• LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Supreme Court protects age-related benefits

Get PDF file

by on
in Discrimination and Harassment,Employee Benefits Program,HR Management,Human Resources

Issue: A key new ruling says your organization can offer benefit packages designed specifically for older employees.

Benefit: More flexibility to set employee perks; eliminates the fear of "reverse" age discrimination lawsuits from younger workers.

Action: Cut costs by using this ruling as justification to restrict access (based on age) to retiree health benefits or buyout packages.

HR specialists won a big victory last month when the U.S. Supreme Court ruled that employers can legally offer more favorable benefits to older employees than to younger ones.

The ruling preserves employers' rights, for example, to offer retiree health benefits and early-retirement buyout packages to only those employees who reach a certain age, say 50 or 60. The court said employees in their 40s who are not old enough to claim such benefits cannot sue for "reverse" discrimination under federal age-bias law.

The case: A group of 200 General Dynamic employees in their 40s sued the company, citing reverse age discrimination because they couldn't receive retiree medical benefits available to other employees age 50 and older. A lower court had ruled in favor of the employees, but the Supreme Court overturned that ruling Feb. 24, effectively choking off such claims in the future. (General Dynamics Land Systems Inc. v. Cline, 02-1080)

The debate surrounded interpretation of the Age Discrimination in Employment Act (ADEA), which outlaws discrimination against employees age 40 and older "because of the individual's age."

In most cases, people file ADEA lawsuits when they feel a younger person has received preferential treatment. This case dealt with the reverse: Should 40-something employees be able to sue if an older employee is favored?

In a 6-3 decision, the Supreme Court said "No"; the ADEA is intended to protect older workers, not younger ones, even if the older workers were treated better.

Leave a Comment