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A few years ago, I attended an employment law seminar at which a judge observed that the participants should pay particular attention to age discrimination claims because the Age Discrimination in Employment Act is the only statute that would cover everyone in the room, sooner or later. While last week’s Supreme Court decision in General Dynamics Land Systems v. Cline doesn’t change the fundamental coverage of the ADEA — that persons over the age of 40 are covered by the act — the Court held that those of us who have just turned 40 are not protected by the act if discriminated against in favor of older workers. In 1997, Dennis Cline and almost 200 co-workers brought suit against General Dynamics based on a recently enacted provision in the collective bargaining agreement between the company and the United Auto Workers that eliminated General Dynamic’s obligation to provide health benefits to employees under the age of 50 who retired from the company. Previously, the company had paid benefits to all retirees who had worked for 30 years, regardless of their age at retirement. Cline and his co-workers claimed that the agreement discriminated against them on the basis of their age, as it penalized them for their youth (between the ages of 40 and 49) and illegally favored those employees 50 years of age or older. The ADEA, they pointed out, prohibits discrimination against “any individual because of such individual’s age.” The act, on its face, does not distinguish between “age” as being old or young. The district court rejected Cline’s claim of what it called “reverse age discrimination,” but the 6th Circuit looked at the plain language of the statute and the EEOC’s interpretive guidance and reversed the district court’s decision. The Supreme Court, in a 6-3 decision, found that the natural reading of the ADEA makes clear that the act’s purpose is to eliminate favoritism toward the young. As the Court observed, the “enemy of 40 is 30, not 50.” This is supported by the preface to the act, which discusses impediments suffered by “older workers” and the Congressional debate prior to the ADEA’s enactment, which quite clearly was concerned with discrimination against older workers, not in favor of them. The Court further looked to what it called “common experience” in finding that society tends to favor youth and that older workers are in need of protection via the ADEA. Finally, the majority found that federal court decisions have been virtually unanimous in rejecting the application of the ADEA to younger employees. The three dissenting judges (Thomas and Kennedy, and a separate dissent by Scalia) found that the plain language of the statute does not limit age discrimination to older workers, but, as noted, prohibits discrimination “because of such individual’s age.” “Age” in this context is a neutral term. Furthermore, the EEOC has interpreted the act to apply to any discrimination on the basis of age, so long as the plaintiff is over 40, regardless of whether the favored employee is older or younger. Scalia, in particular, found that the EEOC’s interpretation is “neither foreclosed by the statute nor unreasonable” and should be applied. The majority brushed aside the EEOC’s views as “clearly wrong.” The dissent also noted that one of the principle sponsors of the ADEA, Texas Democratic Sen. Ralph Yarborough, said that the act “prohibits age being a factor in the decision to hire, as to one age over the other, whichever way the decision went.” This would indicate that it was Congress’s intention that the ADEA cover age discrimination of employees over 40, regardless of whether the favored employee was older or younger. Both the majority and dissent noted that Yarborough’s comment was the only one on point to this specific issue. Furthermore, Yarborough’s views were noted by the majority to have previously carried weight with the Court. However, in this case, his comment was called an “outlying statement” which “is not enough to unsettle our reading of the statute.” The decision seems in parts to be based more in common sense than in strict statutory interpretation. The majority diminishes its well-settled reliance on the plain language of the statute in favor of placing the act in context. It is as if the Court said “we all know what this means” although Congress may not have been as clear as it should have been. It should be noted that the Supreme Courts of New Jersey and Oregon have interpreted their respective state anti-discrimination laws to apply to decisions based on age, regardless of whether the disfavored employee is older or younger than the person chosen or retained. Commentators have already split on whether the ruling aids older employees (in allowing discrimination in their favor) or hurts at least the younger segment of the over-40 work population, as they can be disfavored in relation to even older employees. As a practical matter, the decision will allow employers to make health benefits available to certain employees or retirees, but not others based on age, so long as such decisions give greater benefits to the oldest segment of the employee/retiree population. It also preserves the defense in age discrimination cases where an older employee replaces a younger (albeit over-40) one in the workplace. Had the Court found the other way, employees over the age of 40, replaced by even older employees, would have been able to sue for age discrimination, claiming that they were disfavored because of their youth. Sidney R. Steinberg is a shareholder in the business law and litigation department of Post & Schell, (www.postschell.com). He concentrates his national litigation and consulting practice in the field of employment and employee relations law and may be reached at [email protected].

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