US EQUAL EMPLOYMENT v. Air Line Pilots Ass'n

• Decision Date: 28 May 1980
• Docket Number: No. Civ. 3-79-635.,Civ. 3-79-635.
• Parties: U. S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. AIR LINE PILOTS ASSOCIATION, INTERNATIONAL and Northwest Airlines, Incorporated, Defendants.
• Court: U.S. District Court — District of Minnesota

489 F. Supp. 1003

U. S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. AIR LINE PILOTS ASSOCIATION, INTERNATIONAL and Northwest Airlines, Incorporated, Defendants.

No. Civ. 3-79-635.

United States District Court, D. Minnesota, Third Division.

May 28, 1980.

Thomas Nelson, Frances H. Assa and Lloyd B. Zimmerman, Milwaukee, Wis., for plaintiff EEOC.

James Abbott and Steven D. Wheeler, Minneapolis, Minn., for defendant Northwest Airlines.

Robert Atmore, Minneapolis, Minn., and Michael B. Abram and Jay P. Levy-Warren, New York City, for defendant Air Line Pilots Assn.

MEMORANDUM AND ORDER

DEVITT, Chief Judge.

At issue in this Age Discrimination in Employment Act (ADEA) case is the validity of a union contract provision that allegedly gives age 60 pilots for Northwest Airlines less favorable vacation benefits than younger pilots. The case was tried to the court during the week of May 12, 1980. Plaintiff is the Equal Employment Opportunity Commission, suing on behalf of Northwest Airline Pilots entering their year of normal retirement, age 60.¹ Defendants are Northwest Airlines, Inc. (NWA), the employer, and the Air Line Pilots Association (ALPA), the union. After hearing the evidence, including numerous stipulated facts, the court determines that the contract provision does violate the ADEA and that appropriate relief, detailed below, should issue.

FACTS

Under the vacation system in effect for NWA pilots, vacation earned in one year is taken during the following year. Pilots are required to bid in November for vacations to be taken during the following year. Thus, for example, vacation earned in 1980 is taken in 1981, and pilots must bid for that vacation time in November of 1980.

During 1978 the defendants negotiated a collective bargaining agreement for NWA pilots, which became effective January 1, 1980, replacing an earlier agreement entered into in 1975. Under the 1975 agreement pilots entering their normal retirement year—the year they turn age 60— could bid all of their vacation time for after their retirement and thereby obtain lump sum payments for all accrued vacation time upon retirement. Pilots retiring prior to age 60 could do the same, provided they exercised sufficient aforethought and planned their retirement prior to November of the previous year, when vacation times were bid for the following year.

Under the 1978 agreement, at issue here, pilots at normal retirement can no longer receive lump sum payments for all accrued vacation time at retirement. Rather, those pilots are required by § 7(B)(1) of the agreement to bid a portion of their accrued vacation time prior to retirement. Section 7(B)(1) requires age 60 pilots to take, prior to retirement, the portion of their vacation earned during their 59th year equivalent to the amount of vacation they will accrue prior to retirement during their 60th year.² However, § 7(B)(1) does not alter the ability of pilots retiring prior to age 60 to obtain lump sum payments for all accrued vacation time. Thus, § 7(B)(1) of the 1978 contract requires only age 60 pilots, not early retirees, to take a portion of their accrued vacation time prior to retirement.

DISCUSSION

Liability

The EEOC's age discrimination claim is based on the theory that § 7(B)(1) of the 1978 collective bargaining agreement between NWA and ALPA violates the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-34 (1976). Plaintiff appears to assert two distinct violations of the ADEA: (1) that § 7(B)(1) is illegal because it provides age 60 retiring pilots with less lump sum vacation pay benefits than they received under the 1975 contract; and (2) that § 7(B)(1) is illegal because it provides age 60 retiring pilots with less lump sum vacation pay benefits than younger retiring pilots. The first claim will be disposed of summarily. The Eighth Circuit Court of Appeals has made clear that the ADEA does not require that older employees receive preferential treatment over younger employees. See Cova v. Coca-Cola Bottling Co., 574 F.2d 958, 960 (8th Cir. 1978). Therefore, it is irrelevant whether older employees receive lesser benefits than in the past; the relevant inquiry rather is whether older employees receive lesser benefits than younger employees, and if so, why. This inquiry is the subject of the EEOC's second alleged violation and it is addressed below.

Under the law of this Circuit, analysis of an ADEA case is a three part process. First, the plaintiff must establish a prima facie case. Second, if a prima facie case has been established, the defendant must show that the apparent discrimination is based on reasonable factors other than age. Finally, if the defendant is successful in rebutting plaintiff's prima facie case, the plaintiff still can prevail if plaintiff proves that age was a contributing factor in the adverse employment decision. See Cova, supra, at 959-60; Moses v. Falstaff Brewing Corp., 550 F.2d 1113, 114-15 (8th Cir. 1977).

To establish a prima facie case the following must be proved by the plaintiff: (1) the complaining employees are within the protected age group; (2) those employees are affected by an adverse employment decision; and (3) younger employees similarly situated are not subject to the adverse employment decision. Compare Cova, supra, at 959; Marshall v. Roberts Dairy Co., 572 F.2d 1271, 1272 (8th Cir. 1978).³ The court is satisfied that a prima facie case has been established. The retiring pilots obviously are within the protected age group; those pilots cannot obtain a lump sum payment for all accrued vacation at their retirement date; and younger pilots who decide to retire early can, if they plan their early retirements sufficiently in advance, obtain a lump sum payment for all their accrued vacation at their retirement.

Defendants have argued vigorously that the EEOC has not established a prima facie violation of the ADEA. They argue that if the 1978 agreement is looked at as a whole, retiring pilots actually receive greater benefits than younger pilots. Thus, defendants assert, the court must look at the "total package" of vacation benefits, and the parties have stipulated that under the "total package" approach older pilots as a rule are better off than younger ones.

The court cannot subscribe to defendants' total package argument. The ADEA prohibits discrimination "against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. § 623(a)(1) (1976). Section 7(B)(1) of the 1978 collective bargaining agreement is a term of employment, and if it discriminates based on age it cannot be justified on the basis that some other term of employment grants older employees special benefits. To so hold would, in the court's opinion, be contrary to the liberal policies underlying the ADEA. See 29 U.S.C. § 621 (1976).

Once a prima facie case has been established the burden shifts to the defendants to show that the adverse employment decision was "based on reasonable factors other than age." 29 U.S.C. § 623(f)(1) (1976). Recent analogous Eighth Circuit case law under Title VII has made clear that this is more than merely a shift in the burden of producing additional evidence. Rather, the defendants must prove by a preponderance of the evidence that the adverse decision was based on reasonable factors other than age. Cf. Vaughn v. Westinghouse Electric Co., 620 F.2d 655, at 659 (8th Cir. 1980).

In attempting to meet this burden, the defendants have cited three different factors unrelated to age, which allegedly were the reasons for enacting § 7(B)(1): (1) to equalize the ability of older and younger pilots to bid for prime vacation time; (2) to equalize lump sum payments available to all age 60 pilots; and (3) to eliminate the alleged prime abusers of vacation benefits, age 60 pilots. While each of these factors is plausible in the abstract, the defendants have not proved by a preponderance of the evidence that these "legitimate reasons exist factually." Id.

The first asserted justification is difficult to understand. Apparently defendants argue that under the 1975 contract age 60 pilots generally were bidding all their vacation time after their retirement dates in order to maximize their lump sum payments, and that as a consequence prime vacation times were being bid by retiring pilots who never intended to use those vacation times. As a result, claim defendants, younger pilots with lower vacation bidding rights were being forced to take their vacations at less favorable times, because retiring pilots were bidding for prime vacation slots that they never would use. This argument simply cannot withstand scrutiny. If this problem was a real one, and defendants have presented no credible evidence that it was, it could have been solved simply by allowing younger pilots also to bid for vacation times already taken by retiring pilots, since it would be obvious to the employer that retiring pilots would never use those vacation times but merely were bidding for them to maximize their lump sum payments at retirement. Therefore, the court cannot accept this as a legitimate nondiscriminatory factor rebutting plaintiff's prima facie case.

The second alleged justification for § 7(B)(1) is that its purpose merely is to equalize lump sum payment amounts for all age 60 retiring pilots. Under the old contract the maximum lump sum payment each age 60 pilot could receive at retirement varied depending upon when that pilot's birthday fell during the year. For example, a pilot retiring on July 1, 1979, who sought to maximize his lump sum payment for accrued vacation time, would receive payment for one full year of vacation time accrued from 1978, plus one-half year of vacation for January-June 1979. A pilot retiring on May 1, 1979, however, would receive less, while a pilot retiring on August 1, 1979, would receive a greater lump sum. Under new § 7(B)(1) age 60...