DAN MORALES

ATTORNEY GENERAL 

## QBffice

of tip Wttornep &neral &ate of Qexas August 13,1992

Mr. Wayne Blevins Executive Secretary Opinion No. DM-154

Teacher Retirement System ofTexas 1000Red River Street Austin, Texas 78701-2698 Re: Whether Government Code section 824.304(c) conflicts with the federal Age Discrimination in Employment Act of 1967,as amended by the Older Workers Benefit Protection Act of 1990, and related questions (RQ-371)

Dear Mr. Blevins:

You requested the attorney general’s opinion concerning whether Govemment Code section 824.304(c) conflicts with the federal Age Discrimination in Employment Act of 1967 (the “act”),Pub. L. No. 90-202, 81 Stat. 602 (1967), as amended by the Older Workers Benefit Protection Act, Pub. L. No. 101-433, 104 Stat. 978 (1990), now codified at 29 U.S.C. 90621-34. We conclude that section 824.304(c)conflicts with the federal acts and is therefore pre-empted by federal law and void.

Title 8, subtitle C ofthe Government Code created the Teachers Retirement System of Texas (IRS) to establish a system of benefits for retired teachers and to provide for administration and management of such a system. See Gov’t Code 88 824.001-.701. The retirement benefits offered by the system are based on years of teaching service. See Gov’t Code 93 824.202-.204. If a member of the system becomes disabled, the member is entitled to a disability retirement annuity. Id 5 824.302. Ifa disability retiree isrestored to active service, the disability retirement annuity is discontinued and the retiree must again become a member of the retirement system. Id 5 824.307. However, Government Code section 824.304(c) states the following special provision applicable to TRS members older than 60 years: “Ifa person receives a disability retirement annuity under Subsection (b) and the retirement begins after or continues until the person becomes 60 years old, the

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disability is conclusively presumed continuous for the rest of the person’s life. Therefore, under the present Government Code, a disabled member who cures his disability before the age of60 may return to active service and earn additional years of service credit toward retirement; however, a disabled member who cures his disability after reaching the age of 60 is conchtsively presumed disabled for life, cannot revoke his disability, and cannot earn additional years of service credit toward retirement.

In 1967 Congress passed the Age Diition in Employment Act (ADEA) with the express intent “topromote employment ofolder persons based on their ability rather than age [and] to prohibit arbitrary age discrimination in employment.” 29USC. 8621(b). The ADEA declares:

It shall be unlawful for an employer (1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because ofsuch individual’sage; [or] (2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because ofsuch individual’sage. Id. 5 623(a). The term “employer” includes-“a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State.” Id. 8 630(b)(2). The act’s prohibition against discrimination applies to individuals at least 40years ofage and less than 70years ofage. Id. 0631(a). Despite the ADRA’s broad prohibition against age di&mination, the Supreme Court inPublicEmp@vee.s Retin?ment

SystemofOhiov.Befts, 492 U.S. 158 (1989) held that the act prohibited age disuimmation in hiring, firing, wages, and salary, but did not prohibit discrimination in the fumishing oftkingebenefits such as retirement or pension packages. Congress then passed the Older Workers Benefit Protection Act of 1990with the express intent ofoverturn@ B&r. Pub. L No. lOl433,s 101,104 Stat. 978 (1990);seealsOS.Rep. No. 101263,101st Gong.,2d Seas.5, 14-19 (1990). reprinted in 1990 U.S.C.CAN. 1510, 1519-1524. The Senate

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Subcommittee on Labor and the Senate Special Committee on Aging endorsed the amendments and the overruling ofBertsas follows:

Through this legislation, Congress intends to make unmistakably clear that the ADEA’s purpose of eliminating arbitrary age dismimination in all employment includes the elimination of age discrimination in all forms of employee benefits. It is little consolation to an older worker to be protected &om discriminatory wage payments if an employer is free to discriminate based on age in the broad range of employee benefits that are included as an individual’s compensation, benefits that often are valued between one-quarter and onethird ofearned wages.
S.Rep. No. 101-263at 16-17,rep&&d in 1990U.S.C.C.AN. at 1521-22. The 1990 amendments to the ADEA added the followingnew subsection to make it clear that Congress intended to prohibit d&imina tion as to fringe benefits: The term

‘compensation, terms, conditions, or privileges of employment’ encompasses all employee benefits, including such benefits provided pursuant to a bona fide employee benefit plan.” Pub. L No. 101-433, 0 102, now codified ut 29 U.S.C. 0 630(L). The amendments further provided that: “No..

.employee benefit plan or voluntary early retirement incentive plan shall excuse the failure to hire any individual, and no such employee benefit plan shah require or permit the involuntary retirement ofany individual specified by [this act], because of the age of such individual.” Pub. L No. 101433.# 103,nowco&W at 29U.S.C. 0623(f)(2).

The present Government Code allows a disabled TRS member who cures his disability before the age of60to return to active service and earn additional years of service credit towards retirement. See Gov’t Code Q824.307. However, pursuant to Government Code section 824304(c), a disabled TRS member who cures his disability after reaching the age of 60 is deemed disabled for life, cannot revoke his disability, camtot rejoin the TRS system, and uot earn additional years of service credit toward retirement. We conclude that denying an individual older than 60 years old an opportunity to rejoin the retirement system, while granting this same opportunity to one younger than 60years old, constitutes discrimination against an individual between the ages of 60 and 70 years old “with respect to his compensation, terms, conditions, or privileges ofemployment.” This violates ADEA section 621(b)( 1). SeeAmericanAsh ofRetied Persons v.FamuxsGroup,943F2.d 996,lOOlM (9th Cir. 1991)(pension plan provisions denying accruals of service and

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salary credits to employees over 65 years old violated ADEA, 29 U.S.C. P623(a)( 1)). We also conclude that this disparity adversely affects the status of such employees older than 60 years solely because of their age in violation of section WW).
Under the Supremacy Clause of the United States Constitution, article VI, clause 2, state law is preempted where the state law conflicts with federal law. Englishv. Geneml Electric Ca, 496 U.S. 72, 110 S.Ct. 2270, 2275 (1990). “[Tlhe [Supreme] Court has found pre-emption where it isimpossible for a private party to comply with both state and federal requirements or where state law ‘stands as an obstacle to the accomplishment and execution ofthe full purposes and objectives of Congress.‘” Id. 110 S.Ct. at 2275. In the present case Government Code section 824304(c) conflicts with the federal ADEA as amended; therefore, section 824304(c) is pre-empted by the federal act and is void. SeeMaryland v.L.oukna 451U.S. 725,748 (1981) (“[A]state statute isvoid

. . .to [the] extent that it confl& with [a]federal statute.“); seeuko Attorney General Opinion DM49 (1991) at 7.’

WC bdievc that the proper procedure for tbe repeal of section S24304(c) is for the Texas Lc&+huc to pars a bii unconditionally and eqcssly repealing the former law. The Texas Conchtutionrcsc-thcpowutorcpePlskwtotheLegLLahvcin~I,redion28,whieh provides: ‘No poww of suspclldiag laws in this state shall be exercised exceptby the Lcgishue.’ If the Texas Legislahue ties to remove Gowmmeat Code section S24304@) from the books, the kgishhueshouldpassanewbiUupressIydoiogso. Tex.Const.art.III,i30. Inthemeantimeandfor tbc reasons previously dimsed, Gowmmcnt Code section &24304(c) is prc-emptcd by federal law mdisvoid

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SUMMARY

Texas Government Code section 824304(c) conflicts with the federal Age Discrimination in Employment Act of 1967,as amended by the Older Workers Benefit Protection Act, codified at title 29 of the United States Code sections 621-34, and therefore section &324304(c) is preempted by the federal acts and isvoid.

WILL PRYOR First Assistant Attorney General

MARY KELLER Deputy Assistant Attorney General

RENEAHIcKs Special Assistant Attorney General

MADE- B.JOHNSON Chair, Opinion Committee DAN MORALES Attorney General ofTexas

Prepared by Geoffrey Hermessey Assistant Attorney General

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