Retire the ADEA? Preview of Kentucky Retirement Systems v. EEOC
by Simon Lazarus and Harper Jean Tobin, attorneys with the National Senior Citizens Law Center
On Wednesday, January 9, the Supreme Court will hear arguments in one of the four workplace discrimination cases on its calendar for the current term. Coming as they do on the heels of the notorious Ledbetter v. Goodyear decision in May of last year, these cases will go far to reveal whether the Roberts Court intends to continue hollowing out 20th century civil rights guarantees until there is little of practical significance left. (In Ledbetter, a 5-4 majority effectively gutted the equal pay protections in the 1964 Civil Rights Act by requiring victims to file suit within 120 days of a defendant’s discriminatory act – despite the fact well-known fact that workers rarely learn that they have been targets of discriminatory pay decisions for years.)
Wednesday’s case, Kentucky Retirement Systems v. Equal Employment Opportunity Commission (EEOC), involves the Age Discrimination in Employment Act (ADEA), which bans job-related discrimination against any individual “because of such individual’s age.” Originally passed in 1967, ADEA protections have recently grown more important to the constituency served by the Act, as baby boomers have swelled the ranks of older workers, and shrinking pension benefits have forced many to continue working longer than they anticipated. Kentucky Retirement Systems involves the application of the ADEA to the design of retirement plans, an especially sensitive matter to the baby boomer cohort.
Kentucky drew the ire of the EEOC because its pension program for workers in hazardous state jobs, such as fire or police protection, provides younger workers with a richer disability retirement package than it provides for their older counterparts. Under the plan, hazardous duty workers under the age of 55 – the age at which Kentucky employees become eligible for retirement – if forced to retire because of a disability, are eligible for a special enhanced package of benefits. In contrast, disabled hazardous duty workers over 55 are eligible only for “normal” retirement benefits. In addition, the Kentucky formula uses age as an explicit criterion for determining individual benefit levels for eligible disability retirees in ways that produce better results for younger retirees than similarly situated older colleagues.
In its defense, Kentucky insists that its two-tiered, age-based design was not driven by the sort of invidious stereotypical assumptions about older workers that the architects of the ADEA aimed to banish from American workplaces. Rather, Kentucky explains, their plan aims at giving younger disabled employees an appropriate “boost” by ensuring that their benefits approach or equal the levels for which they would have been eligible, had they been able to work a full career until normal retirement age. The age-discriminatory formula is justified, the state contends, because older workers, having been in the workforce longer, may reasonably be expected to have accumulated additional resources, whereas their younger colleagues would not have had that chance.
In response, the Solicitor General’s brief for the EEOC – echoing an en banc Sixth Circuit Court of Appeals decision (467 F.3d 571) in the EEOC’s favor – spotlighted a 1991 amendment in which Congress acted to clarify that discrimination in the provision of fringe benefits like pensions was covered by the Act (overruling a Supreme Court decision to the contrary). In this revision, Congress spelled out a particular, narrow, exception: it permitted differential treatment of fringe benefits for older and younger workers if necessary to equalize the amount of actual payments or the actual costs incurred. The government stressed, “Congress wisely chose a regime of specific, objective defenses over a regime in which certain ‘non-malevolent motives’ for facially discriminatory laws would preclude the establishment of a prima facie case.”
In addition to its textual argument, the government suggested that there is nothing inappropriate or illegal about Kentucky’s core policy objective, only with the means it chose to attain it. Employers are free to ensure hazardous duty workers minimum levels of retirement benefits, in line with what they could expect after a full career, the Solicitor General stressed, on a non-age discriminatory basis. For example, were employees eligible for retirement benefits after a fixed period of employment, such as 20 years, a plan could accelerate that eligibility for disabled workers who had been employed for less than 20 – as long as eligibility is available in principle to older as well as younger workers.
Concerned about the porous loophole Kentucky’s “good motives” approach would open for all areas covered by the ADEA, amici curiae AARP and the National Employment Lawyers Association noted that such an interpretation would scale the ADEA back to banning only egregiously purposeful or arbitrary discrimination, which is already prohibited by the Constitution. Leaving older workers to the mercy of such vague and easily evaded subjective standards was precisely what Congress sought to avoid in enacting the original 1967 statute and its 1991 clarifying amendment. Indeed, in 2001 the Supreme Court, in Kimel v. Florida Board of Regents, affirmed that the Act prohibits “substantially more state employment decisions and practices than would likely be held unconstitutional under the equal protection, rational basis standard” of the Constitution.
On Kentucky’s side, six state governmental advocacy associations and thirteen individual states filed four separate amicus curiae briefs. Noting that many states and localities have special disability retirement plans similar to that of Kentucky, these amici assert that affirmance of the Sixth Circuit’s decision would necessitate complex statutory and even constitutional adjustments, risk possible damage awards, and threaten potentially “crippling” instability and costs for retirement plans covering 25 million workers.
The principal difficulty with the state and local governments’ plea is that they have had 16 years to design and enact lawful retirement programs since Congress clarified the application of ADEA to fringe benefits in 1991. Given the terms of that law, especially as construed by intervening Supreme Court and appellate decisions, prudent legal advice should have dictated re-tailoring retirement plans to meet the standard recognized by the Sixth Circuit in this case (and most other circuits in similar cases). Indeed, private employers must have received and acted on such counsel, for no private employers or advocacy organizations filed to urge reversal. If state and local employers believe that compliance with the current statutory formula imposes special problems and costs on them, the conventional remedy would be to try to persuade Congress to rewrite the law, not seek permission from the courts to ignore it. And if Chief Justice Roberts and his colleagues believe their often-asserted commitment to judicial restraint, they will direct Kentucky and its supporters to take their complaint across the street to the Capitol.