The 8th U.S. Circuit Court of Appeals ruled that Windstream Communications Inc. did not run afoul of the Age Discrimination in Employment Act (ADEA) when it adopted a plan amendment stepping up pension benefits to younger workers but not changing benefits for older employees.The difference in benefit levels grew out of a difference in pension status and not from a deliberate attempt to short change certain employees because of their age, the 8th Circuit said in Schultz v. Windstream Communications, Inc.
As a result of the plan amendment seven of eight employees targeted in a round of layoffs who were somewhat younger than other laid-off employees, received full pensions while other, older employees received reduced pensions under the pre-amendment terms of the plan. The employer decided to change the plan so that eight laid-off employees who just missed the eligibility cutoffs under the plan would be eligible for the first early-retirement benefit each would have qualified for if they had been allowed to work for another 18 months.
Citing a U.S. Supreme Court case, the 8th Circuit ruled that an employee has to show that differential benefit treatment was, in fact, motivated by illegal treatment because of age and not a properly determined difference in benefits.
The ruling is here.