EEOC’s Lawsuit Charged that Older Employees were Denied Benefits under Exit Incentive Plan
ST. LOUIS -- The Equal Employment Opportunity Commission (EEOC) and BNSF Railway Company (BNSF) today announced that they had agreed to settle an age discrimination lawsuit brought by the Commission on behalf of 137 present and former employees who were allegedly denied benefits under exit incentive programs offered by the railroad because they were eligible to retire.
In its lawsuit (Case No. 2:06-CV-2069), filed in U.S. District Court for the District of Kansas under the Age Discrimination in Employment Act, the EEOC asserted that BNSF discriminated against employees eligible for Railroad Retirement by denying them benefits under exit incentive plans offered to clerical employees in certain of its facilities. The lawsuit also alleged that BNSF and the Transportation Communications International Union (TCU), a union representing the railway’s clerical employees, discriminated against older employees in their labor contract by eliminating their “protected” status, which afforded them certain benefits, when they became eligible to retire and reached age 70. The latter allegations were settled by the filing of a partial consent decree with the court on August 28, 2006, in which BNSF and TCU agreed to remove the provision at issue from the contract. TCU was then dismissed from the case.
The EEOC alleged that between 2002 and 2005, BNSF, in an attempt to reduce its clerical workforce, offered exit incentive plans to clerical employees in Topeka and Kansas City, Kansas, Fort Worth, Texas, and Alliance, Nebraska, but excluded any employee who was eligible for retirement. BNSF employees could retire at age 60 with 30 years of service. Under the exit incentive plans, participating employees ceased working and received $2,500 per month for three years or a lump sum of $90,000. The Commission argued that thirty-five employees over the age of 60 were denied the opportunity to participate in the exit incentive plans offered by the railroad because they were eligible to retire and receive federal Railroad Retirement benefits.
The EEOC also alleged that when their clerical jobs were abolished, many older workers were forced to bump into less desirable jobs and some retired as a result. The EEOC identified one hundred and two other employees whom it alleged participated in the plans but their benefits were cut off at the point they became eligible to retire.
The EEOC said that one affected employee, Ellen Foste, age 72, retired when her clerical job was abolished rather than bump into a job driving a van at night. She had 27 years of service and retired with less than the 30 years of service which would have maximized her retirement benefit.
The Commission also pointed to Erma Gossage, age 63, was also denied the opportunity to participate in an exit incentive plan offered to younger workers because she had 30 years of service and was eligible to retire and receive Railroad Retirement benefits. Younger employees could receive payments under the exit incentive plan for three years, retire with three additional years of service credit, and receive higher pension benefits.
BNSF denied that its retirement incentive program discriminated against any employees on the basis of age. The railroad argued that the program – which was strictly voluntary – was designed to allow employees to choose to retire before they became eligible for government-supplied retirement benefits. The employees who were already eligible for the government benefit were excluded not because of age, but because they had access to an equivalent (or greater) stream of retirement income. BNSF noted that the program allowed anyone who was not yet eligible for the government benefits to participate, regardless of age. It said that there were more than 100 persons over the age of 60 who qualified for the voluntary program.
As provided in the consent decree submitted for approval to U.S. District Judge Julie A. Robinson in Kansas City, Kansas, BNSF agreed to pay a total of $800,000 to be distributed among the 137 affected employees. The railroad also agreed that any retirement incentive programs it offers in the future will comply with the Age Discrimination in Employment Act (ADEA), but denied any liability for discrimination.
Barbara Seely, Supervisory Trial Attorney in the EEOC's St. Louis District Office, and lead counsel on the case, said, "Under Railroad Retirement Board rules, retirement eligibility is directly tied to age. Denying employees benefits because they are eligible to retire is age discrimination. Employees who are old enough to retire don’t necessarily want to stop working; they are entitled to receive the same benefits as younger workers.”
Donald Munro, lead counsel for BNSF, responded by stating, “BNSF is committed to a discrimination-free workplace and has always maintained that its voluntary early retirement programs do not discriminate in any way on the basis of age. The railroad decided to settle to avoid the substantial cost of further litigation, but in doing so insisted on an express statement that there is no admission of liability.”
A subsidiary of Burlington Northern Santa Fe Corporation, BNSF Railway Company operates one of the largest North American rail networks, with about 32,000 route miles in 28 states and two Canadian provinces.
The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on the agency's web site at www.eeoc.gov.