U.S. Supreme Court Issues Four Employment-Related Decisions

On June 19, 2008, the U.S. Supreme Court issued four decisions in employment cases. Two involved cases arising under the Age Discrimination in Employment Act (ADEA).

In Kentucky Retirement Systems v. Equal Employment Opportunity Commission, the EEOC challenged Kentucky's law permitting police officers, firefighters, and other "hazardous position" workers to retire and receive "normal retirement" benefits after 1) working for 20 years or 2) working for five years and reaching age 55. The law allows those who become disabled but have not otherwise become eligible for retirement to retire immediately and receive "disability retirement" benefits. It also treats some disabled individuals more generously than it treats others who became disabled after reaching retirement eligibility by virtue of their age. In a 5-4 decision, the Court held that the system does not discriminate against older workers on the basis of age, noting that it is pension status – not age – that justifies the differential treatment at issue. The case was a close call, however, as four Justices dissented in an opinion that described the case as a "straightforward act of discrimination on the basis of age."

In Meacham et al. v. Knolls Atomic Power Laboratory, workers discharged in connection with a reduction in force claimed that the selection criteria had a disparate impact on older workers. Thirty of the 31 employees let go were over 40. A jury found in favor of the plaintiffs. The Second Circuit Court of Appeals vacated the judgment, holding that the plaintiffs had not carried their burden of persuasion. The Supreme Court reversed, however, holding that an employer defending an ADEA disparate impact claim by asserting that reasonable factors other than age motivated its decisionmaking bears both the burdens of production and persuasion. In other words, the employer must produce evidence raising the defense and ultimately convince the trier of fact of its merit.

Other June 19 Supreme Court opinions of note to employers:

Metropolitan Life Ins. Co. v. Glenn, holding that where ERISA plan administrators have the dual role of both determining benefit eligibility and paying the benefits, a conflict of interest exists that a court should consider as a factor in determining whether an administrator abused its discretion in denying benefits.

Chamber of Commerce of the United States v. Brown, holding that the National Labor Relations Act (NLRA) preempts two provisions of California Assembly Bill 1889 that, among other things, prohibit employers that receive in excess of $10,000 in state program funds per year from using the funds "to assist, promote, or deter union organizing."