IN THE UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
_________________________________________
No. 10-2699
_________________________________________
Equal Employment Opportunity Commission,
Plaintiff-Appellee
v.
Minnesota Department of Corrections, et al.,
Defendant
v.
Minnesota Law Enforcement Association,
Rule 19 Defendant-Appellant
and
American Federation of State, County, and Municipal Employees, Unit 208;
Minnesota Association of Professional Employees; Middle Management
Association; American Federation of State, County, and Municipal Employees,
Council No. 5, AFL-CIO; and Minnesota Nurses Association,
Rule 19 Defendants.
____________________________________________________
On Appeal from the United States District Court for the District of Minnesota
No. 08-cv-05252-PAM
____________________________________________________
Brief of the Equal Employment Opportunity Commission as Appellee
____________________________________________________
P. DAVID LOPEZ
General Counsel
LORRAINE C. DAVIS
Acting Associate General Counsel
CAROLYN L. WHEELER
Assistant General Counsel
JENNIFER S. GOLDSTEIN
Attorney
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION, Office of General Counsel
131 M Street, N.E.
Washington, DC 20507
(202) 663-4733
SUMMARY OF THE CASE
This case involves a challenge to an early retirement incentive plan that the
Minnesota Department of Corrections (DOC) offered its employees. The plan used
age to determine the employees upon whom it would confer the benefit of post-
retirement insurance payments: employees who retired at age 55 received the benefit,
but employees who retired after age 55 received nothing (the age 55 cliff). The DOC
and the State grew increasingly concerned that the age 55 cliff amounted to unlawful
age discrimination, and so they began negotiating to keep the benefit but eliminate
the age 55 cliff with the various unions that represent DOC employees. The State
eliminated the age 55 cliff in all union agreements but one - that of appellant MLEA.
The EEOC brought suit to challenge the age 55 cliff in the MLEA agreement,
and to challenge a grandfathering exclusion in other agreements. The district court
ruled the age 55 cliff illegal, and neither the DOC nor any union other than MLEA
now challenges that ruling. MLEA did appeal, and makes a narrow argument that the
age 55 cliff is permissible when applied to MLEA members because, it contends, the
State could impose mandatory retirement on MLEA members at age 55. Although
the State did not in fact impose mandatory retirement at 55, MLEA argues it
nevertheless can discriminatorily deprive employees older than 55 of early retirement
benefits. MLEA cites no legal authority to support this novel contention, nor is there
any. The EEOC believes oral argument therefore is unnecessary.
TABLE OF CONTENTS
SUMMARY OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
STATEMENT OF JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
STATEMENT OF THE ISSUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARGUMENT
The district court correctly held that the age 55 cliff is invalid as applied to
MLEA members, some of whom are subject to mandatory retirement at
age 60, because it calls for the discriminatory deprivation of benefits for
members between ages 55 and 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
CERTIFICATE OF COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
CERTIFICATE OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
TABLE OF AUTHORITIES
CASES
Auerbach v. Bd. of Educ. of Harborfields Cent. Sch. Dist.,
136 F.3d 104 (2d Cir. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
F.C.C. v. Nextwave Pers. Commc'ns, 537 U.S. 293 (2003). . . . . . . . . . . . . . . . . . 18
Jankovitz v. Des Moines Indep. Cmty. Sch. Dist.,
421 F.3d 649 (8th Cir. 2005). . . . . . . . . . . . . . . . . . 1, 8, 10, 12, 13, 16, 20
Karlen v. City Colleges of Chicago, 837 F.2d 314 (7th Cir. 1988) . . . . . . . . . . . 1, 15
Morgan v. A.G. Edwards & Sons, Inc., 486 F.3d 1034 (8th Cir. 2007). . . . . . . . 13, 16, 17
N. Haven Bd. of Educ. v. Bell, 456 U.S. 512 (1982). . . . . . . . . . . . . . . . . . 18
Quinones v. City of Evanston, 58 F.3d 275 (7th Cir. 1995) . . . . . . . . . . . . . . 17, 18
Russello v. U.S., 464 U.S. 16 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Solon v. Gary Cmty. Sch. Corp., 180 F.3d 844 (7th Cir. 1999) . . . . . . . . . . . . 16
STATUTES and LAWS
Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.
29 U.S.C. § 621(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 13
29 U.S.C. § 623(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
29 U.S.C. § 623(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
29 U.S.C. § 623(f)(2)(B)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 12
29 U.S.C. § 623(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 18
29 U.S.C. § 623(j)(1)(B)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
29 U.S.C. § 630(l) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
29 U.S.C. § 623(m) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 20
Pub.L. 105-244, Title IX, §§ 941(c), Oct. 7, 1998, 112 Stat. 1835 . . . . . . . . . . . . 19
Minn. Stat. § 43A.34(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Minn. Stat. § 43A.34(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4, 14, 17
Minn. Stat. § 179A.03(19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4
Minn. Stat. § 179A.07(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Minn. Stat. § 352.92(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Minn. Stat. § 352.925(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Minn. Stat. § 352.93(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Minn. Stat. § 352.93(2a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Minn. Stat. § 352B.02(1a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Minn. Stat. § 352B.08(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Minn. Stat. § 352B.08(2a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
LEGISLATIVE HISTORY
S.Rep. No. 101-263 (1990), reprinted in 1990 U.S.C.C.A.N. 1509 . . . . . . . . . . . . 15
136 Cong. Rec. S13,596 (daily ed. Sept. 24, 1990)
(statement of Sen. Metzenbaum) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
STATEMENT OF JURISDICTION
The Jurisdictional Statement of the Minnesota Law Enforcement Association
(MLEA) is complete and correct.
STATEMENT OF THE ISSUE
The district court held that an early retirement incentive plan is unlawful
because it explicitly deprives workers older than 55 of any benefits based solely on
their age (known as the age 55 cliff). The issue here is whether the district court
correctly held that age 55 cliff is equally invalid as applied to MLEA members, some
of whom are subject to mandatory retirement at age 60, because it calls for the
discriminatory deprivation of benefits for members between ages 55 and 60.
Jankovitz v. Des Moines Indep. Cmty. Sch. Dist., 421 F.3d 649 (8th Cir. 2005)
Karlen v. City Colleges of Chicago, 837 F.2d 314 (7th Cir. 1988)
29 U.S.C. §§ 621(b), 623(f)(2)(B)(ii)
STATEMENT OF THE CASE
The Equal Employment Opportunity Commission (EEOC) filed this action
against the Minnesota Department of Corrections (DOC), alleging that the DOC
discriminated against a class of employees when it denied them early retirement
incentive benefits because of their age, in violation of the Age Discrimination in
Employment Act (ADEA), 29 U.S.C. § 623(a). R.1.<1> The State of Minnesota, on
behalf of the DOC, incorporated the challenged early retirement incentive plan into
collective bargaining agreements (CBAs) it negotiated with various unions that
represented DOC employees. EEOC therefore opted to include as Rule 19(a)
defendants those unions EEOC believed had affected employees as members so that
the district court could order comprehensive injunctive relief, if the court viewed it
necessary. R.1 at¶¶ 6-10.
EEOC moved for summary judgment, as did the DOC and MLEA. R.73, 76,
84. The district court granted EEOC's motion for summary judgment in part,
simultaneously denying the motions of MLEA and the DOC. Addendum (Add.) 1-
18. The court held the age 55 cliff violated the ADEA, and it ordered the DOC to
pay damages to affected claimants, though for a shorter time period and in a smaller
amount than requested by EEOC. Of the claimants that EEOC and the DOC
subsequently identified as eligible for damages, none were MLEA members. R.152.
The court denied the EEOC's request for an injunction ordering the removal of the
discriminatory clauses from the CBAs, including MLEA's CBA. Add. 17. The
district court entered judgment on June 4, 2010. R156. On July 30, 2010, MLEA
filed a notice of appeal. R. 157. Subsequently, EEOC and the DOC filed notices of
appeal. R. 160; R. 163.
EEOC and the DOC moved for a voluntary dismissal of their appeals (Nos.
10-2783 & 10-2796) on the ground that they had agreed to settle their differences
arising from this litigation. This Court granted the EEOC motion on December 9,
2010, and the DOC motion on December 10, 2010.
STATEMENT OF FACTS
The DOC is a Minnesota state agency operating 10 correctional facilities.
R.103-1, Exh.1 at 1. The DOC employs some 4,000 individuals in a variety of
positions, including nurses, correctional officers, teachers, and fugitive specialists.
Id. DOC employees in certain positions participate in the Correctional Employee
Retirement Plan or the State Patrol Retirement Fund. Under the plans, which are
governed by Minnesota statutory law, Minn. Stat. §§ 179A.07(2), 179A.03(19),
employees and employers pay into the plan at a higher rate than retirement plans for
other state employees, Minn. Stat. §§ 352.92(1), 352B.02(1a), but the participants
who are age 55 and have five or ten years of service<2> may retire with an unreduced
annuity. Minn. Stat. §§ 352.93(1), (2a), 352B.08(2a).
While DOC employees with the requisite years of service "may elect" to retire
at age 55, nothing requires them to do so. Minn. Stat. § 43A.34(3). The State does
require retirement at age 60 for certain employees, but none of the jobs subject to
mandatory retirement are in the DOC. Minn. Stat. § 43A.34(4) (referring to crime
bureau officers, conservation officers, and members of the Minnesota State Patrol
Division and Alcohol and Gambling Enforcement Division of the Department of
Public Safety).
The DOC offers employees an early retirement incentive plan (ERIP). The
terms of the ERIPs are not set by statute but, for the non-supervisory employees
relevant to this lawsuit, are mandatory subjects of bargaining with the unions. Minn.
Stat. § 179A.03(19). The ERIPs are contained within collective bargaining
agreements negotiated between the State and the various unions that represent
individuals employed by the DOC. See, e.g., Appendix (App.) at 4-5. The CBAs
setting out the terms of the ERIPs encompass all represented employees eligible to
participate, not only DOC employees. Id. Appellant MLEA is one of the unions that
has entered into a collective bargaining agreement with the State. Id. MLEA
represents fugitive specialists employed in DOC's Fugitive Apprehension Unit. App.
at 2. The vast majority of MLEA's members are not in the DOC, however, but
instead are nonsupervisory employees in the Department of Public Safety and other
state agencies. <3> App. at 9-11.
As originally structured, the ERIPs all imposed a so-called "age 55 cliff."
R.103-2, Exh. 17-22; R.103-3, Exh. 23, 25, 30-32; R.103-4, Exh. 33-34, 37-42;
R.103-5, Exh. 46-50, 53-61; R.103-6, Exh. 62-64, 69-72; R.103-7, Exh. 77-80. The
age 55 cliff provided that eligible employees who retired at age 55, and who are
covered by the Correctional Employee Retirement Plan or the State Patrol Retirement
Fund, would receive employer-paid contributions for health and dental insurance
until age 65, when the retiree becomes Medicare-eligible. Id.; App. at 4-5. The
employer contribution under the ERIP is 100 percent of the premium for individual
coverage and 85 to 100 percent for dependent coverage.<4> R.103-1, Exh.13 at 6 n.11.
The age 55 cliff meant that, in order to obtain this benefit, employees must
retire at 55, or forever lose the opportunity to obtain the benefit. R.103-2, Exh. 17-
22; R.103-3, Exh. 23, 25, 30-32; R.103-4, Exh. 33-34, 37-42; R.103-5, Exh. 46-50,
53-61; R.103-6, Exh. 62-64, 69-72; R.103-7, Exh. 77-80. For those employees who
were hired at an older age and thus lacked the requisite years of service at age 55, the
ERIP did not give them the opportunity to elect the benefit when they obtained
sufficient service to qualify. Id. Employees hired after age 55 never could obtain the
early retirement benefit. Id.
In the late 1990s, the DOC learned that employees who wished to work
beyond age 55 nonetheless felt forced to retire because of the age 55 cliff aspect of
the ERIP. R.104-4, Exh. 9 at 15-16. The DOC relayed its concerns to the state
agency that represents the DOC in bargaining negotiations, R.104-5, Exh. 13 at 76-
80, and that agency's Commissioner in turn contacted the Minnesota Attorney
General, writing in a letter that he had "some serious concerns as to the legality of
our ERI [Early Retirement Incentive] as it is currently established in those labor
agreements." R.103-1, Exh. 2. He emphasized that "[w]e have never made an
exception to this rule," and "[t]his has ultimately resulted in some individuals retiring
even though they indicated they did not want to retire." Id. The Commissioner
wrote he believed that if the EEOC were to investigate the ERIP, "it could easily
conclude that our provisions violate the ADEA." Id.
In January 2001, the Attorney General's Office responded that "it is the
opinion of this office that the State ERI's . . . are facially discriminatory because no
State employee can obtain the ERI after the age of 55." R.103-1, Exh. 3 at 3. The
Attorney General's Office noted the existence of a defense under the ADEA for early
retirement incentive plans that are voluntary and consistent with the purposes of the
ADEA, but stated that "[w]hether the State's ERI's are consistent with the purposes
of the ADEA is a close and open question." R.103-1, Exh. 3 at 7. Thereafter, in
negotiations between the State and the unions, State negotiators proposed eliminating
the age 55 cliff aspect of the ERIP, highlighting the "AG's opinion that [the ERIP]
more likely than not . . . violates the ADEA." R.103-1, Exh. 5.
Over the ensuing years, the State and the unions were able to agree to
eliminate the age 55 cliff. See R.98 at 7 n.7 (listing dates of CBA revisions). The
State agreed to offer the benefit to any eligible employee who retired early, and the
unions agreed in return to additional service credits needed to obtain the ERIP.<5>
R.103-3, Exh. 24, 26-28; R.103-4, Exh. 35-36, 43-44; R.103-6, Exh. 64-68, 72;
R.103-7, Exh. 73-76, 81-84. Only MLEA refused to negotiate any modification to the
ERIP that would eliminate the age 55 cliff for DOC employees covered by the State
Patrol Retirement Fund. R.103-5, Exh.60.
The EEOC filed suit under the ADEA against the DOC, seeking monetary
relief and injunctive relief requiring that the CBAs be modified to eliminate age-
based restrictions on the ERIPs, including the grandfathering exclusion. R.1. The
EEOC joined the unions representing eligible DOC employees as Rule 19(a) parties
so that the district court could grant complete injunctive relief. Id. The EEOC did
not seek damages from the unions. Id. The EEOC, the DOC, and MLEA each
moved for summary judgment, R.73, 76, 84; EEOC argued that the age 55 cliff
violated the ADEA, R.98, while the DOC and MLEA argued it did not. R.95, 103.
Several other unions indicated to the district court that they did not oppose the
EEOC's request for injunctive relief that would eliminate entirely the age 55 cliff.
R.124.
The district court granted the EEOC's motion for summary judgment in part,
and simultaneously denied the DOC and MLEA's motions. Add. 1-18. At the
outset, the court held that the EEOC had established a prima facie case of age
discrimination. The court observed that "[a]ge is the only distinguishing trait" in
determining whether an employee may retire and receive the benefits set out in the
ERIP. Add. 6. The early retirement incentives offered by DOC are "facially
discriminatory and, as such, violate the ADEA." Add. 6-7.
The court next considered whether the plan fell within the "safe harbor"
created by the ADEA for certain ERIPs that, if within that harbor, would not be
illegal. The court held the ERIP here was inconsistent with the ADEA's purpose of
prohibiting arbitrary age discrimination, and so did not fall within the safe harbor.
Add. 8-10. The court held that this case was analogous to this Court's decision in
Jankovitz v. Des Moines Independent Community School District, 421 F.3d 649 (8th
Cir. 2005), where the challenged plan offered early retirement benefits only until age
65. Add. 9. As the district court emphasized, Jankovitz held that the plan did not fall
within the safe harbor because it defined "'"early" in terms of the employee's age,
rather than years of service or salary.'" Add. 9 (quoting Jankovitz, 421 F.3d at 652);
see also Add. 9-10 (Jankovitz plan amounted to arbitrary age discrimination because
it denied benefits solely based on an employee's age, rather than offering early
retirement benefits regardless of age).
The district court then addressed MLEA's arguments, which are the only
arguments it makes in this appeal. The court held there was nothing superfluous
about reading the safe harbor provision as it did, to prohibit arbitrary age
discrimination - the court observed that the amended ERIPs create an incentive to
retire before the "normal" retirement age, and do so in a way that is not based solely
on age. Add. 10. As the court stated, "[t]he MLEA does not explain why permitting
a 56-year-old employee to receive an early retirement benefit will somehow not
encourage early retirement." Id. The court next rejected the argument that because
the DOC could impose mandatory retirement at age 55, it was somehow permissible
to deny benefits to those older than 55. The court noted that DOC does not in fact
require mandatory retirement, making this argument "disingenuous," for if "the DOC
wanted to relieve an employee's job stress by offering early retirement incentives, it
should base those incentives not on age, but on years of service." Add. 11.
The court ordered the DOC to pay monetary relief to those injured by the
discriminatory denial of benefits, though for a shorter time period and in a smaller
amount than requested by the EEOC. The damages awarded were the amount of
health-insurance premiums DOC would have paid but for the discrimination. Add.
12-13. Of the claimants that EEOC and DOC subsequently identified as eligible for
damages, none were MLEA members. R.152. The court denied the EEOC's
request for an injunction removing the age 55 cliff from MLEA's collective
bargaining agreement as unnecessary because the Court stated it had already
determined that ERIP violates the ADEA, and so "the provisions are illegal and
cannot be enforced." Add. 17.
After MLEA filed a notice of appeal, R. 157, both and the DOC filed notices
of appeal. R.160; R.163. The EEOC and DOC have now settled their differences and
decided to forego their respective appeals. The issues MLEA raises in its opening
brief thus are the only issues before this Court.
SUMMARY OF ARGUMENT
The early retirement incentive plan at issue in this case confers on employees
aged 55 a benefit if they retire "early," but it does not confer any benefit on
employees older than aged 55 who retire "early." In short, the age 55 cliff aspect of
the plan denies an early retirement benefit to otherwise eligible employees solely
because of their age. It is well-settled in this Court that such a plan amounts to age
discrimination, and is not permissible by virtue of the ADEA's "safe harbor" defense
for certain early retirement incentive plans. See Jankovitz v. Des Moines Indep.
Cmty. Sch. Dist., 421 F.3d 649 (8th Cir. 2005).
MLEA does not challenge the principles established in Jankovitz nor does it
challenge the district court's holding that the age 55 cliff is unlawful as to DOC
employees generally. MLEA instead argues that the State of Minnesota could
subject MLEA member employees to mandatory retirement at age 55, and it
contends that the State therefore may deprive such employees older than 55 of a
retirement benefit in order to create a strong incentive for them to leave the
workforce at 55. No court has accepted such an argument. To the contrary, courts
have rejected plans that deprive older workers of benefits in order to induce them to
retire prior to a mandatory retirement age. The State of Minnesota has determined
that 60 is the appropriate age at which to require law enforcement officers to retire,
and the ADEA permits the State to make such a determination. What the ADEA
does not permit is a discriminatory benefit plan that induces older employees to leave
the workforce prior to the mandatory age.
It is a principle of statutory construction that where Congress intends to create
exceptions to statutory provisions, it does so explicitly. Congress created one such
exception when it allowed States to require mandatory retirement for law
enforcement officers. Congress created another exception when it allowed
institutions of higher education to reduce or eliminate early retirement benefits on the
basis of age to tenured faculty. Congress did not create an exception allowing States
to reduce or eliminate early retirement benefits on the basis of age to law
enforcement officers, and this Court should reject MLEA's efforts to write into the
statute an exception that does not exist.
ARGUMENT
The district court correctly held that the age 55 cliff is invalid as applied to
MLEA members, some of whom are subject to mandatory retirement at age 60,
because it calls for the discriminatory deprivation of benefits for members
between ages 55 and 60.
Under the ADEA, as amended in 1990 by the Older Workers Benefits
Protection Act (OWBPA), an employer who offers a benefit that discriminates on the
basis of age violates that statute. 29 U.S.C. §§ 623(a)(1), 630(l) (prohibiting age
discrimination in an individual's "compensation, terms, conditions, or privileges of
employment," and specifying that this language "encompasses all employee benefits,
including such benefits provided pursuant to a bona fide employee benefit plan"); see
also Jankovitz v. Des Moines Indep. Community Sch. Dist., 421 F.3d 649, 651 n.4 (8th
Cir. 2005) (Congress enacted the OWBPA "to clarify that the ADEA applies to all
employee benefits, including early retirement benefits"); id. at 654 (same). DOC's
early retirement plan runs afoul of this general prohibition on age discrimination, for
it explicitly offers insurance benefits to employees at age 55, but not to older
employees - the age 55 cliff. The district court held that the age 55 cliff was facially
discriminatory, and MLEA does not challenge that holding on appeal.
There are exceptions to the general rule that the discriminatory provision of
benefits violates the ADEA. Among those exceptions is the "safe harbor" defense
for a "voluntary early retirement incentive plan consistent with the relevant purpose
or purposes of this chapter." 29 U.S.C. § 623(f)(2)(B)(ii). There is no safe harbor for
the age 55 cliff in this case, however, because the age 55 cliff is inconsistent with the
ADEA's purpose "to promote employment of older persons ..." and "to prohibit
arbitrary age discrimination in employment." 29 U.S.C. § 621(b).
As the district court noted, the age 55 cliff serves to deny benefits to otherwise
eligible employees who retire after age 55, based solely on their age. Add. 9-10. The
problem with the plan, explained the court, "lies with the fact that the Plan defines
'early' in terms of the employee's age, rather than years of service or salary." Add. 9
(internal quotations omitted). The district court noted that any argument that an age-
based early retirement incentive like this one falls within the safe harbor is foreclosed
by this Court's decision in Jankovitz. In Jankovitz, 421 F.3d 649, the employer
offered employees a payment based on the number of unused sick leave days upon
retirement, but it denied that benefit to those older than 65. This Court held the plan
fell outside the ADEA safe harbor because reducing or denying a benefit based solely
on an employee's age amounts to "[a]rbitary age discrimination." Id. at 654; see also
Morgan v. A.G. Edwards & Sons, Inc., 486 F.3d 1034, 1042 (8th Cir. 2007) (same).
Unlike plans permissible under the ADEA, the plan in Jankovitz made "the
upper limit of eligibility . . . the fixed age of 65," and thus was unlawful. Id. at 655;
see also id. ("the amount of available early retirement benefits drops to zero upon an
employee's attainment of the age of 65" and so "is inconsistent with a purpose of the
ADEA"). As in Jankovitz, the benefit at issue here "drops to zero" after age 55.
Jankovitz instructs that the DOC ERIP therefore cannot take refuge within the ADEA
safe harbor for certain early retirement incentive plans.
On appeal, MLEA does not contest the district court's holding that the age 55
cliff, as applied to the vast majority of DOC employees, violates the ADEA. MLEA
Brief at 7 n.3 (whether the age 55 cliff as applied to employees who are not subject to
mandatory retirement violates the ADEA "is not at issue in the MLEA's appeal").
MLEA instead limits its arguments to its members who are subject to mandatory
retirement at age 60.<6> The district court correctly rejected MLEA's arguments.
MLEA first argues that because MLEA members are subject to mandatory
retirement at age 60, this Court must allow the age 55 cliff because to do otherwise
would render the words "early" and "incentive" superfluous. MLEA Brief at 7-8. It
is difficult to see the logic in MLEA's argument, for an employee subject to
mandatory retirement at age 60 but who retires at age 56 (or at any age before 60) is
still retiring "early." Moreover, the allure of having insurance benefits paid upon
such early retirement is no less an incentive for a 56-year old than it would be for a
55-year old. MLEA has not explained how maintaining an age 55 cliff is necessary
to give meaning to the words of the statute. Cf. Add. 10 ("MLEA does not explain
why permitting a 56-year-old employee to receive an early retirement benefit will
somehow not encourage early retirement").
MLEA's argument is similar to the one the Seventh Circuit squarely rejected
in Karlen v. City Colleges of Chicago, 837 F.2d 314 (7th Cir. 1988). In Karlen, the
employer maintained an ERIP that offered benefits that increased until age 65, at
which point the benefits for retiring early plunged. The benefits remained very low
for those between 65 and 70. At age 70, the plaintiffs, who were tenured faculty
members, were subject to then-applicable mandatory retirement. The employer
argued it had to impose the sharp drop in benefits in order "to induce faculty
members to retire by 65." Id. at 320. The Seventh Circuit responded bluntly: "This
strikes us as a damaging admission rather than a powerful defense." Id. The court
stressed that "[t]o withhold benefits from older persons in order to induce them to
retire seems precisely the form of discrimination at which the [ADEA] is aimed." Id.
MLEA seeks to downplay the significance of Karlen by pointing out that it
was a pre-OWBPA case, decided at a time when the ADEA defense consisted of
different language. See MLEA Brief at 13-14. It is true that Karlen was pre-
OWBPA, but MLEA's argument loses its force by virtue of the fact that Congress
explicitly cited to Karlen in explaining how OWBPA should be understood. See
S.Rep. No. 101-263, at 27 (1990), reprinted in 1990 U.S.C.C.A.N. 1509, 1533.
Moreover, this Court, post-OWBPA, has cited Karlen for the proposition that
"adverse changes in employment benefits based solely upon age are inconsistent with
the purposes of the ADEA." Jankovitz, 421 F.3d at 655. Other courts of appeals,
including the same court that issued Karlen, likewise have cited Karlen and
recognized its continuing vitality post-OWBPA. In Solon v. Gary Community School
Corp., 180 F.3d 844, 849, 853 (7th Cir. 1999), for example, the court relied on Karlen
to hold unlawful an ERIP that offered benefits that declined based on age and
terminated at age 62. As the court stated, "the point of Karlen" is that "the 'carrot' of
early retirement incentives cannot be extended based solely on the age of the retiree.
Id. at 853; see also Auerbach v. Bd. of Educ. of Harborfields Cent. Sch. Dist., 136
F.3d 104, 114 (2d Cir. 1998) (ERIP "that withholds or reduces benefits to older
retiree plan participants, while continuing to make them available to younger retiree
plan participants so as to encourage premature departure from employment by older
workers conflicts with the ADEA's stated purpose to prohibit arbitrary age
discrimination in employment.") (citing OWBPA legislative history and Karlen).<7>
MLEA next argues that it is "axiomatic" that if Congress declared it
permissible for States to require mandatory retirement of its law enforcement officers
at age 55, it is therefore also permissible for a State to withhold benefits at age 55 in
order to induce them to retire at age 55 - even if the State has not actually imposed
mandatory retirement at age 55. MLEA Brief at 13. There is nothing axiomatic
about MLEA's novel - and unsupported - assertion.
In the ADEA, Congress deferred to the States to allow them to impose
mandatory retirement on law enforcement officers. 29 U.S.C. § 623(j). The ADEA
permits States to require retirement at age 55, but beyond that minimum it leaves to
the States the responsibility of determining at what age mandatory retirement is
proper. 29 U.S.C. § 623(j)(1)(B)(ii). The State of Minnesota has determined that age
60 is the appropriate age at which to require retirement of its law enforcement
officers, not age 55. Minn. Stat. § 43A.34(4) (2010). Given that determination,
nothing in logic or law permits the State to discriminate in benefits to those between
55 and 60 and, indeed, MLEA cites no case law supporting such discrimination.
Case law does exist, but it hurts rather than helps MLEA's arguments. In
Quinones v. City of Evanston, 58 F.3d 275 (7th Cir. 1995), for example, the court of
appeals considered and rejected an argument similar to the one MLEA makes here.
The City of Evanston had pointed to the fact that the ADEA permitted a maximum
age limit on the hiring of firefighters. The City did not, in fact, set a maximum age
limit for the hiring of its firefighters, but it argued that it could nonetheless
discriminate against firefighters hired at an older age by paying them fewer benefits.
Id. at 276. The Seventh Circuit rejected that argument, holding that the "ADEA's
toleration of an age cutoff for hiring firefighters does not extend to age-based pay
differences among persons a city elects to hire." Id. at 278; see also id. (29 U.S.C. §
623(j) permitted maximum hiring ages but it "did not authorize disparate treatment of
persons a city elected to hire"). So too here, the ADEA arguably may permit the
State of Minnesota to impose a mandatory retirement age of 55, but it does not
"authorize disparate treatment" of the employees between 55 and 60 that the State
elects to retain.
MLEA would have this Court read into the ADEA an exception that does not
exist, one that would permit the reduction or elimination of early retirement benefits
for older employees who are not subject to a mandatory retirement age, but are
within the category of employees who could be so subject. MLEA's arguments
contravene well-settled rules of statutory interpretation. As the Supreme Court has
explained, where Congress has intended to create exceptions to statutory provisions,
"it has done so clearly and expressly." F.C.C. v. Nextwave Pers. Commc'ns, 537
U.S. 293, 302 (2003) (Bankruptcy Code); see also N. Haven Bd. of Educ. v. Bell, 456
U.S. 512, 521-22 (1982) (absence of specific exclusion in Title IX for employees
supports conclusion that they are included); see generally Russello v. U.S., 464 U.S.
16, 23 (1983) ("it is generally presumed that Congress acts intentionally and
purposely in the disparate inclusion or exclusion [of particular language]") (internal
quotations omitted).
The ADEA itself lends support to the principle that Congress is explicit in
creating exceptions to statutory provisions, particularly when the exclusion pertains
to arbitrary age discrimination in ERIPs. In a 1998 amendment, Congress explicitly
authorized for institutions of higher education what would otherwise be prohibited:
early retirement benefits "that are reduced or eliminated on the basis of age." 29
U.S.C. § 623(m) ("Notwithstanding subsection (f)(2)(b) of this section, it shall not be
a violation of subsection (a), (b), (c), or (e) of this section solely because a plan of an
institution of higher education . . . offers employees who are serving under a contract
of unlimited tenure . . . supplemental benefits upon voluntary retirement that are
reduced or eliminated on the basis of age").
Aside from the fact that the plain language limits the exception to tenured
faculty, Congress added language in the rules of construction to the 1998 amendment
to make clear that the exception for tenured faculty was limited to tenured faculty.
See Pub.L. 105-244, Title IX, §§ 941(c), Oct. 7, 1998, 112 Stat. 1835 ("Nothing in
the amendment . . . [enacting 29 U.S.C. § 623(m)] shall affect the application of . . .
29 U.S.C. § 623 . . . with respect to . . . (2) any plan not described in [29 U.S.C. §
623(m)]; or (3) any employer other than an institution of higher education . . .").
Congress thus was clear: early retirement plans that reduce or eliminate benefits on
the basis of age are unlawful, unless explicitly excepted from the general rule. There
is no exception for plans applied to employees who could be subject to mandatory
retirement. Under well-accepted rules of statutory construction, then, the ADEA is
properly understood to prohibit the age 55 cliff at issue here.
Finally, MLEA points out that the safe harbor provision not only must be
consistent with the relevant purposes of the ADEA, but also must be voluntary. The
EEOC had argued to the district court that the age 55 cliff was not voluntary for those
who lacked requisite service at their 55th birthday or who were hired after age 55.
The district court did not address that issue in its opinion. MLEA argues that the
district court "erred in not addressing the first prong of the safe harbor provision."
MLEA Brief at 9. While the EEOC continues to submit that the age 55 cliff was
involuntary for certain employees, there is no basis for arguing that the district court
"erred" by failing to address the issue. It is MLEA's burden to prove that the plan
falls within the safe harbor defense. See Jankovitz, 421 F.3d at 654. The district
court held that MLEA failed to meet its burden of proving the age 55 cliff was
consistent with the purposes of the ADEA. The court therefore did not have to
address whether MLEA also failed to establish that the plan was voluntary.
CONCLUSION
The EEOC requests that this Court affirm the judgment of the district court.
Respectfully submitted,
P. DAVID LOPEZ
General Counsel
LORRAINE C. DAVIS
Acting Associate General Counsel
CAROLYN L. WHEELER
Assistant General Counsel
s/ Jennifer S. Goldstein
Attorney
EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
December 15, 2010
CERTIFICATE OF COMPLIANCE
I hereby certify that the attached opening brief is proportionally spaced, has a
typeface of 14 points, and contains 5,233 words, excluding the parts of the brief
exempted by Fed. R. App. P. 32(a)(7)(B)(iii). I also certify that the brief has been
scanned for viruses and the brief is virus-free.
s/ Jennifer S. Goldstein
CERTIFICATE OF SERVICE
I hereby certify that on December 15, 2010, I electronically filed the foregoing
with the Clerk of the Court for the United States Court of Appeals for the Eighth
Circuit by using the CM/ECF system. I certify that all participants in the case are
registered CM/ECF users and that service will be accomplished by the CM/ECF
system. I also certify that I will serve one paper copy upon counsel for appellant
MLEA upon notification by the Clerk of this Court.
s/ Jennifer S. Goldstein
Attorney
EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
December 15, 2010
**********************************************************************************
<<FOOTNOTES>>
<1> "R.*" refers to the record entry number in the district court docket sheet.
<2> Participants hired prior to July 1, 2010, may retire at age 55 with an unreduced
annuity if they have three years of service. Participants in the State Patrol Retirement
Fund hired on or after July 1 may retire with an unreduced annuity after five years;
covered correctional employees may retire with an unreduced annuity after 10 years.
Minn. Stat. §§ 352.93(1), 352.925(c), 352B.08(1).
<3> Job titles of non-DOC employees represented by MLEA include state patrol
trooper, special agent, conservation officer, and insurance fraud specialist. App. at 2.
<4> Eligible employees between the ages of 50 and 55 could also retire and receive the
benefit, albeit on a reduced basis. App. at 5.
<5> A "grandfathering" exclusion was retained, however, because the State refused to
modify the age 55 cliff so as to allow employees who had passed their 55th birthday
before the date of the ERIP's amendment, and instead insisted on this grandfathering
exclusion. R.104-4, Exh. 9 at 57, 90.
<6> DOC employees represented by MLEA are not subject to mandatory retirement at
any age. Only MLEA members outside DOC are subject to age 60 mandatory
retirement. Minn. Stat. § 43A.34(4). Accordingly, there is no longer any party
contesting the district court's ruling that DOC must eliminate the age 55 cliff from
any early retirement benefits it offers.
<7> As Congress indicated in the OWBPA legislative history, there are many ways for
employers to structure early retirement incentive plans so as to avoid arbitrary age
discrimination. For example, Congress considered lawful early retirement plans that
provide flat service-based benefits (e.g. $1,000 multiplied by the number of years of
service) or a percentage of salary "to all employees above a certain age." 136 Cong.
Rec. S13,596 (daily ed. Sept. 24, 1990) (statement of Sen. Metzenbaum). This Court
recognized that the plan at issue in Morgan, where the employer offered benefits to
all employees age 50 or older with 15 or more years of service, was lawful precisely
because "it offered the same incentives to all eligible persons and did not employ an
age-based phase-out." Morgan, 486 F.3d at 1042. The current DOC plan, without
the age 55 cliff, is another example of a lawful plan.