Does ADEA Protect "Younger" Employees?
 
October 7, 2002
 
Christopher R. "Chris" Nolan- New York

Many employers offer benefits that are available only to employees over a certain minimum age, such as early retirement packages or other retirement benefits. The Age Discrimination in Employment Act, however, bars employers from discriminating against employees who are older than 40 because of their age. Does a benefit plan granting benefits only to those employees older than a certain minimum age (say 55) illegally discriminate against employees aged 40 to 54?
 

Until recently, all of the federal appellate courts that have considered this issue have said “no,” reasoning that “the ADEA ‘does not protect the young as well as the old, or even, we think, the younger against the older.’” However, the United States Court of Appeals for the Sixth Circuit (covering Kentucky, Michigan, Ohio, Tennessee) recently disagreed. It ruled in Cline v. General Dynamics Land Systems, Inc., that the ADEA allows employees over the age of 40 to base age discrimination claims on the argument that the employer treated older employees better.
 

Background Facts

Prior to 1997, General Dynamics provided full health benefits to retired workers who had accumulated 30 years of seniority. Effective July 1, 1997, General Dynamics entered a new collective bargaining agreement that did not provide full health benefits to retirees, with one exception. Retirees who turned 50 on or before July 1, 1997, remained eligible to receive full health benefits upon retirement.
 

A group of General Dynamics retirees and employees aged 40 to 49 as of July 1, 1997, sued, claiming that the new retirement benefits policy discriminated against them because of their age. The district court dismissed the suit, reasoning that such “reverse discrimination” (younger employees claiming that the employer favored older employers) does not violate the ADEA. It reasoned that the ADEA was intended to protect “older workers,” not those who suffer discrimination because they are too young.
 

The Sixth Circuit disagreed. It reasoned that, because the ADEA forbids employers from discriminating against “any individual” because of his or her age, and “any individual” means “those individuals who are at least 40 years of age,” the ADEA protects all workers over 40 from age discrimination – even if the employer favors even older workers. The court found further support for its conclusion in an example the EEOC used to explain its ADEA regulations. This example states that “if two people apply for the same position and one is 42 and the other is 52, the employer may not lawfully turn down either on the basis of age, but must make such decision on the basis of some other factor.” Finally, the court recognized that even though there are good arguments against finding that reverse age discrimination violates the ADEA, it could not rewrite the statute: “[i]f Congress wanted to limit the ADEA to protect only those workers who are relatively older, it clearly had the power and acuity to do so. It did not.”
 

What Does This Mean?
 

The Sixth Circuit’s decision in Cline may have been influenced by the unique circumstances that were particularly unfair to employees aged 40 to 49. Under most age-related policies, such as early retirement plans, younger employees have an opportunity to work until the stated age and receive the benefit. In Cline, however, General Dynamics hit employees age 40 to 49 with a double whammy. Employees could have reached 30 years of seniority without reaching age 50 prior to the policy change and thus qualified for full retiree health benefits under the old rule. Under the new rule, however, they not only lost the health benefits, but had no opportunity to qualify under the 50-year age minimum. Nonetheless, the Sixth Circuit’s reasoning is not limited to the unique facts. As a result, the Cline decision potentially allows employees in the Sixth Circuit to challenge all employment policies under which age is a determining factor, even if older employees are treated better.
 

The only hope for employers in the Sixth Circuit is if the U.S. Supreme Court decides to hear the case. That is a distinct possibility. All the other federal circuit courts to address this issue (the First, Second and Seventh) have refused to allow reverse age discrimination claims, ruling that the ADEA does not protect younger employers against older employers. In contrast, only federal district courts in Mississippi and Pennsylvania had accepted such claims prior to General Dynamics.
 

Employers also should be aware that certain states have been more receptive to reverse age discrimination suits than have the federal courts. Numerous states, (including Florida, Maryland, Minnesota, New Jersey, New York, Ohio and Virginia, for example), do not limit age discrimination protection to employees over 40. In total, more than a third of the states have age discrimination laws that protect either all employees or all employees over the age of 18. In several states, courts have approved reverse age discrimination suits such as the one the Sixth Circuit approved in Cline.
 

Employers should be mindful that discrimination based on age, whether it be toward younger members of the protected class or young workers in general, may leave them open to liability under the ADEA or broader state anti-discrimination statutes.
 

For more information, contact Christopher R. Nolan, toll free at 888-688-8500, or via e-mail at chrnolan@hklaw.com.