## Facts

- A public school corporation implemented early retirement incentive plans for teachers and administrators beginning in 1984 amid declining enrollment and layoffs.
- The plans applied to employees aged 58 through 61 and paid a fixed monthly incentive only until the retiree turned 62.
- As a result, employees retiring at age 58 received the maximum duration of payments (48 months), while employees retiring later received the same monthly payment for fewer months.
- A group of eligible employees who did not retire at age 58 (some retired later; some remained employed) challenged the plans under the Age Discrimination in Employment Act (ADEA), alleging unequal benefits based on age.
- The district court granted summary judgment on liability, finding the plans facially discriminatory, and concluded the employer had waived certain affirmative defenses by not properly pleading them.
- After a remedies trial, the district court awarded back benefits to retired plaintiffs as if they had retired at age 58 and entered injunctive relief requiring equalized payments for plaintiffs who would retire in the future.
- The employer appealed the liability ruling and aspects of the remedy; plaintiffs cross-appealed an evidentiary ruling and the denial of relief to plaintiff Paul Bohney.

## Issues

1. Whether an early retirement incentive plan that decreases the total duration/value of benefits based solely on the employee’s age at retirement violates the ADEA.
2. Whether eligible employees who did not retire at age 58 suffered a cognizable injury and had standing to sue under the ADEA.
3. Whether the employer could rely on statutory affirmative defenses (including benefit-plan defenses) after the district court found them waived.
4. Whether admitting evidence that the employer sought a legal opinion on the plan’s legality was reversible error.
5. Whether the district court erred in denying relief to plaintiff Paul Bohney given the employer’s judicial admissions about his service.

## Decision

- The Seventh Circuit affirmed the judgment in substantial part and reversed only the denial of relief to Paul Bohney.
- The court held the plans violated the ADEA because they were facially age-based: older retirees received fewer total months of payments solely because of their age at retirement.
- The court rejected the employer’s standing arguments, concluding the age-based cap on benefits constituted a concrete injury.
- The court left intact the district court’s conclusion that the employer could not avoid liability through the affirmative defenses as presented in the case.
- The court found no reversible error in admitting evidence concerning the employer’s solicitation of a legal opinion.
- The court reversed the denial of relief to Bohney based on the employer’s judicial admission regarding his years of service and remanded for calculation of his monetary relief.

## Legal Principles

- Under the ADEA, a benefits program that explicitly varies total benefits based on age is facially discriminatory.
- An employer’s decision to offer an early retirement incentive does not exempt the plan from the ADEA’s prohibition on age-based differentials in benefits.
- An age-based reduction in benefits can constitute actionable injury even if an employee could have retired earlier to obtain a larger total benefit.
- Judicial admissions can conclusively establish facts relevant to entitlement to relief and may require correction of a denial of recovery.

## Conclusion

The Seventh Circuit held that an early retirement incentive plan that capped payments at age 62 and thereby reduced total benefits for older retirees discriminated on its face under the ADEA, affirmed the liability and principal remedies, and remanded only to award relief to a plaintiff improperly denied recovery in light of the employer’s judicial admission.


Solon v. Gary Cmty. Sch. Corp., 180 F.3d 844 (7th Cir. 1999)