Alford v. City of Lubbock

664 F.2d 1263, 27 Fair Empl. Prac. Cas. (BNA) 1075, 2 Employee Benefits Cas. (BNA) 2249, 1982 U.S. App. LEXIS 22896, 27 Empl. Prac. Dec. (CCH) 32,386
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 4, 1982
DocketNo. 80-1192
StatusPublished
Cited by34 cases

This text of 664 F.2d 1263 (Alford v. City of Lubbock) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alford v. City of Lubbock, 664 F.2d 1263, 27 Fair Empl. Prac. Cas. (BNA) 1075, 2 Employee Benefits Cas. (BNA) 2249, 1982 U.S. App. LEXIS 22896, 27 Empl. Prac. Dec. (CCH) 32,386 (5th Cir. 1982).

Opinion

JERRE S. WILLIAMS, Circuit Judge:

Appellant City of Lubbock, Texas (City) elected in 1950 to participate in a retirement and pension program created by the Texas Legislature and administered by an agency of the State of Texas, appellant Texas Municipal Retirement System (TMRS). The TMRS retirement plan, Tex. Rev.Civ.Stat.Ann. art. 6243h, § VII(l)(a) (Vernon 1970 & Supp. 1980-1981), provides that a covered employee is eligible for service retirement once the employee has attained the age of sixty and has completed [1265]*1265fifteen years of service. Most Texas cities, prior to changes in federal age discrimination law,1 required their employees to retire at the end of the month in which they reached age sixty-five. Not wishing to administer contributions from and, eventually, refunds to employees who could not expect to meet the fifteen-year service requirement, TMRS prior to 1979 excluded from membership any employee hired after his fiftieth birthday.2 1949 Tex.Gen.Laws, ch. 24, § III(2)(b) at 27. In addition to its voluntary participation in TMRS, the City has followed a separate policy of compensating in cash all employees who retire under the TMRS program for up to ninety days of unused sick leave.

On December 31,1977, the last day of the year in which they reached sixty-five, appellees Truett Alford and Walter Nierlich were involuntarily retired from their jobs with the City. Because each man had been over age fifty when hired, neither was eligible for membership in TMRS and neither received any pension benefits. Moreover, the City refused to pay them for their unused sick leave even though both had accumulated more than ninety days. Alford had worked for the City twelve years and ten months at the time of his retirement. Nierlich, however, had hired on at age fifty in November of 1962 and thus had been employed by the City fifteen years and one month at the time of his involuntary retirement. Since 1965, the City has followed the rather unusual practice of retiring employees at the end of the calendar year, rather than at the end of the month, in which the employee turns sixty-five.3 Thus, it has long been possible that an employee hired just after his fiftieth birthday could work over fifteen years and yet not be eligible for retirement under TMRS. This explains why appellant Nierlich worked over fifteen years but was not in the retirement system.

Alford and Nierlich brought suit in federal district court against the City and TMRS, alleging that the defendants’ actions in retiring them with no pension benefits and refusing them cash compensation for their accumulated sick leave violated the equal protection clause of the Fourteenth Amendment and the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634. They also asserted pendent jurisdiction over claims arising under article 1, section 3 of the Texas Constitution and under Tex.Rev.Civ.Stat.Ann. art. 6252-14 (Vernon 1970).4

The district court held that the exclusion of Alford and Nierlich from the TMRS pension plan had not violated the ADEA, but nevertheless had denied appellants the equal protection of the laws under both the federal and state constitutions. Alford v. City of Lubbock, 484 F.Supp. 1001, 1005-07 (N.D.Tex.1979). It ordered the City and TMRS to pay appellees their pension benefits as if they had been members of TMRS since their hiring, on the condition that the two former employees make contributions equal to those they would have made had they belonged to the plan from the beginning. Id. at 1007. The district court also held that the City’s denial of cash compen[1266]*1266sation for accrued sick leave violated the ADEA and ordered the City to pay both Alford and Nierlich ninety days of accumulated sick leave with interest. Id. at 1005. On appeal, the City and the TMRS challenge the district court’s decision that the involuntary retirement of appellants with no pension benefits constituted a denial of equal protection. They also maintain that their refusal to pay older workers not eligible for a TMRS pension for accrued sick leave does not violate the ADEA.

I. EXCLUSION FROM THE TMRS PENSION PLAN

A. The Equal Protection Clause.

Alford and Nierlich alleged that their exclusion from the City’s TMRS pension plan denied them the equal protection of the laws as guaranteed by the Fourteenth Amendment to the Constitution of the United States. As the district court correctly pointed out, 484 F.Supp. at 1005-06, exclusion of the City employees from a pension program devised by a state legislature, administered by a state administrative agency, and adopted by a political subdivision of the state as part of its employee benefit scheme certainly constitutes the state involvement required to draw our scrutiny under the Fourteenth Amendment. See Burton v. Wilmington Parking Authority, 365 U.S. 715, 721-22, 81 S.Ct. 856, 860, 6 L.Ed.2d 45 (1961).

We also agree with the district court’s determination that the proper standard under which we must review an allegation of age discrimination under the equal protection clause is the “rational basis” test. Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 312, 96 S.Ct. 2562, 2566, 49 L.Ed.2d 520 (1976). Accord ingly, we must determine whether the Texas Legislature’s exclusion of employees over age fifty from the TMRS is rationally related to a legitimate, articulated state pur pose. E. g., San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 17, 93 S.Ct. 1278, 1288, 36 L.Ed.2d 16 (1973); Seoane v. Ortho Pharmaceuticals, Inc., 660 F.2d 146 at 150 (5th Cir. 1981). As the Supreme. Court characterized this type of inquiry in Murgia, however, it “employs a relatively relaxed standard reflecting the Court’s awareness that the drawing of lines that create distinctions is peculiarly a legislative task and an unavoidable one. Perfection in making the necessary classifications is neither possible nor necessary.” 427 U.S. at 314, 96 S.Ct. at 2567. With this admonition in mind, we conclude that the district court erred in holding that the TMRS program denied Alford and Nierlich the equal protection of the laws.

The City and TMRS adduced at trial, and have reiterated in this appeal, several reasons for the exclusion of employees hired after the age of fifty. First, they submit that participation in a pension plan by employees who have put in only a few years of service produces monthly payments so small as to be virtually meaningless. Second, they insist that the fifteen-year service requirement ensures that the pension program will serve as an incentive to younger employees and a reward to those of long standing. Third, they suggest that the administrative costs of including older newly-hired workers are prohibitive, especially when weighed against small monthly benefits resulting from such short-term deductions, and can only dissipate the funds available for providing fringe benefits to employees with long service.

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664 F.2d 1263, 27 Fair Empl. Prac. Cas. (BNA) 1075, 2 Employee Benefits Cas. (BNA) 2249, 1982 U.S. App. LEXIS 22896, 27 Empl. Prac. Dec. (CCH) 32,386, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alford-v-city-of-lubbock-ca5-1982.