Age bias: Does it apply to the young?

The Age Discrimination in Employment Act outlaws discrimination against employees because of their age.

Seems simple enough. But is it illegal when the employee being discriminated against is younger than the worker receiving the favored treatment?

Wednesday, the US Supreme Court takes up a major employment case examining whether the 1967 statute is intended exclusively to protect older workers, or whether it also authorizes so-called reverse-discrimination claims by younger workers.

The case holds important implications for many retirement benefit plans and early-retirement packages. To the extent that such plans offer increasingly generous benefit levels triggered solely by age, they could become the litigation targets of younger employees complaining about illegal disparate treatment.

At its essence, the case is a clash between those who insist on a strict reading of the text of the ADEA and those who say the law must be considered in the broader context of congressional intent.

The ADEA makes it illegal to discriminate because of age against any worker 40 or older. But the law's wording leaves open to dispute exactly what kind of discrimination lawmakers sought to bar. Does it only protect "older" workers, or does the law also cover workers older than 40 but younger than others receiving favored treatment because of their older age?

"The ADEA protects individuals from being discriminated against because they are too old, not because they are too young," says Donald Verrilli in his brief to the court on behalf of General Dynamics Land Systems, the petitioner in the case.

Mark Biggerman counters in his brief for a group of General Dynamics workers: "The plain language of the ADEA clearly and unambiguously provides that persons age forty and older may not be discriminated against because of their age."

The dispute stems from a class-action lawsuit filed by Dennis Cline and nearly 200 other employees at General Dynamics plants in Ohio and Pennsylvania. The plants produce Abrams tanks for the US military. In 1997, General Dynamics and the employees' union, the United Auto Workers, reached an agreement on a projected cutback in retirement benefits. Under the plan, all employees with 30 years of seniority who were age 50 or older by July 1, 1997, would continue to receive full health benefits upon retirement. Those younger than 50 would not.

At the time, Mr. Cline was 47 years old and had already put in 28 years at the plant. Suddenly, his retirement benefit disappeared.

In his suit, he charged that he'd been denied benefits solely because of his age in violation of the ADEA. A federal judge threw the suit out. But in a 2-to-1 vote, a panel of the Sixth US Circuit Court of Appeals reinstated the suit. "By the law's plain language, an employer may not discriminate against any worker age 40 or older on the basis of age," Circuit Judge James Ryan writes in the decision.

"If Congress wanted to limit the ADEA to protect only those workers who are relatively older, it clearly had the power and acuity to do so. It did not," Judge Ryan says. "Whatever the policy justifications for holding otherwise, we are bound by the plain language of the statute and have no occasion to look outside of the text."

Laurie McCann of AARP Foundation Litigation says the Sixth Circuit decision ignores Congress's clear intent in passing the ADEA. "They were concerned because about half the jobs had age limitations - no one over 35 need apply, no one over 45 need apply," she says.

Yet Ms. McCann, who filed a friend-of-the-court brief on behalf of neither side, says a reliance on seniority rather than age will not solve the issue. Higher levels of benefits are granted to older workers in recognition that they may need those greater resources at that point, she says.

The US solicitor general is supporting the employees' position in the suit, urging a strict reading of the law's text. "[General Dynamics] contends that the term 'age' in the ADEA actually means 'old age,' confining the reach of the ADEA to discrimination because of an individual's old age," writes Paul Clement in the government's brief. "But the original and most common meaning of 'age' is the length of time a person has lived, and that is the way Congress used the term throughout the ADEA."

General Dynamics has attracted an eclectic mix of friend-of-the-court briefs from labor unions, the US Chamber of Commerce, an employment retirement organization, and the National Education Association, among others. Many employee benefit programs will not survive if the Supreme Court upholds the Sixth Circuit ruling, says Robert Chanin in the NEA brief. "Rather than stemming from age-based animus or stereotypes, such differential allocation of benefits, in the areas of pensions, health care, severance pay, and the like, reflects the parties' attempt to target scarce resources to those employees who need them most," he writes.

Mr. Chanin adds, "Both law and society recognize the particular needs of older employees and the legitimacy of differential treatment based on advanced age."

The solicitor general's brief says that if the high court embraces its view of the law, the decision need not endanger all benefits granted at higher levels to older workers. The age-discrimination law provides affirmative defenses that allow firms to legally justify benefit programs aimed at meeting the specific needs of older workers.