A Tempe, Arizona school district last week agreed to pay $148,092 to settle an age discrimination suit filed by the U.S. Equal Employment Opportunity Commission (“EEOC”).
The EEOC complaint, filed last year in the District Court of Arizona, centered on a leave compensation plan for retiring employees that allegedly discriminated against older workers. According to the complaint, the Tempe Elementary School District No. 3 plan provided an incentive for workers to retire early, paying employees a retirement benefit based on an ever smaller percentage of their daily salary as they grew older.
Under the plan, workers who retired between the ages of 55 through 60 were paid at 52% of the employees’ final salary; while workers who retired at age 65 were paid at 31% of their final salary, or 50% of a substitute teacher’s daily rate, whichever is larger.
This system amounted to facial age discrimination in violation of the federal Age Discrimination in Employment Act (“ADEA”), the EEOC alleged.
According to the EEOC, the district has revised its retirement plan to comply with the ADEA. The agency claims to have obtained all the actual damages it sought plus interest. Damages sought included payments to all employees who retired between April 3, 2008 and the present who were older than 61 totaling the difference between the amount each was paid for accumulated leave and the amount they would have been paid based on 52% of the employee’s daily rate at retirement.
“Discrimination on the basis of age is simply illegal,” said EEOC Regional Attorney Mary Jo O’Neill in a written statement. “People in their 60s should not be penalized merely because they want to continue working.”