E.E.O.C. v. Jefferson County Sheriff's Dept.

• Decision Date: 31 October 2006
• Docket Number: No. 03-6437.,03-6437.
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. JEFFERSON COUNTY SHERIFF'S DEPARTMENT, Kentucky Retirement Systems, and the Commonwealth of Kentucky, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

467 F.3d 571

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. JEFFERSON COUNTY SHERIFF'S DEPARTMENT, Kentucky Retirement Systems, and the Commonwealth of Kentucky, Defendants-Appellees.

No. 03-6437.

United States Court of Appeals, Sixth Circuit.

Argued: June 7, 2006.

Decided and Filed: October 31, 2006.

ARGUED: Dori K. Bernstein, Equal Employment Opportunity Commission, Washington, D.C., for Appellant. Robert D. Klausner, Klausner & Kaufman, Plantation, Florida, for Appellees. ON BRIEF: Dori K. Bernstein, Equal Employment Opportunity Commission, Washington, D.C., for Appellant. Robert D. Klausner, Klausner & Kaufman, Plantation, Florida, Mitchell L. Perry, Jefferson County Attorney's Office, Louisville, Kentucky, Lisbeth A. Tully, C. Joseph Beavin, James D. Allen, Stoll Keenon Ogden, Lexington, Kentucky, D. Brent Irvin, Office of the Attorney General, Frankfort, Kentucky, for Appellees.

Before BOGGS, Chief Judge; MARTIN, BATCHELDER, DAUGHTREY, MOORE, COLE, CLAY, GILMAN, GIBBONS, ROGERS, SUTTON, COOK, McKEAGUE, and GRIFFIN, Circuit Judges.

MOORE, J., delivered the opinion of the court, in which MARTIN, DAUGHTREY, COLE, CLAY, GIBBONS, SUTTON, COOK, and GRIFFIN, JJ., joined. ROGERS, J. (p. 583), delivered a separate opinion concurring in the result. BOGGS, C.J. (pp. 583-90), delivered a separate dissenting opinion, in which BATCHELDER, GILMAN, and McKeague, JJ., joined.

MOORE, Circuit Judge.

Plaintiff-Appellant the Equal Employment Opportunity Commission ("EEOC") brings this public-enforcement age-discrimination lawsuit against Defendants-Appellees the Jefferson County Sheriff's Department, the Kentucky Retirement Systems, and the Commonwealth of Kentucky (referred to collectively as "KRS"), alleging that KRS's disability-retirement-benefits plan for state and county employees violates the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § § 621 et seq., as amended by the Older Workers Benefit Protection Act ("OWBPA"), Pub. Law 101-433, 104 Stat. 978 (1990). The KRS disability-retirement-benefits plan (hereinafter "The KRS plan") disqualifies employees who are still working from receiving disability-retirement benefits if they have already reached normal retirement-benefit age at the time they become disabled. The KRS plan also calculates disability-retirement benefits in such a way that an older employee who is eligible to receive disability benefits receives fewer benefits—in the form of lower monthly benefit payments—than a younger disabled employee receiving disability-retirement benefits who is similar to the older disabled employee in every relevant factor other than age.

Both the district court and the original panel of this court concluded that pursuant to Lyon v. Ohio Education Association and Professional Staff Union, 53 F.3d 135 (6th Cir.1995), the EEOC had failed to establish a prima facie violation of the ADEA. Lyon concluded that a retirement plan that used age as a factor to determine benefits in a materially indistinguishable manner to the way that age is used in the KRS plan did not establish a prima facie violation of the ADEA despite the fact that older workers received lower benefits because of their age. Lyon held that in addition to demonstrating disparate treatment on the basis of age, a plaintiff needed to produce evidence of discriminatory animus against older people in order to survive the employer's summary-judgment motion.

After reviewing the parties' arguments and the relevant law, we conclude that the EEOC has established a prima facie violation of the ADEA, because the KRS plan is facially discriminatory on the basis of age. Supreme Court authority on disparate-treatment-discrimination claims as well as the persuasive authority of many of the other circuits and the history of the ADEA (as amended by the OWBPA) demonstrate that KRS is not entitled to summary judgment. We further hold that when an employment policy or benefit plan such as the KRS plan is facially discriminatory, a plaintiff challenging that policy does not need additional proof of discriminatory animus in order to establish a prima facie disparate-treatment claim. Upon en banc review, we conclude that Lyon's standard for a disparate-treatment age-discrimination claim is inconsistent with Supreme Court authority as well as the rulings of several of our sister circuits in cases involving the similar role of age in employee-benefit plans. We therefore overrule in part our previous decision in Lyon.

Because we conclude that the EEOC has established a prima facie claim of age discrimination, we REVERSE the district court's grant of summary judgment to KRS on the EEOC's age-discrimination claim and REMAND the case to the district court for further proceedings consistent with this opinion.

I. BACKGROUND

The dispute that led to this lawsuit began when Charles Lickteig, who was at the time a Deputy Sheriff with the Jefferson County Sheriff's Department, was denied disability-retirement benefits under the KRS plan because of his age. Because Lickteig's job as a Deputy Sheriff was considered hazardous, Lickteig became eligible for normal retirement benefits at age 55,¹ but he chose to continue working past that date because he had school-age children to support. Joint Appendix ("J.A.") at 49 (Lickteig Aff. ¶ 11). In 1995, Lickteig, who had worked as a Deputy Sheriff since 1978, became disabled due to "a deteriorating vertebra[ ], arthritis, nerve damage, and Parkinson's disease" to the point that he could no longer perform his Deputy Sheriff duties. J.A. at 48 (Lickteig Aff. ¶¶ 4, 6). In July 1995, at age sixty-one and with seventeen years and seven months worth of service, Lickteig applied for disability-retirement benefits under the KRS plan. J.A. at 42 (William Hanes Aff. ¶ 3); J.A. at 49 (Lickteig Aff. ¶ 7). In a letter dated August 25, 1995, defendants notified Lickteig that his request for disability-retirement benefits had been denied because of his age. In its denial letter, KRS explained:

Our laws state that you must have at least 60 months of service credit, be under age 55, and apply within 12 months of your last day of paid employment in a regular full-time position to qualify for Disability Retirement. Therefore, you are not eligible to apply for Disability Retirement since you are over age 55 and in a hazardous position.

J.A. at 51 (Lickteig Denial Letter). As a result of the denial of his request for disability-retirement benefits, Lickteig filed a charge of discrimination with the EEOC in February 1996, alleging that defendants illegally denied him the benefits because of his age. J.A. at 57-59 (EEOC Charges). The EEOC began investigating Lickteig's charges and eventually concluded that the KRS plan violated the ADEA.

The material aspects of the KRS plan are as follows. First, the KRS plan provides two types of retirement benefits— normal retirement benefits and disability-retirement benefits. Employees like Lickteig who work in hazardous positions are eligible for normal retirement benefits at age fifty-five or after completing twenty years of service, whereas an employee working in a nonhazardous position is eligible for normal retirement benefits at age sixty-five. The EEOC is not challenging the KRS plan provisions for normal retirement benefits for either class of employees, but rather only the plan's provision of disability-retirement benefits. As Lickteig is a hazardous-category employee, the district court and the original hearing panel of our court analyzed only the disability-retirement plan's impact upon employees in hazardous positions, and we do the same. We note, however, that our holding is equally applicable to KRS's treatment of employees in nonhazardous positions to the extent that the disability-retirement plan utilizes age in a materially indistinguishable way in the provision of disability-retirement benefits to employees in nonhazardous positions.

The EEOC argues that the KRS plan's provisions of disability-retirement benefits violates the ADEA because the plan "denies benefits or pays reduced benefits, because of age." J.A. at 21 (Compl. at 1). As the original hearing panel of our court explained:

The [KRS disability-retirement benefits] scheme appears to disadvantage older workers by virtue of the fact that a class of workers, determined in significant part by age (actually youth), gets unworked years attributed to them for purposes of calculating the amount of disability retirement. When workers are disabled after they become eligible for normal retirement, they receive only normal retirement benefits. The amount of the yearly benefits is generally calculated as 2.5% of the employee's final compensation times the number of years worked. However, for employees who are not yet eligible for normal retirement (i.e., employees under age 55 and with fewer than 20 years of service), additional years are added to the number of years worked for purposes of the calculation [of disability-retirement benefits]. The number of years added is the number of years remaining until the worker would have reached either normal retirement age or twenty years of service, but no more than the number of years already worked. The purpose appears to be to give a disabled worker the amount of benefit he would have been entitled to had he worked until normal retirement, notwithstanding the fact that he had not actually worked those additional years.

Under this scheme, disability retirement benefits will often be greater than normal retirement benefits for employees with the same years of service (but less than twenty years of service) and the same final compensation. The employee who receives normal retirement benefits will be entitled to 2.5% of his final compensation times his actual service years, whereas the employee who will receive disability retirement benefits will receive the same 2.5% of his final compensation, but will have it multiplied by a number that is...