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Opinion No. 5239

November 3, 1977


Mandatory age retirement.


Mandatory age retirement.

Although a mandatory retirement age is not illegal, the Civil Rights Act prohibits a mandatory retirement policy that is used as a subterfuge for evading the act's prohibition against age discrimination.

Honorable Earl E. Nelson

State Senator

The Capitol

Lansing, Michigan 48901

You have requested my opinion as to whether the Michigan Civil Rights Act, 1976 PA 453; MCLA 37.2101 et seq; MSA 3.548(101) et seq, prohibits the use of mandatory retirement requirements by either public or private employers. At the outset, it may be noted that the statute makes no distinction between a public or private employer as to conditions of employment relating to retirement.

1976 PA 453, supra, Sec. 202, provides:

'(1) An employer shall not:

'(a) Fail or refuse to hire, or recruit, or discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment, because of religion, race, color, national origin, age, sex, height, weight, or marital status.

'(b) Limit, segregate, or classify an employee or applicant for employment in a way which deprives or tends to deprive the employee or applicant of an employment opportunity, or otherwise adversely affects the status of an employee or applicant because of religion, race, color, national origin, age, sex, height, weight, or marital status.

'(c) Segregate or classify on the basis of sex, an employee for purposes of an employee pension benefit plan or an employee welfare benefit plan, as defined in section 3 of title 1 of the federal employee retiremet income security act, being Public Law 93-406 (1974), except an employer is not in violation of this section if there are equal contributions or benefits paid by the employer. Nothing contained in this section shall be construed to prohibit the establishment or implementation of a bona fide retirement policy or system which is not a subterfuge to evade the purpose of this section.

'(2) This section shall not apply to the employment of an individual by his parent, spouse, or child.' [Emphasis added]

Unlike the prior legislation dealing with fair employment practices (1955 PA 251) which contained a 60 year upper-age limitation, section 103(a) of the current Civil Rights Act, supra, defines age as meaning 'chronological age except as otherwise provided by law.' It is therefore clear that the legislature intended to prohibit employers from utilizing age as a criteria for any decision with respect to the employment of a person except for decisions affecting retirement. Thus, age may be used as a criteria for retirement where there exists a 'bona fide retirement policy or system' and where the policy or system does not constitute 'subterfuge to evade the purposes' of the statute. The key question thus becomes what constitutes 'a bona fide policy or system' and what constitutes a 'subterfuge' to evade the purpose of the statute.

The mandatory retirement provisions of a Massachusetts statute relating to uniformed officers of the state police was upheld by the United States Supreme Court in Murgia v Massachusetts Board of Retirement, 427 US 307; 49 L Ed2d 520; 96 S Ct 2562 (1976), and OAG, 1977-1978, No. 5177, p ---- (April 5, 1977), held that Const 1963, art 6, Sec. 19, which prohibits the election or appointment of a person to judicial office after reaching the age of 70, does not violate the equal protection clause of the United States Constitution.

While there are no reported state court decisions, federal courts have used a variety of criteria to assess the bona fides of a plan and have also addressed the concept of 'subterfuge.' In Thompson v Chrysler Corporation, 382 F Supp 1317 (ED Mich, 1974), the court interpreting 1955 PA 251, supra, utilized the criteria of whether there existed a collective bargaining agreement pertaining to retirement in order to assess the bona fides of employer's mandatory retirement policies. The court found that the retirement policies were established in the contract and thus fell within the statutory exception. The Federal Age Discrimination in Employment Act contains language which is substantially identical to that which exists in the new Michigan Civil Rights Act. The Federal Courts have addressed the concepts of 'bona fides' and 'subterfuge.' These courts have inquired into such matters as the date of adoption of a particular retirement plan and have held that where the plan was adopted prior to the enactment of the federal legislation, that such plans were not adopted 'as a subterfuge to evade the purposes of the act.' 29 USC Sec. 623(f)(2). Kincaid v Steel Workers of America (DC Ind, 1972). Steiner v National League of Professional Baseball Clubs, 377 F Supp (DC Cal, 1974); Brennan v Taft Broadcasting Co, 500 F2d 212 (CA 5, 1974); Hodgson v American Hardware Mutual Insurance Co, 329 F Supp 225 (DC Minn, 1971). The Wisconsin Supreme Court in interpreting a parallel state statute looked to the amount of benefits paid to a retiree and the relative likelihood of continued payment as a criteria relating to the 'bona fides' of the plan and whether or not it was operating as a subterfuge to evade the purposes of the Act. Walker Manufacturing Co v Industrial Comm, 27 Wis2d 669; 135 NW2d 307 (1965). See also Zinger v Blanchette, 549 F2d 901 (CA 3, 1977). Thus, although the law in this area is still developing, no court has yet ruled that mandatory retirement is unlawful per se. It can also be seen that the issue of whether a mandatory retirement policy is unlawful depends on the particular facts surrounding each policy or plan and the implementation of same.

It is, therefore, my opinion that, although a mandatory retirement age is not illegal per se, 1976 PA 453, supra, prohibits mandatory retirement policies by both public and private employers when a retirement policy or plan is used as a subterfuge for evading the provisions of the Act that prohibit discrimination based upon age. The clear trend of the case law developing in this area on the federal level is to uphold the operation and implementation of legitimate retirement plans and policies. New legislation is required if mandatory age retirement is to be prohibited.

Frank J. Kelley

Attorney General