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Big Tobacco Age-Bias Case Heads to Full 11th Circuit

(CN) - The 11th Circuit agreed to rehear en banc claims that tobacco giant R.J. Reynolds rejected a middle-aged man's sales rep application six times in favor of younger applicants.

Richard Villarreal says he first applied online for a "territory manager" sales rep position with R.J. Reynolds Tobacco Co. in November 2007, when he was 49.

After allegedly receiving no response from R.J. Reynolds for more than two years, Villarreal filed an age discrimination charge with the Equal Employment Opportunity Commission in May 2010.

Villarreal meanwhile applied and was rejected for a territory manager position five more times, he claims, later adding that allegation to his complaint.

On April 2, 2012, the EEOC declined to take action against R.J. Reynolds, and sent Villarreal a right-to-sue notice, according to court records.

Villarreal then filed an age discrimination class action against R.J. Reynolds, consulting firm Pinstripe Inc. and now-dismissed CareerBuilder LLC in Northern Georgia Federal Court.

Noting that he failed to file his discrimination charge within 180 days of the discriminatory act, as required by the Age Discrimination in Employment Act (ADEA), Villarreal's complaint says the limitations period should be tolled until April 2010.

Villarreal says the facts necessary to support his discrimination charge could not have been apparent until less than a month before he filed it.

But a federal judge partially dismissed the complaint in January 2015, finding that Villarreal failed to allege what those facts were, that only current employees can sue for disparate impact, and that all claims related to hiring decisions before Nov. 19, 2009, are untimely.

Villarreal moved to amend, arguing that he had not known until April 2010 that R.J. Reynolds used guidelines to target candidates "2-3 years out of college," but to "stay away from" candidates with "8-10 years" of prior sales experience.

But the court refused to let him amend, finding that he never contacted R.J. Reynolds to find out why his application was rejected and failed to allege that the firm concealed anything.

Villarreal voluntarily dismissed his remaining claim and appealed.

A divided 11th Circuit reversed the lower court's ruling on Nov. 30, 2015.

"As it turns out, R.J. Reynolds's hiring statistics suggest a pattern of hiring younger applicants," Judge Beverly Martin wrote for the three-judge panel. "Of the 1,024 people hired as territory managers from September 2007 to July 2010, only 19 were over the age of 40."

The ADEA authorizes disparate impact claims by job applicants, the ruling states.

"In fact, the statute is unclear on this question," Martin wrote. "However, the Equal Employment Opportunity Commission, the agency charged with enforcing the ADEA, has reasonably and consistently interpreted the statute to cover claims like Mr. Villarreal's. We must defer to that reading rather than venture our own guess about what the statute means."

The panel also ruled last November that Villarreal was entitled to equitable tolling.

But Judge Clyde Roger Vinson dissented, holding that tolling is only appropriate in the case of "extraordinary circumstances that are both beyond his control and unavoidable with due diligence."

"Mr. Villarreal does not even claim that there are any extraordinary circumstances in this case (like fraud, misinformation, or deliberate concealment by R.J. Reynolds) that should warrant this extraordinary and sparingly-used remedy," Vinson wrote.

On Wednesday, the 11th Circuit, led by Chief Judge Ed Carnes, nonetheless granted a petition for rehearing en banc and vacated the panel's November opinion.

Villarreal's attorney, Jim Finberg with Altshuler Berzon in San Francisco, said the 11th Circuit's decision was "well reasoned and correctly decided, and will be re-affirmed by the entire court en banc."

R.J. Reynolds spokesman Bryan Hatchell declined to comment on the ruling.

Pinstripe did not immediately return a request for comment emailed Thursday.

The tobacco giant's parent company, Reynolds American Inc., reportedly reaped $3 billion in the fourth quarter of 2015, and more than $10.6 billion for the full year.

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