School Ordered to Backpay Staff Impacted by Pensionable Salary Cap

In EEOC v. Urbana Sch. Dist. No. 116, 18-cv-2212 (C.D. Ill. Nov. 7, 2023), Judge Myerscough held that the EEOC met its burden to prove that language in the collective bargaining agreement discriminated against its teachers on the basis of age.  The relevant language in the CBA provided:

Notwithstanding any of the other provisions of this agreement, no teacher who is less than ten (10) years from retirement eligibility may receive an overall increase in total reportable creditable earnings in excess of six percent (6%) of the previous year's total reportable creditable earnings, unless the payment causing the teacher to exceed the six percent (6%) salary threshold is specifically exempt by statute or regulation from the payment of any penalty of other monies constituting a surcharge to the Teachers' Retirement System. Should the Illinois General Assembly or the Teachers' Retirement System impose a salary threshold greater or lesser than the six percent (6%) threshold thereby causing the payment of any penalty or other monies constituting a surcharge to TRS, then this agreement shall automatically incorporate this new threshold upon its effective date. 

Urbana, Ibid. 18-cv-2212 at 5. The EEOC found, after a challenge by a teacher who alleged he was paid less than similarly-situated employees who were not in the age-protected class (over 40) based on his age due to the foregoing language, that the District violated the Age Discrimination in Employment Act, not only with respect to the complaining teacher, but also with every other teacher so-situated in the District.  The Court agreed, finding the language had a disparate impact on teachers on the basis of age, and ordered back pay awarded to all affected teachers.  According to the Court:

This “is not a case where there is merely a correlation between age and the denial of a particular benefit.” Huff v. UARCO, Inc., 122 F.3d 374, 388 (7th Cir. 1997). Rather, in enforcing Article 21.12,  the District drew “an express line between” workers over age 45 “and those under.” Id. As a result of the District's enforcement of Article 21.12, a 46-year-old teacher and a 44-year-old teacher with identical credentials and experience were not entitled to identical annual increases in pay. The 44-year-old would have received a full salary increase; the 46-year-old would not. The only differences between the two teachers were their ages. The District's treatment of teachers older than age 45 violated the ADEA.

Urbana, Ibid. 18-cv-2212 at 17-18.  The court relied heavily on the testimony of the District’s designated witnesses, who testified the tracking efforts were limited, pursuant to the contract language, to decisions regarding age.

While it is unclear at this time whether this case will be appealed by the District, the case stands as a stark reminder that schools must exercise great care both in drafting language to protect the District’s interests in light of the statutory penalties associated with salary increases while understanding that such language may  cause disparate impact for more experienced teachers that will need to be analyzed for risk with each new bargain (even where such language has long been in place).