scholars to distraction.

“You don’t attribute as much to a dog’s failure to bark as much you do to its barking,” quipped Charles Sullivan, a law professor and dean at Seton Hall University School of Law. “You shouldn’t attribute to Congress’ inaction as much as you do to its action.”

A second, and crucial step came in a 2009 Supreme Court decision, Gross v. FBL Financial Services Inc. The high court ruled in a 5-4 opinion by Justice Clarence Thomas that an employee who believed he’d suffered age discrimination at the hands of his employer must show that he wouldn’t have suffered it “but for” his age. The ruling was widely interpreted to mean that plaintiffs would henceforth have to prove that no other factor but age caused their problems, a very different standard than for race or gender discrimination, and an almost impossibly high legal bar to clear.

In the years since, lower courts and many lawyers, including those for Texas Roadhouse, have sought to use the Gross decision to strictly limit the reach of the age law.

“Because the ADEA does not authorize suits like the one EEOC is pursuing here,” lawyers for the company said in citing Gross, “it cannot prove liability regardless of the evidence it presented at trial.”

Closing arguments in the case concluded Monday. A jury verdict could come as early as this afternoon, and with it new grounds for age discrimination claims or new barriers.

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