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HR and Tax Newsletter - April 2004

Age Discrimination

The United States Supreme Court has decided that an employer may discriminate against younger workers who are protected against age discrimination by the ADEA and in favor of older workers. In the case before the court an employers retiree health benefit plan treated employees age 50 and older better than employees between 40 and 50. The Supreme Courts decision was supported by unions, employer groups and the AARP. General Dynamic Land Systems v. Cline.


The United States Supreme Court has decided that the owners of a business can qualify as participants in ERISA regulated pension plans if the owner works in the business. The decision is significant because it means that these owners can protect their account balances in ERISA plans in the event that they go into bankruptcy. Raymond Yates M.D Profit Sharing Plan v. Hendon.

Note: This protection may not apply if the owner is the only participant in an ERISA regulated plan that is not a tax-qualified plan. Under the Department of Labor regulations these plans have no employees and so are not covered by the protective language in ERISA.