KENTUCKY
RETIREMENT SYSTEM NOT DISCRIMINATORY:
Kentucky permits “hazardous
position” workers (for example, police officers and
firefighters) to receive normal retirement benefits after
working either 20 years or 5 years and attaining age 55,
and pays “disability retirement” benefits to
workers meeting specified requirements. Kentucky’s “plan” calculates
normal retirement benefits based on actual years of service.
The plan calculates disability benefits by adding to an
employee’s actual years of service the number of
years that the employee would have had to continue working
in order to become eligible for normal retirement benefits,
adding no more than the number of years the employee had
previously worked. A member, who continued working after
becoming eligible for retirement at age 55, became disabled
and retired at age 61. He filed an age discrimination complaint
with Equal Employment Opportunity Commission after the
plan based his pension on his actual years of service without
imputing any additional years. EEOC filed suit against
Kentucky, arguing that the plan failed to impute years
solely because the member became disabled after age 55.
The district court granted Kentucky summary judgment, holding
that EEOC could not establish age discrimination. However,
the Sixth U.S. Circuit Court of Appeals, in an en banc
decision, reversed on the ground that the plan violated
the Age Discrimination in Employment Act of 1967. Now,
the United States Supreme Court has reversed, holding that
Kentucky’s system does not discriminate against workers
who become disabled after becoming eligible for retirement.
The Court’s opinion in no way unsettles the rule
that a statute or policy that facially discriminates based
on age suffices to show disparate treatment under ADEA.
The Court is dealing with the quite special case of differential
treatment based on pension status, where pension status
-- with the explicit blessing of ADEA -- itself turns,
in part, on age. Further, the rule for dealing with this
sort of case is clear: where an employer adopts a pension
plan that includes age as a factor, and that employer then
treats employees differently based on pension status, a
plaintiff, to state a claim under ADEA, must adduce sufficient
evidence to show that the differential treatment was “actually
motivated” by age, not pension status. The decision
was 5-4, with an unusual combination of the Chief Justice,
and Justices Breyer, Stevens, Souter and Thomas making
up the majority. Kentucky Retirement Systems v. Equal Employment
Opportunity Commission, Case No. 06-1037 (U.S., June 19,
2008).
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