ADEA Violations Can Be Costly, Even If They Are Not Obvious

A school district in Illinois was found to have violated the federal Age Discrimination in Employment Act (ADEA) by implementing a collective bargaining agreement provision that had the effect of unfairly limiting the pay of older employees.

In 1991, language arts teacher Charles Koplinski began working for Urbana School District No. 116 in Illinois.

To calculate a teacher's pension, the state looks at the average of the four highest consecutive salary years over their last 10 years before retirement.

Teachers hired before 2005, known as "Tier 1" teachers, can retire with a full pension at age 55 with 35 years of service. With 10 years of service, they have to work until age 60. And with five years of service, they must go until age 62.

Teachers with 20 years of service can retire at 55 with a discounted pension.

New provision leads to age discrimination

In 2005, the state passed a new law that required districts to pay more into the teacher's retirement system if the teacher received a raise of more than 6% in any of those critical four years.

The District did not like the idea of having to pay more, so in 2007 it added a new collective bargaining agreement (CBA) provision.

The new provision said teachers who were eligible to retire within 10 years could not get an annual raise of more than 6%. The provision had the effect of eliminating any extra payment that would be required by a larger raise.

Good news, bad news

That move may have eliminated the need to pay more into the retirement system, but it created a bigger problem: unlawful age discrimination.

More specifically, it only applied to employees who were at least 45 years old. (Federal protection against age discrimination begins at age 40.) In addition, it had the clear effect of imposing a wage limitation on older workers that did not apply to younger ones.

Not surprisingly, Koplinski was not a fan of the new CBA provision. He earned a master's degree in 2008, and by 2015 he had earned enough post-master's credits to move up on the District's salary scale.

If he was under 45, his salary would have gone up to $77,242. But because he was within 10 years of retirement eligibility at age 50, the District applied the 6% cap and his salary went up to only $73,880.94 instead.

Koplinski was not alone; the District similarly applied the 6% cap to at least two dozen other teachers.

In 2017, Koplinski filed an Equal Employment Opportunity Commission (EEOC) charge against the District, saying "he was told he was paid less because he was 10 years away from retiring." The District also allegedly told him that it was state law that limited his salary increase to 6%.

Disparate Treatment Under the ADEA

The EEOC said the District's application of the cap violated the federal ADEA by limiting salary increases for older workers and by limiting their supplemental pay.

At the district court, both sides asked the court to enter summary judgment in their favor (EEOC v. Urbana School Dist.).

The court granted the EEOC's motion and denied the District's motion, stating that "a policy 'that facially discriminates based on age suffices to show disparate treatment under the ADEA.'"

Tier 1 teachers could not retire before the age of 55 — and that meant the only teachers subject to the wage limitations were those who were at least 45 years old.

The District drew "an express line" at age 45, the court explained. Its differential treatment of older teachers violated the ADEA, it determined.

Not 'a reasonable factor other than age'

In so doing, the court rejected the District's argument that "on a teacher's years of service, not on a teacher's age." The District argued that "age and years of service are analytically distinct, an employer can take account of one while ignoring the other, and thus it is incorrect to say that a decision based on years of service is necessarily 'age based.'"

The EEOC's motion was granted, and the District's was denied. The court ordered the District to pay $51,093 in back pay.