While the Meacham decision increased the burdens on employers defending ADEA actions, the Court’s decision in Kentucky Retirement Systems reinforced a high standard for proving ADEA disparate treatment claims generally. Under that standard, the plaintiff must show that age “actually motivated” the employer’s employment decision. 

The State of Kentucky, like several other States, adopted a special retirement plan for government employees engaged in hazardous work, such as firefighters and police officers.  Such workers can receive retirement benefits in one of two ways: by working for 20 years, or by working for five years and attaining the age of 55. The benefits are calculated in part on the number of years actually worked, so benefits increase with additional service. At issue in this case was a provision that automatically confers these retirement benefits if a worker becomes disabled but is not yet retired.  Under that provision, benefits are based on the imputed number of years that the worker would have worked until reaching retirement, if not for the disability. For example, a 48-year-old worker who becomes disabled after 17 years of service would have three additional years imputed to reach the 20 years necessary for retirement. However, a 54-year-old worker with 17 years of service would have only one year imputed, since that worker is one year away from the retirement age of 55. As a result, the disability benefits for the younger worker would be based on 20 imputed years of service, while the older worker’s benefits would be based on only 18 imputed years. 

In this case, a 61-year-old law enforcement officer became disabled, but because he was already eligible for retirement, he received no additional imputed years of service. He sued for age discrimination, alleging that a younger worker in his position would have received additional benefits. The question in the case was whether disparate treatment under a retirement plan like this one is actionable under the ADEA.

The Court decided the case 5-4 in favor of the employer—in a vote that did not break down along what many regard as the traditional liberal/conservative line.  Writing for the majority, Justice Breyer (joined by Chief Justice Roberts and Justices Stevens, Souter, and Thomas) explained that the plan in this case conferred retirement benefits based on pension status, which the Court found to be “analytically distinct” from age. In fact, Congress specifically permitted employers to take age into account when designing pension plans.  Furthermore, the State had a “clear non-age rationale for the disparity here,” which was to treat non-retired disabled workers as if they had reached retirement status. Finally, the court also pointed out that this same system could work to the advantage of older workers in some circumstances.  Justices Kennedy, Scalia, Ginsburg, and Alito dissented, opining that employees need only demonstrate a “facially discriminatory policy” without needing to show “additional proof of a less-than-benign motive.”

This case is good news for employers. It demonstrates that the Court takes seriously its precedent and the statutory language limiting claims under the ADEA to situations where age was actually a motivating factor behind the employment decision. Thus a non-age-based policy that may coincide with age will not likely be enough to show discrimination.