Compliance August 30, 2005

Appeals Court Declares Des Moines Early Retirement Plan Discriminatory

August 30, 2005 (PLANSPONSOR.com) - The Des Moines Public School system's early retirement plan discriminated against older employees because it barred those 65 years old and older from participating, an appellate court ruled.
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In that ruling on Monday, the US 8 th Circuit Court of Appeals sided with Chief US District Judge Ronald Longstaff of the US District Court for the Southern District of Iowa that the Des Moines system violated federal age discrimination protections, the Associated Press reported.

Rules enacted in 2001 said eligible teachers could get their unused sick leave paid in a lump sump, but only if they were 55 to 65 years old.

”Arbitrary age discrimination occurs when an employer denies or reduces benefits based solely on an employee’s age,” wrote Circuit Judge Theodore McMillian , for the appellate court, holding that the school district’s actions violated the federal Age Discrimination in Employment Act (ADEA).

Plaintiff Robert Jankovitz, 77, ofDes Moines, challenged the plan in 2003, claiming it violated both federal and state employment protections. Five additional plaintiffs joined the lawsuit after the district court denied Jankovitz’s attempt to have the lawsuit declared a class action. Jankovitz’s sick leave payment would have been $112,200.

”When the district changed the plan, they did not give the plaintiffs a chance to participate,” said Jim Sayre, the teachers’ attorney. ”The only reason they did not have an opportunity to participate was because they were 65 or older.”

As a next step, the district’s attorneys could ask for a full-court 8th Circuit review or appeal to the US Supreme Court.

The appellate court opinion is  here .

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