The Equal Employment Opportunity Commission (EEOC) sued Kentucky Retirement
Systems (KRS) and the Commonwealth of Kentucky, alleging that KRS's disability-retirement plan for public employees violates the Age Discrimination in Employment Act (ADEA). KRS's plan disqualifies employees from receiving disability-retirement benefits if they work past the normal retirement age and then become disabled. The plan also gives older disabled employees fewer benefits than younger disabled employees. The district court dismissed the case because while the EEOC had proved that KRS treated older and younger employees differently, it had failed to prove that the plan's disparate treatment of older people was motivated by the intent to discriminate.
The Sixth Circuit Court of Appeals reversed the district court's decision, holding that an employer's intent to discriminate is proven by the employer's adoption of an employment policy which discriminates on the basis of age. The EEOC did not need to prove that the KRS's purpose was to intentionally discriminate against older people, only that the plan contained arbitrary distinctions based on age.
Whether any use of age as a factor in a retirement plan is "arbitrary" and thus renders the plan facially discriminatory in violation of the Age Discrimination in Employment Act?