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U.S. Supreme Court Rules Age As Factor in Disability Benefits May Not Violate ADEA

June 30, 2008

A disability system that uses age as one of many factors in determining benefits does not violate the ADEA unless age “actually motivates” any disparate treatment, the U.S. Supreme Court has ruled. The plaintiff worked in a sheriff’s department and chose to continue working after he reached retirement age. At age 61, he was injured on the job and retired, receiving full retirement benefits.

When he learned that younger workers injured in the line of duty could get credit for additional years of service when calculating their retirement benefits, he sued for age discrimination.

The county had a complex retirement benefits formula for “hazardous duty” workers who are injured on the job. To ensure they are taken care of, the county’s policy provides those who have not yet reached retirement age with credit for enough additional years of service to ensure they get full benefits.

The U.S. Supreme Court determined that the disparate treatment that occurred in this case was motivated by pension status rather than age, and therefore did not violate the ADEA.

“There is a clear non-age-related rationale for the disparity here at issue,” the Court said in an opinion written by Justice Stephen Breyer. “It is obvious that the whole purpose of the disability rules is … to treat a disabled worker as though he had become disabled after, rather than before, he had become eligible for normal retirement benefits.”

The court noted that the system “does not rely on any of the sorts of stereotypical assumptions that the ADEA sought to eradicate” such as “the work capacity of older workers relative to younger workers.”

Because the goal of the formula was to ensure younger workers injured on the job qualified for a normal pension, the Court ruled that it was not discriminatory.

“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 disparate treatment claim under the ADEA, must adduce sufficient evidence to show that the differential treatment was ‘actually motivated’ by age, not pension status,” it concluded.

U.S. Supreme Court. Kentucky Retirement Systems v. EEOC, No.06- 1037. June 19, 2008. Lawyers USA No. 99310154.

Originally published by Lawyers USA Staff.

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