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School district forced to pay in age discrimination case

A lesson in employment laws

Posted January 22, 2024

School budgets may be tight, but an Illinois district learned the hard way that limiting the pay of older, higher earning teachers to save money is not an acceptable way to control spending.

In an opinion issued in November, a U.S. District Court judge found the Urbana school district violated the Age Discrimination in Employment Act (ADEA) between 2014 and 2020 by capping the salaries of teachers over age 45 to avoid pension contribution surcharges.

The complaint was filed by the U.S. Equal Employment Opportunity Commission (EEOC) on behalf of teachers affected by the district’s action.

The judge’s order says the district is liable for a total $51,093 in back base pay and supplemental pay for 28 teachers.

Payments owed to individual teachers listed in the complaint range from $141 to $11,326 in base pay and from $217 to $7,270 in supplemental pay for extra duties. (Typical examples of duties that teachers may be paid extra for include coaching, writing curriculum, or serving as a department head.)

Lawsuit challenged collective bargaining agreement

The Urbana school district limited salary increases of a group of teachers over age 45 via a provision of the collective bargaining agreement (CBA) between the school district and the union representing teachers, according to the EEOC’s lawsuit.

The Illinois state pension code provides that if a teacher’s final average salary includes a year in which the teacher received a salary increase of more than 6 percent, the school district must contribute to the Teacher’s Retirement System (TRS) to cover the increased pension cost resulting from the salary increase.

The EEOC’s lawsuit challenged a provision of the CBA limiting the salary increases of teachers who are within 10 years of retirement eligibility to no more than 6 percent above their previous year’s salary.

One teacher’s story

One of the claimants in the suit, age 52, completed post-graduate classes which should have entitled the teacher to receive more than a 6 percent raise for the 2015-16 and 2016-17 school years. Because the teacher’s age at the time was within 10 years of retirement eligibility, the school district capped the teacher's raise at 6 percent for both school years.

“Determining compensation based on age violates the ADEA,” said EEOC Regional Attorney for the Chicago District Office Gregory Gochanour. “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.”

This article was written by Judy Kneiszel of J. J. Keller & Associates, Inc.

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