Aaron Carson v. Lake County, Indiana
2017 U.S. App. LEXIS 13494
| 7th Cir. | 2017Background
- Lake County faced severe financial distress (2007–2013) and offered retirement incentives to employees 65+ including a five-year Aetna Medicare-supplement and option to be rehired part-time.
- By 2013 Aetna notified the County that current employees (including rehired retirees) could not participate in the retiree-only supplemental plan without jeopardizing the plan’s exempt status and dramatically increasing costs.
- County counsel advised not to rehire retirees (or to rehire them full-time with regular benefits); the County instead terminated 28 rehired, part-time retirees who met four criteria: retired then rehired part-time, age 65+, Medicare primary, and enrolled in the Aetna supplement.
- A larger group of employees age 65+ who were not enrolled in the Aetna supplement remained employed; many retirees continued to receive the supplement after the terminations.
- Plaintiffs (a subset of the terminated group) sued under the ADEA and the Fourteenth Amendment’s Equal Protection Clause; the district court granted summary judgment to the County.
- The Seventh Circuit affirmed, finding no evidence that age was the but-for cause of termination and holding the County’s action rationally related to a legitimate government interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether termination was unlawful disparate treatment under the ADEA | County terminated employees because they were 65+; age was a necessary condition, so it was a but-for cause | Termination targeted employees enrolled in a retiree-only Aetna supplement who were rehired part-time, not age per se | No ADEA disparate treatment; age was a necessary but insufficient factor and not the but-for cause |
| Whether McDonnell Douglas burden-shifting applies / prima facie case | Plaintiffs alternatively invoke McDonnell Douglas to show discrimination | Plaintiffs cannot identify similarly situated younger comparators; all rehired employees on Aetna (regardless of age) were treated the same | Plaintiffs failed to make a prima facie case; burden-shifting not reached |
| Whether plaintiffs can proceed under a disparate impact theory | Policy had a disproportionate adverse effect on older workers enrolled in Medicare supplements | No statistical proof of significant age-based disparity; action justified by reasonable factors other than age | Disparate impact claim not supported and County would prevail under "reasonable factors other than age" defense |
| Whether terminations violated Equal Protection | Terminations discriminated against older persons in violation of Fourteenth Amendment | Age distinctions are subject to rational-basis review and the County’s action was rationally related to preserving retiree insurance and fiscal stability | Equal Protection claim fails; rational-basis standard satisfied |
Key Cases Cited
- Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993) (age and pension status are analytically distinct; employer may act on non-age factors unless using them as proxies for age)
- Smith v. City of Jackson, 544 U.S. 228 (2005) (ADEA permits disparate-impact claims)
- Gross v. FBL Financial Servs., Inc., 557 U.S. 167 (2009) (ADEA plaintiff must prove age was the but-for cause of adverse action)
- Kentucky Retirement Sys. v. EEOC, 554 U.S. 135 (2008) (age-based differences reviewed under ADEA require evidence of age-based motivation; non-age rationales can justify distinctions)
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) (burden-shifting framework for discrimination claims)
- City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432 (1985) (age classifications reviewed under rational-basis scrutiny)