Sup Ct to Decide Whether Use Of Age As Factor In Retirement Plan Is Arbitrary And Renders Plan Facially Discriminatory In Violation Of ADEA
The United States Supreme Court has granted a
petition for certiorari in a case in which the Sixth Circuit, sitting en banc,
held that, for purposes of a prima facie case under the Age Discrimination in
Employment Act (ADEA), a Kentucky state retirement plan facially discriminated
on the basis of age by rendering employees ineligible for disability retirement
benefits simply because of their age, as well as by using employees' age to
calculate benefits in such a way that older eligible employees received lower
payments than otherwise similar younger employees. Kentucky's petition for
certiorari presented the question whether any use of age as a factor in a
retirement plan is arbitrary and thus renders the plan facially discriminatory
in violation of the ADEA.
The Court of Appeals stated that Kentucky's plan was
facially discriminatory on the basis of age in at least two ways. First, the
plan categorically excluded still-working employees over age 55 from a
particular employment benefit because of their age. In order to be eligible for
disability-retirement benefits, employees in hazardous positions were required
to become disabled before they reached age 55. There was absolutely no dispute
that under the plan, when such an employee became disabled at age 55 or older,
that older employee was adversely treated because of his or her age when
compared to a disabled coworker who was similarly situated in all relevant
aspects other than age.
The plan was facially discriminatory in a second
way, in that employees who became disabled when they were still young enough to
be eligible for disability-retirement benefits received reduced benefits
compared to otherwise-similar but even younger disabled employees for no reason
other than their age. Kentucky did not dispute that its plan paid lower
disability-retirement benefits to an older worker who, apart from age, was
similarly situated to a younger worker in all relevant respects. An employee's
age, therefore, actually played a role in, and had a determinative influence on
the outcome of, the amount a disabled employee's disability-retirement benefit
payment was each month.
Kentucky Retirement Sys. v. E.E.O.C