Age Before Beauty, Supreme Court Rules

Washington

In a victory for corporate insurance buyers, the U.S. Supreme Court has ruled that the Age Discrimination in Employment Act does not prevent employers from discriminating in favor of older workers.

In a 6-3 decision, the high court said that the text, purpose and history of ADEA show that it is not intended to stop an employer from favoring an older employee over a younger one.

The case was closely watched by business groups, who argued that allowing younger workers to file age discrimination claims would place many employee benefit plans in jeopardy.

Quentin Riegel, vice president for litigation with the Washington-based National Association of Manufacturers, said that employers would have been forced to revisit any number of benefit policies and likely would have begun to limit coverage for all employees to avoid a new type of liability.

In General Dynamics v. Cline, an employee in his 40s challenged a collective bargaining agreement between his employer, General Dynamics, and the United Auto Workers that eliminated the companys obligation to provide retiree health benefits except for then-current workers who were at least 50 years old.

The employee, Dennis Cline, argued that since he was at least 40 and thus protected by ADEA, the agreement to eliminate his retiree health benefits illegally discriminated against him. He filed a complaint with the Equal Employment Opportunity Commission, which agreed with him and which urged General Dynamics and the UAW to settle his claim. When they could not reach an agreement, Mr. Cline filed a lawsuit.

A U.S. District Court dismissed the complaint, stating that no court had ever granted relief for reverse age discrimination under ADEA. However, the 6th Circuit Court of Appeals reversed the lower court, reinstating the lawsuit. Citing the clear language of ADEA, the 6th Circuit said it is so clear on its face that the statute covers discrimination against any worker based on age, that if Congress had meant to limit its scope, it would have done so.

However, in an opinion written by Justice David Souter, the U.S. Supreme Court reversed the 6th Circuit and dismissed the action. In its decision, the court said that if Congress had been worried about protecting the younger against the older, it would likely not have ignored everyone under 40 by limiting the class of those protected by ADEA to those 40 and over.

The ADEA, the court said, is a remedy for unfair preference based on relative youth.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, February 27, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.

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Age Before Beauty, Supreme Court Rules

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