United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 10-2699

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Equal Employment Opportunity *

Commission, *

*

Plaintiff - Appellee, *

* Appeal from the United States

v. * District Court for the 

* District of Minnesota.

Minnesota Department of Corrections; *

American Federation of State, *

County and Municipal Employees, *

Unit 208; Minnesota Association of *

Professional Employees; Middle *

Management Association; American *

Federation of State, County and *

Municipal Employees, Council No. 5, *

AFL-CIO; Minnesota Nurses *

Association, *

*

Defendants, *

*

Minnesota Law Enforcement *

Association, *

*

Defendant - Appellant. *

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Submitted: March 16, 2011

Filed: August 10, 2011

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Before SMITH, ARNOLD, and SHEPHERD, Circuit Judges.

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1

The Honorable Paul A. Magnuson, United States District Judge for the District

of Minnesota.

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SMITH, Circuit Judge.

Minnesota Law Enforcement Association (MLEA) appeals the district court's1

grant of summary judgment to the Equal Employment Opportunity Commission

(EEOC), concluding as a matter of law that MLEA's retirement plan arbitrarily

discriminates against older employees on the basis of age, in violation of the Age

Discrimination in Employment Act (ADEA). For the reasons that follow, we agree

with the district court's conclusion and affirm its grant of summary judgment to

EEOC.

I. Background

The Minnesota Department of Corrections (DOC) is a state agency that operates

ten correctional facilities within Minnesota. DOC employees who hold certain

positions within the agency participate in either the Correctional Employee Retirement

Plan or the State Patrol Retirement Fund. Minnesota law governs the plans and allows

agency-employers like DOC and their employees to contribute to the plans at higher

rates than other state retirement plans permit. Moreover, Minnesota law also

authorizes agencies like DOC to 

establish optional annuity forms to pay a higher amount from the date of

retirement until an employee is first eligible to draw Social Security

benefits, reaches age 65, or reaches the age the employee is eligible to

receive unreduced Social Security benefits, at which time the monthly

benefits must be reduced.

Minn. Stat. § 352.93, subdiv. 3(a).

DOC included in its collective-bargaining agreements with the various labor

unions representing its employees an "Early Retirement Incentive Program" (ERIP)
2

As the district court observed, "[t]he [collective-bargaining agreement]

between [DOC] and [MLEA] is slightly different, allowing employees between the

ages of 50 and 55 to retire and receive a continuation of benefits until age 65. MLEAcovered employees who retire before age 55 receive a reduced benefit; those who

retire at age 55 receive full benefits."

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provision. The parties refer to this provision as the "age 55 cliff." Specifically, the

ERIP provides that a plan participant who retires during the pay period of his or her

55th birthday, and is covered by the Correctional Employee Retirement Plan or the

State Patrol Retirement Fund, is eligible to receive an unreduced continuation of the

employer's contribution toward his or her health- and dental-insurance premiums until

he or she reaches age 65. This contribution thereby encourages early retirement for

this age group. Meanwhile, any employee between the ages of 50 and 55 who elects

to retire—and who has a certain length of tenure with the agency—receives an ERIP

benefit but less.2

 Finally, any employee between the ages of 55 and 60—60 being the

age of mandatory retirement—who chooses to retire receives no continuation of

employer contributions. As the EEOC succinctly summarizes in its brief, "[t]he age

55 cliff meant that, in order to obtain this benefit, employees must retire at 55, or

forever lose the opportunity to obtain the benefit. . . . Employees hired after age 55

never could obtain the early retirement benefit."

Amid growing concern that a court might consider this ERIP unlawfully

discriminatory, various state agencies and their respective employee unions eliminated

the ERIP from their collective bargaining agreements. Only MLEA, the official labor

union representing all non-supervisory DOC personnel, refused to negotiate any

modification to the ERIP. Consequently, in September 2008, EEOC sued DOC and

MLEA for injunctive and monetary relief, alleging that their collective-bargaining

agreement's ERIP unlawfully discriminated against state employees on the basis of

age, in violation of the ADEA. 
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On April 8, 2010, the district court granted summary judgment in EEOC's favor

and against DOC and MLEA. In granting summary judgment, the district court first

determined that the ERIP was facially discriminatory, in that it denied employees

certain benefits solely on the basis of their age. Second, the district court, relying

almost entirely on our decision in Jankovitz v. Des Moines Independent Community

School District, 421 F.3d 649, 653 (8th Cir. 2005), rejected DOC's and MLEA's

argument that the facially discriminatory ERIP fell within the ADEA's ERIP "safe

harbor." Presently, only MLEA appeals this ruling.

II. Discussion

On appeal, MLEA maintains that its collective-bargaining agreement's ERIP

does not discriminate against employees on the basis of their age and thus comports

with the ADEA.

"We review the grant of summary judgment de novo, applying the same

standard as the district court." McClendon v. Union Pac. R.R. Co., 640 F.3d 800, 803

(8th Cir. 2011). As is its name implies, "[t]he ADEA prohibits employers from

discriminating against any individual on the basis of age with respect to his or her

'compensation, terms, conditions, or privileges of employment,' which specifically

encompass 'all employee benefits.'" Jankovitz, 421 F.3d at 653 (quoting 29 U.S.C.

§§ 623(a), 623(l) . Pertinent to our analysis is the "affirmative defense under 29

U.S.C. § 623(f)(2)(B)(ii), which was added to the ADEA by Congress's enactment in

1990 of the Older Workers Benefits Protection Act (OWBPA)[, Pub. L. No. 101-433,

§ 103(1), 104 Stat. 978, 978–79]." Id. at 651. Specifically, 

Congress enacted the [OWBPA] in response to the Supreme Court's

decision in Pub. Employees Ret. Sys. v. Betts, 492 U.S. 158, 109 S.Ct.

2854, 106 L.Ed.2d 134 (1989) (holding that the ADEA applies only to

hiring, firing, wages, salaries, and "other non-fringe-benefit terms and

conditions of employment"), in order to clarify that the ADEA applies

to all employee benefits, including early retirement benefits. 
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Id. at 651 n.4. Under MLEA's ERIP, no employee over the age of 55 is eligible for the

early-retirement benefits that the ERIP offers. As this court recognized in Jankovitz,

where, as here, "it is undisputed that an employee is ineligible for early retirement

benefits under the . . . ERIP if he or she is over [a certain] age," the ERIP is

"discriminatory on its face." Id. at 653. 

Still, Congress included in the OWBPA an ERIP "safe-harbor" provision that

insulates an employer from ADEA liability so long as the employer's ERIP satisfies

certain criteria. Accordingly, the dispositive question is whether MLEA's otherwise

invalid ERIP qualifies for protection under the ADEA's safe-harbor provision. That

safe-harbor provision states:

It shall not be unlawful for an employer, employment agency, or labor

organization—

* * * 

(2) to take any action otherwise prohibited under subsection (a),

(b), (c), or (e) of this section—

* * * 

(B) to observe the terms of a bonafide employee benefit

plan—

* * * 

(ii) that is a voluntary early retirement incentive plan

consistent with the relevant purpose or purposes of

this chapter. 

29 U.S.C. § 623(f)(2)(B)(ii). Thus, under the ADEA's ERIP safe harbor, a facially

discriminatory ERIP like MLEA's is only lawful if it is (1) voluntary and (2)

"consistent with the relevant purpose or purposes of [the ADEA]." 29 U.S.C. §

623(f)(2)(B)(ii). Notably, because the ADEA's ERIP safe harbor constitutes a
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statutory affirmative defense, the defendant, MLEA, bears the burden of

demonstrating that its ERIP meets these requirements. Jankovitz, 421 F.3d at 654

(citing 29 U.S.C. § 623(f)(2)).

In Jankovitz, this court determined that an ERIP, identical to the instant MLEA

ERIP in all material respects, failed to satisfy the ADEA's ERIP safe harbor. In

Jankovitz, the ERIP 

offered its employees early retirement benefits that included payment of

health insurance premiums until the age of 65 and a one-time cash

payment equal to approximately thirty percent of the employee's annual

salary. . . . [D]efendant [later] amended its early retirement benefits plan

so that eligible teachers could receive a lump sum payment based upon

the number of unused sick leave days accumulated as of the date of

retirement. 

Id. at 650. Specifically, the Jankovitz court determined that plans of this nature which

effect "adverse changes in employment benefits based solely upon age are inconsistent

with the purposes of the ADEA." Id. at 655. In reaching this conclusion, the court first

recognized that, among the ADEA's stated purposes, the "relevant purpose" in the

ERIP context is the ADEA's aim of "prohibit[ing] arbitrary age discrimination in

employment." Id. at 654 (citing 29 U.S.C. § 621(b)). From this first premise, the court

reasoned that "[a]rbitrary age discrimination occurs when an employer denies or

reduces benefits based solely on an employee's age," concluding that "[t]hat is

precisely what defendant's amended ERIP does." Id. Likewise, that is precisely what

MLEA's ERIP does. An employee's eligibility for the attractive early-retirement

benefits vanishes when that employee reaches 55 years of age, considering no other

factors. Indeed, "[t]he basis for our conclusion" that the Jankvoitz ERIP was

"inconsistent with a purpose of the ADEA [was] the fact that the amount of available

early retirement benefits drops to zero upon an employee's attainment of the age of
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65." Id. at 655. This exclusively age-based reduction in benefits typifies "arbitrary age

discrimination" and therefore fails to meet the ADEA safe harbor's requirements.

Nevertheless, MLEA counters that, because other portions of the ADEA

explicitly authorize state agencies to compel the retirement of firefighters and law

enforcement at age 55, see 29 U.S.C. § 623(j), MLEA's ERIP cannot logically be

viewed as inconsistent with the ADEA's relevant purposes. According to MLEA, "[i]t

is axiomatic that, where Congress has declared that law enforcement officers may be

required to retire at age 55, a program that incents them to do so is not inconsistent

with the purpose of the ADEA." MLEA's argument is superficially appealing.

However, we stated in Jankovitz that "[a]ge discrimination can be established with

respect to employee benefits regardless of whether the employer was required to

provide the benefits in question to its employees." 421 F.3d at 653. Thus, although

DOC is not obliged under federal law to employ certain persons over the age of 55 for

reasons that may include age, it may not discriminate against all persons over age 55

solely due to their age. 

For an example of an ERIP that does qualify for ADEA safe-harbor protection,

MLEA need look no further than our decision in Morgan v. A.G. Edwards & Sons,

Inc., 486 F.3d 1034 (8th Cir. 2007). In Morgan, we affirmed the validity, under the

ADEA's safe-harbor provision, of an ERIP that allowed all employees who were age

50 or older and had at least 15 years of service to retire early in exchange for certain

severance benefits, which included one year's salary, a lump-sum bonus payment, one

year's health coverage and basic life insurance, and the right to vest in an unvested

portion of deferred compensation. Id. at 1037. Contrasting that ERIP to the invalid one

in Jankovitz, we explained that,
3

Auerbach v. Bd. of Educ. of the Harborfields Cent. Sch. Dist. of Greenlawn,

136 F.3d 104, 113–14 (2d Cir. 1998).

4

The other prerequisite for protection under the ADEA's ERIP safe harbor is

that the ERIP be voluntary. 29 U.S.C. § 623(f)(2)(B)(ii). EEOC maintains that

MLEA's ERIP is involuntary because any persons who are already over the age of 55

when DOC hires them will be ineligible for the benefits through no volition of their

own. This court has not spoken at length on the voluntariness of a given ERIP, aside

from stating in Morgan that, "[t]o determine whether a retirement plan is voluntary,

a court must consider whether, under the circumstances, a reasonable person would

have concluded that there was no choice but to accept the offer." 486 F.3d at 1040

(quotation and citation omitted). In light of our conclusion that MLEA's ERIP fails to

meet the ADEA's safe-harbor provision because the ERIP is inconsistent with the

ADEA's relevant purpose of prohibiting arbitrary age discrimination in employment,

we need not address whether the ERIP is voluntary. 

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[c]ontrary to Morgan's argument, the [ERIP] differs substantially from

the faulty Jankovitz plan and is more akin to the valid Auerbach[

3

] plan.

The [ERIP] does not favor younger employees over older employees.

Rather, employees who were age 50 or older with fifteen or more years

of service were eligible for the [ERIP]. The [ERIP] offered the same

incentives to all eligible persons and did not employ an age-based

phase-out where plan benefits decreased over time or were reduced to

zero upon a certain age in order to encourage employees to participate

in the plan. Because the [ERIP] does not arbitrarily discriminate on the

basis of age, the plan is consistent with the purposes of the ADEA.

Id. at 1042.

In contrast to the permissible ERIP that we reviewed in Morgan, the instant

ERIP, by operation of its "age-55 cliff," does arbitrarily discriminate on the basis of

age. In turn, the arbitrary age discrimination that the age-55 cliff works renders the

ERIP inconsistent with the ADEA's relevant purpose, Jankovitz, 421 F.3d at 654, and

consistency with the ADEA's purposes is one of the twin prerequisites for protection

under the ADEA's ERIP safe harbor.4

 29 U.S.C. § 623(f)(2)(B)(ii). Thus, because
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MLEA's facially discriminatory ERIP fails to satisfy the ADEA's ERIP safe harbor,

the district court correctly concluded that, as a matter of law, MLEA's ERIP violates

the ADEA.

III. Conclusion

As the district court recognized, our opinion in Jankovitz squarely forecloses

MLEA's argument, and, therefore, we affirm the district court's grant of summary

judgment.

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