Age-Discrimination Case Puts Supreme Court Justices To The Test
Supreme Court justices strained to recall their law school studies of contracts Wednesday in an important case for older workers who think they were illegally pressured to quit.
At issue: Must those workers pay back their severance money before suing for age bias?
Lower courts ruled in a Louisiana dispute that up-front paybacks by employees are necessary, but the Clinton administration told the nation’s highest court that such a requirement thwarts the protection Congress thought it provided in a 1990 law.
Requiring paybacks “would put the workers exactly back in the situation they were in before enactment of the statute,” Justice Department lawyer Beth Brinkmann argued.
She was joined by Barbara Haynie, a lawyer representing a Louisiana woman who says age bias played a role in her forced departure from a nuclear plant job.
But Carter Phillips, representing the woman’s former employer, said allowing age-bias lawsuits by workers who keep severance benefits would violate “a bedrock principle of contract law.”
A 1990 amendment to the Age Discrimination in Employment Act of 1967, which protects employees over age 40, says workers cannot waive their right to sue under the act unless the waiver is “knowing and voluntary.”
The law requires that employers specifically tell employees that such waivers cover claims under the age-discrimination act.
That provision in the law is at odds with the general contract-law rule that says people cannot challenge contracts they entered unless they first return or try to return any benefit they received.
If the court decides that the 1990 federal law did not change that general rule, workers who accepted and already spent all or part of their severance packages could be deterred from suing over alleged age bias.
Justice David H. Souter voiced that concern when at one point he suggested a pay-back requirement might seek money already “used to pay the rent and buy food.”
The court’s decision is expected by July, and the justices’ many questions and comments Wednesday indicated deep splits.
As the court waded through the nuances of contract law, Souter referred to his “first-year contracts” course at Harvard Law School.
Disagreeing with Souter’s premise, Phillips began his reply, “I don’t know who taught you first-year contracts …”
Souter, laughing, responded: “The teacher was very good. The pupil may not have been.”
Justice Stephen G. Breyer began his follow-up question by identifying his contracts professor and praising his ability.
It was more than the voluble Justice Antonin Scalia could stand. He drew big courtroom laughs by beginning his next question, “I used to teach first-year contracts …”
Delores Oubre quit her job in the planning and scheduling department of Entergy Operation Inc.’s Waterford nuclear power plant at Taft, La., in 1995.
Trying to shrink its work force, Entergy was rating every salaried employee in four states for potential and performance and offering buyouts to those in the bottom 10 percent. Oubre had received such a ranking and was told she soon could be fired without benefits.