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LABOR & EMPLOYMENT LAW — 7/16/08

Teacher did not meet early retirement plan’s minimum age requirement

Without addressing the open question of whether the Iowa Civil Rights Act (ICRA) contemplates a cause of action for reverse age bias, the Iowa Supreme Court held that a school district did not violate ICRA’s prohibition against age bias when it denied a teacher’s application for early retirement incentives on the grounds that she did not meet the plan’s minimum age requirement. Early retirement incentive plans fall within an express exception to ICRA’s general prohibition on age discrimination, confirmed the supreme court. (Weddum v Davenport Community Sch Dist, IowaSCt, 91 EPD ¶43,242)

The school district implemented an early retirement incentive plan for the 2004-2005 school year. Among other things, to be eligible for the plan, employees must have: (1) reached age 55 or older by June 30, 2005; and (2) completed at least 20 years of continuous contracted service with the district by June 30, 2005. In late December 2004, the teacher submitted her application for early retirement. While she satisfied the years-of-service requirement, she did not reach the age 55 until September of 2005, almost three months after the deadline. Consequently, the school district denied her application. After satisfying the necessary administrative requirements, the teacher filed suit alleging that the school district’s denial of early retirement benefits violated the age bias prohibition under ICRA.

Taking the case on interlocutory appeal, the Iowa Supreme Court held that the minimum wage required in the school district’s plan did not violate ICRA because Section 279.46 of the Act expressly provides school districts with the discretion to determine the age upon which employees are eligible for early retirement benefits unless the plan or system is a mere “subterfuge” for age bias. There was no evidence in the record to suggest that the school district acted with age-related animus toward the teacher, nor was there evidence to suggest that she was being singled out because of her age, confirmed the supreme court. In fact, two other employees did not qualify for early because they were also too young. Moreover, wrote the court, “the school district provided a legitimate reason for setting the minimum age requirement.” The early retirement program was primarily driven by financial savings and the “school district in this case was not willing to extend its early retirement plan to teachers who were not at least fifty-five years old on June 30 because the cash incentive would have to come out of the general fund if it did so,” wrote the circuit court. The plan’s funding avenue, which requires employees to be between the ages of fifty-five and sixty-five at the time of their retirement, frees up more money in the school district’s general fund for other needs.

For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.

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