"Reverse" Age Discrimination:
Are "Younger" Employees Protected?
By Tim Webb

In enacting the Age Discrimination in Employment Act of 1974 ("adea"), Congress stated that such legislation was necessary to protect "older persons" whom, it found, had been disadvantaged "relative to the younger ages" in employment.1 Congress defined "older persons" as those workers who are at least 40 years old and prohibited discrimination against any such individual "because of such individual's age."2

Common sense might tell us that the ADEA was meant to protect older workers from being treated less favorably than relatively younger workers.3 After all, if the ADEA was meant to protect younger workers as well as older workers in the same way that Title vii protects men as well as women, then limiting the protected class to those 40 and older would make little sense. However, the ADEA does not specifically limit age discrimination to situations where a worker, who is at least 40 years old, is being treated less favorably than a comparatively younger worker. So, what happens when a 42-year-old claims that older workers are receiving preferential treatment?

REVERSE DISCRIMINATION?

Most courts facing this issue have followed the more conventional approach to age discrimination, holding that the ADEA is meant to protect older workers from being treated less favorably than comparatively younger workers.4 But last year, in General Dynamics Land Systems v. Cline,5 the 6th Circuit Court of Appeals decided that a comparatively younger worker can bring a lawsuit against an employer for extending benefits to older workers without giving the same benefits to workers who are younger but still within the ADEA's protected class of 40 years old or older.

The case arose when General Dynamics amended its agreement with the United Auto Workers to limit retiree health benefits to those workers who were at least 50 years old at the time of the amendment. A class of workers aged 40 to 49 sued General Dynamics under the ADEA, claiming that giving health benefits to only the oldest workers constituted age discrimination in violation of the ADEA.

The district court dismissed the plaintiffs' complaint, reasoning that such "reverse" age discrimination does not violate the ADEA, which was intended to protect "older workers" -- not those who suffer discrimination because they are too young.6 But the 6th Circuit reversed the district court, holding that such a scheme did violate the ADEA. It reasoned that the plain language of the ADEA prohibits employers from discriminating against "any" individuals who are older that 40 years old, because of their age.7 The 6th Circuit thus became the first federal circuit court to hold that plaintiffs may sue for "reverse" age discrimination under the ADEA.

Two other federal circuits have held that the ADEA does not prohibit employers from giving more favorable treatment to older workers. The 7th Circuit addressed a situation involving an employer's early retirement benefits. The employer, Caterpillar, Inc., offered early retirement benefits to workers who were at least 50 with ten years of service.8 A group of former employees between the ages of 40 and 50 years of age who had at least ten years of service sued Caterpillar for reverse age discrimination because they were too young to qualify for the benefits.9 In rejecting the plaintiffs' claim, the 7th Circuit ruled that the plain language of the ADEA does not support a claim for reverse age discrimination because Congress enacted the ADEA based on its concern "that older people were being cast aside on the basis of inaccurate stereotypes about their abilities. The young ... cannot argue that they are similarly victimized."10

The 1st Circuit addressed a situation involving an employer's severance plan. The employer, Polaroid Corp., created a company-wide reorganization designed to help reverse a trend of declining profits. In order to reduce its workforce, Polaroid created a severance plan. The severance plan gave greater benefits to workers with more seniority.11 The plaintiff, a 57-year-old worker, was encouraged by his supervisor to take advantage of the generous severance package rather than stay on with Polaroid in another position. The 1st Circuit held that, to the extent his claim was based upon the premise that such a plan violated the ADEA by inducing him to resign, the ADEA "does not forbid treating older persons more generously than others."12

A third federal circuit has expressed doubt that the ADEA protects reverse discrimination in another case involving an employer's severance plan. In Stone v. Travelers Corp.,13 the employer created a severance plan under which only employees over the age of 55 were permitted to receive their benefits as a lifetime annuity. A 52-year-old claimed discrimination because he was denied an annuity because he was too young. While the 9th Circuit did not reach the issue of whether such reverse discrimination violates the ADEA, the court expressed its skepticism, exclaiming in apparent disbelief, "Stone claims that Travelers violated the ADEA by discriminating against him because he was too young!"14The Cline case is now being considered by the Supreme Court, which will hear arguments in November 2003. The Court's ruling could affect the way in which employers allocate retirement benefits, as well as determining if the ADEA prohibits "reverse" age discrimination generally.

IMPLICATIONS OF CLINE

Will Retirement Benefits Change? If the Supreme Court rules that workers are able to sue under the ADEA for "reverse" age discrimination, a wide range of employee benefits may be affected. Many employers offer early retirement or other retirement benefits to workers over a certain age (e.g., 55 years old). Employees may now be forced to either provide the same benefits to all workers over 40 or abandon these benefits. Such a result may force employers either to abandon all age-related benefits or to provide "watered down" retirement-related benefits to all workers who fall within the ADEA's protected class.

More Difficulty Defending? If the Supreme Court affirms the 6th Circuit's decision in Cline, it would expand the scope of viable claims under the ADEA and employers would likely face more lawsuits. Every employment transaction involving someone 40 years old or older would be the potential subject of a discrimination claim. For example, anyone 40 or older who was passed over for a job opening or promotion would need only show that the successful candidate was either substantially younger or older in order to assert a prima facie claim of age discrimination. This would put the burden on the employer to articulate a legitimate, nondiscriminatory reason for its decision.15

Traditional ADEA lawsuits would also become more difficult to defend or settle. For example, imagine an ADEA claim brought by a 55-year-old worker claiming he is treated less favorably than a similarly situated 45-year-old worker.

To defend such a lawsuit, the employer would typically want to show that the older worker was actually treated more favorably than the younger worker. While such a defense would certainly defeat this ADEA claim, it would conclusively establish a claim by the younger, 45-year-old worker that the employer violated the ADEA. Thus, the employer would have to thoughtfully establish that it does not give preferential treatment to any age group within the ADEA's protected class of 40 and older.

To settle such a suit the employer might typically offer to increase the wages or benefits of the 55-year-old plaintiff. If the Supreme Court ratifies "reverse" age discrimination claims, however, the employer must carefully consider the wages and benefits received by those both older and younger than the plaintiff, or the company may face lawsuits from those substantially older or younger than the settling plaintiff.

Will Congress Work a Legislative Fix? Another possibility, alluded to by the 6th Circuit in Cline, is that Congress may amend the ADEA in order to clarify its intent. In other words, Congress may specifically limit actions under the ADEA to those instances that involve discrimination against "relatively older" workers. After all, in enacting the ADEA, Congress did not make legislative findings that workers over 40 were disadvantaged as compared to relatively older workers.

Does the MHRA Protect Younger Employees? Given the uncertainty of "reverse" age discrimination under the federal ADEA, a Minnesota practitioner might look to case law under the state's Minnesota Human Rights Act (" MHRA") for guidance. Unfortunately, the law is unclear at the state level as well. The Minnesota Supreme Court generally has found "interpretations of federal anti-discrimination statutes useful to guide our interpretation of the MHRA when the MHRA provisions in question are similar to provisions of the federal statutes."16 So one might argue that Minnesota courts interpreting the MHRA should follow the lead to be taken by the Supreme Court in Cline.

On the other hand, when provisions of the MHRA are not similar to provisions of federal antidiscrimination statutes, the Minnesota Supreme Court has departed from the federal rule in its interpretation of the MHRA.17 Unlike the ADEA, the Minnesota Human Rights Act does not limit the protected class to workers age 40 and older.18 Rather, the MHRA protects all workers over 18 years old against age discrimination.19 So one may argue that this textual difference opens the door to a broader interpretation. Indeed, when would an 18-year-old be discriminated against for being "too old"?

Nonetheless, decisions by the Minnesota Court of Appeals have required a worker claiming age discrimination under the MHRA to show that comparatively younger workers were treated more favorably.20 The Minnesota Supreme Court has not weighed in on the issue of whether the MHRA prohibits reverse age discrimination. In one opinion, however, the Court did assume, without deciding, that a claim of reverse discrimination was viable under the MHRA in a case where a 36-year-old worker claimed age discrimination because her employer limited its "early retirement" incentives to those workers age 45 or older.21

Until the issue of "reverse" discrimination is resolved under both the ADEA and the MHRA, employers in Minnesota should assume that each act forbids discrimination against comparatively younger workers as well as comparatively older workers. While exceptions do exist under both the ADEA22 and the MHRA,23 employers' decisions involving hiring, firing and other terms of employment, should be age neutral.

NOTES
1. 29 U.S.C.A. §621.

2. 29 U.S.C.A. §623.

3. This is not to say that any age difference will qualify; an inference of age discrimination "cannot be drawn from the replacement of one worker with another worker insignificantly younger." O'Connor v. Consolidated Coin Caterers Corp., 116 S. Ct. 1307, 1310, 517 U.S. 308, 313 (1996)..

4. See e.g. Hamilton v. Caterpillar Inc., 966 F.2d 1226 (7th Cir. 1992); Schuler v. Polaroid Corp., 848 F.2d 276, 278 (1st Cir. 1988); Lawrence v. Town of Irondequoit, 246 F. Supp.2d 150, 161 (W.D.N.Y. 2002).

5. 296 F.3d 466 (6th Cir. 2002).

6. Cline v. General Dynamics Land Systems Inc., 98 F.Supp.2d 846 (N.D. Ohio 2000).

7. In further support of its conclusion, the court cited 29 C.F.R. § 1625.2(a) (1991) ("It is unlawful ..., for an employer to discriminate ... by giving preference because of age between individuals 40 and over.").

8. Hamilton v. Caterpillar, Inc., 966 F.2d 1226 (7th Cir. 1992).

9. Id. at 1227.

10. Id. at 1228. The court also rejected the regulation promulgated by the eeoc at 29 C.F.R. §1625.2 (see note 7, supra) as inconsistent with the plain language of the ADEA. Id.

11. Schuler v. Polaroid Corp., 848 F.2d 276 (1st Cir. 1988) (opinion written by then soon-to-be Supreme Court Justice Breyer).

12. Id. at 278 (emphasis in original).

13. Stone v. Travelers Corp., 58 F.3d 434 (9th Cir. 1995).

14. Id. at 437.

15. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973).

16. Kolton v. County of Anoka, 645 N.W.2d 403, 407 (Minn. 2002); Goins v. West Group, 635 N.W.2d 717, 726, n. 6 (Minn. 2001).

17. Kolton v. County of Anoka, 645 N.W.2d 403, 407 (Minn. 2002) (citing Cummings v. Koehnen, 568 N.W.2d 418, 422 n. 5 (Minn.1997).

18. Minn. Stat. §§ 363.03, subd. 1 and 363.01, subd. 3.

19. There must, however, be a significant age difference between the workers whom are treated differently. Dietrich v. Canadian Pacific, 536 N.W.2d 319, 325 (Minn. 1995).

20. Michurski v. City of Minneapolis, 2002 wl 1791983 (Minn. App. 2002); Andrews v. Northwestern Travel Services, 1998 wl 1000608 *5 (Minn. App. 1998); LeBlond v. Greenball Corp., 942 F. Supp. 1210 (D. Minn. 1996) (citing Ward v. Employee Development Corp., 516 N.W.2d 198, 201 (Minn. App. 1994)); Shea v. Hanna Min. Co., 397 N.W.2d 362, 368 (Minn. App. 1986).

21. State by Beaulieu v. Independent School Dist. No. 624, 533 N.W.2d 393, 395 (Minn. 1995).

22. See 29 U.S.C. §623(l)(1)(A).

23. See Minn. Stat §363.02, subd. 1 (2002).