Court Opinion

ID: 149534
Source: CourtListenerOpinion
Date Created: 2010-06-25 17:37:11+00
Date Added: 2024-06-11T09:42:18.516756
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                               No. 09-1688

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

                 Plaintiff – Appellant,

           v.

BALTIMORE COUNTY,

                 Defendant – Appellee,

           and

AMERICAN   FEDERATION  OF   STATE,   COUNTY, AND  MUNICIPAL
EMPLOYEES, Local #921; BALTIMORE COUNTY FEDERATION OF
PUBLIC EMPLOYEES, FMT, AFT, AFL-CIO; BALTIMORE COUNTY
SHERIFF’S OFFICE FRATERNAL ORDER OF POLICE/LODGE NUMBER 25;
BALTIMORE COUNTY LODGE NO. 4 FRATERNAL ORDER OF POLICE
INCORPORATED; BALTIMORE COUNTY FEDERATION OF PUBLIC HEALTH
NURSES;   BALTIMORE   COUNTY   PROFESSIONAL  FIRE  FIGHTERS
ASSOCIATION INTERNATIONAL ASSOCIATION FIRE FIGHTERS LOCAL
1311-AFL-CIO,

                 Defendants.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.    Benson Everett Legg, Chief District
Judge. (1:07-cv-02500-BEL)

Argued:   May 11, 2010                       Decided:   June 25, 2010

Before GREGORY and SHEDD, Circuit Judges, and Arthur L. ALARCÓN,
Senior Circuit Judge of the United States Court of Appeals for
the Ninth Circuit, sitting by designation.
Vacated and remanded by unpublished opinion. Judge Shedd wrote
the opinion, in which Judge Gregory and Senior Judge Alarcón
joined.

ARGUED: Paul D. Ramshaw, U.S. EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION, Washington, D.C., for Appellant.       James Joseph
Nolan, Jr., BALTIMORE COUNTY OFFICE OF LAW, Towson, Maryland,
for Appellee.   ON BRIEF: James L. Lee, Acting General Counsel,
Carolyn L. Wheeler, Acting Associate General Counsel, Vincent J.
Blackwood, Assistant General Counsel, U.S. EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION, Washington, D.C., for Appellant.    John
E. Beverungen, County Attorney, BALTIMORE COUNTY OFFICE OF LAW,
Towson, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

                                2
SHEDD, Circuit Judge:

     The    Equal   Employment     Opportunity       Commission         appeals    the

district     court’s    order      granting       Baltimore       County    summary

judgment.     EEOC v. Baltimore County, 593 F. Supp.2d 797 (D. Md.

2009).     For the following reasons, we vacate and remand.

                                         I.

     We    view   the   evidence    in    the     record    in    the    light    most

favorable to the EEOC, the non-moving party.                     Laber v. Harvey,

438 F.3d 404, 415 (4th Cir. 2006) (en banc).

                                         A.

     At all times relevant, as a condition of employment with

the County, new, full-time employees were required to join the

County’s    Employee    Retirement       System    (ERS),     unless      they    were

fifty-nine or older.       Baltimore County Code § 5-1-203(1) (2004).

Under the ERS, most employees are eligible for retirement at age

sixty or, regardless of age, when the employee completes thirty

years of creditable service.          § 5-1-213.       Correctional officers,

however,    are   eligible   for    retirement       after       twenty    years   of

creditable service, regardless of age.              § 5-1-218(b).

     All employees must contribute a percentage of their salary

to the ERS, but that percentage varies based on the employee’s

age at the time the employee joins the system.                      § 5-1-203(1).

For example, employees who join the ERS at age forty contribute

                                         3
5.57% of their salary to the ERS, while employees who join at

age twenty need only contribute 4.42%.                   J.A. 30.

                                         B.

       Wayne Lee and Richard Bosse were both correctional officers

for the County. In 1999 and 2000, they filed EEOC complaints

alleging      that    the    ERS   violates        the    Age     Discrimination        in

Employment Act (ADEA) because, as older enrollees, they have

more money deducted from their paychecks than younger enrollees.

In    2000,   the    EEOC    ordered    the      County     to    respond       to   their

complaints. The County responded, denying the officers’ charges

of discrimination. Six years later, 1 the EEOC determined that the

ERS violates the ADEA. Conciliation failed, and the EEOC filed

this action.

       Subsequently,        the    County       moved     for     summary       judgment,

arguing    that      the    disparate   contribution            rates     are   based   on

financial concerns rather than age.                  It argued that because an

older new-hire has fewer years to fund a pension, the older new-

hire needs to contribute to the pension plan at a higher rate

than a younger new-hire.           The EEOC opposed this motion and moved

for   partial     summary     judgment,         arguing    that     the    contribution

rates violate the ADEA because they are expressly based on age.

       1
       Because of this delay, the County moved to dismiss on the
grounds of laches. The district court denied the County’s
motion, and the County does not cross-appeal this issue.

                                            4
      The district court found that the disparate contribution

scheme is not motivated by age.               Baltimore County, 593 F. Supp.

2d at 802.       Accordingly, it granted the County’s motion for

summary   judgment      and    denied    the     EEOC’s    motion       for    partial

summary   judgment.     The    EEOC    now    appeals     the   grant    of    summary

judgment. 2

                                        II.

      The EEOC argues that the district court erred by finding

that the disparate contribution rates under the ERS are based on

the   number   of     years    an    employee    contributes      until       reaching

retirement     age,    along    with    the     corresponding     time        value   of

money.    We review the order granting summary judgment de novo.

Jennings v. Univ. of N.C., 482 F.3d 686, 694 (4th Cir. 2007) (en

banc).

      Under the ADEA it is generally unlawful for an employer to

create a pension plan that discriminates based on age. See 29

U.S.C. § 623(a)(1).           To succeed on such a claim, the plaintiff

carries the burden to demonstrate that age “actually motivated”

the disparate treatment.            Ky. Ret. Sys. v. EEOC, 128 S.Ct. 2361,

      2
       In its complaint, the EEOC challenges the ERS under 29
U.S.C. §§ 623(a)(1) & (i)(1). J.A. 14. The district court
granted the County summary judgment on both counts. The EEOC,
however, only appeals the district court’s decision related to
§ 623(a)(1).

                                         5
2366 (2008).        In fact, age must be the “but-for” cause of the

disparate treatment.          Gross v. FBL Fin. Serv., Inc., 129 S.Ct.

2343, 2351 (2009) (citing Ky. Ret. Sys., 128 S.Ct. at 2363-66).

       Here,      the    district       court        found    that       the     County's

“requirement that older new-hires pay higher contribution rates

is based on the number of years a new-hire has until reaching

. . . retirement age and how long it will take to accumulate a

sufficient       reserve     to   fund    the        new-hire's      life       annuity.”

Baltimore County, 593 F. Supp. 2d at 801.                     The court also noted

that because older new-hires will reach retirement faster, their

contributions will have less time to accrue earnings. Id. at

801-02.        These two conclusions led the court to find that “the

County was motivated by a permissible principle, the time value

of   money,     rather   than     the   age     of    new-hires.”         Id.    at    798.

Though    the    court     gave   various     reasons        why   the    ERS    was   not

motivated by age, each reason relies on this “time value of

money” rationale.

       However, under the express terms of the ERS, two new-hires

with     the    same    number    of    years        until   retirement         age,   and

therefore the same time value of money, can be required to pay

different contributions into the ERS.                  For example, if a twenty-

year-old new-hire and a forty-year-old new-hire enroll in the

ERS as correctional officers at the same time, they have the

same number of years until retirement eligibility.                        However, the

                                          6
forty-year-old must contribute 5.57% of his annual salary while

the twenty-year-old need only contribute 4.42%. 3                   J.A. 30.        This

disparity is not justified by the time value of money because

both employees contribute for the same twenty years. 4                           Because

the     district     court’s     holding       rests    solely     on     this   faulty

premise, we must vacate the summary judgment.

        Though the EEOC maintains that the ERS violates the ADEA

because      applicable    rates      expressly    rely    on    age, 5    the   County

argues that, regardless of their express basis, these rates do

not   violate      the   ADEA    because   they    are    actually      motivated    by

other financial considerations. From the record before us, we

are unable to determine as a matter of law that the contribution

rates       are   justified     by   permissible       financial    considerations.

        3
        This is not the only example demonstrating this
possibility under the ERS.      Because the ERS allows for the
“transfer of service credit,” J.A. 30, two new-hires, a thirty-
two-year-old with ten years of service credit and a fifty-year-
old with ten years of service credit enter the system with the
same   potential   time   value   of   money before   retirement
eligibility.   However, the latter must contribute 6.61% of his
salary while the former pays only 4.93%.
        4
       At oral argument, the County offered no explanation when
it was questioned about this scenario.
        5
       In their appellate brief, the EEOC argues for the first
time that the ERS violates the ADEA because (1) it reduces older
workers wages because of their age and (2) it violates 29 C.F.R.
§ 1625.10(d)(4)(i).     Because the EEOC did not make these
arguments below, they have forfeited the right to make these
arguments in this appeal. Skipper v. French, 130 F.3d 603, 610
(4th Cir. 1997).

                                           7
Therefore, we remand this case for the district court to decide

whether the ERS is supported by such considerations.

                                    III.

     For   the   reasons   stated   herein,   we   vacate   the   district

court’s opinion and remand for further proceedings consistent

with this opinion.

                                                   VACATED AND REMANDED

                                     8