Kentucky's System Favoring Disabled Early Retirees Did Not Violate ADEA
The Commonwealth of Kentucky has put in place a special retirement plan for state and county employees who occupy “hazardous positions,” e.g., active duty law enforcement officers, firefighters, paramedics, and workers in correctional systems. The Plan sets forth two routes through which such an employee can become eligible for what is called “normal retirement” benefits. The first makes an employee eligible for retirement after 20 years of service. The second makes an employee eligible after only 5 years of service provided that the employee has attained the age of 55. An employee eligible under either route will receive a pension calculated in the same way: Kentucky multiplies years of service times 2.5% times final preretirement pay.
Kentucky's Plan has special provisions for hazardous position workers who become disabled but are not yet eligible for normal retirement. Where such an employee has worked for five years or became disabled in the line of duty, the employee can retire at once. In calculating that employee's benefits Kentucky will add a certain number of (“imputed”) years to the employee's actual years of service. The number of imputed years equals the number of years that the disabled employee would have had to continue working in order to become eligible for normal retirement benefits, i.e., the years necessary to bring the employee up to 20 years of service or to at least 5 years of service when the employee would turn 55 (whichever number of years is lower). Thus, if an employee with 17 years of service becomes disabled at age 48, the Plan adds 3 years and calculates the benefits as if the employee had completed 20 years of service. If an employee with 17 years of service becomes disabled at age 54, the Plan adds 1 year and calculates the benefits as if the employee had retired at age 55 with 18 years of service.
Charles Lickteig, a hazardous position worker in the Jefferson County Sheriff's Department, became eligible for retirement at age 55, continued to work, became disabled, and then retired at age 61. The Plan calculated his annual pension on the basis of his actual years of service (18 years) times 2.5% times his final annual pay. Because Lickteig became disabled after he had already become eligible for normal retirement benefits, the Plan did not impute any additional years for purposes of the calculation.
Lickteig complained of age discrimination to the Equal Employment Opportunity Commission; and the EEOC then brought this age discrimination lawsuit against Kentucky. The EEOC pointed out that, if Lickteig had become disabled before he reached the age of 55, the Plan, in calculating Lickteig's benefits would have imputed a number of additional years. And the EEOC argued that the Plan failed to impute years solely because Lickteig became disabled after he reached age 55.
The District Court held that the EEOC could not establish age discrimination; and it granted summary judgment in the defendants' favor. A panel of the Sixth Circuit affirmed that judgment. The Sixth Circuit then granted rehearing en banc, and held that Kentucky's Plan did violate the ADEA.
Granting Certiorari, the U.S. Supreme Court reversed the Sixth Circuit’s en banc decision, holding that, in this particular instance, the differences in treatment of the two types of employees were not actually motivated by age, and thus did not violate the ADEA.
Kentucky Retirement Systems v. E.E.O.C.