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Mitchell-White v. Northwest Airlines

Pension Plan's Provision That Discriminates Against Older Disabled Workers Upheld

A federal court upheld an employee pension plan that offset pension benefits with workers' compensation benefits when employees reached age 65 but not at younger ages.

Background

Marta Mitchell-White worked for Northwest Airlines from 1967 to 2003, participating in the company's pension plan throughout that time. In 2005, when she was 64, she elected to take an early retirement pension plan and also began receiving workers' compensation benefits. In 2008 she received a letter stating that her monthly pension would be offset by her workers' compensation benefits and that offset would be retroactive to when she turned 65 in 2006, which reduced her monthly pension benefit to $173.61 The decision was based on a provision in the pension plan that prohibited participants age 65 and older from receiving both pension benefits and workers compensation benefits simultaneously. The prohibition does not apply to individuals younger than 65.

Mitchell-White sued, alleging a violation of the federal Age Discrimination in Employment Act (ADEA), a law that prohibits discrimination in compensation because of an employee's age. A trial court dismissed her claim on the grounds that while the offset was based on eligibility for a pension, and pension eligibility was in turn defined by age, the offset was not motivated by Mitchell-White's age. The court cited a 2008 Supreme Court decision (Kentucky Retirement Systems v. EEOC) that unreasonably limits the scope of challenges to age-based pension plan policies.

Attorneys with AARP Foundation Litigation had filed a "friend of the court" brief in the appeal arguing that the ADEA's prohibitions are clear and longstanding and that while the Kentucky Retirement Systems decision — in which AARP had similarly filed a brief — did limit challenges, this case wrongfully expanded that decision's holding. Kentucky Retirement Systems dealt with distinctions based on pension status, while this dispute centered solely on age. The brief noted that Northwest offered four types of pensions, but all of them included the age-based offset provision. "Because the plan did not treat workers differently based on pension status but instead reduced their benefits as soon as they turned age 65, regardless of what type of pension they were receiving, Kentucky Retirement Systems does not apply," AARP's brief argued. The brief urged the court to rule that the ADEA prohibited the age-related pension policy.

What's at Stake

Federal law clearly prohibits discrimination against employees in work and compensation based on age, a protection that was enacted after extensive debate and after overwhelming evidence of age discrimination in employment. The law provides some very narrow exceptions, one of which was recently widened by the Kentucky Retirement Systems decision. It is critically important that any exceptions to the law be narrowly tailored and that they not be allowed to reach beyond the boundaries enacted by and intended by Congress.

Case Status

Mitchell-White v. Northwest was decided by the U.S. Court of Appeals for the 2nd Circuit.


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