Court Backs Workers In Age Bias Lawsuit

The Supreme Court yesterday made it easier for fired workers to pursue claims that they lost their jobs because of age discrimination.

The court ruled 7 to 1 that when older workers are disproportionately affected by employment decisions, the company bears the burden of showing there are reasons other than age discrimination that produced the outcome.

The decision was one of several workplace-related rulings from the court yesterday that yielded mixed results for business organizations.

The court struck down a California law favored by union organizers and challenged by the Chamber of Commerce; weighed in on how judges should view the incentives that insurance companies and employers have for denying benefits; and ruled that Kentucky's retirement system does not discriminate against workers who become disabled after reaching retirement age.

In the first age discrimination case, the court sided with a group of workers who were dismissed from their jobs at the Knolls Atomic Power Laboratory in Upstate New York. Under pressure to further reduce its workforce after buyouts, Knolls devised a system of evaluating workers on "performance,'' "flexibility" and "critical skills.'' The workers got points for each, along with points for years of service.

As the results were totaled, 31 workers were laid off -- 30 of them above age 40 -- and a group of them challenged the process under the Age Discrimination in Employment Act (ADEA).

The question before the court was whether an employer facing such a "disparate-impact" claim must both produce evidence that the measurement areas were based on reasonable factors other than age and "persuade" courts of their merit.

"We hold that the employer must do both,'' Justice David H. Souter wrote.

Groups such as AARP and the federal government had supported the workers in the case, while business groups opposed them. "This decision ties the hands of employers to respond to market changes and new technology without fearing that any real change in their business plan will prompt a baseless ADEA lawsuit,'' the National Federation of Independent Business said.

But Souter said that although plaintiffs must make specific charges, the law is clear that the burden is on employers to show dismissals are based on factors other than age. "We have to read it the way Congress wrote it,'' Souter said. The case is Meacham v. Knolls Atomic Power Laboratory.

Justice Clarence Thomas dissented, saying he did not think disparate-impact claims fell under the ADEA's jurisdiction. Justice Stephen G. Breyer recused himself. Breyer holds shares of Lockheed Martin, a subsidiary of which operates Knolls Atomic Power Laboratory.

Business groups were happier with the outcome in Chamber of Commerce v. Brown. In a 7 to 2 ruling, the court voided a California law that forbade employers that received state money from trying to influence workers during union organizing efforts in their workplaces.

Justice John Paul Stevens wrote in the majority opinion that the California law strayed into an area that is preempted by the National Labor Relations Act, which regulates how employers should react to union organizing activities.

California had said employers that receive state money could not use the funds to "assist, promote or deter union organizing.'' But the chamber, supported by the federal government, said the purpose was not neutrality but to "muzzle'' companies from opposing unions.

The chamber said the decision "shuts the door on attempts by other states'' to pass such laws. Craig Becker, associate general counsel of the AFL-CIO, disagreed, saying states with similar laws and those considering them might be able to accommodate the court's decision.

Breyer and Justice Ruth Bader Ginsburg dissented, saying the California law did not dictate companies' activities, but simply "says to those employers, do not do so on our dime.''

The court was more splintered in its other decisions.

Justices split 5 to 4 in the Kentucky case, Kentucky Retirement Systems v. Equal Employment Opportunity Commission. It concerned the commonwealth's attempt to permit "hazardous position" workers, such as law enforcement personnel, to receive pensions if they become disabled before age 55 or before reaching certain levels of experience.

But Charles Lickteig, a police officer who became disabled and retired at 61, sued under the ADEA because the system meant he would receive lower benefits than a younger worker who became disabled.

Breyer wrote for the majority to uphold Kentucky's system because the differences in treatment were not "motivated by age.'' He was joined by Chief Justice John G. Roberts Jr., Stevens, Souter and Thomas.

Justice Anthony M. Kennedy wrote for the dissenters, saying Kentucky's motivations did not matter.

"By explicit command of Kentucky's disability plan, age is an express disadvantage,'' he wrote.

The court was divided 6 to 3 in Metropolitan Life Insurance v. Glenn, which involved a worker who claimed to have been unfairly denied disability benefits. Breyer wrote for the majority that Metropolitan Life's role as the administrator and insurer of Sears's long-term disability plan created the kind of conflict of interest that a court should consider when reviewing whether a plaintiff was wrongly denied benefits.