Compliance February 24, 2004

High Court: Favoring Older Workers Not ADEA Violation

February 24, 2004 (PLANSPONSOR.com) - US Supreme Court justices have ruled that a 1967 law prohibiting companies from discriminating against workers over 40 fails to shield the same employees when employers favor older colleagues.

Reported by

Fred Schneyer

In throwing out a lower court ruling, the justices said in a split six to three decision that the Age Discrimination in Employment Act (ADEA) is meant to protect workers from companies favoring younger colleagues but not the reverse, the Associated Press reported.

Hiring managers had been following the case with great interest since about 70 million US workers – roughly half the nation’s workforce – are 40 or older. If justices had swung the other way, employers could have been laid bare to lawsuits from 40-something or 50-something employees, when the employer offered attractive retirement packages to workers in their 60s.

The Bush administration unsuccessfully argued that the law was “crystal clear” in protecting people over 40 from discrimination, even when contested actions help more senior co-workers.

The decision blocks a lawsuit over a benefits change that helped older workers at a division of General Dynamics Corp., which makes battle tanks and combat vehicles for the military (See Supremes Begin Hearing Reverse Age Discrimination Case ). General Dynamics had maintained that Congress intended to protect “older” employees.About 200 General Dynamic workers in Ohio and Pennsylvania had sued, claiming they were discriminated against because they were too young to get benefits being offered to older colleagues.

Justice David Souter, writing for the majority, agreed with General Dynamics. “The statute does not mean to stop an employer from favoring an older employee over a younger one,” he wrote. The law clearly “forbids discriminatory preference of the young over the old,” Souter wrote. “The question in this case is whether it also prohibits favoring the old over the young. We hold it does not.”

But in a dissent, Justice Clarence Thomas complained “this should have been an easy case.” The law, he said, “clearly allows for suits brought by the relatively young when discriminated against in favor of the relatively old.”Also in dissent were Justices Antonin Scalia and Anthony Kennedy.