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July 20, 1993



The opinion of the court was delivered by: PAUL E. PLUNKETT

Tony Quinones was hired as a firefighter by the City of Evanston (the "City" or "Evanston") in 1989, but was twice refused admission into the Evanston Firefighters Pension Fund (the "Fund"). Quinones filed suit against the City and the Fund, claiming this denial of pension benefits was based on his age, and thus, contrary to the federal Age Discrimination in Employment Act as codified in 29 U.S.C. § 623. This matter is before us upon cross motions for summary judgment. For the reasons stated below, we deny both motions.


 The following facts are undisputed. Plaintiff, Jose Quinones was born on September 28, 1950. (Pl.'s Local Rule 12(M) Stmt. P 5.) In the spring of 1985, when Plaintiff was thirty-four years of age, he applied to the City of Evanston for a position as a firefighter/paramedic. (Pl.'s Local Rule 12(M) Stmt. P 5.) The City placed Quinones' name on a list of eligible candidates in July 1986. In June 1989, the City extended him an offer of employment and sent Plaintiff a letter regarding the legal problems concerning the availability of pension benefits. (Pl.'s Local Rule 12(M) Stmt. P 6, 8.) Besides explaining the state imposed restrictions, this letter also opined that the age restrictions were discriminatory and in conflict with federal law, and that they might soon be amended. Plaintiff accepted the offer and began work on October 5, 1989, when he was thirty-nine years of age. (Pl.'s Local Rule 12(M) Stmt. P 9.) Since his hiring, Plaintiff has been employed by Evanston as a firefighter/paramedic.

 After being hired, Plaintiff was denied pension coverage on two separate occasions. On December 6, 1989, the Board of Trustees of the Evanston Firefighters Pension Fund, citing Plaintiff's age, concluded that Plaintiff was ineligible for coverage under Section 4-107 of the Illinois Pension Code. (Pl.'s Local Rule 12(M) Stmt. P 6, 8; 40 I.L.C.S. ch. 5-4/101 et seq.) Plaintiff reapplied for membership in October 1992, after the effective date of the Older Workers Benefit Protection Act (the OWBPA.) (Pl.'s Local Rule 12(M) Stmt. P 12.) The Board again refused to admit Quinones on the basis of Section 4-107(b) for three reasons: (1) failure to apply for membership within three months of his initial appointment; (2) failure to litigate the matter within thirty days of rejection; and (3) failure to meet the thirty-five year age limitation. (Def.'s Local Rule Stmt. in Supp. of its Mot. for Summ. J. P 2.)

 The Evanston City Council created the firefighters pension fund pursuant to the Illinois Pension Code. It is administered by the Evanston Firefighters Pension Fund strictly according to state statutes. Following an admission decision of the Fund, Evanston is required by Illinois law to contribute. State law prohibits municipalities from providing benefits other than as set forth by statute. 40 I.L.C.S. ch. 5-4/142.

 Legislative History

 Congress enacted the original Age Discrimination in Employment Act (ADEA) in 1967 to prevent discrimination based on age in such matters as hiring, job retention, compensation and other terms of employment. The ADEA protects workers who are at least forty years old from discrimination by employers of twenty or more people.

 In drafting the ADEA, Congress was concerned that requiring employers to treat all workers alike in terms of benefit plans regardless of age would have an adverse affect on decisions to hire older workers. The drafters felt that encouraging hiring of older workers should predominate over insuring that older workers had absolutely equal benefits. Therefore, section 4(f)(2) of the Act created an exemption that allowed lower benefits for older workers in plans that were not "a subterfuge to evade the purposes" of the Act.

 The scope of the "subterfuge" exception has been the subject of much disagreement. The Department of Labor, initially given responsibility for enforcing the Act, and later the EEOC, which took over, suggested that a "subterfuge" should include any plan which could not rationalize unequal benefit payments with age-based cost considerations. See, e.g., 29 C.F.R § 860.120(a) (1970) (proof of adequate cost-considerations was sufficient, although not necessary, to qualify for the exemption). The administrative interpretation of "subterfuge" has remained focused on an economic basis for discrimination to this day. The current regulation defines "subterfuge" as a discriminatory benefit plan not justified by age-related cost considerations. See 29 C.F.R. § 1625.10(d) (1992).

 Several circuit courts also adopted the cost justification interpretation of "subterfuge." See e.g., EEOC v. Mt. Lebanon, 842 F.2d 1480, 1489 (3d Cir. 1988); Cipriano v. Board of Educ. of North Tonawanda School Dist., 785 F.2d 51, 57-58 (2d Cir. 1986). However, the Supreme Court took up the matter in Ohio Pub. Employees Retirement System v. Betts. 492 U.S. 158, 188, 106 L. Ed. 2d 134, 109 S. Ct. 2854 (1989) (Marshall, J., dissenting). In Betts, the Court invalidated section 1625.10's cost-consideration definition of "subterfuge" as not justified by the plain terms of the ADEA, and developed its own definition. Betts held that a benefit plan with lower benefits for older workers is subterfuge only if it was created with the intent to evade the forbidden discrimination in pay or hiring practices specifically outlined in Section 4(a). Betts, 492 U.S. at 180. In effect, this ruling removed most discriminatory pension benefits from the reach of the ADEA.

 Congress was not pleased, and in response enacted the Older Workers Benefit Protection Act, Pub. L. 101-433 (1990). The Act overruled Betts and reinstated the original cost consideration analysis of a "subterfuge," as set out in section 1625.10 of the regulations with respect to employee benefits. See 29 U.S.C. § 623 (f)(2)(B)(i). The provisions of the amendment became effective against state and local governments as of October 16, 1992.


 For a party to prevail on a summary judgment motion, "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, [must] show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56 (c). At this stage, we do not weigh evidence or determine the truth of asserted matters. We simply determine whether there is a genuine issue for trial, i.e., "whether a proper jury question was presented." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). When the nonmoving party is faced with a properly supported motion for summary judgment, it may not avoid judgment by resting on its pleadings. If the nonmoving party bears the burden of proof at trial on a dispositive issue, it is required to "go beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' [to] designate 'specific facts showing that there is a genuine issue for trial.'" Celotex Corp. v. Catrett, 477 U.S. 317, 324, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986), (quoting Fed. R. Civ. P. 56 (e)).

 Plaintiff argues that the decision of the Fund in October 1992 to deny pension coverage and the subsequent failure of the City to make contributions, violated the ADEA as amended by the OWBPA. The relevant portion of the statute prohibits an employer from discriminating "against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U.S.C. § 623 (a)(1). ...

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