“This case should be a message to school districts in Illinois that they cannot attempt to minimize their contributions to TRS by limiting the compensation of older teachers based on their age.”
On August 10, 2018, the Equal Employment Opportunity Commission (EEOC) filed a lawsuit against Urbana School District No. 116 in the U.S. District Court for the Central District of Illinois, Urbana Division. The EEOC alleged that the District violated the Age Discrimination in Employment Act of 1967 (ADEA) by limiting the salary increases of teachers “less than ten years from retirement eligibility to no more than six percent of their year’s total reportable creditable earnings.” The judge ruled in favor of the EEOC finding that the District’s collective bargaining agreement limiting salary increases was facially discriminatory based on age and ordered the District to furnish $51,093 in unpaid base and supplemental pay.
The District paid its teachers according to a collectively bargained salary schedule. Teachers were paid based on their years of experience and their credentials. Article 21.12 was introduced to the District and Union’s collective bargaining agreement in 2007. Article 21.12 limited any increases in all wages, including salary and supplemental pay, of teachers, within 10 ten years of retirement eligibility to no more than 6% over their previous year’s earnings. An identical provision was included in the District and Union’s subsequent collective bargaining agreement ratified in 2012.
In July 2014, a set of temporary exemptions for Teacher’s Retirement System (TRS) contributions for excess creditable-earnings increases expired. Under this temporary exemption program, which took effect in 2006, the excess creditable-earnings contribution requirement did not apply to raises earned by teachers more than ten years from retirement eligibility. In 2015, the District and the Union ratified a new collective bargaining agreement, which included a revised version of Article 21.12 that tied the District’s salary cap to any changes to the state’s statutory threshold.
Charles Koplinski joined the District in 1991. He received a master’s degree in 2008. By the 2015-2016 school year, Koplinski, who was age 50 at the time, had obtained enough post-master’s credits to move up the District’s salary scale. Based on Koplinski’s credentials, experience, and that school year’s salary schedule, Koplinski was entitled to a salary of $77, 242. However, under Article 21.12, because the increase in pay would have exceeded 6% of his prior year’s earnings, Koplinski’s salary was capped at $73,880.94. Had Koplinski been age 44 rather than age 50, he would have earned a full salary of $77,242.
During the 2016-2017 school year, Koplinski was entitled to a salary of $79,945, but Article 21.12 again limited him to $78,313.80. Had Koplinski been age 44 rather than age 51, he would have earned a fully salary of $79,945. In 2018, Koplinski applied to teach summer school, but the District denied his request, because the resulting increase in his creditable earnings would have exceeded the salary cap set forth in Article 21.12. Between 2014 and 2020, the District limited the salary increases of at least 24 of its teachers.
In August 2016, the Union filed a grievance on Koplinski’s behalf regarding Article 21.12. The grievance included an Informal Discussion Letter from the EEOC, which concluded that a provision like Article 21.12 would violate the ADEA. On April 28, 2017, Koplinski filed an EEOC discrimination charge against the District.
Before suing the District, the EEOC “attempted to eliminate” the complained-of practices and “to effect voluntary compliance with the ADEA” through the alternative dispute-resolution procedures. Those efforts were unsuccessful, so the EEOC filed its complaint against the District in August 2018. The EEOC claimed that because retirement eligibility is “based on a combination of age and years of service,” and because no teachers may reach retirement eligibility until the age of 45, Article 21.12 “violates the ADEA by limiting pay increases because of age.”
The District contended that its application of Article 21.12 was based on years of service, not on age. However, two of the District’s administrative employees testified that the District used a spreadsheet to track the ages of employees. When asked, the District clarified that it was only tracking the ages of employees over the age of 45. The Court noted that 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 the same pay increase. The District conceded that under Article 21.12, the 44-year-old would receive the raise, while the 46 year old would not.
The District further contended that its policy was based on a reasonable factor other than age. This defense is often referred to as a “RFOA” defense. The District argued, a “desire to avoid TRS surcharges” constituted a RFOA. The Court was not persuaded and concluded that any reasonable factfinder would find that the teachers’ ages were the sole cause of the District’s treatment of teachers older than 45. Therefore, the Court concluded that the District violated the ADEA through its treatment of teachers aged 45 and older.
Damages and Future Cases
The District was ordered to furnish $51,093 in undisputed back pay for teachers whose compensation was limited by Article 21.12. The EEOC stated that it will continue to seek additional disputed lost wages. EEOC Regional Attorney for the Chicago District Office Gregory Gochanour said, “Determining compensation based on age violates the ADEA. It does not matter that the school district claims it was trying to limit contributions to TRS. This case should be a message to school districts in Illinois that they cannot attempt to minimize their contributions to TRS by limiting the compensation of older teachers based on their age.”
It has been reported to us that the EEOC is issuing its own complaints against school districts with similar contract provisions. It is important to review your current teachers’ contracts to determine if any changes need to be made. While we believe that the position taken by the school district in the Urbana case is correct, i.e., that the avoidance of a significant penalty that is imposed by a State statute should be considered a RFOA, the EEOC and the courts, at least under the factual scenario presented in this case, do not agree. It is also noted that the Urbana contract, according to the case, limited all forms of salary increase over 6% to anyone who was a certain age, whether they had elected to retire or not – which appears to be a bit more than what is typically included in a contract. If your district is contacted by the EEOC, or if you receive a complaint or grievance from them or from an employee, please contact us as soon as possible.
not pictured: Michael Parille