Official Syllabus: Kentucky permits “hazardous position” workers, e.g., policemen, to receive normal retirement benefits after working either 20 years or 5 years and attaining age 55 and pays “disability retirement” benefits to workers meeting specified requirements. Kentucky’s “Plan” calculates normal retirement benefits based on actual years of service. The Plan calculates disability benefits by adding to an employee’s actual years of service the number of years that the employee would have had to continue working in order to become eligible for normal retirement benefits, adding no more than the number of years the employee had previously worked. Charles Lickteig, who continued working after becoming eligible for retirement at age 55, became disabled and retired at age 61. He filed an age discrimination complaint with respondent (EEOC) after the Plan based his pension on his actual years of service without imputing any additional years. The EEOC filed suit against Kentucky and others (collectively Kentucky), arguing that the Plan failed to impute years solely because Lickteig became disabled after age 55. The District Court granted Kentucky summary judgment, holding that the EEOC could not establish age discrimination, but the Sixth Circuit ultimately reversed on the ground that the Plan violated the Age Discrimination in Employment Act of 1967 (ADEA).

Held: Kentucky’s system does not discriminate against workers who become disabled after becoming eligible for retirement based on age. Pp. 4–14.

    (a) The ADEA forbids an employer to “discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age.” 29 U. S. C. §623(a)(1) (emphasis added). A plaintiff claiming age-related “disparate treatment” (i.e., intentional discrimination) must prove that age “actually motivated the employer’s decision.” Hazen Paper Co. v. Biggins, 507 U. S. 604 (emphasis added). In Hazen Paper, the Court found that, without evidence of intent, a dismissal based on pension status was not a dismissal “because … of age,” id., at 611–612, noting that, though pension status depended upon years of service, and years of service typically go hand in hand with age, the two concepts are “analytically distinct,” id., at 611. And the dismissal at issue there, if based purely on pension status, would not embody the evils prompting the ADEA: It was not based on a “prohibited stereotype” of older workers, did not produce any “attendant stigma” to those workers, and was not “the result of an inaccurate and denigrating generalization about age.” Id., at 612. However, the Court noted that discrimination based on pension status could violate the ADEA if pension status was a “proxy for age.” Id., at 613. Pp. 4–6.

    (b) Applying Hazen Paper, the circumstances here, taken together, show that the differences in treatment in this particular instance were not “actually motivated” by age. (1) Age and pension status remain “analytically distinct” concepts. (2) Here, several background circumstances eliminate the possibility that pension status serves as a “proxy for age.” Rather than an individual employment decision, at issue here are complex systemwide rules involving not wages, but pensions—a benefit the ADEA treats somewhat more flexibly and leniently in respect to age. Further, Congress has otherwise approved programs, such as Social Security Disability Insurance, that calculate disability benefits using a formula that expressly takes account of age. (3) The disparity here has a clear non-age-related rationale. The Plan’s disability rules track Kentucky’s “normal retirement” rules by imputing only those additional years of service needed to bring the disabled worker’s total to 20 or to the number of years that the individual would have worked had he worked to age 55. Thus, the disability rules’ purpose is to treat a disabled worker as though he had become disabled after, rather than before, he had become eligible for “normal retirement” benefits. Age factors into the disability calculation only because the normal retirement rules themselves permissibly consider age. The Plan simply seeks to treat disabled employees as if they had worked until the point at which they would be eligible for a normal pension. Thus, the disparity turns upon pension eligibility and nothing more. (4) Although the Plan placed an older worker at a disadvantage here, in other cases, the rules can work to the advantage of older workers, who may get a bigger boost of imputed years than younger workers. (5) Kentucky’s system does not rely on the sorts of stereotypical assumptions, e.g., the work capacity of “older” workers relative to “younger” workers, that the ADEA sought to eradicate. The Plan’s “assumptions” that no disabled worker would have continued to work beyond the point at which he was both disabled and pension eligible do not involve age-related stereotypes, but apply equally to all workers regardless of age. (6) The nature of the Plan’s eligibility requirements means that, unless Kentucky were severely to cut the benefits to disabled workers who are not yet pension eligible, it would have to increase the benefits available to disabled, pension-eligible workers, while lacking any clear criteria for determining how many extra years to impute for those already 55 or older. The difficulty of finding a remedy that can both correct the disparity and achieve the Plan’s legitimate objective—providing each disabled worker with a sufficient retirement benefit—further suggests that this objective, not age, “actually motivated” the Plan.

    The Court’s opinion in no way unsettles the rule that a statute or policy that facially discriminates based on age suffices to show disparate treatment under the ADEA. The Court is dealing with the quite special case of differential treatment based on pension status, where pension status—with the explicit blessing of the ADEA—itself turns, in part, on age. Further, the rule for dealing with this sort of case is clear: Where an employer adopts a pension plan that includes age as a factor, and that employer then treats employees differently based on pension status, a plaintiff, to state a claim under the ADEA, must adduce sufficient evidence to show that the differential treatment was “actually motivated” by age, not pension status. Pp. 6–11.

    (c) The Federal Government’s additional arguments are rejected. Since Hazen Paper provides the relevant precedent here, an ADEA amendment made in light of Public Employees Retirement System of Ohio v. Betts, 492 U. S. 158 , is beside the point. And a contrary interpretation contained in an EEOC regulation and its compliance manual does not lead to a different conclusion. Pp. 11–13.

467 F. 3d 571, reversed.

    Breyer, J., delivered the opinion of the Court, in which Roberts, C. J., and Stevens, Souter, and Thomas, JJ., joined. Kennedy, J., filed a dissenting opinion, in which Scalia, Ginsburg, and Alito, JJ., joined.

Case below: Equal Employment Opportunity Commission v. Jefferson County Sheriff's Department (6th Cir en banc 10/31/2006) (10-4)
Oral argument:  01/09/2008. [Transcript]
Official docket sheet 
Certiorari granted 09/25/2007.  

Question presented in petition for certiorari:  

This Petition involves a public employee retirement plan that includes normal and disability retirement benefits. A member who is eligible for normal retirement benefits based on attained age plus a minimum service requirement, or based on service alone, is not eligible for disability retirement benefits. Because age may be a factor in determining eligibility for normal retirement, it is an indirect factor in determining eligibility for disability retirement. Moreover the calculation of disability retirement benefits is based upon actual years of service plus the number of years remaining before the member reaches retirement age or eligibility based on years of service alone; age may thereby be an indirect factor in determining the amount of disability retirement benefits.

The question presented in this Petition is accordingly:

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?

Question presented in brief for the EEOC:

Whether proof that an employee benefit plan on its face requires older workers to be denied disability benefits available to younger workers or to receive fewer disability benefits than younger workers establishes a prima facie case of discrimination in violation of the Age Discrimination in Employment Act of 1967, 29 U.S.C. 621 et seq.

Certiorari Documents: 

• Petition for Writ of Certiorari 
• Brief in Opposition 
• Reply of petitioners Kentucky Retirement Systems, Commonwealth of Kentucky, and Jefferson County Sheriff
• Brief amici curiae of Michigan, et al.
• Brief amici curiae of National Association of State Retirement Administrators, et al.

Briefs on the merits: 

• Brief of petitioners Kentucky Retirement Systems, Commonwealth of Kentucky, and Jefferson County Sheriff  
• Brief for Respondent the Equal Employment Opportunity Commission 
• Reply Brief for Petitioner Kentucky Retirement Systems, Commonwealth of Kentucky, and the Jefferson County Sheriff's Department 
• Brief amicus curiae of National Association of State Retirement Administrators, et al. 
• Brief amici curiae of Michigan, et al. 
• Brief amicus curiae of National School Boards Association  
• Brief amici curiae of the National Association of Counties, Council of State Governments, National League of Cities, and the International Municipal Lawyers Association 
• Brief amici curiae of AARP and the National Employment Lawyers Association in Support of Respondent 

Counsel:

• For Petitioners Kentucky Retirement Systems, Commonwealth of Kentucky, and Jefferson County Sheriff's Department : Robert D. Klausner; 10059 N.W. 1st Court; Plantation, FL  33324. 
• For Respondent Equal Employment Opportunity Commission:  Paul D. Clement, Solicitor General; United States Department of Justice; 950 Pennsylvania Avenue, N.W., Room 5614; Washington, DC 20530-0001; (202) 514-2217.