Labor & Employment Law

Age discrimination, retirement plans, and the Supreme Court

Today the US Supreme Court hear oral arguments in Kentucky Retirement Systems v. EEOC [Click here for briefs, link to transcript, etc.].

EEOC sued claiming that a disability-retirement-benefits plan for state and county employees violates the Age Discrimination in Employment Act (ADEA). The trial court granted summary judgment for defendants on the ground that EEOC did not establish a prima facie case; the 6th Circuit, en banc 10-4, reversed.

The KRS disability-retirement-benefits plan disqualifies employees who are still working from receiving disability-retirement benefits if they have already reached normal retirement-benefit age at the time they become disabled. The plan also calculates disability retirement benefits in such a way that an older employee who is eligible to receive disability benefits receives fewer benefits - in the form of lower monthly benefit payments - than a younger disabled employee receiving disability-retirement benefits who is similar to the older disabled employee in every relevant factor other than age.

The 6th Circuit held that (1) EEOC established a prima facie case because the plan is facially discriminatory on the basis of age and (2) when a plan is facially discriminatory a plaintiff does not need additional proof of discriminatory animus to establish a prima facie claim of disparate treatment.

The US Supreme Court granted certiorari to review the 6th Circuit's judgment.

If you want to see what Paul Secunda at Workplace Prof Blog gleaned from the transcript of the Supreme Court argument, go to Oral Argument Transcript Analysis of Kentucky Retirement Systems v. EEOC.

My view: Extremely difficult to predict the outcome, but three things make me tilt toward the EEOC's position:

1. Kentucky is relying to some extent on an argument that their plan is not "arbitrary." OK, fine. The problem with that argument is that the word "arbitrary" does not appear in the portion of the statute that EEOC relies on, so it's not really relevant whether the plan is arbitrary or not. "Arbitrary" appears in the preamble only.
2. The plan expressly uses age as a criterion. Where I come from, that makes the plan facially discriminatory on the basis of age. Any counterargument to that is really going to have to make mincemeat out of the English language.
3. All EEOC is trying to do is establish a prima facie case. If EEOC wins on that one issue, Kentucky still has the opportunity to defend its plan based on defenses that the statute allows.

Full post as published by Ross' Employment Law Blog on January 09, 2008 (boomark / email).