Pension Plan Found to Be Discriminatory on the Basis  of Age

BALTIMORE - A federal judge has granted summary judgment  against Baltimore County in favor of the U.S. Equal Employment Opportunity  Commission (EEOC), the federal agency announced today.  In so doing, the judge found that Baltimore  County's pension plan, known as the Employee Retirement System (ERS), violates  the Age Discrimination in Employment Act (ADEA) because the plan is inherently discriminatory.  U.S. District Judge Benson Everett Legg also  denied Baltimore County's motion for summary judgment.  

The EEOC initially filed suit against Baltimore County in  September 2007, charging that Baltimore County discriminated against Wayne A.  Lee, Richard J. Bosse, Sr., and a class of similarly situated employees at  least 40 years of age by requiring them to pay higher pension contributions  than those paid by younger employees (Case No. BEL-07-2500, filed in U.S.  District Court for the District of Maryland, Northern Division).  The EEOC also named various county labor  organizations as defendants who must negotiate with Baltimore County to effectuate the changes sought in its lawsuit.  In January 2009, the Court awarded summary  judgment in favor of Baltimore County.   

After the EEOC appealed, the Fourth Circuit Court of Appeals  vacated the entry of summary judgment and remanded the case to the District  Court to decide whether Baltimore County's pension plan is supported by permissible  financial considerations (EEOC v.  Baltimore  County, 385 F. App'x 322,  325 [4th Cir. 2010]).  The District Court  rejected Baltimore County's argument that the Supreme Court's decision in Kentucky Retirement v. EEOC, 554 U.S. 135 (2008) excused the pension practice.  Noting that Baltimore County "was given an  opportunity to conduct full discovery, including a comprehensive 30(b)(6) deposition  of Buck Consultants, the actuarial firm that has been responsible for ERS since  its creation," the District Court found that Baltimore County had failed to bring  forward non-age related financial considerations that justify the disparity in  contribution rates between older and younger workers. The next phase of the  litigation will determine damages.

"It is pretty rare that any plaintiff can win any claim  against a pension plan," said EEOC General Counsel David Lopez.  "While some may have thought the Kentucky Retirement decision spelled the  death knell for this case and others like it, our perseverance paid off in  limiting the impact of that decision.   The EEOC is prepared to vigorously litigate these cases, where necessary,  to ensure compliance with the law."

EEOC Regional Attorney Debra Lawrence said, "The county made  older employees pay more than younger employees for the same retirement  benefits, without any financial justification. Older employees felt the impact  of this discrimination in every paycheck.   Because more money is taken out of older employees' paychecks to fund  their retirement benefits, they receive less pay than younger employees doing  the same job.  With the court's decision,  we are putting an end to this unlawful practice."

This  resolution is the latest in a series of systemic suits the EEOC has brought against  public employers alleging age discrimination in the provision of retirement  benefits.  In several related  cases against Minnesota state agencies, the federal agency challenged early  retirement incentive plans that denied health benefits for those employees who  chose not to retire earlier than age 55.  The Eighth Circuit agreed that the plan  violated the ADEA.  In a case against  an Arizona school district, the EEOC challenged a retirement plan that granted  more compensation for unused leave to younger employees than to older  employees.  These cases settled.