Question:

The company I work for has a policy that provides greater health insurance premium reimbursement for employees as they get older. I am currently 42, but employees who are older than I am get a larger cash benefit. I know that the age discrimination laws prohibit discrimination against workers who are over 40. Can my employer provide a greater benefit to older workers, while discriminating against me?

Answer:

The question you raise, one of “reverse age discrimination” has been in a state of uncertainty until the recent United States Supreme Court decision of General Dynamics Land Systems, Inc. v. Cline, decided February 24, 2004.
The Cline case involved the federal Age Discrimination in Employment Act (ADEA), which forbids discriminatory preference for the young over the old. However, the question in Cline was whether the ADEA also prohibits favoring the old over the young. The United States Supreme Court held that an employer may favor older workers over younger workers. So, under federal law, your employer’s practice of providing greater health premium reimbursement to older workers is lawful.

In Cline, the employer and the employee’s union eliminated the company’s obligation to provide health benefits to workers who were retiring in the future, except as to then current workers who were at least 50 years old. Mr. Cline and a group of other employees, who were at least 40, and therefore protected by the ADEA, but under 50, sued because under this new agreement when they retired they would not receive health benefits. They claimed the agreement violated the ADEA because it discriminated against them as a class of workers over 40 with respect to the compensation, terms, and conditions of their employment.

The Cline court reviewed the history of the ADEA, noting the vast record that showed that a person’s chances to find and keep a job got worse over time and as between any two people, the younger is in the stronger position in a job market. The Court noted the purposes of the ADEA were to “promote employment of older persons based on their ability rather than age; to prohibit arbitrary age discrimination in employment; and to help employers and workers find ways of meeting problems arising from the impact of age on employment.”

Based on its review of the legislative history and studies of age discrimination in the job market, the United States Supreme Court held that it is beyond reasonable doubt that the ADEA was enacted to protect a relatively older worker from discrimination that works to the advantage of the relatively young. The Court noted that, “if Congress had been worrying about protecting the younger against older, it would not likely have ignored everyone under 40.” The Court considered that the text, structure, purpose, and history of the ADEA, along with its relationship to other federal statutes shows that the statute does not mean to stop an employer from favoring an older employee over a younger one, stating, “the enemy of 40 is 30, not 50.”

California law often grants more protection to an employee than federal law. Therefore, while the United States Supreme Court’s decision in Cline is of great importance, it remains to be seen if California law will interpret the age discrimination provisions in the Fair Employment and Housing Act (FEHA) in the same manner as the United States Supreme Court. Both statutes prohibit “discrimination because of an individual’s age,” and the Supreme Court interpreted this language to allow a greater employment benefit to an older employee. Also, because welfare benefit plans are governed by the federal Employee Retirement Income
Security Act (ERISA), federal law usually governs the interpretation of such plans and benefits.
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