Supreme Court to Hear Reverse Age Bias Case

The U.S. Supreme Court agreed Monday to decide whether middle-aged employees can sue employers who adopt pay or benefit plans that favor older workers.

The case, to be heard in the fall, is the first claim of “reverse discrimination” in the area of age bias to reach the high court.

The outcome could rewrite the rules for pensions and health-care plans.

If the court says companies must follow exactly the same rules for all employees, employers could no longer offer special incentives to encourage older workers to retire, business lawyers said.

“This basically calls into question what employers have been doing,” said Ann Reesman, a Washington attorney who filed a friend-of-the-court brief on behalf of the U.S. Chamber of Commerce and the National Assn. of Manufacturers.

The groups urged the court to reject reverse discrimination claims by younger workers. They argue that the federal law against age bias was intended to protect older workers from discrimination.

“This would turn the law on its head,” Reesman said.

But lawyers for the younger workers point out that the age bias law protects people who are over age 40.

The Age Discrimination in Employment Act, or ADEA, of 1967 makes it illegal for employers to “discriminate against any individual with respect to his compensation, terms, conditions or privileges of employment because of such individual’s age.”

A pension or benefit plan that favors 60-year-olds over 40-year-olds is illegal because it discriminates against some individuals based on their age, advocates say.

The case arose when a division of General Dynamics Corp. moved to change its policy on providing health care for retired employees.

Before 1997, workers with more than 30 years of service could retire with full health benefits. But after 1997, only those employees who were at least 50 years old in 1997 could look forward to this benefit.

Those who were younger than 50 were not entitled to health benefits when they retired.

Dennis Cline and a group of workers who were between 40 and 49 sued for age discrimination. Last year, they won a key ruling in the U.S. 6th Circuit Court of Appeals in Cincinnati. In a 2-1 decision, the appeals court said the law forbids all age bias against protected workers, whether they are 40 or 65.

The General Dynamics plan discriminates by creating two classes of employees based solely on age, the court said.

But lawyers for the military contractor appealed to the Supreme Court, arguing that reverse discrimination claims are outside the law.

They noted that no other court has upheld reverse bias claims in this area.

The lower court’s “counterintuitive conclusion that the ADEA permits younger employees to challenge the beneficial treatment of older workers is nothing short of absurd,” argued Washington attorney William J. Kilberg, representing General Dynamics.

“In times of economic uncertainty, employers are faced with the need to scale back previously generous benefits programs. In many cases, the choice they face is between offering a retirement benefit only to some employees, or offering it to none.”

If the middle-aged workers win their claim, employers might opt to cancel benefits for all, Kilberg suggested.

“Perversely, those most injured by this interpretation will be the very group of older workers whose employment opportunities Congress sought to enhance by adopting the ADEA,” Kilberg said.

General Dynamics Land Systems makes tanks and other military vehicles at its plants in Lima, Ohio, and Scranton, Pa.

The court will rule on the case of General Dynamics vs. Cline early next year.