US Supreme Court curbs discrimination claims over lost retiree benefits
June 20 (Reuters) - Retirees cannot sue their former employers for disability discrimination after leaving their jobs, the U.S. Supreme Court decided on Friday in a ruling against a disabled former Florida firefighter that could make it harder to bring lawsuits seeking to restore lost retiree benefits.
The ruling, opens new tab upheld a lower court's decision to dismiss a lawsuit by Karyn Stanley, who had worked as a firefighter in Sanford, that accused the city of discriminating against her by ending a health insurance subsidy for retirees.
Conservative Justice Neil Gorsuch, who authored the ruling, wrote that only job applicants and current employees are "qualified individuals" covered by the Americans with Disabilities Act, a landmark federal law that prohibits discrimination based on disability.
"In other words, the statute protects people, not benefits, from discrimination. And the statute also tells us who those people are: qualified individuals, those who hold or seek a job at the time of the defendant's alleged discrimination," Gorsuch wrote.
Gorsuch was joined by the court's five other conservative justices and liberal Justice Elena Kagan. Liberal Justices Sonia Sotomayor and Ketanji Brown Jackson penned separate dissenting opinions.
While Stanley worked for Sanford, located in the suburbs of Orlando, the city changed its policy to limit health insurance coverage for disabled retirees to 24 months after they stopped working.
Stanley retired from her job after two decades because her Parkinson's disease had made it impossible for her to work, according to court filings. She sued the city in 2020, claiming it discriminated against workers who retired early because of a disability by giving them a smaller healthcare subsidy than employees who retired after 25 years of service.
The city in court filings has said its policy was lawful and necessary to contain costs related to employee benefits.
Sanford covers insurance costs for workers who retire after 25 years of service until they turn 65, and had previously done so for employees who retired due to a disability regardless of how long they worked for the city.
While Stanley worked for the city, it changed its policy to limit coverage for disabled retirees to 24 months after they stopped working. Stanley was 47 when she retired.
Friday's decision will help reduce the legal risks that employers face when they change or terminate retirement benefits, according to Caroline Pieper, a Chicago-based lawyer with the firm Seyfarth Shaw, which represents employers.
"While there are certainly other considerations ... this case should give employers more comfort under the ADA when they modify or reduce post-employment offerings," Pieper said, referring to the Americans with Disabilities Act.
Friday's ruling affirmed decisions by a judge in Florida and the Atlanta-based 11th U.S. Circuit Court of Appeals, which had dismissed Stanley's lawsuit.
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