[Cline v. General Dynamics Land Systems, Inc., 2002 U.S. App. LEXIS 14643 (6th Cir 2002)]

For a copy: http://pacer.ca6.uscourts.gov/cgi-bin/getopn.pl?OPINION=02a0242p.06

The employees in this case were between the ages of 40 and 49 when their employer and their labor union entered into a new collective bargaining agreement under which only employees who were age 50 or older as of the agreement's effective date were eligible for full health benefits on retirement. Under the previous collective bargaining agreement, such benefits were available to all retirees who had accumulated 30 years of seniority. The employees sued their employer under the federal Age Discrimination in Employment Act (ADEA), alleging that providing retiree health benefits solely to those over age 50 constituted illegal age discrimination. (The ADEA protects employees age 40 and over from discrimination on the basis of age, and accordingly, the employees were members of the ADEA's protected class.) The trial court dismissed the lawsuit, holding that the ADEA did not recognize claims for "reverse age discrimination" and reasoning that the ADEA was drafted to aid "older workers," not workers who suffer age discrimination because they are too young. (We reported on the trial court's decision in the 7/13/00 EBIA WEEKLY; see http://www.ebia.com/weekly/articles/2000/HIPAA000713Cline.html.)

In a 2-1 decision, the Sixth Circuit reversed the trial court, holding that the ADEA provided a cause of action for employees within its protected class who claim age discrimination because of their employer's more favorable treatment of older employees (also within the class). The appellate court rejected the argument that the ADEA protected only those workers who were both age 40 or older and relatively older than the "favored" employees with whom they were being compared. It found this conclusion to be contrary to the ADEA's plain language, which prohibited discrimination against any worker age 40 or older on the basis of age, without reference to whether the worker was relatively older than those who were treated more favorably. While the appellate court acknowledged that other courts had concluded that the ADEA did not provide a cause of action for "reverse discrimination," it criticized them for ignoring the ADEA's "direct and specific language." It also found these decisions to be contrary to the EEOC's ADEA regulations, which provide that it is unlawful for an employer to discriminate by "giving preference because of age between individuals 40 and over." Because the employees were members of the ADEA's protected class and had properly alleged that they were denied benefits due to age, the appellate court sent the case back for further proceedings.

EBIA Comment: The ADEA is one of several federal nondiscrimination statutes that affect employer-sponsored group health plans. (Other such laws include the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act, and the Pregnancy Discrimination Act (PDA).) Under these laws, employers may not discriminate against the protected group with respect to fringe benefits or other terms, conditions or privileges of employment. Accordingly, employers must take these laws into account when making plan design and plan amendment decisions. Note: Majority, concurring and dissenting opinions were issued in the case--interested readers may want to review them all. For a further discussion of the ADEA as it applies to group health plans, see EBIA's Group Health Plan Mandates manual at Section XIX ("Age Discrimination in Employment Act (ADEA)").

Contributing Editors: EBIA Staff.

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