O’Brien v. Caterpillar Inc.

For more than 50 years, Caterpillar paid unemployment benefits to laid-off employees at its Joliet, Illinois manufacturing plant. Caterpillar and the local union agreed to end the program in their 2012 collective-bargaining agreement. In exchange for the elimination of the benefits, Caterpillar distributed $7.8 million to certain employees who had participated in the plan. Retirement-eligible employees received a pro rata share if they agreed to retire. Those who were ineligible to retire received the same pro rata share of the fund but with no strings attached. O’Brien and 47 other retirement-eligible employees who refused to retire brought suit under the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. 621. The Seventh Circuit affirmed summary judgment for Caterpillar,. Though the liquidation plan has a disparate impact on older workers, it was justified by several “reasonable factors other than age.” The plan achieved one of Caterpillar’s long-standing financial objectives— the elimination of costly unemployment benefits. It also saved money by incentivizing early retirement and reducing administrative expenses, and contributed to labor peace between Caterpillar and the union. View "O'Brien v. Caterpillar Inc." on Justia Law