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The Supreme Court said Monday it will decide when companies can be punished for treating older workers better than their slightly younger colleagues, a type of reverse discrimination. The case, to be reviewed in the fall, could open up companies to many more lawsuits from middle-aged workers, in their 40s or 50s. Justices were asked to define the bounds of a federal law that protects people over age 40 from being discriminated against based on their age. The 1967 law covers about 70 million workers, nearly half the work force. Business groups argue that if the court allows it, companies can be sued for giving better benefits to older workers who are retiring or are being laid off. General Dynamics Corp., which filed the appeal, said that Congress intended to protect “older” employees. To allow lawsuits challenging the good treatment of those workers would “undermine the very protections and opportunities that Congress sought to secure,” attorney William Kilberg told justices in a filing. At issue is retirement benefits offered to employees of a General Dynamics division which makes battle tanks and combat vehicles for the military. Workers employed at plants in Lima, Ohio, and Scranton, Pa., sued, claiming that the benefits were more generous to older workers. Under a 1997 contract change, only workers over age 50 could receive full health benefits after they retired. Mark Biggerman, the attorney for about 200 General Dynamics employees, said the workers in their 40s were victims of age discrimination and should be protected by the law. An appeals court had said the workers could sue under the federal Age Discrimination in Employment Act. The case is General Dynamics Land Systems Inc. v. Cline, 02-1080. The court agreed to hear the case on the same day that it heard arguments in a sex discrimination case that asks the justices to clarify what proof workers who claim sexual discrimination must produce. The case involves a woman who drove trucks for Caesars Palace before she was fired. Separately, the Supreme Court said Monday that it would decide whether the government had grounds to pursue a pay telephone company founder for investment fraud. The Securities and Exchange Commission argued that Charles E. Edwards engaged in widespread fraud, raising more than $300 million from at least 10,000 investors in 38 states without divulging that the company was losing money. The SEC called it a “massive Ponzi scheme.” The SEC sued ETS Payphones Inc. and Edwards, winning a preliminary injunction. But an appeals court agreed with Edwards that the pay phone contracts do not qualify as security transactions under federal law. The case began after Georgia-based ETS filed for bankruptcy. Edwards started the company in 1994. Investors would pay nearly $7,000 for a pay telephone, and ETS would lease back the phone. Solicitor General Theodore Olson warned of “a serious gap in investor protection” if the SEC is not allowed to prosecute the case and others like it. The case is Securities and Exchange Commission v. Edwards, 02-1196. Copyright 2003 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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