Supreme Court, U.S.FILED

J~O - 3 6 JUL 1_- Z~(INo. 10-

--O-FF]CE OF THE CLERK

IN THESUPREME COURT OF THE UNITED STATES

KAPL, INC., LOCKHEED MARTIN CORPORATION,and JOHN J. FREEH, both individually and as anemployee of KAPL and Lockheed Martin,

Conditional Cross-Petitioners,V.

CLIFFORD B. MEACHAM, THEDRICK L. EIGHMIE,ALLEN G. SWEET, JAMES R. QUINN, DEBORAH L.BUSH, RAYMOND E. ADAMS, WALLACE ARNOLD,WILLIAM F. CHABOT, ALLEN E. CROMER, BELINDAGUNDERSON, CLIFFORD J. LEVENDUSKY, BRUCEE. PALMATIER, NEIL R. PAREENE, MARGARETREYNEER, JOHN K. STANNARD, DAVID W.TOWNSEND, and CARL T. WOODMAN,

Concb’tional Cross-Respondents.

ON CROSS-PETITION FOR WRIT OF CERTIORARI TO THEUNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

CONDITIONAL CROSS-PETITION FOR WRIT OFCERTIORARI

MARGARET A. CLEMENSCounse] of RecordLITTLER MENDELSON, P.C.400 Linden Oaks, Suite 110Rochester, NY 14625mclemens@littler.com(585) 203-3400

JOHN E. HIGGINSNIXON PEABODY LLP677 Broadway, 10th FloorAlbany, NY 12207jehiggins@nixonpeabody.com(518) 427-2650

Counsel for Conditional Cross-Petitioners

~lank Page

QUESTIONS PRESENTEDThis disparate impact age discrimination case,

which has been here twice before (see KAPL, Inc. v.Meacham, 544 U.S. 957 (2005); Meacham v. KAPL,Inc., 554 U.S. 84 (2008) ("Meacham3), again raisesimportant questions about prope~..application of the"reasonable factors other than age" ("RFOA") defensein the Age Discrimination in Employment Act("ADEA"). In Meacham, this Court held that RFOAis an affirmative defense on which employers bearthe burden of persuasion. Id. The Court of Appeals’judgment in Meacham v. KAPL, Inc., 461 F.3d 134(2d Cir. 2006) (~Meacham H’), adopting a contraryview, was thus vacated and the case remanded forfurther consideration consistent with Meacham.

On remand, the Second Circuit correctly heldthat there was no issue of waiver, but failed toanswer directly the question remanded: namely,whether the outcome in Meacham II- where thecourt previously "showed no hesitation in findingthat Knolls prevailed on the RFOA defense" - shouldbe any different with Knolls bearing the burden ofpersuasion. Instead, the court has ordered a newtrial in this 14-year-old case, raising these questions:

1. Whether the Summary Order conflicts withthe opinion and mandate in Meacham, withSmith v. City of Jackson, 544 U.S. 228 (2005),and other decisions by this Court, in failing todetermine as a matter of law on the existingtrial record if Knolls satisfied its burden ofpersuasion on the RFOA defense?

(i)

2. Whether the Summary Order conflicts withdecisions of other circuit courts, and withcertain prior still-valid findings in MeacharaI/, in concluding that "uncertainty and[complicating] changes in the governing law"preclude the grant of judgment as a matter oflaw to Knolls on its RFOA defense?

3. Whether Meachara and City of Jacksonpreclude employees, who have conceded thereasonableness of the non-age layoff factors inquestion, from defeating an employer’s RFOAshowing with allegations of "subconscious agebias" or "application problems," or by showingthat there were alternative non-age factorsavailable that may have had less of adisparate impact?

(ii)

LIST OF THE PARTIESThe following individuals were named as

parties in the proceedings before the United StatesDistrict Court for the Northern District of New Yorkand the United States Court of Appeals for theSecond Circuit, and were included in the caption ofboth of these proceedings below, but they arebelieved to have no interest in the outcome of thispetition: Henry Bielawski, Ronald G. Butler, Sr.,James S. Chambers, Arthur J. Kaszubski, David J.Kopmeyer, Christine A. Palmer, Frank A. Paxton,Janice M. Polsinelle, Hildreth E. Simmons, TeofolisF. Turlais, and Bruce E. Vedder. Notice of non-interest has been served upon each of theseindividuals pursuant to Supreme Court Rule 12.6.

All other parties in the courts below arenamed in the caption to this cross-petition.

(iii)

STATEMENT PURSUANT TO RULE 29.6KAPL, Inc.’s parent corporation is Lockheed

Martin Corporation, which owns 100% of KAPLInc.’s stock. The only publicly traded company whichis known to beneficially own 10% or more ofLockheed Martin Corporation’s stock, as reported ona Schedule 13G filed on February 12, 2010, pursuantto the Securities Exchange Act of 1934, is:

State Street Corporation, 20.0%

TABLE OF CONTENTSPage_

QUESTIONS PRESENTED ........................................i

LIST OF THE PARTIES ............................................iii

STATEMENT PURSUANT TO RULE ~.9.6 ..............iv

TABLE OF CONTENTS .............................................v

TABLE OF CITED AUTHORITIES .........................vii

CONDITIONAL CROSS-PETITION FOR WRIT OFCERTIORARI ..............................................................1

OPINIONS AND ORDERS BELOW ..........................1

STATEMENT OF JURISDICTION ...........................3

STATUTORY PROVISIONS AND REGULATIONS 3

STATEMENT OF THE CASE ....................................4

Factual Background ...............................................4

Relevant Pre-Trial Proceedings .............................4

Knolls’ RFOA Evidence at Trial .............................6

The Jury Instructions on Disparate Impact ........11

Knolls’ "RFOA" Arguments in Summation .........15

(v)

The Jury Verdicts on Treatment and Impact ......17

KAPL’s Rule 50 Motions ......................................18

The Magistrate’s Denial of Knolls’ Rule 50(b)Motion on Petitioners’ Impact Claims .................20

The Second Circuit’s Decision in Meacham I ......21

This Court’s Granting of Knolls’ Petition for a Writof Certiorari in 2005 ............................................. 23

The Second Circuit’s Decision in Meacham II. ....24

Subsequent Appellate History .............................25

REASONS FOR GRANTING THE PETITION .......28

This Case and the Questions Presented Are ofExceptional National Importance ........................28

The Summary Order Conflicts With and Fails toFully Execute the Mandate in Meacham .............31

The Summary Order Conflicts With Decisions inOther Circuits on Similar Questions ................... 36

The Summary Order Conflicts With Reeves andOther Supreme Court Cases ................................40

CONCLUSION ..........................................................43

(vi)

TABLE OF CITED AUTHORITIESPage(s)

FEDERAL CASES

Adams v. Lucent Techs., Inc.,No. 2:03cv300, 2007 U.S. Dist. LEXIS 662(S.D. Ohio Jan. 3, 2007), affd, 284 Fed.Appx. 296 (6th Cir. 2008) .................................38

Aldridge v. City of Memphis,No. 05-2966, 2008 U.S. Dist. LEXIS 67539(W.D. Tenn. July 31, 2008) ...............................38

Aliotta v. Bair,576 F. Supp. 2d 113 (D.D.C. 2008) ...................38

Alien v. Highlands Hosp. Corp.,545 F.3d 387 (6th Cir. 2008) .......................31, 37

Durante v. Qualcomm, Inc.,144 Fed. Appx. 603 (9th Cir. 2005) ..................37

Embrico v. United States Steel Corp.,404 F. Supp. 2d 802 (E.D. Pa. 2005), all’d,245 Fed. Appx. 184 (3d Cir. 2007) ....................38

Gallagher v. The IBEW Local Union No. 43,No. 5:00CVl161, 2008 U.S. Dist. LEXIS81615 (N.D.N.Y. Oct. 15, 2008) ........................38

(vii)

Gambill v. Duke Energy Corp.,No. 1:06-CV-00724, 2009 U.S. Dist. LEXIS83126 (S.D. Ohio Sept. 10, 2009) ......................38

KAPL, Inc. v. Meacham (~Meacham ~),544 U.S. 84, 128 S. Ct. 2395 (2008) ...........passim

Magnello v. TJX Cos., Inc.,556 F. Supp. 2d 114 (D. Conn. 2008) ...............38

Meacham v. KAPL,185 F. Supp. 2d

Meacham v.381 F.3d

Meacham v.544 U.S.

Meacham v.544 U.S.

Meacham v.461 F.3d

Meacham v.305 Fed.

193 (N.D.N.Y. 2002) ........passim

KAPL, Inc. (~Meacham I"),56 (2d Cir. 2004) .........................passim

KAPL, Inc.,228 (2005) .......................................2, 24

KAPL, Inc.,957 (2005) .......................................2, 23

KAPL, Inc. (~Meacham II’),134 (2d Cir. 2006) .......................passim

KAPL, Inc.,Appx. 748 (2d Cir. 2009) ................2, 26

Meacham v. KAPL, Inc.,627 F. Supp. 2d 72 (N.D.N.Y. 2009) .............1, 26

Ontario v. Quon,No. 08-1332, __U.S.m (~Iun. 17, 2010). 29, 31, 41

(viii)

Pippin v. Burlington Res. Oil and Gas Co.,440 F.3d 1186 (10th Cir. 2006) .........................37

Reeves v. Sanderson Plumbing Prods., Inc.,530 U.S. 133 (2000) ............................... 31, 40, 41

Smith v. Ci(y of Jackson,544 U.S. 228 (2005) ....................................passim

Smith v. Xerox,196 F.3d 358 (2d Cir. 1999) ........................11, 12

Summers v. Winter,303 Fed. Appx. 716 (llth Cir. 2008) ................37

Suslovic v. Black & Decker, Inc.,No. 1:06CVl16, 2007 U.S. Dist. LEXIS53055 (N.D. Ohio July 23, 2007) ......................39

Wards Cove Packing Co. v. Atonio,490 U.S. 642 (1989) .....................................11, 12

Watson v. Fort Worth Bank & Trust,487 U.S. 977 (1988) ...........................................12

FEDERAL STATUTES

28 U.S.C. § 1254(I) ...................................................3

42 U.S.C. § 2000e et seq .........................................24

29 U.S.C. § 623(0(1) .................................................3

(ix)

STATE STATUTES

N.Y. Exec. Law § 296 (3-a) (d) ...................................4

REGULATIONS

29 C.F.R. § 1625.7(d) ..............................................13

PROPOSED REGULATIONS

Definition of "Reasonable Factors Other ThanAge" Under the Age Discrimination inEmployment Act, 75 Fed. Reg. 7212(proposed February 18, 2010) (to becodified at 29 C.F.R. Part 1625) .......................13

RULES

Sup. Ct. R. 12.5 .....................................................1, 3

Fed. R. Civ. P. 50 .............................................passim

OTHER AUTHORITIES

Daniel B. Kohrman, The ADEA at 40: TheSupreme Court Confronts Old Age, 42Clearinghouse Rev. 463 (January/Februa .ry2009) .................................................................. 28

Michael G. Cleveland on Meacham v. KnollsAtomic Power Laboratory, 2008 EmergingIssues 2560 (July 16, 2008) ..............................28

(x)

Robin S. Conrad, The Roberts Court and theMyth of a Pro-Business Bias, 49 SantaClara L. Rev. 997 (2009) ...................................28

Blank Page

CONDITIONAL CROSS-PETITION FOR WRITOF CERTIORARI

Pursuant to Supreme Court Rule 12.5, cross-petitioners (UKnolls") respectfully submit thisConditional Cross-Petition for a Writ of Certiorari toreview the judgment of the United States Court ofAppeals for the Second Circuit.

OPINIONS AND ORDERS BELOWThe Order Denying Cross-Petitioner Knolls"

Petition for En Banc Consideration and PanelRehearing by the Second Circuit is an unpublishedorder entered on February 23, 2010. It is reproducedin the Appendix to the Petition for Writ of Certiorari(the "Appendix" or "App.") filed by plaintiffs (here,"petitioners") in Meacham et al. v. Knolls AtomicPower Laboratory, Inc. et al., No. 09-1449, at App.64a-65a.

The Summary Order Vacating Judgment andRemanding Case for New Trial by the United StatesCourt of Appeals for the Second Circuit is anunpublished opinion entered on December 21, 2009.App. la-5a.

The Order Reinstating the Second AmendedJudgment by the United States District Court for theNorthern District of New York, filed on May 1, 2009,is published at 627 F. Supp. 2d 72 (N.D.N.Y. 2009).App. 6a-34a.

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The Order Remanding Case for FurtherProceedings by the United States Court of Appealsfor the Second Circuit, entered on January 7, 2009,is published at 305 Fed. Appx. 748 (2d Cir. 2009).App. 35a-37a.

The Order Vacating Judgment andRemanding Case for Further Proceedings by theSupreme Court of the United States, entered onJune 19, 2008, is published at 554 U.S. 84, 128 S. Ct.2395 (2008).

The Order Vacating Judgment andRemanding with Instructions to Enter Judgment asa Matter of Law in Favor of Employer by the UnitedStates Court of Appeals for the Second Circuit,entered on August 14, 2006, is published at 461 F.3d134 (2d Cir. 2006).

The Order Vacating Judgment andRemanding for Further Consideration in Light ofSmith v. City of Jackson, 544 U.S. 228 (2005), by theSupreme Court of the United States, entered April 4,2005, is published at 544 U.S. 957 (2005).

The Order Affirming Judgment by the UnitedStates Court of Appeals for the Second Circuit,entered on August 23, 2004, is published at 381 F.3d56 (2d Cir. 2004).

The Order Denying Knolls’ Motion forJudgment as a Matter of Law by the United States

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District Court for the Northern District of New York,entered on February 13, 2002, is published at 185 F.Supp. 2d 193 (N.D.N.Y. 2002).

The Order Entering Amended Judgment bythe United States District Court for the NorthernDistrict of New York is an unpublished order enteredon December 11, 2000.

The Order Denying Knolls’ Motion forSummary Judgment by the United States DistrictCourt for the Northern District of New York is anunpublished Order entered on December 15, 1999.

STATEMENT OF JURISDICTIONThe Summary Order and judgment of the

United States Court of Appeals for the SecondCircuit was entered on December 21, 2009 (App. la-5a). The Court denied a timely motion for rehearingen banc on February 23, 2010. (App. 64a-65a). ThePetition was filed on May 24, 2010 and was placedon this Court’s docket on June 1, 2010. ThisConditional Cross-Petition is timely pursuant toRule 12.5 of the Rules of this Court. This Court hasjurisdiction under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS ANDREGULATIONS

The relevant statutory provision of the AgeDiscrimination in Employment Act, 29 U.S.C. §623(0(1), provides in pertinent part that: "[i]t shall

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not be unlawful for an employer . . . to take anyaction otherwise prohibited where thedifferentiation is based on reasonable factors otherthan age."1

STATEMENT OF THE CASEFactual Background

Relevant Pre-Trial Proceedings

After being involuntarily laid off from theirsalaried jobs at Knolls Atomic Power Laboratory in1996, petitioners commenced this consolidatedaction, claiming they were discriminated againstbecause of age in violation of state and federal laws.Petitioners pressed their claims on both disparatetreatment and disparate impact theories. From theoutset, with the filing of its Answer, Knolls raisednumerous "defenses," including one closely trackingthe RFOA language of both the ADEA and state law.

After extensive discovery, including the pre-trial depositions of numerous KAPL managers on

I Similarly, New York Executive Law Section 296(3-a)(d)provides in relevant part that: UNotwithstanding any otherprovision of law, no employee shall be subject to termination..¯ from employment on the basis of age, except¯., where thedifferentiation is based on reasonable factors other than age..

4

the design, development, and use of the layoff factorsat issue in this case (i.e., criticality of skills,flexibility to perform more than one job, jobperformance, and company service), Knolls movedfor summary judgment on petitioners’ disparateimpact claims. Central to that motion was Knolls’contention that petitioners ~were evaluated for layoffpurposes using a matrix which rated fourcharacteristics: performance, company service,criticality and flexibility."

In support of its dispositive motion, Knollsargued that these four criteria are "work-relatedattributes" and that:

[E]ven if [petitioners] were able toestablish a prima facie case [ofdisparate impact age discrimination,which Knolls has always maintainedpetitioners failed to do], they [were]unable to satisfy their burden ofdemonstrating that [Knolls’] legitimatebusiness objectives, i.e., a mandatedstaff reduction, could have beenachieved by reasonable means otherthan those that were employed.

Without specifically addressing any of thesearguments, the district court denied the motion,finding "genuine issues of material fact whichpreclude summary judgment" and that "[a] prima

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facie case has been established.., requiring a jurytrial.~

Knolls’ RFOA Evidence at Trial

The case proceeded to trial on both petitioners’disparate treatment and disparate impact claims.During the five-week liability phase of the trial,more than forty (40) witnesses testified, includingthree experts (one for the petitioners; two forKnolls). Eighteen (18) lay witnesses were called bypetitioners in their case in chief (only seven of thesewitnesses were members of the plaintiff class).Another twenty-four (24) witnesses were called byKnolls in defense. When Knolls rested, petitionersoffered no rebuttal.

The majority of the witnesses who testifiedwere KAPL managers involved in rankingpetitioners for layoff. These witnesses demonstratedintimate knowledge about the layoff factors at issuehere and how they were applied to petitioners, andabout the design and implementation of theinvoluntary reduction in force ("IRIF~ or "RIF~)resulting in petitioners’ layoff.

The testimony of these KAPL managers aboutthe legitimacy and reasonableness of the non-agefactors used to select petitioners for layoff-including "criticality" and "flexibility" - was notevenly or "closely balanced." Meacham, 128 S. Ct. at2406 (quoting Schaffer v. Weast, 546 U.S. 49, 56

-6-

(2005) in observing that the "burden of persuasionanswers ’which party loses if the evidence is closelybalanced"). Indeed, the existing trial recorddemonstrates that Knolls’ proof of reasonablenessand legitimacy with respect to its use of the non-agefactors criticality and flexibility was overwhelminglyone-sided in favor of Knolls and was never directlychallenged by petitioners. See Meacham II, 461 F.3dat 145 (petitioners ~did not directly challenge thetestimony of KAPL principals regarding theplanning and execution of the IRIF.’).

This unchallenged proof of Ureasonableness"included the layoff matrices prepared by petitioners’managers. On these matrices, similarly situatedemployees with certain ~excess skills~ were rated forlayoff based on their comparative scores for companyservice, job performance, criticality, and flexibility.

Knolls’ undisputed proof of reasonablenessalso included the testimony of KAPL managers whoexplained the importance of using criticality andflexibility to rate employees for layoff. Id. at 144("KAPL’s staffing manager testified to theimportance of criticality and flexibility to ensuringthat KAPL could carry on operations with ashrinking workforce.~). This uncontested evidenceproved that an employee’s flexibility to performtasks outside his/her existing roles was imperative.This evidence likewise proved that criticality was areasonable factor to use because KAPL needed to

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retain those employees who possessed uniqueknowledge and skills essential to the Laboratory’songoing work. The unchallenged trial evidencefurther proved that Knolls used these job-relatednon-age factors to select employees for layoff only asa last resort and only after considering the bestpractices of other companies that had performedsimilar layoffs, including GE, IBM, Ford, and others.

Knolls’ proof of reasonableness at trial alsoincluded evidence demonstrating, inter alia, thatKAPL managers received training and writtenguidance on the meaning and definitions of"criticality" and "flexibility" and how to apply them.As explained by Justice Souter, writing for the Courtin Meacham:

The "flexibility" instruction read: "Ratethe employee’s flexibility within theLaboratory. Can his or her documentedskills be used in other assignments thatwill add value to current or future Labwork? Is the employee retrainable forother Lab assignments?" The "criticalskills" instruction read: "How criticalare the employee’s skills to continuework in the Lab? Is the individual’sskill a key technical resource for the[Naval Reactors] program? Is the skillreadily accessible within the Lab or

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generally available from the externalmarket?"

128 S. Ct. at 2398 n.2 (original emphasis).

Knolls also introduced evidence proving that areview board made up of senior managers wasempanelled to rigorously examine the managers whoselected petitioners and others for layoff to ensurethat the rankings were legitimate, appropriate, andconsistent with the ongoing and future needs of theLaboratory. Based on this and other evidenceintroduced by Knolls at trial, the Second Circuitcorrectly observed in Meacham II that "KAPL setstandards for managers constructing matrices andselecting employees for layoff, and it did monitor theimplementation of the IRIF," thereby "restrict[ing]arbitrary decision-making by individual managers."Meacham II, 461 F.3d at 145-46.

The uncontested proof of "reasonableness" attrial also included the expert testimony of Dr. FrankLandy, a "specialist in industrial psychology withsubstantial corporate downsizing experience." Id. at144. Notably, before Landy was called as a witness,petitioners, having long ago been placed on noticethat Landy would testify that "the criteria [Knolls]used in its IRIF were legitimate, non-discriminatoryfactors," moved to preclude his testimony. Inseeking to exclude Landy’s testimony about Knolls’adherence to certain corporate "best practices" andabout the job-related nature of the layoff factors in

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question, petitioners argued, unsuccessfully, thatLandy’s testimony would invade the province of thejury and be unduly prejudicial to petitioners becauseLandy was expected to "render an opinion as towhether the [layoff] process was fair." ((JointAppendix ("JA") 2632-35)).

Petitioners thus knew at the time of trial notonly that Knolls had interposed a specific RFOAdefense in its Answer, supported at trial by thelayoff matrices themselves and the testimony ofnumerous Laboratory managers, but also that Landywould testify that he "found the [layoff] process...clearly demonstrated a thorough and well-developedapproach with job-related outcomes." (JA 2672).Petitioners also knew that Knolls intended to elicitexpert testimony from Landy on "[w]hether or notthe criteria that [Knolls] used in its RIF werelegitimate, non-discriminatory factors" and "whether

the criteria are appropriate and wereappropriately used .... " Id.

Following the parties’ briefing on therelevance and helpfulness of Landy’s testimony,which the trial judge questioned initially,petitioners’ motion to preclude was denied andLandy was permitted to testify. As noted inMeacham II, Landy testified without contradictionthat "the criteria ’criticality’ and ’flexibility’ wereubiquitous components of ’systems for makingpersonnel decisions,’ and that the subjective

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components of the IRIF were appropriate becausethe managers conducting the evaluations wereknowledgeable about the requisite criteria andfamiliar with the capabilities of the employeessubject to evaluation." 461 F.3d at 144. In fact,Landy, who was never cross-examined bypetitioners, testified that the four criteria used by[Knolls] "form the core of most reasonable andeffective systems" and he had not "seen any systemsfor making personnel decisions in the last coupledecades that have not included those four things."

Landy’s testimony in this regard and that ofthe nearly twenty KAPL managers who testified attrial, coupled with literally dozens of trial exhibits,demonstrated "that the specific features of the IRIFchallenged by plaintiffs were routinely-usedcomponents of personnel decision-making systems ingeneral, and were appropriate to the circumstancesthat provoked KAPL’s IRIF." Meacham II, 461 F.3dat 144. This finding by the Second Circuit inMeacham II has never been challenged bypetitioners on appeal. And, as discussed more fullybelow, this Court took no issue with this particularfinding in Meacham.

The Jury Instructions on Disparate Impact

At trial, the parties and the District Court allconsidered themselves bound by Wards CovePacking Co. v. Atonio, 490 U.S. 642 (1989), and bythe Second Circuit’s prior decision in Smith v, Xerox,

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196 F.3d 358 (2d Cir. 1999). See Meacham v. KAPI’.,185 F. Supp. 2d at 212-213.

In Smith v. Xerox, the Second Circuit hadpreviously held that once a plaintiff establishes aprima fade case of disparate impact discriminationunder the ADEA, only the burden of productionshifts to the employer to demonstrate a "businessjustification" (or "business necessity") for its actions.196 F.3d at 365. The instructions proposed byKnolls at trial, and the instructions given to the jury,were in full accord with this burden-shiftingparadigm, which the Second Circuit and the trialjudge had adopted wholesale from Wards Cove, 490U.S. at 643, and Watson v. Fort Worth Bank & Trust,487 U.S. 977 (1988). See, e.g., Meacham v. KAPL,185 F. Supp. 2d at 206, 212-13. Petitioners agreedat trial, and on appeal, that these disparate impactinstructions correctly stated the law as it existed atthe time in the Second Circuit. See Meacham II, 461F.3d at 148.

It is also undisputed that, at the time of thetrial ten years ago, neither the Second Circuit northe Supreme Court had ever decided that RFOA wasan affirmative defense as to which employers carriedthe burden of persuasion. See, e.g., Meacham, 128 S.Ct. at 2400 (observing that this same issue had beentaken up in an earlier case from the Ninth Circuit,but "it was not well posed"). Moreover, theregulations from the Equal Employment

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Opportunity Commission ("EEOC") existing at thetime of trial and still on the books today (see 29C.F.R. § 1625.7(d)) treated RFOA and the "businessnecessity~ test previously applied in the SecondCircuit (and at trial in the present case) "asidentical.~ Meacham, 128 S. Ct. at 2407 (Scalia, J.,concurring in judgment),z

Given the law as it existed in the SecondCircuit then, and given that petitioners did notchallenge at trial Knolls’ proof of "reasonableness"regarding the use of criticality and flexibility asfactors upon which to rank employees for layoff, it isnot surprising that neither Knolls nor petitioners

ZIn a recently issued notice of proposed rulemaking, the EEOCproposes to amend its RFOA regulations at 29 C.F.R. §1625.7(d) to conform them to this Court’s decisions in bothMeacham and CI~y of Jackson. See Definition of "ReasonableFactors Other Than Age" Under the Age Discrimination inEmployment Act, 75 Fed. Reg. 7212 (proposed February 18,2010) (to be codified at ~-9 C.F.R. Part 1625). However, theEEOC’s most recent RFOA proposals are inconsistent with andcontrary to the liability-limiting standards of reasonablenesslaid down by this Court in both of these decisions. Indeed, theproposed regulations attempt to define reasonableness, in part,by asking whether there were "alternatives" available with lessof an impact on older workers, and whether there was"unchecked managerial discretion" resulting in the applicationof "conscious or unconscious age-based stereotypes." See, e.g.,newly proposed §§ 1625.7 (b) (1) (iv)-(vi) and 1625.7 (b) (2).

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ever specifically requested a separate instruction tothe jury on RFOA, or that no such jury charge orinstruction was given by the Magistrate. Indeed,petitioners themselves have previously argued, evenafter City of Jackson, that there was no need forsuch a specific instruction on "reasonableness" here.(See Petitioners’ Brief on Remand to Second CircuitFollowing this Court’s Decision in KAPL v.Meacham, pp. 10-11) (conceding that "It]hisamounted to a concession that the factors [Knolls]asserted (i.e., the education, work performance,skills, flexibility and criticality) were reasonable,provided they were not influenced bysubconscious age bias").

Moreover, given the similarity and substantialoverlap between RFOA and "business necessity" (seeMeacham, 1~.8 S. Ct. at 2404 (observing that theseare "two overlapping enquiries")), it is also notsurprising that the jury in this case was clearlyinstructed, inter alia, that: (a) "[e]mployers generallypossess the right to terminate the employment ofemployees involuntarily for many reasons," but notdue to age (ETT-4725-26), (b) [petitioners] alleged intheir disparate impact case "that the practices bywhich they were selected for termination .... whilefair on their face, were discriminatory in operation"(ETT-4731); and (c) "[tlhe defendants assert[edl thatfactors other than the ages of the plaintiffs . . .account[ed] for any statistical deviations .... [and][t]hese factors include the education, work

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performance, skills, flexibility and criticality of theplaintiffs as compared to other similarly situatedemployees~ (ETT-4733-34).

During the trial, petitioners never directlyquestioned or challenged Knolls’ substantial showingthat criticality and flexibility were legitimate andreasonable non-age factors to use. Rather than fightan unwinnable battle on this issue, petitionersinstead chose a wholly different tack. As theMagistrate Judge explained in his disparate impactinstructions to the jury, it was at all times thepetitioners’ argument "that some of these factors[including criticality and flexibility] were themselvesinfluenced by the ages of the plaintiffs."

Knolls has steadfastly maintained throughoutthis litigation, both at trial and on appeal, that thisargument is nothing more than an intentionaldiscrimination argument disguised as a disparateimpact claim. Knolls has similarly argued that this"subconscious age bias" argument by petitioners wascompletely rejected by the jury when it found forKnolls on petitioners’ disparate treatment claims.

Knolls’ "RFOA" Arguments in Summation

In closing arguments to the jury, Knollsargued that petitioners were terminated due tolegitimate non-age factors, including criticality,flexibility, job performance, and company service.(See TR 252-254, 4554-65). Thus, as explained in

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summation, "a number of factors~ - referred to bothas "factors other than age" (TR 4557) and as"legitimate, non-discriminatory reasons havingnothing to do with age" (TR 4555) - "explain[ed] whythe individual plaintiffs were laid off for no reasoninvolving their ages." (TR 4557).

Knolls further argued in summation that theevidence proved that "there were legitimate reasonshaving to do with criticality, flexibility, companyservice and performance that account for the layoff,[andl that account for [any] disparity~ (TR 4561).And Knolls argued that the undisputed andunimpeached evidence introduced at trial provedthat the layoff matrices and factors criticality andflexibility (as well as performance and years ofcompany service) were in fact Uused to select, fairly,employees [for layoff] because of legitimate job-related qualifications and criteria.~ (TR 4562).

In other words, as defense counsel explainedto the jury, the unimpeached evidence showed thatKnolls ~didn’t pick this way of selecting people out ofa hat~ (TR 4563). To the contrary, it was argued, theundisputed evidence proved that ~criticality,flexibility and performance were legitimate factorson which to rank everybody and that KAPL usedextreme care in developing this system in order toselect only those people who were lowest, in terms oftheir criticality, flexibility, company service andperformance." (TR 4563).

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The Jury Verdicts on Treatment and Impact

The jury returned its verdict on a SpecialVerdict Sheet proposed by the trial judge and agreedto by the parties. The jury found for Knolls on theintentional discrimination claims made by alltwenty-eight (28) original plaintiffs, findingspecifically that petitioners failed to prove thatKnolls was motivated by their ages in selectingemployees for layoff (on both "pretext" and "mixedmotive" theories).

This finding, and the District Court’ssubsequent judgment and amended judgments infavor of Knolls dismissing petitioners’ disparatetreatment claims, is no longer open to review orappeal. Petitioners have never suggested otherwise,including in the Petition which they recently filed.

On the disparate impact claims, the juryfound for twenty-six (26) of the twenty-eight (28)petitioners. See Meacham, 128 S. Ct. at 2399. Morespecifically, in answer to question 6 of the SpecialVerdict Sheet, the jury found that petitionersestablished a prima facie case showing "that aspecific employment practice . . had an adverseimpact on [petitioners] because of their age." And onquestion 7 of the Special Verdict Sheet, the juryfound that Knolls failed to ~articulate[] a businessjustification for selecting [petitioners] fortermination" in the RIF.

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After answering questions 6 and 7 of theSpecial Verdict Sheet, the jury then answered bothquestion 8 and question 9 (on ~willfulness~) in favorof petitioners.

KAPL’s Rule 50 Motions

At the close of petitioners’ case and again afterthe jury’s verdict was returned, Knolls made timelymotions for judgment as a matter of law, pursuant toFed. R. Civ. P. 50(a) and (b).

In its motions under Rule 50(a) and itsrenewed motion under Rule 50(b), Knolls arguedthat the petitioners failed to establish a prima faciecase of disparate impact discrimination. This wasbased in part on petitioners’ repeated admissions attrial that the specific employment practice they werechallenging on their disparate impact claim was ~theoverall layoff selection process." See Meacham v.KAPL, 185 F. Supp. 2d at 207-08. Knolls alsoargued that they had in fact articulated a businessjustification for petitioners’ layoff selections; ajustification that was neither contradicted norimpeached by petitioners at trial. (TR 2453-56).

Additionally, Knolls argued in its Rule 50(a)motions that this and other one-sided evidence notrequiring any credibility determinations (TR 2455)proved that ~managers determined the criticalityand the flexibility and performance andcontinuous service~ of employees selected for layoff.

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It was also argued that these "nondiscriminatoryfactors" and "factors other than age" were the onlyfactors "used to determine where [plaintiffs wereranked[ on a particular matrix;" and that any"disparity was caused by the procedure.., used andnot by age." (TR 2464-67). Based on theselegitimate, non-age factors and the petitioners’failure to either rule them out as the cause of anydisparity, or to otherwise prove adverse impact agediscrimination under the standards of proof andproduction then governing such claims in the SecondCircuit, Knolls argued that it was entitled tojudgment as a matter of law under Rule 50(a).

Similarly, Knolls argued after the jury’sdisparate impact verdict was returned, pursuant toRule 50(b), both that: (1) "[t]here was no legallysufficient evidentiary basis for a reasonable jury tofind that a specific employment practice,although non-discriminatory on its face, had anadverse impact on [petitioners] due to their ages;"and (2) "[t]here was no legally sufficient evidentiarybasis for a reasonable jury to find that defendantsdid not articulate a business justification forselecting [petitioners] for termination" in the IRIF.(Post-Trial Motion, p. 1). Rather, Knolls argued,"the evidence to the contrary... (including... thetestimony of [KAPL’s staffing manager], and otherKAPL managers), was overwhelmingly in favor of[Knolls] and was unrebutted by [petitioners] attrial." Id.

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The court in Meacham II found that thesemotions were sufficiently specific for Knolls not onlyto preserve, but to prevail upon, its RFOA defense,as a matter of law. See Meacham II, 461 F.3d at 146n.9 (correctly holding that Knolls never "waived [its]argument that [its] business judgment wasreasonable." and granting Knolls’ motion under Rule50(b) because, while "[t]here may have been otherreasonable ways for [Knolls] to achieve its goals ....the one selected was not unreasonable").

The Magistrate’s Denial of Knolls’ Rule 50(b)Motion on Petitioners’ Impact Claims

On February 13, 2002, the District Courtissued a decision denying Knolls’ post-trial motionfor judgment as a matter of law as to petitioners’disparate impact claim. In the course of its decision,the court found that the non-age factors criticalityand flexibility, as well as job performance, "requiredthe application of objective standards in variouscategories." Meacham v. KAPL, 185 F. Supp. 2d at208. Thus, "[f]or example, advanced degrees,training and prior experience were considered forflexibility and criticality." Id. n. 17.

Nevertheless, in an opinion written by theMagistrate Judge who tried the case, the courtrejected every argument Knolls made in support ofits Rule 50(b) motion on petitioners’ disparateimpact claim, except one. On this last argument(i.e., based on Knolls’ contention that the jury’s

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finding against it on the sufficiency of its businessjustification was plainly and clearly erroneous), theMagistrate Judge sided with Knolls. See Meachamv. KAPL, 185 F. Supp. 2d at 212-213 (holding thatKnolls "met its burden of production" bydemonstrating "a legitimate business justificationfor the challenged employment practice"). Accordingto the Magistrate, whose decision on this issue wasupheld both in Meacham I and Meacham II, "[t]hebusiness justification offered by defendants was thebudgetary need to reduce its workforce while stillretaining employees with skills critical to theperformance of KAPL’s functions. Thepresentation of this justification sufficed to satisfy[Knolls’] burden of production." Id. at 213.

Given this latter finding, the MagistrateJudge was compelled to hold that the jury’s findingto the contrary was erroneous. Nevertheless, theMagistrate denied Knolls’ Rule 50(b) motion findingthat "[t]he jury’s findings at the third and final stageobviated the error made on [Knolls’] burden ofproduction and rendered that error harmless.~ Id. at214.

The Second Circuit’s Decision in Meacham I

After the denial of their Rule 50(b) motion,Knolls filed a timely appeal to the Second Circuitfrom the final judgment of the District Court. In aunanimous opinion, the Second Circuit found, "asthe district court ruled, [that] [Knolls] offered a

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facially legitimate business justification for the IRIFand its constituent parts: ’to reduce its workforcewhile still retaining employees with skills critical tothe performance of KAPL’s functions.’" Meacham v.KAPL, 381 F.3d 56, 74 (2d Cir. 2004) ("Meacham I").

Significantly, Meacham I correctly held that"[u]nchallenged, KAPL’s justification would precludea finding of disparate impact.~ Id. However, thepanel then re-constructed and re-cast petitioners’adverse impact arguments at trial and determinedthat the jury might have found that "uncheckedmanagerial bias and subjectivity~ was "one basicflaw in the IRIF process," and that this was thespecific discriminatory practice identified at trial bypetitioners. In reality, this was not the case at trial,where petitioners repeatedly asserted that it was"the overall layoff selection process~ that caused adisparate impact.

In any event, the court in Meacham I thenconcluded that "[a]t least one suitable alternative isclear from the record: KAPL could have designed anIRIF with more safeguards against subjectivity, inparticular, tests for criticality and flexibility that areless vulnerable to managerial bias." 381 F.3d at 75.Of course, any such "alternative" is inconsistent withthe subsequent decision of this Court in Meacham.See 128 S. Ct. at 2405 n.14 (where this Courtreaffirmed City of Jackson’s teaching that "[u]nlikethe business necessity test, which asks whether

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there are other ways for the employer to achieve itsgoals that do not result in a disparate impact on aprotected class, the reasonableness inquiry includesno such requirement").

The EEOC’s most recent proposed regulationson the RFOA defense are likewise sharply at oddswith both Meacham and City of Jackson in thislatter regard. See, e.g., newly proposed 29 C.F.R. §1625.TCo)(1)(iv)-(vi) and 1625.7(b)(2). Thus, nodeference at all should be afforded to these aspects ofthe EEOC’s proposals.

This Court’s Granting of Knolls’ Petition for aWrit of Certiorari in 2005

Knolls timely petitioned this Court for a writof certiorari, seeking review and reversal of thejudgment in Meacham I. On April 5, 2005, thisCourt granted Knolls’ petition, vacated the judgmentin Meacham I, and remanded the case for furtherconsideration in light of City of Jackson. SeeMeacham v. KAPL, Inc., 544 U.S. 957 (2005).

It was in City of Jackson where the SupremeCourt first held that disparate impact claims arecognizable under the ADEA. 544 U.S. at 230-31. Itwas also in City of Jackson that:

[T]he Supreme Court held that the’business necessity’ test [previouslyapplied in this Circuit to adverse

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impact claims under the ADEA, andapplied at the trial in this case] is notapplicable in the ADEA context: rather,the appropriate test is for’reasonableness,’ such that theemployer is not liable under the ADEAso long as the challenged employmentaction, in relying on specific non-agefactors, constitutes a reasonable meansto the employer’s legitimate goals.

Meacham II, 461 F.3d at 140.

Just as importantly, in light of the RFOAprovision of the ADEA and certain "textualdifferences between the ADEA and Title VIU of theCivil Rights Act of 1964 (4~. U.S.C. § 2000e et seq.),this Court in City o£Jackson made it clear that "thescope of disparate impact liability under the ADEAis narrower than under Title VII." 544 U.S. at 240."Thus, it is not surprising that certain employmentcriteria that are routinely used may be reasonabledespite their adverse impact on older workers as agroup." Id. at 241.

The Second Circuit’s Decision in Meacham II

In Meacham II, the same three-judge panelreconsidered Meacham I and the trial evidence inlight of the "reasonableness" test and narrower scopeof liability announced in City of Jackson. Aftercorrectly holding that the Second Circuit’s prior

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precedent in Smith v. Xerox Corp., supra, "is nolonger good law insofar as it holds that the ’businessnecessity’ test governs ADEA disparate-impactclaims,~ the Meacham // majority reversed MeachamI and granted appellants’ Rule 50(b) motion forjudgment as a matter of law.

As a result of this decision, the case wasremanded to the district court with directions toissue an order dismissing petitioners’ disparateimpact claims.

Subsequent Appellate History

Thereafter, petitioners filed their first petitionfor a writ of certiorari with this Court on an issuethey never raised at trial, and that was only raisedin these proceedings in an amicus brief filed by theEEOC with the Second Circuit following this Court’sremand in KAPL v. Meacham, supra. Then, on June19, 2008, after this Court granted the petition solelyon the issue of whether RFOA is an affirmativedefense under the ADEA, the Court vacated thejudgment in Meacham H and remanded the case forfurther proceedings consistent with the SupremeCourt’s Opinion in Meacham.

On remand, the Second Circuit first asked theparties how it should proceed in light of the Opinionin Meacham vacating the judgment in Meacham//.Knolls argued in response that the Court of Appealsshould "apply[] the law recently articulated by the

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Supreme Court to the facts of this case~ and "againgrant defendants’ motion for judgment as a matter oflaw, pursuant to Fed. R. Civ. P. 50.~ (cite). Knollsalso argued that the court should ~dismiss the[petitioners’] disparate impact claims in theirentirety based on the unimpeached and uncontestedevidence of reasonableness introduced at trial by~Knolls. Id.

The Second Circuit rejected this and otherarguments made on remand by Knolls (and by thepetitioners) and remanded the case to the districtcourt with directions to decide four issues. Meachamv. KAPL, Inc., 305 Fed. Appx. 748 (2d Cir. 2009).The district court found in response, after extensivebriefing and oral arguments from the parties, thatKnolls had knowingly and intentionally waived itsRFOA defense at trial, and the waiver could not beexcused. Because of these holdings, the MagistrateJudge never considered the specific issue that wasremanded in Meacham - whether Knolls is entitledto judgment as a matter of law in light of thisCourt’s Opinion in Meacham. Instead, theMagistrate reinstated his prior judgment in favorof petitioners. See Meacham v. KAPL, Inc., 627 F.Supp. 2d 72 (N.D.N.Y. 2009).

Knolls timely appealed these rulings to theCourt of Appeals. In a unanimous decision, a newpanel of the Second Circuit reversed the Magistrate’sdecision on waiver, and vacated the judgment of the

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district court, finding that this Court’s opinion andmandate in Meacharn precluded reconsideration ofpetitioners’ previous arguments (made before boththis Court and the Second Circuit in Meacham II)that Knolls had waived, abandoned, and/or forfeitedtheir RFOA defense.

Although Knolls maintains that this was thecorrect decision on the issue of waiver, the Court ofAppeals failed to answer the specific questionremanded by this Court in Meacl~am. Instead, theSecond Circuit has ordered additional discovery anda new trial on liability based on what the panel’sSummary Order characterizes as "uncertainty andmultiple changes in the governing law complicat[ing]the issues in this case."

On January 4, 2010, Knolls timely filed aPetition for Rehearing En Banc, which was deniedon February 23, 2010.

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REASONS FOR GRANTING THE PETITIONThis Case and the Questions Presented Are of

Exceptional National Importance

This is a case of considerable nationalimportance to employers (and employees) across thecountry. See Daniel B. Kohrman, The ADEA at 40:The Supreme Court Confronts Old Age, 42Clearinghouse Rev. 463, 465 (January/February2009) (describing the Supreme Court’s ruling inMeacham as "[t]he most important Supreme Courtage-bias decision of 2008"); Michael G. Cleveland onMeacham v. Knolls Atomic Power Laboratory, 2008Emerging Issues 2560 (July 16, 2008) (noting that"[t]he Court’s decision is particularly significant withworkforce reductions being daily front-page news intoday’s troubled economy" and that "It]he SecondCircuit’s handling of the case on remand will likelyprovide the first significant interpretation of theCourt’s Meacham decision" and "lilts decision shouldand will be closely monitored by employers").

For these and certain other pragmatic as wellas policy reasons discussed below, this conditionalcross-petition should be granted in its entirety, andthe Court should decide this dispute once and for allon the merits in Knolls’ favor, as a matter of law.See Robin S. Conrad, The Roberts Court and theMyth of a Pro-Business Bias, 49 Santa Clara L. Rev.997, 101 (2009) (suggesting that "[t]wo key valuesthat.., influence the outcomes of business cases are

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the preference for a uniform set of legal rules, andfor laws and regulations that produce predictableresults"); see also Cleveland on Meacham, 2008Emerging Issues 2560 (noting that *[i]f the record inCity of Jackson was adequate for the Court to makesuch a determination, one might expect that therecord in Meacham, after a full trial, would beadequate for such a purpose as well").

Indeed, given the Second Circuit’s SummaryOrder and failure to do what was directed by thisCourt on remand, this case cries out for the SupremeCourt’s supervision and intervention in carrying outMeacham’s mandate. Only this, and deciding onceand for all that Knolls has proved that the non-agefactors in question here are reasonable as a matterof law, will ensure greater predictability anduniformity in the lower courts’ application of theRFOA standards set down in Meacham and City ofJackson. Compare Ontario v. Quon, No. 08-1332,

U.S. (June 17, 2010) (determining"reasonableness" of public employer’s search of anemployee’s pager messages, as a matter of law,where the trial evidence showed that search wasbased on legitimate work-related reasons).

Moreover, the questions presented by thiscross-petition involve lingering issues of exceptionalimportance (both in and outside of the SecondCircuit) concerning the proper application of theliability-limiting principles expressed by Congress in

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the ADEA’s RFOA provision, and by this Court inMeacham and City of Jackson. These importantquestions, each of which the Court’s mandate inMeacham required the Court of Appeals to considerand decide on remand, include: (a) whether therecord facts of this long-running case satisfy thestandards of "reasonableness" articulated inMeacham and City of Jackson; (b)whether Knollssatisfied its burden of persuasion on the RFOAdefense based on the extensive existing trial record,as a matter of law; and (c) whether the outcomereached in Meacham II should be any different whenthe burden of persuasion on the RFOA defense isproperly placed on Knolls.

The exceptional importance of the answers tothese questions is demonstrated, inter alia, by thefact that this Court has twice vacated the SecondCircuit’s judgments in this case, both timesremanding this case with certain specificinstructions for further consideration. It is alsodemonstrated by the arguments of amici who haveexpressed interest in this case, by the extensivecommentary which the Meacham decision hasgenerated, and by the EEOC’s most recentregulatory proposals on the RFOA defense.

As discussed below, the Second Circuit’srecent conclusion that this Court’s opinions inMeacham and City of Jackson have caused suchuncertainty and complications in the governing law

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as to make it impossible for the lower court(s) todecide the burden of persuasion question as a matterof law, as if on summary judgment, also conflictswith authoritative decisions from other circuit courtsof appeal. See, e.g., Allen v. Highlands Hosp. Corp.,545 F.3d 387, 404 (6th Cir. 2008) (affirming thegrant of summary judgment to employer on itsRFOA defense and noting that "Meacham clarified~certain "questions remain[ing] about the nature of"the RFOA provision after City of Jackson).

Finally, the Summary Order and the Court ofAppeals’ failure to decide whether Knolls satisfiedits burden of persuasion on the question of"reasonableness" is inconsistent with the standardsarticulated by this Court in Reeves v. SandersonPlumbing Prods., Inc., 530 U.S. 133, 149 (2000), andother cases decided by this Court, including Quon,supra (deciding Ureasonableness" issue as a matter oflaw, but in a different, constitutional context).

The Summary Order Conflicts With and Failsto Fully Execute the Mandate in Meacham

On the specific burden of persuasion questionleft open and remanded by this Court in Meacham,Knolls agrees with petitioners’ arguments that thisCourt may correct the Court of Appeals’misconstruction of the mandate and opinion inMeacham. See Petition, p. 28 (and cases citedtherein). Albeit for different reasons, Knolls alsoagrees with petitioners that, in the present case, "the

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factual record is adequate, and would not beimproved by a remand to the court of appeals," or bya new trial, and that "the straightforward question"left open by the Court in Meacbam should be decidedby this Court "by a straightforward application ofcontrolling precedentn (Petition, p. 29) and as amatter of law, but in Knolls’ favor.

In Meacham, this Court held, for the very firsttime since the ADEA was enacted in 1967, that anemployer defending against a disparate impact claimunder the ADEA must not only produce evidenceraising the RFOA defense, but also persuade thefactfinder of its merit. 128 S. Ct. at 2398. At thesame time, the Court reaffirmed that the RFOAclause in the ADEA Usignificantly narrow[ed] itscoverage" to preserve a fair degree of leeway foremployment decisions with effects that correlatewith age. Id. at 2406.

This Court also noted in Meacham that theSecond Circuit in Meacham H"showed no hesitationin finding that Knolls prevailed on the RFOAdefense, though the court expressed its conclusion interms of [plaintiffs’] failure to meet the burden ofpersuasion." Id. (emphasis added). Because theCourt disagreed with this placement of the burdenon plaintiffs (and no other aspect of the decision inMeacham 11), the Court vacated the judgment andremanded the case for a determination as to"[w]hether the outcome [in Meacham I~ should be

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any different when the burden is properly placed onthe employer .... " Id. at 2406-07.

The Opinion in Meacham also made threeother important observations, each apparentlyignored or not taken into account by the panel belowin failing to answer the specific question remanded.First, "[t]he focus of the [RFOA] defense is that thefactor relied upon was a ’reasonable’ one for theemployer to be using." Id. at 2403. Second, the"burden of persuasion answers ’which party loses ifthe evidence is closely balanced’" and "’[i]n truth,however, very few cases will be in evidentiaryequipoise.’" Id. at 2406 (quoting Scbaffer v. Weast,546 U.S. 49, 56 (2005)). And third, "the more plainlyreasonable the employer’s ’factor other than age’ is,the shorter the step for that employer fromproducing evidence raising the defense, topersuading the factfinder that the defense ismeritorious." Id.

Moreover, the unpublished Summary Orderrecently issued in this case effectively and needlesslyoverturns, sub silentio, certain prior holdings andfindings in both Meacham II and Meacham I whichwere not in fact overturned or affected by thisCourt’s decision in Meacham.

For example, Meacham did not disturb oroverturn cast doubt upon the majority holdings inMeacham II that: (I) "[t]he range of reasonablepersonnel systems is wide in a fluid and adaptive

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economy" (461 F.3d at 144); (2) while ~[t]here mayhave been other reasonable ways for [KAPL] toachieve its goals (as we held in Meacbam [I], 381F.3d at 75), ’the one selected was notunreasonable’" (ld. at 146); and (3) "there arereasonable and permissible employment criteria thatcorrelate with age" and ~[t]his case is a fine exampleof the phenomenon." (ld. at 143). This Court’sopinion in Meacham also did not disagree with orcast doubt upon Meacham I_r’s findings that "thatthe criteria of ’criticality’ and ’flexibility’ wereubiquitous components of ’systems for makingpersonnel decisions,’ and that the subjectivecomponents of the IRIF were appropriate .... ~ Id.at 144.

Nor did this Court in Meacham disagree ortake issue with Meacham II’s holding that u[t]hisevidence unquestionably discharged defendants’burden of production suggest[ing] that thespecific features of the IRIF challenged by plaintiffswere routinely-used components of personneldecision-making systems in general, and wereappropriate to the circumstances that provokedKAPL’s IRIF.~ Id. As also correctly explained inboth Meacham II and Meacham I, but apparentlyoverlooked in the Summary Order, Knollsunquestionably "offered a facially legitimatebusiness justification for the IRIF and its constituentparts: ’to reduce its workforce while still retainingemployees with skills critical to the performance of

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KAPL’s work." Id. at 140. As also observed correctlyin Meacbara II, the trial "[e]vidence supports[appellants’] business objective" (id. at 143), and"KAPL set standards for managers constructingmatrices and selecting employees for layofF’ andthose standards "restricted arbitrary decision-making by individual managers." Id. at 145-46.

The Supreme Court’s decision in Meachamdoes not overturn or cast doubt upon any of thesestill-valid holdings and findings, for it only reversedthe Meacham H panel majority’s holding that theADEA’s RFOA defense is not an affirmative defenseand that petitioners bore the burden of provingunreasonableness. As the Summary Order correctlynotes, however, the Supreme Court observed inMeacham, inter alia, that this Court "showed nohesitation in finding that [appellants] prevailed onthe RFOA defense, though the court expressed itsconclusion in terms of [appellees’] failure to meet theburden of persuasion." 128 S. Ct. at 2406.

This language, and a review of the entireOpinion in Meacbam, indicates that the SupremeCourt disagreed only with the latter finding on theissue as to which party bore the burden of proof onthe RFOA defense, but had no problem acceptingMeacbam I_rs ultimate findings on thereasonableness of the non-age factors at issue here.

Furthermore, reversal of the Summary Orderis warranted because the Order conflicts and is

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inconsistent with Congress’ intent in adding theRFOA clause to the ADEA and with the clearstandards of ~reasonableness~ recently set down bythis Court in Meacham and City of Jackson. Asreaffirmed in Meacham, Congress put the RFOAclause in the ADEA to ~significantly narrow itscoverage~ and to preserve a fair degree of leeway foremployment decisions with effects that correlatewith age. Id. Accordingly:

[t]he focus of the [RFOA] defense is that thefactor relied upon was a "reasonable" one forthe employer to be using (SPA-193) . . . [and]the more plainly reasonable the employer’s"factor other than age~ is, the shorter the stepfor that employer from producing evidenceraising the defense, to persuading thefactfinder that the defense is meritorious.

Id. at2404-06.

As a matter of law, this is just such a ~short-step~ case because the non-age factors relied upon byKnolls are not obscure, but plainly reasonable, asamply demonstrated by the evidence alreadycontained in the existing trial record.

The Summary Order Conflicts With Decisionsin Other Circuits on Similar Questions

The Second Circuit’s Summary Order conflictswith the decisions of other circuit courts of appeal in

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ordering a new trial in this case and in refusing todetermine, on the existing trial record, whether thelayoff factors at issue here are reasonable non-agefactors, as a matter of law. Indeed, on less of afactual record than the one that already exists in thepresent case, other circuit courts have not hesitatedto grant summary judgment to employers on thesame or similar issues based on the clear existence ofRFOA. See, e.g., Allen v. Highlands Hosp. Corp.,545 F.3d 387, 404 (6th Cir. 2008) (noting that"Meacham clarified" certain "questions remain[ing]about the nature of’ the RFOA provision after Cityof Jackson); Summers v. Winter, 303 Fed. Appx. 716(llth Cir. 2008) (affirming summary judgmentwhere "the Navy’s decision to implement [a new]training program was in response to the September11 terrorist attacks" and this was "a decision basedon a reasonable non-age factor"). See also Pippin v.Burlington Res. Oil and Gas Co., 440 F.3d 1186(10th Cir. 2006) (RIF decisions based on "[c]orporaterestructuring, performance-based evaluations,retention decisions based on needed skills, andrecruiting concerns are all reasonable businessconsiderations~); Durante v. Qualcomm, Inc., 144Fed. Appx. 603, 607-08 (gth Cir. 2005) (affirmingsummary judgment where Umany managers madeemployment termination decisions based upon thereasonable and diverse business needs of differentdepartments within the corporation").

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Unlike the Second Circuit’s Summary Orderhere, none of these decisions have found that thisCourt’s decisions in City of Jackson and/or Meachamhave created "uncertainty" or "complicated theissues .... to such an extent that neither party isentitled to judgment as a matter of law." In fact,these and other lower court decisions issued bothbefore and after Meacham was decided demonstratethat just the opposite is true. See, e.g., Aldridge v.City of Memphis, No. 05-2966, 2008 U.S. Dist. LEXIS67539, at *26-27 (W.D. Tenn. July 31, 2008) (citingMeacham in affirming summary judgment where no"genuine issues of material fact exist as to whether[d]efendant’s RFOA’s were reasonable"); Gambi11 v.Duke Energy Corp., No. 1:06-CV-00724, 2009 U.S.Dist. LEXIS 83126, at *24-26 (S.D. Ohio Sept. 10,2009) (same); Magnello v. TJX Cos., Inc., 556 F.Supp. 2d 114, 123 (D. Conn. 2008) (employer’spractice of recruiting recent college graduates for atraining program with entry-level pay was"appropriate and reasonable~); Gallagher v. TheIBEW Local Union No. 43, No. 5:00CVl161, 2008U.S. Dist. LEXIS 81615 (N.D.N.Y. Oct. 15, 2008)(citing Meacham and finding that exceptions tounion referral procedures based on special skillswere based on reasonable factors other than age);Adams v. Lucent Techs., Inc., No. 2:03cv300, 2007U.S. Dist. LEXIS 662, at *23-24 (S.D. Ohio Jan. 3,2007) (decisions by employer were based onreasonable factors other than age, as a matter oflaw), affd, 284 Fed. Appx. 296 (6th Cir. 2008);

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Aliotta v. Bair, 576 F. Supp. 2d 113, 127-28 (D.D.C.2008) (same); Embrico v. Unlted States Steel Corp.,404 F. Supp. 2d 802, 829-31 (E.D. Pa. 2005) (same),atFd, 245 Fed. Appx. 184 (3d Cir. 2007). Andcompare Suslovic v. Black & Decker, Inc., No.1:06CV116, 2007 U.S. Dist. LEXIS 53055 (N.D. OhioJuly 23, 2007) (citing Meacham H and holding thatemployer was entitled to use subjective criteria in aRIF "to assemble what was, in its opinion, the bestteam of service center managers available"), affd,300 Fed. Appx. 393 (6th Cir. 2008).

Significantly, each of these cases resolvedsimilar RFOA liability disputes on summaryjudgment, as a matter of law, and without the needfor a trial, just as was done in City of Jackson. And,in stark contrast to the Second Circuit’s recentSummary Order, the uniformity of these decisionscompels the conclusion that the law as it currentlystands has not been complicated or rendereduncertain by the Supreme Court’s recentpronouncements on the RFOA defense, as the panel’sSummary Order erroneously concludes. Instead, thelaw has been clarified and simplified by the SupremeCourt in an effort to effectuate Congress’s intent tosignificantly narrow the scope of liability fordisparate impact discrimination under the ADEA.

But now, the Second Circuit’s SummaryOrder, in ordering a new trial and failing todetermine whether the factors here in question were

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reasonable non-age factors for Knolls to use, asmatter of law, has departed from what had been auniformity of approach both in and outside of theSecond Circuit following Clty of Jackson andMeacham. Only this Court can resolve this conflictamong the circuits and restore uniformity withoutthe need for a new trial here.

The Summary Order Conflicts With Reeves andOther Supreme Court Cases

In Reeves, the Supreme Court explained that:

Whether judgment as a matter of law isappropriate in any particular case will dependon a number of factors. Those include thestrength of the plaintiffs prlma facle case ....and any other evidence that supports theemployer’s case and that properly may beconsidered on a motion for judgment asmatter of law.

530 U.S. 133, 148-49 (2000).

Like the district court did on remand, theSummary Order here in question ignores theseissues, including petitioners’ failure to establish aprima facie disparate impact case as required by thisCourt’s precedents. See, e.g., Meacham, 128 S. Ct. at2406 (noting this is a requirement that "has bite").Similarly, in refusing to grant judgment as a matterof law to Knolls on the RFOA defense, the Second

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Circuit’s Summary Order fails to heed this Court’sadmonition in Reeves that "an employer would beentitled to judgment as a matter of law if the recordconclusively revealed some other, nondiscriminatoryreason for the employer’s decision, or if... there wasabundant and uncontroverted independent evidencethat no discrimination had occurred." 530 U.S. at148.

Here, the existing trial record conclusivelyreveals that petitioners were selected for layoff inthe RIF not based on their ages, but based on theirflexibility and criticality, as well as theirperformance and prior service to Knolls. These non-discriminatory reasons are reasonable factors otherthan age, as a matter of law.

The decision in Reeves, together with theliability-limiting language articulated by the Courtin both Meacham and City of Jackson, indicates thatthe Second Circuit, or the district court, rather thana jury, could have and should have properly decidedas a matter of law under Rule 50(b) that theunimpeached proof of reasonableness introduced byKnolls at trial satisfied its burden of persuasion.And, as demonstrated by this Court’s decision in Cityof Jackson (and in a somewhat different contextmore recently in Ontario v. Quon, supra), in a propercase the question of "reasonableness" can and shouldbe decided by this Court, as a matter of law. This isjust such a case.

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In short, only one conclusion can be reached inthis case given the undisputed and unimpeachedevidence amassed by Knolls at trial related to thelegitimacy and reasonableness of criticality andflexibility as factors upon which to rank petitionersfor layoff, given the fact that petitioners were plainlyon notice of Knolls’ RFOA defense from the time anAnswer was filed until the time of trial, and giventhat petitioners have conceded that both Knolls’objectives and the non-age layoff factors in questionhere are "undoubtedly reasonable" and that~defendants presented evidence regarding thereasonableness of their practices" at trial. Thatconclusion, this Court should find as a matter of law,is that the existing record evidence satisfies Knolls’burden of proving that criticality, flexibility, jobperformance, and company service are reasonablenon-age factors in the circumstances of this case, asa matter of law, and no new trial on liability istherefore needed.

This conclusion is not and cannot beundermined or altered by petitioners’ claims that thereasonable non-age factors here in question wereaffected by "subconscious age bias," a disparatetreatment argument rejected by the jury, or by theexistence of alternative factors with less of adisparate impact, as the EEOC would have it intheir newly proposed RFOA regulations.

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On the record already before this Court inMeaclbam, and before the Court of Appeals and theDistrict Court on remand, no reasonable jury couldfind otherwise, particularly since "everyone knowsthat the choice of a practice relying on a ’reasonable’non-age factor is good enough to avoid liability."Meacham 128 S. Ct. at 2405.

CONCLUSIONThis Conditional Cross-Petition should

granted for all of the reasons set forth herein.be

Dated: July 1, 2010

Respectfully submitted,

MARGARET A. CLEMENSCounsel o_f Record

LITTLER MENDELSON, P.C.400 Linden Oaks, Suite 110Rochester, NY 14625(585) 203-3400

JOHN E. HIGGINSOn the Petition

NIXON PEABODY LLP677 Broadway, 10th FloorAlbany, NY 12207(518) 427-2650

Attorneys for ConditionalCross’Petitioners

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