Early Retirement Incentive Program Did not Violate ADEA

Citing previous court cases, the appellate court rejected the officers’ argument that they could not waive their rights under the ADEA. In addition, the court found the plan was not discriminatory because the officers did not prove that age motivated the city’s decisions, and even if it did, the plan would be allowed under the ADEA’s safe harbor provisions.

According to the court opinion, the retirement plan at issue, the Deferred Retirement Option Program (DROP), is a voluntary early retirement program by which a police officer who elects to participate can earn early retirement benefits while continuing to work and draw a regular salary. However, in order to participate in these additional benefits, an officer has to submit an irrevocable letter of resignation to take effect at the termination of the DROP period for that employee and execute an “Acknowledgment, Waiver And Release Agreement” releasing all claims against the city pertaining to the program and its benefits.

The officers argued that an employee cannot waive his or her rights under the ADEA, and that this view is reinforced by the passage of the Lilly Ledbetter Fair Pay Act. The court found the Lilly Ledbetter Fair Pay Act inapplicable in the case.

The court’s opinion is here .