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About 200 employees of General Dynamics in Ohio and Pennsylvania sued their company after the company said in 1997 it would discontinue retirement health benefits to union workers younger than 50. Among them was Dennis Cline, a materials driver at the company's Land Systems tank plant in Lima, Ohio.
The age discrimination case springs from a dispute between defense contractor General Dynamics and the United Auto Workers eliminated the company's provision of health benefits to
subsequently retired employees, except for current workers who were at least 50 years old at the time of the amendment of the agreement. Employees who were over 40 years old, filed a claim with the Equal Employment Opportunity Commission (EEOC), alleging age discrimination in violation of the ADEA, and seeking protection under § 623(a)(1).
Among the groups that supported the company's position was the U.S. Chamber of Commerce, the National Association of Manufacturers, the AFL-CIO national labor federation and the Society for Human Resource Management. The federal Equal Employment Opportunity Commission had argued the law was "crystal clear" in protecting people over 40 from all discrimination, even when it favored the most senior workers.
Following the failure of settlement, Cline and others filed suit in federal court, which viewed the claim as one for "reverse age discrimination." The District Court dismissed the claim, but a divided panel of the Sixth Circuit reversed, reasoning that the prohibition of §623(a)(1), covering discrimination against "any individual ...because of such individual's age," supported the plaintiffs' cause of action.
The EEOC backed the workers, saying its own regulations prohibit such distinctions. At issue was Congress' intent when it passed the 1967 age discrimination law. The law refers to "age" in many contexts, including some that suggest that lawmakers were intent on age- neutral policies in all cases. Justice Souter rejected the EEOC's reading of the statute to permit a claim for "reverse discrimination," suggesting that deference to the agency's reading is suggested only where there is no clear sense of Congressional intent.
Feb. 25, 2004 -- the United States Supreme Court held a 6-3 ruling that the language of the Age Discrimination in Employment Act, and its purpose, history, and relationship to other federal statutes demonstrate that Congress' intent in enacting the law was to prohibit discriminatory preference of younger workers over older workers (within the protected class), but not to prevent an employer from favoring an older employee over a younger employee.
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The Supreme Court ruled that employers can give older workers better benefits than younger workers without committing age discrimination. Laws against age discrimination don't prohibit employers from rewarding older workers and retirees with enhanced benefits such as insurance policies, pension plans and buyout offers. The law protects older workers from preferential treatment for younger workers, but it does not protect the younger workers. The law "forbids discriminatory preference of the young over the old," Justice Souter wrote in the decision. "The question in this case is whether it also prohibits favoring the old over the young. We hold it does not." Justice Souter noted that discussion of the law at the time of passage centered on "unjustified assumptions about the effect of age on ability to work," and that nothing in the record indicates that Congress heard complaints from younger workers. The ADEA "was concerned to protect a relatively old worker from discrimination that works to the advantage of the relatively young," Souter wrote. "The enemy of 40 is 30, not 50."
"It's a very important decision that clarifies the definition of discrimination, and expands on what the court meant in some earlier opinions," said Lawrence Lorber, a partner at the Prosskauer, Rose law firm in Washington and a labor law expert. "The court is making it clear that the word 'age', in the context of age discrimination, means older age, not younger. It is discrimination if you do something that disfavors older workers, but not if you create packages that benefit them over younger ones." We're pleased with the court's interpretation," said Laurie McCann, senior lawyer for AARP, an advocacy group for senior citizens. "In this country, it's older workers who almost always get the shorter end of the stick."
The ruling means pension plans that draw age distinctions are permissible, as are benefits packages that "grandfather" in older employees. The decision also protects layoff plans that reward older employees more generously than younger ones. In a dissenting opinion, , Justices Scalia, Kennedy and Clarence Thomas, who previously was EEOC chair, said "the plain language' of the law prohibits any distinctions drawn by age "and clearly allows for suits brought by the relatively young when discriminated against in favor of the relatively old."
Justice Souter rejected the dissenting arguments of Justices Scalia, Kennedy and Thomas, stating that the term "age" must be given a general meaning, suggesting instead that the broad use of the term "age" in the ADEA, e.g., in the exceptional provision that age (like gender) could be a bona fide occupational qualification, did not imply a Congressional intent to assign a per se meaning to the use of the term. Recognizing the presumption of uniform usage of terms in the language of a statute, Justice Souter noted that Congress nevertheless often intends the assignment of different meanings to terms used in different parts of a statute, and the meaning assigned in the latter instances is a matter of context. "