Opinion ID: 803614
Heading Depth: 2
Heading Rank: 4

Heading: ADEA Compliance

Text: Finally, Day contends that offsetting LTD benefits by pension benefits violates the Age Discrimination in Employment Act (ADEA) and runs afoul of Kalvinskas v. California Institute of Technology, 96 F.3d 1305 (9th Cir. 1996).
Not Apply [6] As a preliminary matter, we hold that AT&T waived the argument that the ADEA does not apply as a matter of law. The protections of the ADEA apply only to employees at least 40 years of age. See 29 U.S.C. § 631(a). Here, AT&T DAY v. AT&T DISABILITY INCOME PLAN 7857 argues that Day was only 39 at the time any ADEA violation may have occurred, so his ADEA claims fail as a matter of law. Because AT&T raised this issue for the first time at oral argument, we must decide whether AT&T has waived the issue. To do so, we must first ascertain whether the ADEA’s age requirement is jurisdictional or an element of a claim. A jurisdictional defect can be raised at any time, and cannot be waived, whereas an argument that the plaintiff failed to satisfy an element of a claim does not ordinarily affect the subject matter jurisdiction of the court, and may therefore be waived. See Arbaugh v. Y & H Corp., 546 U.S. 500, 506-07 (2006). We recently considered a similar question in the ERISA context. See Leeson v. Transamerica Disability Income Plan, 671 F.3d 969, 979 (9th Cir. 2012) (holding that whether a plaintiff is a plan participant for purposes of ERISA is a substantive element of his claim, not a prerequisite for subject matter jurisdiction). In Leeson, we explained that “the only limitation to invoking federal court jurisdiction under [ERISA] relates to the categories of individuals entitled to initiate a civil action in state or federal court.” Id. at 978; see also 29 U.S.C. § 1132(a)(1)(B) (“A civil action may be brought . . . by a participant or beneficiary . . . to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.”). The definition of participant under ERISA, by contrast, “appears in a separate provision that does not speak in jurisdictional terms or refer in any way to the jurisdiction of the district courts.” Leeson, 671 F.3d at 978 (internal quotation marks omitted). It thus “serves [only] to identify those plaintiffs who may be entitled to relief, not to limit the authority of federal courts to adjudicate claims under ERISA.” Id. [7] Here, like the definition of “participant” under ERISA, the ADEA’s age requirement appears in a separate provision that “does not speak in jurisdictional terms.” Id. (internal quotation marks omitted); see also 29 U.S.C. § 631(a) (“The pro7858 DAY v. AT&T DISABILITY INCOME PLAN hibitions in this chapter shall be limited to individuals who are at least 40 years of age.”). Accordingly, we hold that the age requirement does not affect this court’s subject matter jurisdiction. See Leeson, 671 F.3d at 979; see also Arbaugh, 546 U.S. at 516 (explaining that “when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character”). Because AT&T failed to raise this issue during administrative review, in the district court or in it its response brief to this court, the age issue is waived.
Offset [8] Applying the ADEA, we hold that the offset does not violate the ADEA or our decision in Kalvinskas. Kalvinskas involved employer Caltech’s attempt to offset an employee’s LTD benefits with monthly retirement benefits for which the employee was eligible, but which he could not actually receive unless he retired, which he had not yet done. See 96 F.3d at 1307. We held that such an offset violated § 4(f)(2) of the ADEA, 29 U.S.C. § 623(f)(2), because it coerced the employee to retire in order to receive the full value of the offset. See id. at 1307-08. We also held that Caltech’s policy was not protected under an ADEA safe harbor applicable to employers that “provide[ ] a bona fide employee benefit plan or plans under which longterm disability benefits received by an individual are reduced by any pension benefits (other than those attributable to employee contributions) . . . paid to the individual that the individual voluntarily elects to receive,” 29 U.S.C. § 623(l)(3) (emphasis added). See Kalvinskas, 96 F.3d at 1309-10. The safe harbor is designed to prevent an employee from doubledipping by receiving both disability and pension benefits at the same time. See id. at 1309. Caltech’s plan had the effect of forcing its employee to retire, triggering concurrent payDAY v. AT&T DISABILITY INCOME PLAN 7859 ments of disability and pension benefits, contrary to the safe harbor’s purpose. See id. at 1309-10. [9] The circumstances here are distinguishable. Day’s rollover election was independent of any retirement decision. Unlike Mr. Kalvinskas, under AT&T’s plan Day would have received full LTD benefits without having to retire.5 Additionally, Day arguably would achieve the kind of double-dipping the ADEA safe harbor is designed to allow employers to prevent. If Day’s interpretation of the Plan were correct, he would be able to roll over his pension benefits into an IRA, continue to receive full LTD benefits and have the option of withdrawing from his IRA (albeit at the cost of a tax penalty), thus circumventing the Plan’s attempt to prevent doubledipping. We therefore hold that Sedgwick’s decision to offset Day’s LTD benefits did not violate the ADEA or Kalvinskas.