The United States Supreme Court recently heard argument on the issue of whether an employer can discriminate against younger employees over the age of 40 in favor of older employees, also over the age of 40, since both are protected by the Age Discrimination in Employment Act (ADEA). This decision should be watched closely by all employers.
What was the alleged discriminatory act?
General Dynamics Land Systems, Inc., and the United Auto Workers entered into a new collective bargaining agreement that provided that only current employees who were over the age of 50 on the date the agreement was signed would be entitled to receive full medical benefits upon their retirement, provided they had accumulated 30 years of seniority. The previous collective bargaining agreement had provided for health benefits to any retiree who had accumulated thirty years of seniority. General Dynamics was then sued by 196 union employees who were over the age of 40, but under the age of 50, when the contract took effect. These employees claimed that the new agreement discriminated against them because of their younger age. The workers argued that they were being discriminated against based on their ages because they were being treated differently than those workers over the age of 50.
Federal district court holds no discrimination
The district court held that the ADEA does not allow for lawsuits by employees who claim age discrimination because they were too young, regardless of whether they were over the age of 40. Rather, the judge said age discrimination claims could be filed only by those who claim discrimination because they were "too old".
Appellate court says ‘not so fast'
The 196 plaintiffs then appealed the decision to the Appellate Court located in Cincinnati. That court began its review of the case by looking at the plain and unambiguous language of the ADEA which states: "It shall be unlawful for an employer . . . to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment because of such individual's age." The ADEA defines "any individual" as those "individuals who are at least forty years of age".
The Appellate Court then held that the ADEA does not simply prohibit discrimination against workers who are "older" than employees receiving favorable treatment. Rather, any employee over the age of 40 must be protected from discrimination regardless of whether favoritism is shown to another person who is younger, or older, than the person being discriminated against.
The court also noted regulations from the U.S. Equal Employment Opportunity Commission that state:
It is unlawful . . . for an employer to discriminate in hiring or in any other way by giving preference because of age between individuals 40 and over. Thus, if two people apply for the same position, and one is 42 and the other 52, the employee may not lawfully turn down either one on the basis of age, but must make such decision on the basis of some other factor.
The court noted that Congress could easily have limited protection to those employees who were "relatively older" than those who received preferential treatment. Since Congress had not done so, the court stated that it was improper for any court to limit the broad scope of the ADEA.
So what happens now?
General Dynamics appealed this decision claiming that the ADEA only protects older workers from age discrimination. Therefore, the company argued that the lawsuit by the 196 younger workers should have been dismissed. On November 12, 2003 the case was argued before the United States Supreme Court. The Court's final decision of the United States Supreme Court should be announced early next year and will be discussed in a subsequent issue of this newsletter. The result will be a very important consideration for employers, especially when contemplating retirement plans and collective bargaining agreements. Stay tuned!
Reprinted with permission of publisher. First appeared in Connecticut Employment Law Letter (January 2004). For subscription information, call (800)274-6774.