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A fascinating case on the U.S. Supreme Court’s docket this term, scheduled for oral argument on Nov. 12, is Cline v. General Dynamics, No. 02-1080. The legal issue presented in Cline is comparatively straightforward: Does the age discrimination made illegal by the Age Discrimination in Employment Act (ADEA), 29 U.S.C. 621 et seq., include so-called reverse age discrimination against younger workers within the protected class (e.g., those 40-49) and in favor of older workers within the protected class (e.g., those 50 and older)? The social and policy issues Cline raises are considerably more complex. Both labor and business in their amici submissions oppose the legal viability of what they call reverse age discrimination claims-though for different reasons. The EEOC, on the other hand, has broken its traditional rank with labor, and supports the viability of such claims-at least at the stage of Fed. R. Civ. P. 12(b)(6) motions to dismiss. In 1982, General Dynamics Land Systems acquired three defense production facilities owned by Chrysler Corp., which employed approximately 7,500 workers at the time, including one in Lima, Ohio. The United Auto Workers (UAW) had a collective bargaining agreement with Chrysler covering the employees at the facilities, which General Dynamics apparently assumed at the time of the acquisition. Under that collective bargaining agreement, Chrysler, and then General Dynamics, agreed to provide full health benefits to retired workers who retired after accumulating 30 years of seniority. Shortly after acquiring the facilities, General Dynamics began demanding concessions from the UAW on the health benefits provided in the collective bargaining agreement, arguing that it was unable to bid competitively for defense contracts against other defense contractors not saddled with such obligations. In negotiations for the 1994-1997 collective bargaining agreement, General Dynamics demanded that health insurance for future retirees be ended entirely, and that active employees begin paying 20% of their health care premiums. Ultimately, following an eight-week strike, General Dynamics and the UAW agreed on keeping retiree health benefits and on a 10% co-pay for active employees through 1997. By 1997, however, with a prolonged recession in the defense industry, the bargaining unit had shrunk to only 500 employees, and the average retiree was receiving not only a monthly pension of $2,000, but also paid health care insurance valued at $700 per month. Once again, General Dynamics demanded the elimination of retiree health benefits. Fearing it could not replicate the success of the 1994 strike, the UAW decided to cut a deal with General Dynamics, and in a new collective bargaining agreement that went into effect on July 1, 1997, agreed that General Dynamics would no longer be required to provide future retirees with health benefits-unless the retiree had been 50 years of age or older on July 1, 1997. A class action to test theory Upon learning of this deal, several workers aged 40 to 49, including Dennis Cline, filed charges of age discrimination in violation of the ADEA with the Equal Employment Opportunity Commission (EEOC), which issued right-to-sue letters. Cline subsequently filed a class action on behalf of close to 200 General Dynamics employees, aged 40 to 49, who were no longer eligible for benefits, or who had retired before July 1, 1997, in order to preserve their full retiree health benefits. See Cline v. General Dynamics Land Systems Inc., 98 F. Supp. 2d 846 (N.D. Ohio 2000). In response to Cline’s complaint, General Dynamics moved to dismiss and argued that the ADEA does not forbid an employer from favoring older over younger workers in the provision of benefits as a matter of law. On March 10, 2000, the district court granted the motion, relying, among other things, on a 1992 decision, Hamilton v. Caterpillar Inc., 966 F.2d 1226 (7th Cir. 1992), in which the 7th U.S. Circuit Court of Appeals had rejected a reverse age discrimination challenge to an early retirement program for which certain employees aged 40 to 50 had not been eligible. See Cline, 98 F. Supp. 2d 846, 848 (N.D. Ohio 2000). Cline appealed. On July 22, 2002, the 6th Circuit reversed the district court, and found Cline’s reverse age discrimination theory legally viable, and thereby creating a split in the federal courts of appeals. Cline v. General Dynamics Land Systems, 296 F.3d 466 (6th Cir. 2002). The 6th Circuit found that under the plain language of the ADEA, employers are prohibited from defining the terms and benefits of “any individual’s” employment based solely on his or her age (see 29 U.S.C. 623(a)(1)), and that “any individual” is defined as “individuals who are at least 40 years of age.” 29 U.S.C. 631(a). The 6th Circuit dismissed out of hand the district court and 7th Circuit’s characterization of the claim as a legally untenable one of “reverse discrimination,” agreeing with the EEOC that such claims are legally viable: “Insofar as we are able to determine, the expression ‘reverse discrimination’ has no ascertainable meaning in the law. An action is either discriminatory or it is not discriminatory, and some discriminatory actions are prohibited by law. Presumably, what the district judge and others meant when they concluded that the ADEA does not prohibit ‘reverse discrimination’ is that otherwise prohibited discrimination is permitted if the victims are literally (statutorily) within the protected class, but are a group within the protected class who in most cases are the beneficiaries of discrimination against others. There is no basis for this conclusion. We are not aware of any legal doctrine permitting courts to redraft anti-discrimination statutes so that they better advance the court’s view of sound policy.” Id. at 471. The positions of the actual parties before the Supreme Court are predictable. General Dynamics has essentially argued that the term “age” as used in the ADEA is ambiguous, and that the text of the statute read as a whole, the legislative history of the act and prior Supreme Court interpretations of the ADEA as well, all require that “age” under the law be construed to mean advanced or old age, rather than chronological age, as the 6th Circuit found. Cline, on the other hand, has argued that the 6th Circuit got it right by rejecting General Dynamics’ reverse discrimination characterization-and that the plain, unqualified language of the statute should control. EEOC takes different view The EEOC’s position as amicus is more subtle. According to the agency, Congress chose in Title VII of the Civil Rights Act of 1964 not to outlaw discrimination based only on “female” sex or “African American” race, but rather discrimination based on “sex” and “race” generally, and the Supreme Court has thus found that the statute protects, for example, males as well as white Americans. See Oncale v. Sundowner Offshore Servs. Inc., 523 U.S. 75, 79-80 (1998); McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273 (1976). Similarly, in passing the ADEA (which it modeled on Title VII) Congress could have prohibited discrimination based only on “older” age, but chose not to do so. See Amicus Brief of EEOC filed Aug. 29, 2003, at pages 8-18. Rather, Congress prohibited discrimination based on age generally-so long as an individual was within the protected class of those 40 and older. In 1981, the EEOC interpreted this prohibition as preventing employers from taking into account age at all (subject to certain specific exceptions spelled out in the statute), when persons are within the 40-and-older protected class. See 29 C.F.R. 1625.2(a). This regulation, adopted following notice and comment, the EEOC argues, should be given Chevron deference. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). While a separate section of the ADEA, 29 U.S.C. 623(f)(2)(B)(i), may still allow employers such as General Dynamics to maintain “bona fide” benefits plans that provide greater benefits to older workers within the protected class, the burden should have been on General Dynamics to plead and prove this as an affirmative defense. The plaintiff’s complaint, however, stated a prima facie case. See Amicus Brief of EEOC, at 26-30. Labor disagrees, and, though the UAW was not a named defendant in the district court, echoes General Dynamics’ legal argument that reverse age discrimination claims should be found legally untenable in general. The UAW characterizes its policy position this way: “[A]ll workers-and not just the oldest workers . . . should be provided with retiree health benefits by their employers.” However, “employers and labor organizations should be, and are, free-under the ADEA-to negotiate health insurance plans that favor older workers.” See Amicus Brief of AFL-CIO and UAW filed July 7, 2003, at 2. In this case, for example, according to the UAW, “protecting the expectations of the older workers was a first priority” in its negotiations with General Dynamics because the “older workers” were most likely to be eligible for retirement under the contract, and “for a variety of reasons, including the applicable state labor laws and the Vietnam-era military draft, as of 1997 few workers would be able to meet the thirty year service requirement before age 50.” According to the UAW, if it had not bargained to preserve retiree health benefits for those aged 50 and older, such individuals would have been less likely to take early retirement (for which they became eligible at 55 when laid off for more than 60 days)-and thus, younger workers would have been disproportionately adversely affected by additional layoffs made in order of reverse seniority. See Amicus Brief of AFL-CIO and UAW filed July 7, 2003, at 16-17. The business view The legal argument of business, reflected in a joint amicus submission from, among others, the U.S. Chamber of Commerce, the National Association of Manufacturers and the American Benefits Council, echoes that of General Dynamics and labor. Its policy rationale, however, differs substantially. The costs of retiree health benefits and pension liabilities are, according to these groups, already high and still rising. Additional legal exposure associated with such plans will only raise their cost and increase employer incentives to eliminate such benefits entirely. See Amicus Brief of Equal Employment Advisory Council et al., filed July 7, 2003, at 21-22. They further pointed out that employers are already overburdened by laws and court decisions interpreting the ADEA and the Employee Retirement Income Security Act in ways that require them to treat older workers as favorably as younger workers. Legal recognition of reverse age discrimination claims, therefore, would make regulatory compliance that much more complicated-and only multiply opportunities for wasteful litigation. See Id. at 16-24. Though on the surface a straightforward case of statutory interpretation, a decision upholding the 6th Circuit’s decision in Cline could have negative implications for both business and labor. Business could face a host of lawsuits challenging a wide variety of common health and pension benefits arrangements. Labor, for its part, is doing whatever it can to preserve and fund health and pension packages for existing members and retirees without becoming even less attractive to youth-particularly in employment sectors such as health care and government, where labor has recently been more successful and insulation from foreign competition made unionization more financially rewarding to members. Exposing unions to potential liability for cutting deals that preserve retirement benefits selectively for older workers might leave unions with no choice but to go along with business and agree to the elimination of such benefits entirely. In Cline, intergenerational politics will soon come to the Supreme Court in the form of statutory interpretation. The complex politics of the case make predicting the decisions of justices otherwise customarily inclined to insist on strict adherence to the plain meaning of statutes-as well as justices customarily inclined to find ambiguities and to resort to legislative history-much more difficult. Suffice it to say, the Supreme Court’s opinion in Cline should make for some interesting reading in the very near future. Indeed, with the graying of society-and the high court-could youth as the next protected class be just around the corner? John H. Douglas is senior counsel to the San Francisco office of Foley & Lardner. He represents and advises management on labor and employment law issues.

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