Age Discrimination & related ERISA/Benefit issues [Chapters 12, 16]

 

A) Age Discrimination [Ch. 12]   

Basics: Age > 40: The only protected class to which we all aspire!

[CA Appeals Court rules age discrimination may constitute Unfair Competition]

 

1) Disparate Treatment analysis in Age cases

        *ADEA designed to prohibit employers from assuming that performance necessarily declines with age

 

-"Substantially younger replacement" test for McDonnell-Douglas purposes (O’Connor v. Consolidated Coin, S.Ct. 1996—in class)

 

-Hazen Paper v. Biggins (factors "closely correlated with" or "proxy for" age--S.Ct. 1993)

 

-ERISA Section 510 (similar to covenant of good faith, but explicit, not implied)

 

-Pretext often demonstrated by sudden poor evaluation after many good reviews or major change in performance criteria just before a RIF; see, e.g., EEOC v. Texas Instruments--in Malos 1998 Performance Appraisal—legal issues)

-But, trend may be changing, particularly in RIFs involving new business plans; see, e.g., Cerutti v. BASF, 2003, cited in Malos, 2005--Job Analysis, Validation, and Performance Appraisal in Discrimination Litigation [pdf pp. 23-24]

-And, recent Supreme Court case [Gross v. FBL Financial Services, Inc.; June 18, 2009] makes disparate treatment cases harder to prove; plaintiff must show that “but for” age, adverse action would not have occurred (Court rejects Price-Waterhouse mixed motive analysis applicable to T.VII claims for ADEA)

         

*BFOQ “alive”—barely—but not at all well [on life support; Criswell case would not be decided the same today]; still "recognized", but waning in viability—weakestADEA defense

                   -Western Air Lines v. Criswell (S.Ct. 1985; would be decided differently today)

                   -News articles [in class]: recent evidence in favor of older pilots [flight simulators, USAir crash into Hudson River]

 

2) Adverse Impact analysis in Age cases

*Adverse Impact theory viable in age cases based on layoffs due to cost?

-Marks v. Loral (economic justification/bus. necessity/RIFs—Cal. App., 1997)

>Text of Marks v. Loral

*FEHA amended (August, 1999) "Overrules" Marks

-New Cal. Govt. Code Section 12941.1

>Update re: Age Discrimination (Adverse Impact analysis reinstated; Marks v. Loral rejected; August 1999)

        *Adverse Impact makes a comeback—in part …

-Smith v. City of Jackson, S.Ct. 2005; scope of allowable claims under ADEA narrower than under Title VII—no business necessity test; financial concerns may constitute RFOA (“reasonable factor other than age”)

       

3) Older Workers' Benefit Protection Act (OWBPA) 

                -OWBPA Basics (validity of waivers in age discrimination cases)

                -Absolute compliance required, no refund of premature payout if waiver defective (Oubre, S. Ct. 1998; and Hodge—in-class example)

 

B) Additional ERISA/Retirement Benefit Issues [Ch. 16, pp. 803-end]

 

1) Overview and Basics of ERISA:

-Defined Benefit vs. Defined Contribution, PBGC

 

2) Fiduciary Duties of Retirement Plan Administrators

-Recall ERISA Section 510 (Biggins, above; similar to covenant of good faith)

        -Varity Corp. v. Howe (S. Ct. 1996—in class)

-Bins v. Exxon (9^th Cir. 2000, en banc--in class) re: early retirement plans and misrepresentation liability; when a plan participant inquires about potential plan changes, the employer has a duty to provide complete and truthful information about any such changes then under “serious consideration”

-Individuals may now be able to sue their employer for failure to follow instructions re: investments in defined contribution plans administered by the employer