The Age Discrimination in Employment Act (ADEA) only applies to employers with 20 or more employees. For years, small local governmental units have understood that they are exempt from ADEA jurisdiction based on the actual number of employees in the political subdivision. Last Monday, the Ninth Circuit Court of Appeals rejected this understanding, finding that small government units are covered under ADEA regardless of their size.

In Guido v. Mount Lemmon Fire District, the plaintiffs worked for a small unit of the Arizona state government. The district court dismissed their age discrimination suit on the grounds that their employer did not meet the statutory 20 employee threshold for coverage under ADEA. It rejected the plaintiffs’ argument that amendments to ADEA created separate jurisdiction for claims against political subdivisions of states regardless of the number of employees.

On appeal, the Ninth Circuit reversed this decision, remanding the matter for further proceedings. The court relied on a reading of ADEA’s jurisdictional section that removes state governments and their political subdivisions from the 20 employee minimum. This decision rejects reasoning used by four other federal appellate circuits in concluding that the 20 employee minimum does apply to such political subdivisions.

The practical result of this case is that absent Supreme Court review of this decision, small governmental units may or may not be subject to federal age discrimination claims depending on where they are located.