The Commonwealth of Kentucky ("Kentucky") provides normal retirement benefits to public employees who are 55 years of age and have satisfied a minimum service requirement, or who have worked for Kentucky for 20 years. Kentucky also provides disability-retirement benefits to employees who are ineligible for normal retirement benefits (e.g. employees who are under 55 or who have not satisfied the service requirement) and who become disabled. Because age is a factor in determining whether an employee may receive normal retirement benefits, by definition, age is also a factor in determining whether an employee may receive
Moreover, the calculation that determines the amount of benefit paid to an employee under both plans includes the employee's age as well as the years served. Under the
The question presented to the U.S. Supreme Court asks, as the benefits provided under the
After finding that older individuals faced discrimination in the workplace, Congress passed the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. ?621 et seq. The ADEA prohibits employers from arbitrarily discriminating against older employees. The Equal Employment Opportunity Commission ("EEOC") brought suit against the Jefferson County Sheriff's Department, the Commonwealth of Kentucky, and Kentucky Retirement Services ("KRS"), who administers the state retirement program, because the retirement program distinguishes among recipients, at least in part, on the basis of age. The U.S Court of Appeals for the Sixth Circuit, sitting en banc, held that the retirement scheme in question violated the ADEA. In this case, the U.S. Supreme Court will determine whether an employer may deny an employee disability benefits because of his or her eligibility to receive normal retirement benefits under the ADEA.
Questions as Framed for the Court by the Parties
This Petition involves a public employee retirement plan that includes normal and disability retirement benefits. A member who is eligible for normal retirement benefits based on attained age plus a minimum service requirement, or based on service alone, is not eligible for disability retirement benefits. Because age may be a factor in determining eligibility for normal retirement, it is an indirect factor in determining eligibility for disability retirement. Moreover, the calculation of disability retirement benefits is based upon actual years of service plus the number of years remaining before the member reaches retirement age or eligibility based on years of service alone; age may thereby be an indirect factor in determining the amount of disability retirement benefits.
The question presented in this Petition is accordingly: 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 Age Discrimination in Employment Act?
Kentucky law prescribes two methods in which a public employee may reach what is termed "normal retirement." Under normal circumstances, a public employee may retire upon crossing either of two thresholds, whichever comes first. Employees who work in hazardous positions become eligible to receive normal retirement benefits when they reach the age of 55 and have worked for at least five years, or after they have completed twenty years of service, no matter what their age is. As an additional benefit, Kentucky provides disability-retirement benefits for employees who become disabled before they become eligible to receive normal retirement benefits.
Under this statute ("KRS plan"), only employees ineligible for normal retirement (e.g. employees under the age of 55 or those who have not satisfied the service requirement) may receive disability-retirement benefits, which in many cases is greater than the normal retirement available to those over 55. The defendants explain that the purpose of disability-retirement is to provide a safety net for those employees who are less likely to have financial resources available to them. Because employees eligible for normal retirement already have a safety net, the argument continues, they donot need disability-retirement. Id. Accordingly, Kentucky law denies disability-retirement to those employees disabled after they become eligible for normal retirement benefits. Thus, the KRS plan categorically excludes a group of employees, at least in part, on the basis of their age.
Furthermore, the method of calculating the disability-retirement benefit treats older employees differently than younger employees. For normal retirement benefits, the yearly payment is generally calculated as 2.5% of the employee's final compensation, times the number of years he or she worked. ? In contrast, in determining the yearly amount of disability-retirement benefits, the number of years the employee worked is increased. The number added is the number of years remaining until the employee would have reached either normal retirement age or 20 years of service, but the addition is capped at the number of years the employee actually worked. ? For example, if a 44 year-old employee with 10 years of service became disabled, the KRS plan provides that 10 years of service would be added to the calculation, doubling the amount the employee would receive per year.
A consequence of the disability-retirement plan, however, is that it provides otherwise identical employees, but of different ages, different monthly payments. A chart prepared by the EEOC shows the resulting discrepancy.
Age at Disability
# Years Service
55 or older
45 or younger
The differences do not stop there. A hazardous-category employee who may receive disability-retirement who is injured in the line of duty is guaranteed sizable monthly benefits, including benefits for dependent children. The KRS plan does not provide these benefits to an otherwise identical employee who is eligible for normal retirement. Furthermore, assuming everything else is equal, the amount paid annually to an employee who retires on disability at a younger age will frequently exceed, and never be less than, the annual benefits of an employee who retires due to disability at an older age. Similarly, an employee younger than normal retirement age (if in a hazardous position, age 55) who retires on disability will receive more benefits each year than an identical, but older, employee who must take normal retirement.
Lickteig, a Deputy Sheriff with the Jefferson County Sheriff's Department, was denied disability benefits because he was old enough to qualify for normal retirement benefits. Lickteig became eligible for normal retirement benefits at age 55, but he continued working past that date. In 1995 Lickteig became disabled and could no longer perform his duties as Deputy Sheriff. Thus, at age 61 and with seventeen years and seven months worth of service, he applied for disability-retirement benefits under the plan provided to Jefferson County employees and administered by Kentucky Retirement Services ("KRS"). KRS denied Lickteig's request, explaining that, under Kentucky law, he was ineligible for disability-retirement because as a hazardous-category employee he was eligible for normal retirement at the age of 55.
Lickteig then filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"), alleging that KRS, the Jefferson County Sheriff's Department, and the Commonwealth of Kentucky, who provided the KRS plan to certain state and county employees, illegally denied him benefits because of his age. The EEOC investigated Lickteig's charges and concluded that the KRS plan violated the Age Discrimination in Employment Act, 19 U.S.C. ? 621 et seq ("ADEA"). The EEOC then brought suit against the Sheriff's Department, KRS, and the Commonwealth of Kentucky. A panel of judges for the U.S Court of Appeals for the Sixth Circuit, affirmed the District Court's ruling that the EEOC had failed to provide a prima facie case of discrimination. The Sixth Circuit Court of Appeals, however, granted a rehearing en banc and reversed its ruling.
The en banc court of appeals ruled on two different aspects of the case. First, the en banc court overturned a prior Sixth Circuit opinion and ruled that, under the ADEA and a disparate treatment theory of discrimination, when the statute at issue facially discriminates against older employees, a plaintiff need not prove that the defendant acted with discriminatory animus. In other words, the en banc court explained, where the KRS plan categorically denies the provision of disability-retirement benefits to any employee over the age of 55 (who has satisfied the minimum service requirement), the plan reflects direct evidence that age is a dispositive factor, and thus a court may infer the defendant's intent to discriminate. Second, the en banc court ruled that the KRS plan violated the ADEA in at least two distinct ways. The en banc court first pointed to the categorical exclusion of employees over the age of 55 who have satisfied the minimum service requirement. The en banc court then discussed the procedure of adding years of service for the calculation of an employee's benefit amount, and how that provision results in a greater benefit to younger employees.
Does the KRS plan facially violate the ADEA?
The Sixth Circuit Court of Appeals, sitting en banc, found that the Kansas retirement statute facially violates the Age Discrimination in Employment Act, 29 U.S.C. ? 621 et seq ("ADEA"), as amended by the Older Workers Benefits Protection Act, 29 U.S.C. ? 621 ("OWPBA") under a disparate treatment theory of discrimination. Discrimination may be proved by either one of two standards of proof. Under a disparate treatment theory of discrimination, by contrast to the disparate impact theory, a plaintiff must prove that the employer treated the employee differently by virtue of his or her age, and that the age, itself, motivated that discrimination. For example, an employer disparately treats an employee when the employee is denied a benefit because the employee is over the age of 40, and the employer made the distinction because it intended to disfavor older employees. In this case, the en banc court held that because the retirement plan ("KRS plan") facially violated the ADEA, the requirement of intent was satisfied. ?In other words, the en banc court reasoned that because Kentucky purposely structured the statute to favor employees ineligible for normal retirement, regardless of whether it chose to do so maliciously, it was clearly on notice that it was treating older employees less favorably.
The defendants challenge this finding by emphasizing their intention in providing retirement-disability benefits They assert that the Commonwealth of Kentucky meant only to provide a benefit to disabled employees yet ineligible to receive normal retirement benefits. Similarly, they argue that the only purpose of adding years (of either age or service, whichever is lesser) to a disabled employee's calculation for determining benefits is not to disfavor older employees, but to provide younger employees a meaningful benefit that will actually mitigate the lifelong hardship of disability.
The defendants rely on the U.S. Supreme Court case Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993). In that case, the employer fired an employee, not because of his age, but because his right to receive retirement benefits was about to vest. The retirement statute in that case granted retirement benefits when an employee worked for 10 years and did not consider age at all. The Court ruled that the employer did not violate the ADEA because age and years of service are analytically distinct, and the ADEA prohibits conduct based only on age. As the employer intended to avoid paying retirement benefits, and not to treat the employee unfavorably on the basis of his age, the Court ruled that the employer acted outside of the ADEA's prohibition. In their brief, the defendants argue that the KRS plan, like Hazen Paper, provides for individuals to receive different levels of benefits on the basis of eligibility for normal retirement, and not age. Accordingly, as the Court considered age and years of service analytically distinct in Hazen Paper, the Court here should treat age and eligibility for normal retirement as analytically distinct. Thus, the defendants assert that because the significant factor is whether the employee is eligible for normal retirement the Court should find that here, as in Hazen Paper, their actions lay outside of the ADEA's prohibition.
In turn, the Equal Employment Opportunity Commission ("EEOC") asks the U.S. Supreme Court to affirm the en banc courts' finding of facial discrimination. In its brief, the EEOC summarizes the ADEA mandate: the Act generally forbids discriminatory preference for the younger over the old in providing benefits to employees 40 and older, and requires the employer to ignore an employee's age, absent a statutory exemption or defense. The EEOC argues that as the KRS plan considers the employee's age in at least two ways, the retirement scheme falls within the ADEA prohibition by relying on age as a distinguishing factor. The EEOC reasons that because age is a factor in determining whether one is eligible for normal retirement, the consideration of age directly affects whether an employee may receive disability-retirement benefits. The EEOC also challenges the defendants' use of Hazen Paper. Unlike the employer there, the EEOC argues the KRS program cannot ignore an employee's age as the ADEA requires. Instead, when a disabled employee applies for retirement benefits, Kentucky law mandates consideration of the applicant's age to determine whether the employee is eligible for normal retirement benefits, and if not, whether, and to what extent, the employee will be credited with additional years of service for purposes of calculating his or her disability-retirement benefit.
The EEOC relies on the Supreme Court case, City of Los Angeles Department of Water & Power v. Manhart, 435 U.S. 702 (1991). In that case, the retirement plan at issue paid equal monthly retirement benefits to similarly situated men and women, but required female employees to make larger monthly contributions to the pension fund. The Court acknowledged that, in setting a higher contribution rate for female employees, the employer had not relied on stereotyped impressions of men or women. Rather, the employer had based its decision on a generalization the parties accepted as unquestionably true: women, as a class, do live longer than men. The Court held that the retirement plan facially violated Title VII of the 1964 Civil Rights Act, 42 U.S.C. 2000e et seq, ("Title VII") and as such, the employer's motive was irrelevant. In applying the ADEA to the facts of this case, the en banc court of appeals relied on Manhart and similar cases.
The ADEA and Title VII of the Civil Rights Act of 1964
Discrimination against employees on the basis of age is prohibited by the ADEA, while discrimination against employees on the basis of other characteristics is governed by Title VII. In instances of Title VII discrimination, a statute that facially violates the Act satisfies the plaintiff's burden of proof in establishing a prima facie case. In applying the same rule to this case, the en banc court interpreted the ADEA as substantively identical to Title VII in this regard.
Pointing to events leading to the inception of the ADEA, the defendants argue that the en banc court erred in interpreting the Act in accordance with Title VII. Congress considered including age as a protected class in the Civil Rights Act of 1964, but declined to do so because of concerns that employers might sometimes have a legitimate basis for making age-related employment decisions. In 1965 a study conducted by then-Secretary of Labor Willard Wirtz reported that, in contrast to discrimination based on race, ethnicity, or gender, discrimination against older employees arose not from dislike or intolerance, but from an unfounded assumption that they were less able to perform their job because of their age. The Secretary of Labor described this type of discrimination as "arbitrary" discrimination. . At Congress' request, Secretary Wirtz drafted legislation to address age discrimination in the workplace, which was enacted as the ADEA. The ADEA explicitly prohibits this sort of "arbitrary" discrimination.
The defendants argue that Congress intended the ADEA to meet a need separate and distinct from that addressed by Title VII. Whereas Congress explicitly intended Title VII to address an acknowledged dislike or intolerance of individuals because of their age or sex, here, the defendants argue that Congress intended only to protect older workers from unfair termination on the basis of unfounded stereotypes that they were no longer able to work effectively because of their age. Further, the defendants assert the sequence of events suggests that the term "arbitrary," undefined in the ADEA, should be interpreted in accordance with Secretary Wirtz' report. As such, the defendants argue that the KRS plan does not exhibit arbitrary discrimination, and instead uses age as only one factor in determining eligibility for normal retirement. As a result, the KRS plan does not facially violate the ADEA, and the en banc court erred in its interpretation.
In response, the EEOC explains that the ADEA incorporated the substantive meaning of Title VII in haec verba, or in verbatim. The EEOC relies on the Supreme Court case TWA v. Thurston, 469 U.S. 111, 121 (1985). In that case, the Supreme Court explained that because substantive provisions of the ADEA were derived exactly from the Civil Rights Act of 1964, an interpretation of Title VII that prohibits unequal provision of benefits applies with equal force in the context of age discrimination. Thus, the EEOC claims, the en banc court correctly applied the ADEA to the facts before them.
The Older Workers Benefit Plan and the ADEA
The EEOC also suggests that intervening events reflect that Congress expanded its understanding of the ADEA after its inception. In particular, it points to the Supreme Court case Public Employees Retirement System of Ohio v. Betts, 492 U.S. 158 (1989). . In that case, the Supreme Court found that a retirement plan materially indistinguishable from the KRS plan met a statutory exception to the ADEA. The EEOC asserts that the Supreme Court there found the retirement plan to facially violate the ADEA. The Betts court acknowledged that the trial court found the retirement plan facially violated the ADEA, and wrote, "[o]n its face, the [retirement] statutory scheme renders covered employees ineligible for disability retirement once they have reached age 60."
The defendants deny that this text means that the Supreme Court found a facial violation because the Court never explicitly states it. The EEOC counters by pointing out that the Court resolved the Betts decision on the basis of an affirmative defense, which become relevant only if the plaintiff has proven a prima facie case. Instead, the Court would simply have dismissed the case as the plaintiff has failed to prove that the defendant violated the ADEA.
The Betts case sheds light as well on the congressional intent behind the ADEA. Approximately 16 months after the Betts decision was handed down, Congress enacted the Older Workers Benefits Protection Act, amending the ADEA, 29 U.S.C. ?621 et seq. Congress drafted the amendment because they found that as a result of the Betts decision, "legislative action [was] necessary to restore the original congressional intent in passing and amending" the ADEA, "which was to prohibit discrimination against older employees in all employee benefits except when age-based reductions in employee benefit plans are justified by significant cost considerations." The EEOC characterizes this as evidence that Congress intended the ADEA to have a wider breadth than initially evidence by the Wirtz report. In turn,the defendants argue that Congress did not intend to broaden the scope of the ADEA, but only intended to clarify its intent to protect against age discrimination in the provision of benefits.
Concerns of Retirement Program Administrators
Several of the amicus curiae briefs demonstrate concern about the potential implications of the en banc court's ruling. See ; ; ; One organization points out that 25 million people currently rely on existing retirement plans. See e.g. at 4. Thus, a change in retirement eligibility or benefit amounts, or even damage awards for injured retirees, would result in exorbitantly large payments that may endanger the health of the retirement industry. Moreover, they urge the Court to adopt a conservative approach that will tend to leave the existing plans as they are.
A brief submitted on behalf of several states suggests that the en banc court's application of the ADEA upsets the appropriate balance of power between the federal and state governments. at 10. The states are concerned that the en banc court's ruling will force them to change their statutory and constitutional framework to comply with the new interpretation of the ADEA. Their concern appears largely influenced by a fear that they will not be able to consider age as a factor in providing retirement. While the EEOC does not directly address these concerns in its brief, it does emphasize that it does not challenge the use of age in providing retirement benefits. at 28. The EEOC argues only that Kentucky's provision of greater benefits to younger employees, and its' categorical exclusion of older employees from receiving disability-retirement benefits violates the ADEA.
Some organizations, which administer retirement programs to thousands of people, argue that if the Supreme Court affirms the en banc court's ruling, many states will have to adjust their statutory framework to comply. They suggest that some states may even have to alter their constitutions. The National Association of Counties, et al, pointed out that disability-retirement programs such as the KRS plan performed an important role in staffing much-needed hazardous positions. Thus, they explained, the en banc court's ruling frustrates the state in satisfying their legitimate interest in hiring such employees as firemen and police officers. The EEOC explained in its brief to the Court that it did not challenge the provision of disability-retirement benefits. Instead, it challenges only the provision of greater benefits to younger employees and the express exclusion of older employees from receiving disability-retirement benefits.
The outcome of this case hinges on the way in which the U.S. Supreme Court will interpret the Age Discrimination in Employment Act, 29 U.S.C. ? 621 et seq ("ADEA"), as amended by the Older Workers Benefits Protection Act, 29 U.S.C. ? 621 ("OWPBA"). In particular, the question presented depends entirely on what information the Court relies on in its interpretation. Canons of statutory construction permit a court to look to a statute's text, the legislative intent in enacting the law, or intervening events or change in perception of the statute's meaning and purpose. Here, the defendants and the Equal Employment Opportunity Commission ("EEOC") each present to the Court a different interpretation of the ADEA, each party pointing to different evidence in the Act's statutory history that supports their respective construction. How the Court addresses that history may potentially affect the more than 25 million people currently covered by existing retirement plans.
The Court of Appeals for the Sixth Circuit, sitting en banc, held that under the ADEA and the disparate treatment theory of discrimination, if the statute at issue facially discriminates against older employees, a plaintiff need not prove that the defendant acted with discriminatory animus. The defendants urge the Supreme Court to reverse this ruling. In addition to disputing that the policy facially discriminates against older employees, the defendants argue that the en banc court of appeals erred in interpreting the ADEA to be entirely consistent with Title VII of the Civil Rights Act of 1964, 42 U.S.C. ?1981 et seq. Pointing to the ADEA's separate and distinct origin, differences in congressional intent in passing the respective statutes, and undisputed dissimilarities between the nature of the age discrimination and discrimination based on other protected classes, such as race and sex, the defendants argue that the ADEA should not be applied to situations in which a legitimate purpose underlies the difference in treatment.
In contrast, the EEOC urges the Supreme Court to affirm the en banc court of appeals' ruling and apply the ADEA in a manner identical to Title VII. Pointing to the Supreme Court case, TWA v. Thurston, 469 U.S. 111, 121 (1985), the EEOC explains that the ADEA directly adopted the language and substantive meaning of Title VII, thus reflecting congressional intent that the statutes be applied similarly. Acknowledging that ADEA jurisprudence departs in some ways from that of Title VII jurisprudence, the EEOC nonetheless argues that the ADEA does not require that the plaintiff demonstrate that the defendant held a malevolent motive in discriminating against older employees. In addition, the EEOC points to intervening legislative acts that may have broadened the original scope of the ADEA.
Several organizations responsible for providing retirement benefits submitted briefs as amicus curiae on behalf of the defendants. Some organizations, which administer retirement programs to thousands of people, argue that if the Supreme Court affirms the en banc court's ruling, many states will have to adjust their statutory framework to comply. Some states, the briefs suggest, may even have to alter their constitutions. The National Association of Counties, et al, argued that disability-retirement programs such as the KRS plan performed an important role in staffing much-needed hazardous positions. Thus, they explained, the en banc court's ruling frustrates the state in satisfying their legitimate interest in hiring such employees as firemen and police officers. The EEOC explained in its brief to the Court that it did not challenge the provision of disability-retirement benefits. Instead, it challenges only the provision of greater benefits to younger employees and the express exclusion of older employees from receiving disability-retirement benefits.
The facts here present the U.S. Supreme Court with an opportunity to clarify the reach of the ADEA. This decision may reflect how the Court will approach statutory construction when the statutory history reflects a variety of meanings and understandings of an Act's scope. If the Court rules in favor of the EEOC, many states and even the federal government may have to reevaluate the structure of their retirement plans. If, on the other hand, the Court rules in favor of the defendants, employees across the nation may be denied disability-retirements merely on the basis of his or her age. If the Court finds in favor of the EEOC, the case will be remanded to the trial court to allow the defendants to assert affirmative defenses that their particular retirement scheme is exempted from the ADEA.
- Legal Definitions from Wex.
- E.E.O.C. v. Jefferson County Sheriff's Dept., et al, 424 F.3d 467 (6th Cir. 2005)(vacated on grant of rehearing en banc Jan. 4, 2006).
- E.E.O.C. v. Jefferson County Sheriff's Dept, at al, 467 F.3d 571 (6th Cir. 2006) (en banc).
- Brief for the Petitioners.
- Brief for the Respondents.
- Brief of the National Association of State Retirement Administrators, The National Conference on Public Employee Retirement Systems, and the National Council on Teacher Retirement as Amicus Curiae.
- Brief for the States of Michigan, Alaska, Arkansas, Colorado, Delaware, Idaho, Maryland, Minnesota, New Mexico, Oklahoma, South Carolina, Tennessee and Texas as Amicus Curiae.
- Brief of Amicus Curiae National School Boards Association.
- Brief for the National Association of Counties, Council of State Governments, National League of Cities, and International Municipal Lawyers Association.