U.S. District Judge Walker D. Miller of the U.S. District Court for
the District of Colorado granted a request by the employer, El Paso
Corporation, to throw out the ADEA claims in a long-running lawsuit
challenging El Paso’s 1997 cash balance conversion. Miller ruled that
the cash balance conversion by the Houston-based natural gas provider
did not violate ADEA Section 623(i)(4) because the provision only makes
it illegal to cut off or reduce the rate of an employee’s benefit
accrual because of age.
A group of employees sued the company and alleged the ADEA
violation because El Paso set the initial cash balance accounts for
older employees who had been with the company longer at lower levels
than the value of their accumulated annuities under the old plan. They
also alleged that the cash balance plan violated the Employee Retirement
Income Security Act (ERISA) age discrimination rule, anti-backloading
rule, and nonforfeiture provisions – claims that Miller mostly dismissed
in 2007 and 2008. In March 2007, the district court dismissed the
employees’ ERISA age bias claim.
Miller eventually also threw out the ADEA claim has having been
filed too late, just before President Obama signed the Lilly Ledbetter
Fair Pay Act. The lead plaintiff in the case cited the Ledbetter measure
as “intervening change in the controlling law” and asked the court to
reinstate the ADEA claim.
The court eventually accepted the plaintiff’s argument and
ruled that while Ledbetter law does not apply to the payment of pension
benefits, it can be applied in the pension context to age discrimination
claims that challenge the rate at which pension benefits accrue before
they are paid out.
The case is Tomlinson v. El Paso Corp., D. Colo., No. 04-cv-02686-WDM-MEH.