Equal Employment Opportunity Commission v. City of Mt. Lebanon, Pennsylvania

payable advantage items as interest nix could have taken of the ris- ing such diverse bonds, mortgage ing legal de- rates of savings passbooks, interest Ecuador. Pur- on bonds, obligations of the central suant velopment Resolution Phoenix was governments, compelled interbank to invest half of its after-tax provincial and and, thus, transactions, operations. royalty proceeds various credit in Ecuador and surely profited would have from the soar- typical a resolution read: Article 8 of ing legal “Prejudgment rates. interest present Regulation provisions of “The compensate serves to for the loss of use of apply only to the acts and contracts shall money damages due as from the time the including and the date it entered into from entered, judgment claim accrues until Registro in the Official. published achieving thereby compensation full for the Therefore, stipu- types of interest rates injury damages those are intended to re- and contracts entered into lated the acts States, dress.” Virginia West v. United date, they drawn or to be prior to that — U.S. —, —, 706 n. S.Ct. drawn, continue in effect until the shall agreed upon in expiration respec- date contract.” tive act or IV. SUMMARY applied many The resolutions different judgment We will affirm the in favor of merely and not types of transactions arising Phoenix for breach of contract out in court. The resolutions’ causes of action payments of quarter due for the last of against language must be read their back- quarters 1973 and first two of 1974. ground application. of broad claim, judgment On that we will vacate the 1975, Monetary Board issued Res- In parent Corporation favor Gulf Oil legal fixed the interest olution 755 which (now, name, by change U.S.A., Chevron aver that this rate rate at Defendants 8%. Inc.) and proceedings remand for further apply the entire breach of con- should opinion. consistent with this We will af- judgment. tract The district court disa- firm the district court’s and award calcula- greed segmented applied interest prejudgment tion of interest. Because reflecting rate the five successive increases stay the automatic under the Bankruptcy legal in the Ecuadorian rate. Code, any dispositive we will not enter or- acknowledged the Resolution’s court Texaco, der as to Inc. at this time. We will apply that the new rates were to statement remaining judgments affirm all in fa- agreements entered into after the vor defendants. publication, date of Resolution’s but held restriction was limited to contracts

providing stipulated rate of interest. Be- here contained no such

cause the contract

stipulation, prejudgment interest rate legal as the rate rose. increased ruling, accepted court the views so EQUAL EMPLOYMENT OPPORTUNI- rejected expert those of Phoenix’s COMMISSION, Appellant, TY experts. The the defendants’ court also declined to follow a decision of the Su- LEBANON, CITY OF MT. Ecuador, preme Segovia Court of v. Acos- PENNSYLVANIA. ta, Chamber, Judgment No- No. Third No. 87-3189. 11, 1977, presented vember which a similar factual situation. The district court ob- Appeals, United States Court of correctly precedential served the lack of Third Circuit. judicial juris- effect of decisions in civil law Argued Oct. 1987. dictions. Decided March We in the find no reversible error district court’s ruling prejudgment on interest. properly if the reasoned that

arrearages paid promptly, had been Phoe- E.E.O.C., Duplinsky (argued),

Warren D.C., Washington, appellant. for Eckert, Myers (argued), J. John Sea- mans, Mellott, Pa., Pittsburgh, Cherin and appellee. HIGGINBOTHAM, Before SCIRICA, HUTCHINSON and Circuit Judges. THE

OPINION OF COURT SCIRICA, Judge. Circuit discrimination, Age one commentator re- observed, cently grayest, is “the and there- troublesome, by the most employ- area” of Kalet, ment discrimination law. Age See J. Employment Discrimination in Law ix (1986). Because most instances “direct employer’s evidence of the motivation is ”, acquire unavailable or difficult to ... involving employer’s cases an intent are particularly Chipollini troublesome. See Inc., (3d Spencer Gifts, Cir.) (en banc) Coles, (citing Dillon v. (3d Cir.1984)), cert. dis — missed, —, (1987). L.Ed.2d 815 This case is no differ- employer’s ent: we must examine deci- sion-making process light Age Employment Discrimination Act (ADEA), 29 U.S.C. 621-634 §§ First, inquiry is Our twofold. we must City whether the of Mt. determine Leba- non’s decision to maintain its R16-73 dis- ability plan, urged after being modify cording to pension plan, covers carrier, by its insurance constituted any a will- employee age fifty-five twenty- ADEA, triggering ful violation of the years five of continuous service. three-year period. statute’s limitations Congress amended the ADEA to Second, we must determine whether Mt. restrict mandatory retirement upon based subsequent Lebanon established that a dis- age and protection to extend to individuals MEIT, ability plan, was not a up age seventy. result, See 631. As a purposes evade the ADEA and Bankers Life notified Mt. Lebanon in writ- thereby 623(f)(2), fell within the statu- in February, that the amendment tory exemption for employee fide bona ben- “may have created a need for benefit/rate plans. efit appellant, Equal After Em- adjustments your present group pro- Opportunity (EEOC) ployment Commission gram.” App. at 120. The Bankers Life sought partial judgment, summary the dis- memorandum noted proposed Depart- granted trict court summary judgment in ment of regulations Labor guidelines favor of Mt. Lebanon on both issues.1 For would require in disability modifications follow, reasons that we vacate and re- plans: mand. Long Disability Term pro- —One of two posed may alternates implemented. be

I. AND FACTS BE- PROCEEDINGS simply The first provides that LTD cov- LOW erage must age continue until 70. The A. The Plan R16-73 second provides alternate that LTD bene- 26,1986, February On the EEOC institut- fit payments may age cease at 65 for against Lebanon, ed suit Mt. alleging those employees that who were prior disabled age of disability employ- termination benefits to 60 but must be continued for at age fifty-five (but ees at city’s years 70) under the least 5 beyond age former not for (R16-73) disability plan those age violated the disabled on or ADEA. after 60. discriminatory The last allegedly act stem- Although the DOL has finalized the ming plan from the R16-73 concerned a proposed regulations, we have seen no 22, 1983 June termination of benefits. 1, January indications that the 1979 ef- Thus, the EEOC’s claim was time-barred fective date will postponed. Since two-year under the ADEA’s pe- limitations compliance is the direct responsibility of riod, three-year but not under the period employer, each you we wanted to have 626(e)(1) (in- for willful violations. report this status now.... corporating 255(a)). 29 U.S.C. Accord- App. (emphasis at 121 original). in ingly, our proceeds factual examination Bankers Life city August, notified in. particular emphasis on factors relat- guidelines 1979 that federal rules and con- ing to Mt. Lebanon’s possible willfulness. cerning the 1978 ADEA amendments had

Mt. adopted Lebanon plan R16-73 issued in App. been final form. at 122. 1973 and it continued in force until Decem- “The purpose of this explain letter is to 31, ber 1983. As of paid Life, benefits Group how rules affect Disability through were insured under a Expense coverages and Medical and to from policy Company. Bankers Life suggestions present installing any nec- revisions_” Lebanon, however, Mt. pay continued to a essary benefit Id. Bank- portion of the benefits not covered under Life ers stated that Group Long “[m]ost the Bankers Life policy. plan, Under Disability Term plans presently eliminate disability benefits coverage terminated when an em- at longer This is no ployee reached age.” “normal retirement permitted plans and such must be revised.” interpreted Mt. Lebanon applied cautioned, that Id. 123. Bankers Life how- phrase to employee’s ever, refer to an eligibility suggestions that its were not intend- benefits, which, for normal retirement legal ac- ed advice and that each insured issues, 1. In order to decide prima both we must as- could underly- establish a case of an facie sume, court, as did the district that the EEOC violation. disregard” attorney concerning ing the “knew or reckless will- its own consult should at 124. set forth this court amendments. fulness standard the ADEA Co., 799 F.2d Brock v. Richland Shoe Bankers Life on authorized Mt. Lebanon (3d Cir.1986) (applying 29 U.S.C. change the R16-73 November — U.S. —, 255(a)), granted, portion changed the of the city plan. The (1987), district S.Ct. Life, by Bankers but did not plan insured granted summary judgment in favor under change portion that Lebanon, holding that the R16-73 of Mt. co-payments. provided which was because Mt. Leba- claim time-barred payments to six em- city terminated the ADEA. willfully non had not violated co-payment the unmodified ployees under Lebanon, 651 City Mt. E.E.O.C. causing re- thereby plan, portion of (W.D.Pa.1987). F.Supp. 1260-62 those em- disability benefits to duction result, sought the EEOC ployees. As damages liquidated on the lost B. The MEIT Plan behalf, alleging employees’ Adding its claim on the R16-73 co-payment por- pre-1979 continuation of April complaint amended its the EEOC ADEA. For tion of the violated the 1986, asserting that Mt. Lebanon’s termi- Gordon, example, a fireman disabled James employees age sixty- nation of benefits to $1,450 receiving per age fifty-two through sixty-eight under the 1984 two month, modify its city did not but when the ADEA. Mt. MEIT violated Leba- plan, his benefits co-payment portion of the contended, however, the MEIT non $1,250 age fifty-five. to at were reduced exempt coverage ADEA plan was from be- sought to recover Accordingly, the EEOC employee cause it was a bona fide Gordon would monthly difference $200 subterfuge plan and not a to evade the 1993, he would until when have received purposes of the ADEA. See 29 U.S.C. sixty-five. age turn 623(f)(2). § reductions, no 1982 benefit Until the presently MEIT is Under the which partial question concerning arose effect,2 longer Mt. Lebanon no termi- plan. At that modification of the R16-73 upon eligibility for normal nates benefits time, by informed counsel Mt. Lebanon was Instead, retirement. it discontinues bene- lawfully co-pay- its it could terminate that (1) providing: pay- fits based on a schedule for- disability benefits to a portion ment age sixty-five ment until or normal retire- officer, age fifty-five, with thir- police mer ment, first, if the whichever occurs disabili- city ex- ty-three years of service. The (2) ty age sixty-two; occurred before or portion of

plained modify to its its failure payment age seventy, based on a slid- until of its plan by relying on a statement ages six- scale for individuals between she had not finance director that current ty-two sixty-nine.3 and of the insurance read nor been made aware App. (Taylor 24 affi- company notices. alleged Mt. The EEOC Lebanon's davit). (1) plan MEIT ADEA because: violated the provide age sixty- benefits until it did not facts, light the EEOC main- of these (2) age sixty; five for those disabled before willfully vio- tained Mt. Lebanon had provide years for five it failed benefits refusing modify by lated its the ADEA age sixty and for those disabled between thereby terminating bene- disability plan, (3) provide it benefits sixty-five; failed despite warnings employees, fits to older age seventy for individuals disabled until from discrimi- Bankers Trust that sixty- ages sixty-six age. Apply- between employee’s nated based on an employee example, an dis- city fits decreases. For 2. The in favor abandoned the R16-73 1, January age sixty-three would receive benefits MEIT effective abled at employee years, disabled at three while an for employee sixty-two 3. An receives disabled at age sixty-nine benefits for would receive years, benefits for three age and as and one-half year. one increases, disability of bene- duration

1485 (4) eight; and Mt. Lebanon had not estab- appropriate only in the of genu- absence lished that this lower level of benefits for ine issue of material fact and where the employees supported by older suffi- moving party is judgment entitled to as a age-related cient cost considerations. See matter of law. See 56(c). Fed.R.Civ.P. 860.120(f)(iii)(1982). 29 C.F.R. Accord- Material facts are identified reference to ingly, the EEOC contended that the MEIT law, the substantive Chipollini, 814 F.2d was a pur- evade the 896, genuine issue only if the poses of exempt the ADEA and not under “evidence is such that a jury reasonable 623(f)(2). Lebanon, however, Mt. main- could find the nonmoving party.” pursuant 860.120(f)(iii), tained that Equimark Comm. Fin. Co. v. C.I.T. Fin. had demonstrated age-related sufficient Corp., 141, Serv. 812 (3d F.2d 144 Cir.1987) cost considerations to establish that (citing Anderson v. Liberty Inc., Lobby, plan was not a subterfuge. Specifically, it 477 U.S. 2510, 91 prepared relied on a schedule its insur- (1986)). L.Ed.2d 202 Moreover, we must er, which general that as a concluded rule view the light record most favorable providing the cost of disability in- party opposing the motion and re- creases age. with an employee’s App. “inferences, solve all doubts and issues of at 43. credibility” against nonmoving party. E.E.O.C. v. Westinghouse granted Corp., district Elec. summary (3d Cir.1983), judgment Lebanon, denied, in favor holding Mt. cert. city disproved that the had S.Ct. subterfuge by L.Ed.2d 38 refrain, establishing We must however, “an pur- economic business from pose weighing competing inferences, or valid reason challenged for the resolving disputed facts, though terms even every detail of and determining the cost- the truth justification regulations not met.” matter. E.E. Jackson v. University of Lebanon, O.C. v. Mt. F.Supp. (3d Pittsburgh, Cir.1987), at 1263. — denied, U.S. —, II. DISCUSSION (1988); Sorba, L.Ed.2d 680 821 F.2d at 203; Chipollini, 900; 814 F.2d Equi at reviewing When grant summary mark, F.2d 812 at 144. Our role is judgment, we must apply the same the test genuine determine the existence of a issue district court should have utilized initially. Sorba, for trial. 821 (citing F.2d at 203 v. Pennsylvania Inc., Sorba Drilling Co., Anderson, 2511). 106 S.Ct. at 200, (3d Cir.1987), 821 F.2d 203 cert. de — nied, U.S. —, 730, 108 S.Ct. 98 L.Ed. A. (1988); 2d 679 Willfulness Chipollini, 814 F.2d at 896 (citing Goodman Co., v. Mead Johnson matter, & aAs threshold we must de 566, (3d 534 Cir.1976), F.2d 573 cert. de termine proper standard for “willful” nied, 429 1038, 732, U.S. 97 S.Ct. 50 L.Ed. triggering three-year violations limitat (1977)). 2d 748 principles governing Relying ions.4 on our in decision Rich summary judgment Shoe, are well settled: 80, it is land 799 F.2d applying a case 4. Mt. Lebanon addressing contends before does state such a proposition. broad In issue, the willfulness case, we must first determine question the willfulness whether the exempt R16-73 from the 623(f)(2) question § were intertwined. The 623(f)(2). Appellee ADEA under § Brief of willfulness determination turned on whether (citing Westinghouse 15 Corp., E.E.O.C. v. Elec. Westinghouse validly had invoked 211, (3d Cir.1983), denied, F.2d 221 623(f)(1) (f)(2) respect § with defense to its 820, 92, (1984). 83 L.Ed.2d 38 plan. severance See id. at 218. in order Here, however, presented we are with a factual Westinghouse willfully to decide whether had record that is silent applicability as to the of the ADEA, violated the we first were 623(f)(2) exemption plan. to the R16-73 Westinghouse properly determine whether had granted summary judgment district court on the exemption asserted the for bona fide benefit question, willfulness and we limit our review case, plans. inquiries In this the two are not that issue. intertwined. Furthermore, contrary to Mt. Lebanon's asser- tion, our decision Westinghouse E.E.O.C. v. (FLSA), Act underlying

Fair Standards 29 U.S. opinion Labor the Court’s in Thur- (1982),the district ston, C. 201-219 court con- light examined in statutory §§ employer acts willfully that an if it language structure, cluded apply equal with “ disregard reckless for ‘knew or showed force in ADEA statute of limitations its conduct pro- the matter of whether Shoe, context. See Richland 799 F.2d at F.Supp. at 1260-61 83; hibited....”’ see also Walton v. United Consumers Shoe, 83). (quoting 799 F.2d at Richland Club, Inc., (7th Cir.1986) 786 F.2d agree. We FLSA).5 (applying Indeed, the Fifth Circuit, June, Jiffy which decided has ac- involved the statute of Richland Shoe knowledged that Thurston overrules Jiffy provision of the limitations Portal-to-Portal June, and that the definition of willfulness 255(a), Act, applicable which is 29 U.S.C. § liquidated damages applies equally proceedings. provision That FLSA the definition of willfulness for the statute here the ADEA expressly relevant because of limitations. City See Peters v. incorporates by reference 255 for statute Shreveport, (5th 818 F.2d 1167-68 purposes. limitations 29 U.S.C. Cir.1987). 626(e)(1). Although some distinguished courts have adopt we declined to Richland Shoe liquidated willfulness standard for dam- picture” the more lenient “in the standard ages from the standard for statute of limi- first enunciated in Jiffy Coleman v. June Cir.1972), tations, see, e.g., Farms, Inc., (5th Secretary Labor 458 F.2d Products, Daylight Dairy Inc., denied, rt. 409 U.S. ce (1st Cir.1985), we declined to do so. Jiffy June Instead, expanding we concluded that permitted lia- plaintiffs prove willful viola- bility by increasing the period limitations purposes by tions for statute of limitations and imposing liquidated damages were showing that the knew FLSA equally punitive. Accordingly, held, we found picture.” was “in the Id. We how- no for imposing basis ever, meanings different require that willful acts a deliberate for the same term effort, i.e., used similar bring contexts “an intent to about cer- in the statutory same scheme. disregard tain ends or Richland respect reckless Shoe, 83-84; 799 F.2d at Walton, see Shoe, also those ends.” Richland 786 F.2d at 311. Any at 82 & n. 83. other standard would any transform almost violation into a will- Applying standard, the proper the dis- thereby ful act and congression- eviscerate trict court city concluded that the did not al intent to create a two-tiered liability willfully (1) act because: current Finally, scheme. we noted that knowledge fiscal officer had no of the 1979 Supreme adopted Court had an identi- memos; (2) Bankers Trust city was not cal purpose willfulness standard for the confronted with a claim that its R16-73 assessing damages 626(b) double under § plan 1982; (3) violated the ADEA until (citing ADEA. Id. at 83 Trans city the had received a legal opin- favorable Thurston, World Airlines v. 469 U.S. ion on in the 1982. See E.E.O.C. v. (1985)). Lebanon, F.Supp. Mt. 651 at 1261. These sure, Supreme To be the factors could Court in show that Mt. Thur- Lebanon’s con- speculate Indeed, ston declined to duct was whether the not willful. the district disregard” “knew or apparently reckless persuaded by standard was was the ab- appropriate for the ADEA any challenge statute of limita- sence of to the until Thurston, 127-28, 1982, tions. See 469 U.S. at and apparently found that the Bank- 105 Yet, S.Ct. at 624-25. principles the er’s Life merely memos were advisory. Although ADEA, Supreme granted infra, the Court has cer- necessarily see we hold that the tiorari Shoe Richland on the "willfulness" may EEOC be able to establish that Mt. Lebanon issue, proceed we nevertheless to decide this knowledge acted with that the ADEA was in the appeal. By holding may that the EEOC be able picture, may or that Mt. Lebanon have violated recklessly establish that Mt. Lebanon knew or any other more lenient standard. disregarded whether its conduct violated the

1487 case, however, This cannot be decided on the disability plan in 1982 was not aware of these facts alone. the notices. This jury is a question.

Although the required court was to view The memos warning of ADEA noncom- light the evidence most favorable pliance and suggesting alternative benefit Mt. Lebanon when it plans considered the were sent by Trust, 1979 Bankers EEOC’s motion for summary judgment, own insurance carrier. city that not necessarily does summary dictate acted upon warning this modifying the judgment for the princi- nonmovant. This portion insured of its disability plan. For ple is especially important here because the reason, some however, city declined to district court used the EEOC’s motion to modify copayment portion of grant summary judgment in favor of Mt. financed funds, solely city and in 1982 inappropriateness Lebanon. “The of sum- terminated the co-payment portion of six mary judgment when motive inis issue is employees’ benefits. a fact-finder dispelled by the fact summary could infer that someone position in a judgment sought by both sides.” E.E. authority in the city approved only partial Co., O. C. v. Home Insur. 257 modification of the R16-73 based on (2d Cir.1982). Here, the district court care- warnings in the Bankers Trust memos. fully identified the facts relevant to the The city argues that these facts show its question intent, of Mt. Lebanon’s then but was, conduct worst, negligent, not will- competing elected between in- reasonable ful. issue, of this however, Resolution de- ferences from those facts. pends on credibility judgments that must trial, be deciding

In reserved for at the where summary judg opposing coun- sel can stage properly challenge ment that Mt. Lebanon did not such assertions. act Jackson, See willfully, 235; 826 F.2d at district court assumed Losch v. Borough fact-finding Parkesburg, function F.2d expressly reserved for (3d Cir.1984). For Jackson, example, trial. F.2d at unclear (quoting whether city official said Fireman’s who she was Fund Ins. Co. v. Videfreeze unaware of the 1979 Corp., memos employed (3d Cir.1976), by the city that time. denied, App. at 24 429 U.S. (Taylor affidavit). Moreover, these (1977)). L.Ed.2d facts Willfulness is a factu question call into the city’s motive for de- question al requiring an examination of an clining modify copayment portion of employer’s mind, “state of knowledge, in plan. tent and belief regarding the propriety of actions.” [its] E.E.O.C. v. Westinghouse, addition, the Bankers Trust memos 725 F.2d at 218. Whenever reasonable disputed raise question of material fact minds could differ in characterizing the whether city recklessly disregarded the employer’s intent, the trier fact must possibility violating it was the ADEA. Al- resolve the Jackson, conflict. See 826 F.2d though Bankers Trust warnings stated its at 235. The EEOC established such a con legal advice, were not juror a reasonable flict demonstrating plausible several could construe the providing memos as suf- and reasonable inferences may ficient notice of an ADEA violation. drawn from the underlying facts. manner, Viewed in this city would have been to at legal least seek formal By granting summary judgment in favor advice in concerning 1979 the lawfulness of Lebanon, of Mt. apparent- the district court portion of plan. the R16-73 ly believed Mt. Lebanon’s contention that it had knowledge no of its insurer’s 1979 Finally, light of the 1979 memos and notices. Without this knowledge, Mt. plan’s Leb- subsequent partial modification, asserts, anon its termination of benefits in reasonable minds could signif- differ on the 1982 cannot be viewed as willful. Mt. Leb- city icance of the solicitor’s 1982 recom- anon does not contest that it never received mendation to continue R16-73 benefit ter- notices; rather, it maintains that the minations. There are no in the facts record city official responsible for implementing whether the solicitor was informed of the 1488 Thurston, Bankers Trust or of the fit in the first instance. from See

prior notices 121, (citing U.S. at 105 S.Ct. at 621 inconsistency between in- Hishon 69, 75, plan city’s King Spalding, and the v. & 467 U.S. portion of sured 2229, 2233, (1984)). city’s contin- S.Ct. copayment portion. Congress’s portion purpose supports its own of the stated this in 1982 of uation having broad construction. The ADEA enact- plan could be viewed was R16-73 (1) disregard promote employment ed to: of older made in reckless been persons ability, age; Although the decision to ul- based on rather than ADEA. (2) legal prohibit professional opinion arbitrary age is discrimination in timately seek a (3) inquiry, employment; promote it is and resolution of relevant to willfulness age-based problems. attorney employment was hardly dispositive where See city 621(b). years after the U.S.C. consulted three first plan might be unlawful. Under learned the Nevertheless, any action in ob facts, legal opinion receipt of a can- these employee servance of a bona fide benefit might otherwise immunize conduct that not plan exempt from the ADEA’s broad as a willful violation. be construed 623(f)(2) scope. Section states that it shall employer Therefore, of turns be unlawful for an the issue willfulness credibility determination and on the on a to observe the terms of a bona fide se conflicting but reason- fact-finder’s of view niority system any employee or fide bona from the material retirement, able inferences drawn plan pen benefit such as a these matters was sion, plan, facts. Resolution or insurance which is not a summary judgment. inappropriate for subterfuge purposes to evade the of this 234, 235; Jackson, Chipollini, 826 F.2d at chapter.... 901; Westing-

814 F.2d E.E.O.C. v. By defense, invoking this Mt. Lebanon house, F.2d at 218. establishing bears the burden of plan acted in fide observance a bona Subterfuge B. The MEIT Plan as a subterfuge that the is not a to evade ADEA makes it unlawful for an The purposes of the ADEA. E.E.O.C. v. 223; Westinghouse, 725 F.2d at see also discharge Ass’n, Inc., Shipping to hire or to v. New York to fail or refuse Potenze (2d Cir.1986), otherwise any individual or discriminate cert. de —nied, —, against any respect individual with to his terms, conditions, privi- compensation, L.Ed.2d 528 The EEOC concedes leges employment, the MEIT employee because such is a bona fide age.... individual’s and that Mt. Lebanon observes plan. only dispute the terms of the 623(a)(1). Supreme Court U.S.C. § whether Mt. Lebanon created the as a “broadly pro- has ADEA to construed the prohibition ADEA to evade the arbitrary discrimination in the work- ] hibit! place discrimination.6 Thurston, age.” based on 469 U.S. (quoting Congress task is to determine 105 S.Ct. at 621 Lorillard Our what 575, 577, Pons, required employers v. 434 U.S. meant when it to dis- (1978)). Employers may prove subterfuge. The ADEA itself offers L.Ed.2d 40 discriminatory explanation, Supreme not dole in a manner no further and the out parcel “subterfuge” part benefits that are of the Court has defined terms, scheme, employment relationship if the em- as “a broad strata- —even ployer granting gem, has discretion in the bene- or artifice of evasion.” Air United ‘specific showing genu Lebanon bears the burden of nate facts that there is a Because Mt. ’’ defense, 623(f)(2) (citing proving the ine issue for trial.’ Id. at 2553 Fed.R. EEOC 896; 56(e)); Chipollini, Equi Civ.P. mark, to establish "that there is an absence of 814 F.2d at By granting summary support nonmoving party’s evidence 812 F.2d at 144. Catrett, Lebanon, judgment case.” Corp. Celotex in favor of Mt. the district 477 U.S. 2548, 2554, (1986). necessarily 106 proof S.Ct. held that the 91 L.Ed.2d 265 At ex point, that "desig- Mt. Lebanon was ceeded this burden.

1489 McMann, 192, 203, Lines, 434 intent, v. U.S. Inc. Consistent with this federal regulations 444, 450, permit employers 98 S.Ct. with bona fide benefit plans reduce benefit levels legislative must turn to the we histo- for older workers “to the extent necessary governing regulations ry and the for fur- approximate achieve equivalency in cost guidance. ther younger for older and workers.” 29 C.F.R. 623(f)(2) enacting exemption, the § 860.120(a)(1).8 plans Benefit satisfy the Congress recognized greater expense the statute whenever the cost employer in employers by providing incurred benefit providing curs in benefits to older employ programs employees. for older This equals ees the cost in providing incurred factor, feared, might discourage employ- younger benefits employees “even hiring ers they from older workers “when though the may older worker re thereby might grant- have hired them under a law ceive a lesser amount of benefits....” ing degree flexibility them a of with re- regulations The process describe this spect to McMann, such matters.” 434 U.S. justification” “cost 200, (citing Hearings at 449 on Cost data in justification used of a bene- S. 830 the before Subcomm. on Labor of provides fit which lower benefits to the Committee on Senate Labor and Public employees older on account of must Welfare, Cong., Sess., (1967) 90th 1st 27 be valid and reasonable. This standard (statement Javits)). Thus, of Senator is met where an has cost data 623(f)(2)exception prin- was based on the which the actual pro- show cost to it of ciple employers should be viding (or relieved of particular benefits) benefit obligation providing question of employees representative period older over a years. of employer may rely An equal younger benefits to benefits on cost data for employees its own over employees when such it would would be more period, or larger on cost data for a group costly do so. See E.E.O.C. v. Borden’s of similarly employees. situated Inc., 1390, (9th Cir.1984); 1396 Cong.Rec. (March 23, 124 860.120(d)(1). accord 8218 Id. § 1978) (statement Javits) (benefit of Senator regulations expressly require cost plans comply with ADEA cost in- where justification long-term for reduced disabili- curred behalf of equals on older workers benefits, ty 860.120(f)(iii)(long-term id. § cost incurred on behalf of work- younger disability “justifiable benefit reductions are ers, if even older workers receive less bene- only age-related on the of basis cost consid- fits).7 erations as set forth elsewhere in this sec- Javits, recognize We 7. that Senator Department who was a not enacted based on the of Labor's ADEA, primary passage force behind reading of legislative history. of the 1978 years made 1978 his more than ten Finally, legislative remarks sparse history relating McMann, passage after of the statute. See 623(f)(2) aspect supports this §of either Sena- 200 n. n. tor Javits’ or does not comment address it. In- (1977) (remarks years L.Ed.2d 402 made ten deed, legislative comments cited Mt. Leb- passage part legislative after of statute are not observations, general anon are sup- but tend to Nevertheless, history). we find the 1978 re- port Appellee, the Javits’ view. See Brief of helpful marks for several reasons. 31-32 n. 13. support 1978 statement was made in of an 623(f)(2), assuming authority Since amendment Senator enforcement over which ADEA, emphasized Javits that the did EEOC has not amendments the- issued its own change present regarding interpretations regulations regarding law the cost of Instead, providing over, plans. employees. incorporated to older Mor- the EEOC has Congress Department interpretations, Senator Javits’ statement of Labor which approved “equal concept enacting cost” continue in force. See 29 C.F.R. § 1625.10 subterfuge provision (1985); 23,811 Department (June generally Fed.Reg. tracks the see interpretation 1987) (pursuant Labor’s statute. to transfer of ADEA en- Borden's, authority Department E.E.O.C. Inc. 724 F.2d forcement from the (9th Cir.1984) (June EEOC, (citing Feg.Reg. regulations Labor to the issued 1969)). assertion, Contrary Department to Mt. pend- Lebanon’s of Labor continued in effect therefore, 860.120(a)(1) (1982) review). 29 C.F.R. § EEOC tion.”). may also Employers comply with The district court apply declined to up by providing age requirement. benefits the EEOC’s “nexus” the ADEA It held occurring authority supported that no for disabilities before the sixty-five EEOC’s position by providing up sup that Mt. Lebanon’s failure age sixty; or ply justification, required cost as years or five after the age seventy, disable- first, regulations, subterfuge establishes as ment, occurs for disabili- a whichever matter of City law. E.E. v. occurring sixty. after O. C. Mt. ties of Lebanon, F.Supp. Instead, (B). 1263. 860.120(f)(iii)(A), may data “Cost held, Mt. Lebanon need support patterns other of re- produced to prove “an economic or purpose business 860.120(f)(iii)(B). well.” Id. duction as valid reason for the challenged terms even support In of the reduced benefit sched- though every cost-justification detail of the plan, in the MEIT Mt. ule Lebanon sub- regulations is not met.” Id. one-page mitted a memorandum from its declining In regula- to follow the EEOC insurer, Cigna, stating general terms justification” requirement, tions’ “cost providing disability of that the cost insur- district court relied on the Second Circuit’s employees grow as ance increases older. Cipriano decision in v. Board Edu- addition, App. at 43. Mt. Lebanon cation, (2d Cir.1985), 785 F.2d 51 as “re- offered an affidavit from Paul Mocken- fusing every to endorse regu- detail” of the haupt, up firm MEIT plan. whose set interpreting lations the ADEA. E.E.O.C. App. Mockenhaupt at 37-38. stated that Lebanon, F.Supp. Mt. at 1263. Acc- the schedule used in the MEIT ordingly, the court Cipriano per- read applied by disability most insurers in the mitting employers to show their is not Cigna cost United States and that the data subterfuge by a offering any legitimate insuring against “shows that the cost of business reason for the reduced benefits. ¶¶ 5, age.” disability increases with 6. appeal, See id. On Mt. Lebanon cites the city The contends that this evidence estab- subsequent Second Circuit’s decision in Pot lishes sufficient reason for the business enze, support as further disproves MEIT holding. district court’s purposes to evade the ADEA. do not We read those cases so broadly. Because neither Supreme Court nor dispute underly- EEOC does not this court had “subterfuge” addressed the Instead, legal facts. questions it issue, the district court understandably standard used Mt. to evaluate Lebanon’s turned to guidance. the Second Circuit for showing subterfuge. of no The EEOC disagree forth, We with the standard set claims Mt. Lebanon’s data “without more however, follow, and for the reasons that explain information does not schedule we will grant vacate the district court’s duration, [ie., why employ- older summary judgment. Specifically, we con- ees period]. receive benefits for a shorter disprove subterfuge, clude that to Mt. Leb- In order to definitively state the schedule why general age- anon must demonstrate plan] justified[,] MEIT is cost a nexus [the related cost factors it to reduce between general the schedule and the data benefits for older workers to the extent (affidavit must be App. shown.” at 142-43 and in prescribed the manner in the MEIT Wollman). city Milton must estab- plan. Because the district court reached a “nexus,” maintains, lish a the EEOC be- contrary holding based on the Second Cir- cause simply “it make common does not reasoning Cipriano, cuit’s we first turn sense purpose spe- that an for a economic to an examination of that decision. graduated cific benefit reduction schedule MEIT plan] through In Cipriano, can be shown the court [the focused on a New general data anyway pension plan that is York provided connect- incentives ed specific with the early reductions mandated teachers who volunteered for re- by Appellant, ques- schedule.” Brief of tirement. The court addressed two concerning requirements tions 623(f)(2). First, rejected employ- stood as endorsing every detail of the argument ees’ employer that an must dem- regulations, we cannot simply disregard “actuarially onstrate based” cost considera- them. All that we decide is that even in prove plan tions to that the bona was fide. the case of voluntary early retirement Cipriano, 785 F.2d at 55. Cost consid- plans employer the ... must up come erations, noted, the court are “immaterial” with some evidence plan that the is not a determining plan in a whether is bona subterfuge fide to evade the purposes of the thereby 623(f)(2). and covered under Id. by ADEA showing legitimate a business at 55. The court concluded way that “the reason for structuring plan the as it did. plan the is only structured affects whether Id. The district court apparently construed might it subterfuge.” Here, be a Id. the quoted this passage as rejecting the “cost- EEOC does not contend that Mt. Lebanon’s justification” requirement set forth in the plan Thus, is not bona fide. aspect this regulations. Yet the court in Cipriano Cipriano inapplicable.9 is tempered its by statement adding that it Next, Cipriano cannot disregard” the “simply court regulations. considered the Moreover, employer the requiring whether had met its burden the employer to disproving “legitimate demonstrate a plan that its a subter- was business reason fuge. for the structuring aspect Cipriano It is id., plan did,” this as it that is the court in Cipriano simply relevant here. The court concluded restated gen- that the proposition eral employer the disprove must it had subterfuge previously set forth v. in Co., E.E.O.C. Home though even Insur. participation in plan the was 672 F.2d at Cipriano, 785 F.2d at 58. In voluntary. 258-59.10 reaching conclusion, this recog- the court addition, In Cipriano was decided in the governing nized the regulations federal on context of a voluntary early retirement subterfuge requirement. the It then noted plan. Cipriano, 785 F.2d at 59. The regulations the that court observed that evidence of business put seem fairly to a heavy burden on the required reasons disprove to subterfuge employer justify any age-based dis- for plan a voluntary “would almost neces- employee tinctions in plans benefit on the sarily be less than required what was “age-related basis of justifications.” cost make showing such a in the case of a While we not wish would to be under- mandatory plan.” Id. at 59. Here, we are 9. The court Cipriano correctly Thus, here, noted that our 9. we infra, see hold Discussion that Westinghouse, decision in v. E.E.O.C. disprove subterfuge employer an must dem- (3d Cir.1983), denied, onstrate that it reduced benefits for older work- (1984), S.Ct. L.Ed.2d not did hold to only ers extent ap- the to achieve contrary. the Westinghouse, In E.E.O.C. v. we proximate equivalency providing in the cost plan concluded that a benefit is fide bona under younger benefits to older and workers. This 623(f)(2) type if it whereby "the is the cost of showing involves more than a that the age." with increases Id. 224. If at benefits, age i.e., somehow pays linked and nature of the any unrelated to requires employer bona fide. It an to demon- factors, age pay plan, such as a severance we why strate it reduced benefits to the level that it held cannot be bona fide. at 225. In Id. City Colleges did. See Chicago, Karlen addition, we pay concluded that the severance (7th Cir.1988). 318-20 "functionally was not any related” to exist- plan, retirement thereby exempt and not Home, In grant 10. the court reversed a of sum- coverage. from ADEA requiring Id. mary judgment employer to an whose reasons age some link plan, between our hold- reducing mandatory retirement were ing was congressional consistent with intent "specious” relationship or “had no whatever to types plans certain qualify of benefit Home, mandatory age.” F.2d at exemption 623(f)(2). for the ADEA in § Accordingly, concluded, employer In Westinghouse, E.E.O.C. v. had not we did not have demonstrated "valid business reasons action,” here, occasion to address the issue we for its disproved and therefore confront had i.e., subterfuge. whether a subterfuge bona fide a 260. The court Home did to evade purposes regulations With not discuss deed, ADEA. re- here. In- issue spect inquiry, employer's we must exam- because the stated reasons employer's merit, ine an purpose motive or for reduc- presented lacked the court was not with ing benefits for older workers. See id. at 224 n. the need to do so. disregards mandatory justifi- standard the cost benefit reduc- This

confronted which, pervades regula- Cipriano, under cation rationale would tion tions, showing. employer’s stringent and also overlooks an ob- more require a ligation justification to somehow relate that as Mt. Lebanon persuaded, Nor are we In plan. justify” to its order to “cost subsequent decision Pó- urges, that employ- level of benefits for older reduced Póteme, position. supports teme ees, subterfuge, thereby disprove that to the extent held Circuit Second a connection or must establish must es- cost considerations age-related showing general savings how cost nexus fide, show that bona tablished supports data the extent of reductions in Potenze, this burden. had met appellants particular plan. require- its Without this (citing Cipriano, 237 785 804 F.2d at ment, employer implement an could a bona issue, 54). respect to the relevant at With then fide benefit but evade the i.e., plan that offset whether a retirement purposes by reducing ADEA’s benefits for subterfuge, was a Security income Social beyond necessary older the level workers held the district court had erred the court approximate equivalency in to achieve holding plan was a the offset subter- providing cost of benefits to older and “better alternatives fuge simply because younger regulations workers. The EEOC’s Significantly, Id. at 238. were available.” properly implement concept. this regulations federal the court followed the concluding adopted that the offset was agency’s interpretation An is es “non-age-based Relying reasons.” Id. pecially important specialization where its 860.120(f)(ii)(A), 860.120(e) on and § significant supporting § is a factor the is justification require- which discuss the cost regulations. suance of 2 generally See ment, the court determined that the offset Davis, K. Administrative Law Treatise regulations “in of was line with the theme fact, 7.22, (1979). however, at 107 That § adopted by Department of Labor Although dispositive. is not courts must implementation respect the ADEA with of disregard agency’s long-standing not an to offsets of Medicare benefits....” Id. contemporaneous interpretation of a Cipriano reject nor Póteme neither statute, Dry EEOC v. Associate Goods regulations. cost-justification the EEOC’s 590, 17, Corp., 449 U.S. 600 n. 101 S.Ct. 817, 17, (1980); n. 823 66 L.Ed.2d 762 Here, concluded, the district court as a Co., 424, Griggs v. Duke Power 401 U.S. law, matter of that Mt. Lebanon demon- 433-34, 849, 854-55, 91 28 S.Ct. L.Ed.2d strated MEIT not a was (1972); Tollman, 1, 158 Udall v. 380 U.S. by producing generic schedule illustrat- 16, 792, 801, 13 (1965), rule, 85 S.Ct. L.Ed.2d 616 that, ing general the cost of as a agency’s regulation deference to an is un providing age. increases with justified interpretation sup where the city need lacks comply court held that the not port statutory language legisla in the or “every cost-justifi- with detail of the EEOC Chevron, U.S.A., regulations,” only history. cation must tive show Inc. v. Council, Inc., that the reduced benefit schedule was Natural Resources Defense 837, 844-45, 2778, based on or purpose “an economic business 467 U.S. 2782- (1984); or valid City Griggs, reason.” See E.E.O.C. v. 401 U.S. Lebanon, 855; F.Supp. Mt. Department 651 at 1264.11 at 91 S.Ct. at holding, support 11. As further for its the district missible if it based were on reasonable actuarial plan’s department expressly noted that the MEIT benefit sched- data. The cautioned ule is underlying identical to the benefit schedule set forth it had verified data or the Department agency’s of Labor in the 1979 assumptions reasonableness of the on which it interpretive City 30,655. rule. E.E.O.C. v. Mt. Leba- computed. Fed.Reg. See 44 non, (citing F.Supp. Fed.Reg. Moreover, department used the schedule 30,648, 30,655 (May only as an 1979». illustration because on "Statistics fact, relevant, employees age although the rate of disablement for over controlling This is not Here, First, contends, scanty.” Department here. 65 are cited the EEOC of Labor only example complied require- schedule Mt. Lebanon has not of a submitted this during period per- the comment that would be ment. Navy, Military Command F.L. ployers prove “to a close correlation Sealift be- R.A., (3d Cir.1988). 836 F.2d tween and cost” they whenever use Here, however, the justifica- EEOC’s cost age as a basis for reducing retirement ben- requirement tion constitutes type efits. Karlen v. City Colleges Chicago, long-standing and contemporaneous agency (7th 837 F.2d Cir.1988) (citing 29 C.F.R. interpretation deserving recognition. More 1625(a)(1), (d)(1)-(3)); see also Henn v. importantly, independent based on our ex- Soc., National Geographic amination statutory scheme, of the requir- (7th Cir.) (discussing “sound business employer an justify cost its decision purpose” test in terms of 29 C.F.R. to reduce benefits for older workers is con- — 860.120(a)(1)), denied, U.S. —, sistent with the requirement statute’s L.Ed.2d 394 cannot be a subterfuge to evade When anti-discriminatory produces ADEA’s purpose. evi By adding 623(f)(2), dence disprove Congress subterfuge, intended the fact find employers relieve er must provid- burden of assess whether the stated business ing equal benefits to employees all economic purpose reasonably justifies when the cost of providing lower benefits reduced benefits. See Crosland v. to older workers is approximately equal to Eye, Charlotte Ear & Hosp., Throat providing the cost of greater (4th benefits to Cir.1982). F.2d justifica- Cost younger Hearings workers. See on tion, S. practical sense, in a demonstrates or 27; supra, at Cong.Rec. 8218; E.E. quantifies a “non-age-based reason” for an Borden’s, O.C. v. Thus, F.2d employer’s provide to decision lower bene- by allowing reduced benefits to older work- fits to older employees. If the cost of a ers when necessary “to approxi- achieve reduced duration of benefits for older mate equivalency in cost for older and workers is approximately equal to the cost workers,” younger 860.120(a)(1), see providing type same of benefits to regulations are consistent with the statu- younger workers, employer’s benefit tory By viewing scheme.12 justifica- cost plan is not subterfuge. tion, i.e., need approximate to achieve Thus, in order to establish that reduced equality in benefit for cost older and justified benefits are by the “approximate younger workers, as somehow inconsistent rule, equality” employers link must with purpose,” “business the district court general allowing data some type of reduc- erred. tion specific to the level of reductions set purpose” “business requirement was forth in plan. Here, their Mt. Lebanon set forth general as a allowing means of solely relied general on the that, principle employers disprove to improper for motive disability most plans, the provid- cost of reducing older workers' benefits. See ing benefits increases as employees grow Co., Home Yet, Insur. at 258. older. This is a generally accepted and merely proffering a business reason for conclusion; indeed, reasonable usually it is reducing levels, e.g., it saves the self-evident in an insurance context be- employer money, does not necessarily mean cause of the increased risks accompa- employer an using not also its benefit ny age. What Mt. Lebanon to failed estab- program to evade the purposes. ADEA’s lish is how this increased cost theory ap- Requiring employer an to cost its justify plies to the MEIT reductions. reduced disprove benefit schedule to sub- terfuge gives meaning “legitimate general (1) conclusions that: purpose” business showing. The providing United cost of benefits increases States of Appeals Court for the employee’s age; (2) Seventh an that reduc Circuit recently recognized as much benefits when serves a valid pur business interpreted it 623(f)(2) requiring as em- pose by saving money, always apply will if not, however, 12. We do regula- view EEOC’s cause we find them language statutory consistent with the Rather, tions as a rely talisman. we legislative underlying on and the intent regulations supporting holding 623(f)(2). our be- enactment of § obligation inquire fide. order to establish its into the is bona lawfulness does, is not a device to plan. however, schedule that its benefit It allow an purpose prohibit- ADEA’s evade the the employer good despite to show that its discrimination, Mt. Leba- ing arbitrary age attempt provide faith in con- benefits that it reduced older em- non must show ADEA, formity misrep- with the errors or necessary no more than ployees’ benefits pro- resentations its insurer caused it to higher insuring cost of compensate for the unlawfully vide low benefits to its older If, example, employ- an older workers. employees. employer cannot sat- spend fifty percent provide more to er must isfy by merely producing its burden a con- the same benefits to older workers that clusory certification from its insurer that workers, provides younger then it could the benefit schedule is There lawful. must employee’s not reduce an older proving be cost data a correlation between seventy-five percent. generally Kar cost, age and which allows an len, Congress F.2d at 319-20. did assess the insurer’s benefit schedule. employers intend to allow to use the Therefore, we will remand for considera- 623(f)(2)exemption to discriminate based reasonably tion whether Mt. Lebanon can employee’s age. on an justify its proper view of the stan- course, recognize, of that the subter- We dard, incorporates cost-justifica- which fuge inquiry normally requires examination requirement good principle tion faith employer’s subjective “purpose or of an city explains set forth above. Unless the Westinghouse motive.” EEOC v. Elec. legitimate purpose business in this man- 9; Corp., 725 F.2d at n. accord ner, summary judgment stage either at the McMann, 434 U.S. at 98 S.Ct. at 450. trial, or at it cannot establish that it did not Although justification evidence of cost plan subterfuge use the as a to evade the usually provides straightforward a method anti-discriminatory purposes of the ADEA. ascertaining of employer’s by an motive reasons, judgment For these the of the demonstrating benefits for whether older district court will vacated be and we will workers were reduced no more than neces- proceedings remand for consistent with sary compensate higher to for the cost of opinion. this workers, insuring may older it not be con- if employer clusive the can establish that it HUTCHINSON, Judge, Circuit good in example, acted faith. For we do concurring. Congress not believe could contem- have plated holding employer an liable for evad- judgment I concur in the of the Court ing employer the ADEA when the made a separately myself but write to disassociate good implement faith effort to a bona fide any suggestion opinion from in the Court’s pur- with no intention to evade the that the employ- means available to an ADEA, poses legal of the but its or counsel er, seeking to defend a discrimination insurer misrepresented13 erred or true the charge against its benefit is to demon- extent of the needed reductions and there- justification” pursuant strate “cost to 29 by reduced beyond the level neces- 820.120(d)(1).1 regulations C.F.R. of- § sary compensate to for the increased cost However, employer. fer one defense to the insuring of employees. older employer proffer an who does not data demonstrating justification” may “cost “good

This still per- faith” defense does not jury’s mit an be entitled to a determination as to employer eyes ignore to close its “subterfuge legal actions its whether his benefits is a insurer or counsel that purposes it knows the plan violating will result in the to evade [the ADEA].” (West 1985). 623(f)(2) ADEA. employer Nor does Accord- it relieve an U.S.C.A. § misrepresentations, justification regulations ap- 13. In the case of 1. These cost now errors of employer modify (1987). the plan would pear Opinion its at 29 C.F.R. 1625.10 § compensate to correct the mistake and Court, of the at n. 8. employees any benefits lost a result of the misrepresentation. error or Court in United Air Supreme to the put seem fairly a heavy burden on the Lines, McMann, 192, 203, Inc. v. employer justify U.S. any age-based dis- tinctions in 444, 450, employee plans (1977), 98 S.Ct. 54 L.Ed.2d 402 on “age-related basis of justifications.” cost 623(f)(2) term means “a § While we would not wish to be under- scheme, plan, stratagem, or artifice of eva- stood as endorsing every detail of the sion.” regulations, cannot we simply disregard Unfortunately, legislative history to them. All that we now decide is that the ADEA insight offers little into the lim- even the case of voluntary early retire- 623(f)(2) its of the Comment, defense. § plans ment employer ... must come 4(f)(2) Section Interpreting the ADEA: up with some evidence that “Plan”?, Does Anyone Have a 135 U.Pa.L. not a subterfuge to evade the purposes McMann, (1987). Rev. ADEA showing legitimate a business reason for Supreme structuring Court chose to apply the “ordi- as it did. nary” definition to the term subterfuge in 623(f)(2). McMann, Admittedly, the decision in Cipriano U.S. at is lim- ited to a voluntary early Subterfuge, plan. S.Ct. at 450. retirement according to the However, the Court’s reluctance afford Court, requires McMann showing some regulations the force of law clear. mind, my artifice. To this examination See also Potenze New Shipping York calls for scrutiny of employer’s subjec- Ass’n, (2d Cir.1986)(both words, tive intent. In other intent of employer regulations relevant may 623(f)(2) be able to invoke the de- — issue), on subterfuge denied, cert. upon fense showing sought, —, (1987); L.Ed.2d 528 good faith, comply objectives of Cook v. Pan American Airways, World the ADEA. Since the contemplates statute Inc., 647 F.Supp. 825 (S.D.N.Y.1986) such good defense, faith I would allow (showing legitimate business reason suf- Mt. Lebanon on remand opportunity ficient to show seniority system not subter- elicit demonstrating facts good faith. per curiam, fuge), (2d 817 F.2d 1030 aff'd emphasis Court’s objective on the crite- — denied, Cir.), U.S. —, 820.120(d)(1) rion of 29 C.F.R. unduly restricts ability Mt. Lebanon’s to defend On the limited record there is conflicting the charge of discrimination. evidence on the issue of whether Mt. Leba- non good acting faith when it It is the role of an agency administrative sought provide disability benefits to its legislative execute policy; agen- neither employees. remand, On given it should be cies nor courts are free to rewrite acts of chance, a objective the absence of data Congress. Contracting Williamson Shaft demonstrating justification,” “cost per- Co. v. Phillips, (3d 794 F.2d Cir. suade jury a acting good it was 1986). The Court’s focus on cost considera- faith sought when it the advice of its insur- tions, pursuant to regulations, connotes ers and its counsel on how comply emphasis objective on factors rather the ADEA. I believe the final determina- than subjective analysis suggested in tion as to Mt. whether MEIT Lebanon’s 623(f)(2). While demonstrating evidence plan is objectives avoid the compliance with objective factors is of the ADEA more properly left to a probative on the issue of employer’s jury local Washington than a regulator. good faith, inquiry does not end there. Therefore, I permit would the District In the objective data, absence of the em- Court to jury question submit ployer should nevertheless able to dem- whether Mt. adopted Lebanon its varied onstrate subjective good faith. plans “scheme, as a strata- gem, or artifice of evasion” of the ADEA. This approach is consistent with that of the Second Cipriano Circuit. In v. Board Education, (2d Cir.1986),

the Court regulations: stated that the

Case Details

Case Name: Equal Employment Opportunity Commission v. City of Mt. Lebanon, Pennsylvania

Court Name: Court of Appeals for the Third Circuit

Date Published: Mar 30, 1988

Citation: 842 F.2d 1480

Docket Number: 87-3189

Court Abbreviation: 3rd Cir.