Opinion ID: 400084
Heading Depth: 2
Heading Rank: 2

Heading: The Stipulated Events Leading to Home's Lowering of the

Text: Mandatory Retirement Age 7 Following discovery, both sides moved for summary judgment. The parties entered into a stipulation of facts that was to constitute the complete record for purposes of the parties' motions for summary judgment. The stipulation gave the following background of Home's lowering of the retirement ages. 8 For some years prior to 1973 it had been Home's practice to conduct, every five years, a review of its employee benefit plans to ensure that Home remained competitive in the labor market. Pursuant to that practice Home commenced a review in 1973 with the aid of the employee benefit consulting firm of Towers, Perrin, Forster & Crosby (Towers, Perrin). 9 Towers, Perrin made a report to Home recommending two steps pertinent to the present case. First, it recommended that Home lower the normal retirement age from 65 to 62, thus allowing an employee to retire earlier and receive full pension benefits. Second, it recommended that the fractional pension benefits payable to employees who took early retirement be increased. This report neither recommended nor discussed any lowering of the mandatory retirement age. 10 The Towers, Perrin report was reviewed by Home's Retirement Committee, chaired by Home's Senior Vice President and General Counsel, Joseph F. Quinn. The Retirement Committee agreed with Towers, Perrin's recommendations and, in addition, decided to recommend to Home's management that not only the normal retirement age, but also the mandatory retirement age, be lowered. According to Quinn's testimony at his deposition, the purpose of the Committee's proposed reduction of the mandatory retirement age was to reduce the number of spontaneous retirements-i.e., early retirements that left Home with no adequately trained employees to fill the vacated positions. The Committee's report to Home's board of directors did not contain any discussion of the proposed reduction in the mandatory retirement age or of the spontaneous retirements problem that assertedly prompted the recommendation. 11 In presenting the Committee's recommendations to the board, a memorandum by Quinn stated that the lowering of normal retirement age to 62 should very favorably affect morale in terms of affording more years of retirement to look forward to and promoting more rapid turnover at the top. The proposed modifications of the Plan, including the lowering of the mandatory retirement age, were eventually adopted by Home's board of directors. No evidence was offered as to the substance of any discussion of the mandatory retirement age reduction at any meeting of Home's directors. 12 The Plan's modifications were first announced to Home's employees in a company newsletter. The article stated in pertinent part as follows: 13 The revised Retirement Program is not only advantageous to those approaching retirement but to all employees. Perhaps the biggest impact is in the retirement age which has been reduced to 62, offering full retirement benefits 3 years sooner. This feature will quicken the pace of promotional advancement within the company, offering qualified employees better career opportunities. 14 Thereafter Home circulated printed descriptions of the modifications of the Plan, stating in pertinent part as follows: Full Pension at Age 62 15 Under the improved Plan, normal retirement (the mandatory retirement age) for both male and female employees will be age 62 for everyone under age 60 on January 1, 1974. 16 What's more, in the case of long service employees, the change in the Plan not only means a full pension three years sooner than now, but it also means a bigger pension than the Plan now pays at age 65. 17 If you are a young employee, this Plan change can create entirely new career opportunities for you. It will quicken the pace of promotional advancement for all those who can qualify to move into more demanding, better paying positions. And since pensions at The Home are based on final average earnings, early career advancement can add substantially to your retirement income. Final average earnings are your average basic earnings for the highest consecutive five years out of the last 10 you work. 18 (Emphasis in original.) 19 The parties' stipulation also recited that Home offered various reasons for its decision to lower the normal and mandatory retirement ages. As set forth in the district court's opinion, Home's asserted reasons were 20 (1) to remain competitive in the labor market; (2) to come into line with other subsidiaries of Home's parent, City Investing Company, each of which had age 62 as the normal retirement age, and with the parent company itself, ... plus three other reasons Home labels compelling business reasons apart from the marketplace for amending the Plan, namely, (3) improving employee morale, ((4)) ensuring that there would be trained successors for retiring employees, and ((5)) 'quicken(ing) the pace of promotional advancement for all those who can qualify to move into more demanding, better paying positions'.... 21 Slip op. at 3-4 (brackets in original). In support of these reasons Home proffered the affidavit and deposition testimony of Quinn, along with various documents and Home's answers to interrogatories. The EEOC neither endorsed the reasons advanced by Home nor accepted the truth of the statements contained in the proffered evidence.