SUPREME COURT Case affects retirement incentives

Can a company limit retirement benefits according to workers' ages?
WASHINGTON (AP) -- An age discrimination fight at the Supreme Court pits 40-something workers against their older colleagues over job benefits.
At issue is whether General Dynamics Corp. wrongly singled out people over 50 to get health benefits when they retired, but excluded employees between 40 and 49.
The case, being argued today at the court, is important for U.S. companies that offer retirement packages to get employees to leave and for the workers who hope to benefit from the offers.
The crux of the case is the interpretation of a federal law that protects workers over 40 from age discrimination. In an odd twist, the 40-something workers who sued say they are being discriminated against because they are too young to get the benefits being offered.
The Bush administration, which frequently sides with businesses, is instead backing the General Dynamics workers who sued. On the other side are unions, business groups and AARP, the advocacy group for people 50 and over.
About 70 million U.S. workers are 40 or older, about half the nation's work force. They can sue under the discrimination law when younger colleagues get preferential treatment because of age.
What happened
General Dynamics was accused of a type of reverse age discrimination when it changed its retirement benefits in 1997. Until then, longtime company employees could retire and receive full health benefits. Under the new union contract at plants in Lima, Ohio, and Scranton, Pa., only longtime workers age 50 or older as of 1997 could receive full health benefits after retirement.
The company, which makes battle tanks and combat vehicles for the military, was sued by about 200 people in their 40s, who no longer were eligible for free health care in retirement, regardless of when they retired. They won in the 6th U.S. Circuit Court of Appeals in Cincinnati.
The workers' lawyers told justices in court papers that it's illegal for companies to limit benefits based on age, as General Dynamics did.
Chicago labor lawyer Condon McGlothlen said a victory for the General Dynamics workers would hurt many other employees. Downsizing companies would be more likely to lay off older workers, instead of facing lawsuits for treating them more generously, he said.
Tension
"This case reflects the underlying tension between older and younger workers within the baby boom generation who are struggling for jobs and benefits and advancement," McGlothlen said.
AARP lawyer Laurie McCann said that the drafters of the 1967 discrimination law did not seem worried about the type of claim raised by the General Dynamics workers. She said the Supreme Court may say Congress was not specific enough, however, which could prompt a request for Congress to rewrite the law.