Labor & Employment Law Daily Justices will not review award of retroactive back pay to EEOC under ADEA
Thursday, June 20, 2019

Justices will not review award of retroactive back pay to EEOC under ADEA

By Joy P. Waltemath, J.D.

The Court let stand a decision by the Fourth Circuit that held that the retroactive back pay sought by the EEOC was a mandatory legal remedy upon a finding of liability.

On June 17, the Supreme Court denied review of a Fourth Circuit decision that allowed the EEOC to obtain an award of retroactive back pay in a case involving contribution rates of Baltimore County, Maryland’s age-based employee retirement benefit plan. Vacating and remanding a district court’s denial of retroactive back pay to the EEOC under the ADEA, the Fourth Circuit held that back pay awards under the ADEA, such as the retroactive back pay sought here, was a mandatory legal remedy upon a finding of liability.

The petition asked whether the Fourth Circuit erroneously held that a retroactive award of monetary relief is mandatory under the ADEA in this pension case, because:

A. the Fourth Circuit’s holding is in conflict with this Court’s instructions in a trilogy of pension cases not to award retroactive monetary relief against pension plans;
B. this Court has previously held that the rules governing pension plans “should not be applied retroactively unless the legislature has plainly commanded that result” and there is no such legislative command in the ADEA;
C. any award of retroactive monetary relief in this case involves the complex review of and individualized actuarial calculations for a class of approximately 12,000 pension beneficiaries, not the relatively simple calculation of unpaid minimum wages or overtime compensation contemplated by the enforcement provision of the FLSA;
D. the ADEA’s enforcement provision provides that the district court had “jurisdiction to grant such legal and equitable relief as may be appropriate;”
E. the broad grant of discretionary authority in 29 U.S.C. § 626(b) has been repeatedly confirmed by the Circuit Courts of Appeal; and
F. no other federal court has interpreted the enforcement provision of the ADEA, 29 U.S.C. § 626(b), as requiring that retroactive monetary relief be awarded for ADEA violations?

Contributions rates to employee retirement benefit plan. The case, which was before the Fourth Circuit for a third time, originally involved whether the contribution rates of the county’s age-based employee retirement benefit plan were permissible based on financial considerations, or whether they violated the ADEA. The district court eventually found the county had violated the ADEA by imposing disparate plan contribution rates based on age and awarded partial summary judgment on liability in favor of the EEOC. The Fourth Circuit affirmed summary judgment to the EEOC and remanded for consideration of damages. The parties later agreed to a strategy to gradually equalize contribution rates under the plan and entered into an approved joint consent order, which did not resolve the claims for monetary relief, expressly indicating the district court would address that relief later.

Retroactive back pay. And it did, ultimately denying the EEOC’s motion for retroactive monetary relief in the form of back pay, closing the case, and concluding that it had the discretion under the enforcement provision of the ADEA, 29 U.S.C. § 626(b), to wholly deny back pay. And, even if back pay were a mandatory remedy, the court said it would deny the relief according to its equitable powers because of the EEOC’s years-long delay in bringing the action.

The EEOC appealed, arguing that the court lacked the discretion to decline to award back pay, but the county stressed the ADEA grants courts broad authority “to grant such legal or equitable relief as may be appropriate,” including denying back pay, under its enforcement provision. But, said the EEOC, the ADEA incorporated certain FLSA provisions that mandate violators “shall be liable” for back pay. Because back pay is a mandatory, legal remedy under the FLSA, the Fourth Circuit agreed with the EEOC and concluded that a retroactive monetary award of back pay under the ADEA is mandatory upon a finding of liability.

Title VII doesn’t govern here. Although the county cited three Title VII pension decisions issued by the Supreme Court that all held retroactive monetary awards are discretionary under Title VII based on the unique burdens that retroactive awards place on employee pension plans, the Fourth Circuit still sided with the EEOC. A back pay award under Title VII is a discretionary equitable remedy that a court may select in awarding relief to a plaintiff, but back pay awards under the ADEA are mandatory legal remedies, the amount of which is to be determined by a factfinder. Accordingly, the Fourth Circuit held that retroactive monetary awards, such as the back pay sought here, are mandatory legal remedies under the ADEA upon a finding of liability.

Unreasonable delay. That the EEOC unreasonably delayed in the investigation, which the agency conceded, and which caused the county to incur substantial additional back pay liability, did not change the appeals court’s approach as to the law. It did note that “exercising its prosecutorial discretion,” the EEOC had represented to the court that it would not seek monetary relief for the excessive deductions that the county made before the commission issued its letter of determination. The EEOC further represented that it had secured reasonable back pay awards from public pension plans in over 30 ADEA lawsuits and that “it will do the same here.” The court vacated and remanded to the district court for a determination of the amount of back pay owed.

The case is Baltimore County, Maryland v. EEOC, Dkt No. 18-781.

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