Lyon v. Ohio Educ. Ass'n and Professional Staff Union

• Decision Date: 27 April 1995
• Docket Number: No. 93-4072,93-4072
• Citation: 53 F.3d 135
• Parties: 67 Fair Empl.Prac.Cas. (BNA) 1088, 66 Empl. Prac. Dec. P 43,580, 63 USLW 2704, 19 Employee Benefits Cas. 1244, Pens. Plan Guide P 23912E James LYON, James E. Romick, et al., Plaintiffs-Appellants, v. OHIO EDUCATION ASSOCIATION AND PROFESSIONAL STAFF UNION, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 135

53 F.3d 135

67 Fair Empl.Prac.Cas. (BNA) 1088,

66 Empl. Prac. Dec. P 43,580, 63 USLW 2704,

19 Employee Benefits Cas. 1244,

Pens. Plan Guide P 23912E

James LYON, James E. Romick, et al., Plaintiffs-Appellants, v. OHIO EDUCATION ASSOCIATION AND PROFESSIONAL STAFF UNION,

Defendants-Appellees.

No. 93-4072.

United States Court of Appeals, Sixth Circuit.

Argued Sept. 30, 1994.

Decided April 27, 1995.

Theodore E. Meckler (briefed), Meckler & Meckler, Cleveland, OH, Robert S. Bauders (argued and briefed), Law Office of Robert S. Bauders, Cleveland, OH, for James Lyon.

W. Irl Reasoner (briefed), Habash, Reasoner & Frazier, Georgeann G. Peters (argued), Carol T. McClarnon, Baker & Hostetler, Columbus, OH, for Ohio Educ. Ass'n.

Ronald G. Macala (argued), Green, Haines, Sgambati, Murphy & Macala, Canton, OH, Randall Vehar (briefed), Green, Haines, Sgambati, Murphy & Macala, Akron, OH, for Professional Staff Union.

Jennifer S. Goldstein (argued), E.E.O.C., Office of the Gen. Counsel, Washington, DC, for amicus curiae E.E.O.C.

Before: RYAN and BOGGS, Circuit Judges; ROSEN, District Judge. ^*

BOGGS, Circuit Judge.

The district court granted summary judgment, dismissing a suit challenging an early retirement incentive plan under the Age Discrimination in Employment Act. We now affirm because plaintiffs have not presented a prima facie case of age discrimination.

I

On December 23, 1992, James Lyon sued his employer, the Ohio Education Association ("OEA"), and his union, the Professional Staff Union ("PSU"). He was later joined by sixteen co-workers (collectively, "plaintiffs"). They alleged that an early retirement provision in the collective bargaining agreement between the defendants violates the Age Discrimination in Employment Act of 1967 ("ADEA"), as amended by the Older Workers Benefit Protection Act of 1990 ("OWBPA"), 29 U.S.C. Sec. 621 et seq. The district court granted summary judgment to defendants, and plaintiffs appeal that ruling.

The dispute centers upon a provision for early retirement called "Option B," which appears in the collective bargaining agreement in effect for May 15, 1992, through August 31, 1997. The pertinent language appears in the section of the agreement entitled "Early Retirement Options and Benefits."

[U]pon the earlier of the completion of twenty (20) years of service or the attainment of age sixty (60) after five (5) years of service, a participant may elect to retire. Early retirement under this Option B may be elected by the participant at any time after the participant meets the eligibility requirement.... Early retirement benefits under this Option B shall be at least equal to the same percent of salary that the participant would have received if the participant had retired on the normal retirement date.

Sec. 12.05 (emphasis added). The agreement also allows "normal" retirement at the earlier of age 62 or 32 years of service (Sec. 12.04(A)), and calculates an employee's monthly retirement benefit level by multiplying the years of service by 2% of an employee's Average Monthly Compensation ("AMC") (Sec. 12.08). Employees retiring with at least 20 years of service under normal retirement or Option B are guaranteed a minimum benefit of 50% of AMC and a maximum of 64%. Sec. 12.08(B).

Plaintiffs claim that Option B's imputation of service clause ¹ (italicized above) violates the ADEA because "younger persons who take an early retirement receive a higher pension amount than older persons taking a retirement with the same length of service...." Complaint at 1-2. In order to equate benefits for early retirees to those under normal retirement, Option B assumes that early retirees had worked until age 62, requiring OEA to impute the necessary years of service to each early retiree based on their present age. If a 56-year-old employee with 21 years of experience selected Option B, the plan treats the employee as if she had worked six additional years: the worker would receive [ (21 years worked) + (62-56) years imputed] X 2% = 54% of AMC. A younger employee with the same experience would receive a larger benefit: a 52-year-old who also had worked 21 years would receive [ (21 years worked) + (62-52) years imputed] X 2% = 62% of AMC. The net effect is to ensure early retirees the same benefits under Option B that they would receive had they continued to work until their normal retirement date.

The district court gave three reasons for granting summary judgment for defendants (because the facts were not in dispute, the only issue to resolve was whether Option B violates the ADEA). First, plaintiffs failed to establish a prima facie case of age discrimination based on a disparate-treatment theory because they "do not allege that OEA and PSU intended to discriminate because of age, only that Option B has the effect of discriminating because of age." Second, the court held that defendants were entitled to summary judgment under a disparate-impact theory of discrimination, but it did not explain its reasoning. Instead, the court discussed its third basis for granting summary judgment--that Option B did not violate the ADEA because it was a lawful early retirement incentive explicitly sanctioned by 29 U.S.C. Sec. 623(f)(2)(B)(ii). ² Accordingly, the court entered judgment for defendants.

On appeal, plaintiffs challenge three aspects of the district court's order granting summary judgment: they assert that the court improperly held that they had not presented a prima facie case of age discrimination, that Option B is not a lawful voluntary retirement incentive under the ADEA, and that the court incorrectly denied their motion for summary judgment.

II

Because we hold that plaintiffs have failed to advance a prima facie case of disparate-treatment or disparate-impact discrimination, we need not address whether Option B is a lawful early retirement provision authorized under the OWBPA.

This court reviews de novo the district court's grant of defendants' motion for summary judgment. Baggs v. Eagle-Picher Industries, Inc., 957 F.2d 268, 271 (6th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 466, 121 L.Ed.2d 374 (1992). This court may affirm the district court only if it determines that the pleadings, affidavits, and other submissions show "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). We agree with the district court that the pertinent facts are not in dispute, and that this appeal requires only that we determine whether Option B violates the ADEA as a matter of law.

III

Plaintiffs have conceded that "[t]his is not a disparate impact case since Option B, as administered by Defendants-Appellants [sic] is not age neutral," and we shall take them at their word. Petitioner's Brief at 8-9. Therefore, the primary issue is whether they have stated a claim of disparate-treatment age discrimination. The Supreme Court has long differentiated between the two theories of discrimination, and the distinction is relevant to plaintiffs' arguments:

"Disparate treatment" ... is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin. Proof of discriminatory motive is critical, although it can in some situations be inferred from the mere fact of differences in treatment....

Claims of disparate treatment may be distinguished from claims that stress "disparate impact." The latter involve employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. Proof of discriminatory motive ... is not required under a disparate-impact theory.

International Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n. 15, 97 S.Ct. 1843, 1854 n. 15, 52 L.Ed.2d 396 (1977) (citations omitted).

The Supreme Court recently held in Hazen Paper Co. v. Biggins, --- U.S. ----, ----, 113 S.Ct. 1701, 1705, 123 L.Ed.2d 338 (1993), that "there is no disparate treatment under the ADEA when the factor motivating the employer is some feature other than the employee's age." The Court stressed that the ADEA protects workers only from an employer who intended to discriminate because of age:

[T]he very essence of age discrimination [is] for an older employee to be fired because the employer believes that productivity and competence decline with age. Congress' promulgation of the ADEA was prompted by its concern that older workers were being deprived of employment on the basis of inaccurate and stigmatizing stereotypes.

Id. at ----, 113 S.Ct. at 1706 (citation omitted).

The Court recognized that an ADEA violation does not occur where an employer is motivated by a factor other than age. In Hazen Paper, an employee was fired to prevent his pension from vesting. Nonetheless, the Court held that Biggins could not recover for age discrimination, ³ since the employee's cost, rather than his age, motivated the firing:

When the employer's decision is wholly motivated by factors other than age, the problem of inaccurate and stigmatizing stereotypes disappears. This is true even if the motivating factor is correlated with age, as pension status typically is.... On average, an older employee has had more years in the work force than a younger employee, and thus may well have accumulated more years of service with a particular employer. Yet an employee's age is analytically distinct from his years of service.... Because age and years of service are analytically distinct, an employer can take account of one while ignoring the other, and thus it is incorrect to say that a decision based on years of service is necessarily "age-based."

Id. at ---- - ----, 113 S.Ct. at 1706-07; see Anderson v. Baxter Healthcare Corp., 13 F.3d 1120 (7th Cir.1994) (firing an older worker to eliminate high salary is...