Argument recap: Kentucky Retirement Systems v. EEOC

The Justices asked a lot of questions of both sides’ counsel during oral argument. Many of those questions were about the facts of Kentucky’s disability retirement plan and how exactly it uses age as a factor for providing benefits. But the Justices were also concerned about the impact that a ruling in favor of the EEOC would have on disability pension plans across the country.

Petitioners’ counsel began by emphasizing that under Kentucky’s plan, age is only one factor in deciding whether a worker is eligible for disability retirement benefits. He was quickly interrupted by Justice Breyer, who asked a series of questions about why Kentucky’s plan imputed years of service to some disabled workers under 55 but not those over 55. Counsel answered by saying that workers over 55 are eligible for retirement benefits and thus not in a similar position as younger disabled workers. But this prompted Justice Kennedy to observe that Kentucky’s plan “does make an explicit determination based on age as to some people,” and he asked why that doesn’t make the plan facially discriminatory. Counsel’s response was that the plan makes determinations based on “pension status,” not age, which Justice Scalia chimed in to say was “one step removed” from age discrimination.

Justice Ginsburg asked petitioners’ counsel whether the ADEA bans all discrimination based on age or only “arbitrary” discrimination. Counsel argued that the use of the word “arbitrary” in the statute’s preamble and the legislative history suggest that the ADEA should not be construed as rigidly as Title VII’s antidiscrimination provisions, but Justice Ginsburg seemed unconvinced.

Petitioners’ counsel then fielded several questions about whether disability benefits were distinct from normal retirement benefits and how they fit into the overall retirement system. Counsel argued that the disability retirement plan is designed to “fill the gap” for those not eligible for normal retirement. But Justice Breyer seemed skeptical, asking counsel why Kentucky didn’t simply avoid any potential ADEA claims by imputing years of service to all disabled workers, including those already eligible for normal retirement. Counsel responded by saying that it wouldn’t be economically feasible to do that without lowering benefits for everyone.

Chief Justice Roberts then asked, “So the effect of this litigation is that policemen or firefighters who are injured and become disabled now get lower benefits for disability?” “Much lower,” counsel answered. Justice Breyer said he thought that result was “just terrible,” and one that Congress probably didn’t intend. How, he asked, could the Court avoid interpreting the statute that way? Counsel responded that the Court could reach such a result by holding that age is not the determining factor for calculating benefits. But Justice Kennedy wasn’t buying it. “Suppose I can’t make that assumption or adopt that premise. Is there another basis on which to reach the result?” Counsel responded by arguing that the EEOC’s suit should be considered an as-applied challenge rather than a facial challenge, so the Court could consider whether there are reasonable reasons to use age as a factor. Furthermore, counsel argued, Kentucky was not motivated by age discrimination in developing its plan.

Respondent EEOC’s counsel began by arguing that Kentucky’s retirement plan uses age to determine benefits in a way that disadvantages older workers, but he was quickly interrupted by Justice Stevens, who asked several questions about whether disability retirement was any different from regular retirement. Shortly thereafter, Justices Scalia and Alito asked why Kentucky can’t condition benefits on a combination of years of service, age, and disability. Counsel’s answer was that the state can’t use age as a proxy in determining how many years of service they should impute to a disabled employee.

Justice Breyer pressed the government about the effect of “using absolutely mechanical rules” in defining age discrimination under the ADEA. Justices Souter and Ginsburg followed by asking how the state could craft a sensible disability policy that would be age-neutral. Counsel suggested that an equal number of years could be imputed to all disabled workers. Although the use of age in Kentucky’s plan may not seem discriminatory in the traditional sense, counsel argued, the ADEA does not permit any discrimination against older workers. Justice Breyer asked whether the Court should construe the ADEA to reach only stereotypical age discrimination, but counsel answered that Congress intended the ADEA to be construed the same way Title VII had been interpreted.

Overall, a majority of the Court seemed convinced that Kentucky’s plan does discriminate on the basis of age. But the Justices’ concerns about ruling for the EEOC were also apparent in their questioning. At times, the Court’s liberal members seemed to be searching for a way to uphold disability retirement plans such as Kentucky’s without stretching the meaning of the Age Discrimination in Employment Act. It is unclear whether they found one.