
USCA1 Opinion

	




          March 12, 1993                              UNITED STATES COURT OF APPEALS                                   FOR THE FIRST CIRCUIT                                   _____________________               No. 92-1696                         EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,                                   Plaintiff, Appellant,                                            v.                          COMMONWEALTH OF MASSACHUSETTS, ET AL.,                                  Defendants, Appellees.                                   _____________________                                       ERRATA SHEET                    Please make the following corrections in the opinion in               the above case released on March 4, 1993:               Page 11, 3 lines from bottom:                    change "consitutional" to "constitutional"               Page 13, line 15:                       change "Massachusetts's" to "Massachusetts'"               Page 22, line 4:                    delete "in".               March 4, 1993                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-1696                       EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,                                Plaintiff, Appellant,                                          v.                        COMMONWEALTH OF MASSACHUSETTS, ET AL.,                                Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Edward F. Harrington, U.S. District Judge]                                               ___________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                         Higginbotham,* Senior Circuit Judge,                                        ____________________                              and Boudin, Circuit Judge.                                          _____________                                 ____________________            Lamont N. White, Attorney, with whom Donald R. Livingston,            _______________                      ____________________        General Counsel, Gwendolyn Young Reams, Associate General Counsel, and                         _____________________        Vincent J. Blackwood, Assistant General Counsel, were on brief for        ____________________        appellant Equal Employment Opportunity Commission.            Steven S. Zaleznick, Cathy Ventrell-Monsees, and Thomas W.            ___________________  ______________________      _________        Osborne on brief for American Association of Retired Persons, amicus        _______        curiae.            Pierce O. Cray, Assistant Attorney General, with whom Scott            ______________                                        _____        Harshbarger, Attorney General, was on brief for appellee Commonwealth        ___________        of Massachusetts.            James H. Quirk, Jr. for appellee The Barnstable County Retirement            ___________________        Association.                                 ____________________                                     March , 1993                                 ____________________        _____________________        *Of the Third Circuit, sitting by designation.                    Higginbotham,  Senior  Circuit  Judge.    Massachusetts                    Higginbotham,  Senior  Circuit  Judge                                   ______________________          requires  state and local officials and general employees who are          seventy years old or older to take and pass a medical examination          as  a  condition of  continued employment.     The issue  on this          appeal   is  whether   such  a   requirement  violates   the  Age          Discrimination  in  Employment  Act  (ADEA),  81  Stat.  602,  as          amended, 29 U.S.C.   621 et seq. (1990).  We hold that it does.                                   _______                                          I.                    In   1977,   Massachusetts   enacted  Chapter   32   of          Massachusetts General Laws to regulate its retirement systems and          pensions.    One component  of Chapter 32,  Section 90F, requires          Group  1   employees  of  the  Commonwealth   and  its  political          subdivisions who are  seventy years of  age or older  to pass  an          annual   medical  examination   as   a  condition   of  continued          employment.1                                               ____________________             1Section 90F provides in its entirety:                    Any member in service classified in Group 1, or any                    other person who would be classified in Group 1                    except for the fact that he is not a member, shall                    continue in service, at his option, notwithstanding                    the fact that he has attained age seventy; provided,                    however, that he is mentally and physically capable                    of performing the duties of his office or position.                     Such member or other person shall annually, at his                    own expense, be examined by an impartial physician                    designated by the retirement authority to determine                    such capability.  No deductions shall be made from                    the regular compensation of such member or other                    person under the provisions of this chapter for                                         -2-                                          2          Group  1  employees   are  "[o]fficials  and   general  employees          including   clerical,   administrative  and   technical  workers,          laborers,  mechanics and  all others  not otherwise  classified."          Mass. Gen. L.  ch. 32,   3(2)(g)  (1992).  Under the  regulations          enacted  pursuant to section 90F,  no later than  120 days before          the last day of  the month when a Group 1 employee will reach the          age  of seventy,  the retirement board  of which  he or  she is a          member notifies him or her of the retirement benefits to which he          or she would  be entitled  if he  or she  retired at  the age  of          seventy.   In  order  to remain  in employment  after the  age of          seventy,  the employee must complete an application and submit to          a medical  examination by  a physician  designated by  the board.          Upon receipt of the report of the physician, the retirement board          votes to decide  whether to grant the  application for permission          to  continue  in service.   If  the  application is  granted, the          employee must repeat the  process each year.  If  the application          is denied, the employee is  retired on the last day of  the month          of his  or her birth.   Mass. Regs. Code tit.  840,   11.01-11.02          (1992).                                              ____________________                    service after he has attained age seventy and upon                    retirement such member or other person shall receive                    a superannuation retirement allowance equal to that                    which he would have been entitled had he retired at                    age seventy.             Mass. Gen. L. ch. 32,   90F.                                         -3-                                          3                    Barnstable  County Retirement Association (BCRA) is one          of the  106 public retirement systems governed by   90F.  In 1988          the BCRA required Mary  Cavender, a librarian employed by  a town          in  Massachusetts,  to pass  a  medical examination  in  order to          continue  her employment with the  town.  She  passed the medical          examination  and was  allowed  to continue  her  employment.   No          employees  have been forced  to retire  since    90F has  been in          effect.                      On September  9, 1989, the Equal Employment Opportunity          Commission  (EEOC) brought  suit  against  Massachusetts and  the          BCRA.   The  EEOC alleged  that the  requirements  of    90F that          Massachusetts  state and  local employees  aged seventy  or older          take and pass  an annual  medical examination as  a condition  of          continued employment was violative of,  and hence preempted by,            4(a)  of the  Age  Discrimination in  Employment  Act (ADEA),  29          U.S.C.   623(a).  Section 4(a) provides:                     It shall be  unlawful for  an employer (1)  to fail  or                    refuse  to  hire  or  to discharge  any  individual  or                    otherwise  discriminate  against  any  individual  with                    respect  to  his  compensation,  terms,  conditions, or                    privileges  of employment, because of such individual's                    age; (2) to limit, segregate, or classify his employees                    in any way which  would deprive or tend to  deprive any                    individual  of  employment  opportunities or  otherwise                    adversely affect his status  as an employee, because of                    such individual's age; or (3)  to reduce the wage  rate                    of any employee in order to comply with this chapter.                                         -4-                                          4                      Following  discovery, all  parties moved  for summary          judgment.    The  EEOC  argued  in  its  motion  that    90F  was          discriminatory  on   its  face   and  that  defendants   had  not          established  a  justification  for  using  age  as  a  factor  in          determining  who would  be required  to take  and pass  a medical          examination   as    a   condition   of    continued   employment.          Massachusetts'  answer in  its  motion for  summary judgment  was          twofold: first,  it  argued  that    4(a)  of the  ADEA  was  not          applicable to the dispute because    90F was not preempted by the          ADEA; second, and in the alternative, Massachusetts argued that            90F did not violate the ADEA because concerns over the fitness of          employees, rather than age, was the basis of the statute.                      On   April  17,  1992,   the  district   court  granted          defendants'  motions for  summary  judgment, denying  the  EEOC's          motion.   The court reasoned that the regulation of its employees          has traditionally been one  of the historic powers of  the state.          According  to the  court, the  Supreme Court  held in  Gregory v.                                                                 __________          Ashcroft, 111 S.Ct. 2395,  115 L.Ed.2d 410 (1991), that  Congress          ________          should make its intention  clear and manifest when it  intends to          preempt  the historic powers  of the state.   In the  view of the          court, Congress, in enacting the ADEA, did not make  it clear and          manifest that  it intended to "limit  employer-states' ability to          assess  the fitness  of their  employees."   Moreover, the  court                                         -5-                                          5          continued, the  practice of requiring employees  seventy years of          age  or  older to  undergo an  annual  medical examination  "is a          practice very conducive  to the  health and well  being of  those          employed by state  government as  well as by  society at  large."          Thus, the  court concluded,   90F is not preempted by, and is not          violative of, the ADEA, and for the court to hold otherwise would          be "to indulge in judicial legislation to override the balance of          federal and state powers."                    The  EEOC now  appeals  the district  court's grant  of          summary judgment.  The EEOC requests that we reverse the grant of          summary judgment  in  favor  of  appellees  and  that  we  remand          directing the  district court  to enter  summary judgment  in its          favor.  The  EEOC makes three  main arguments in  support of  its          appeal.  First,  the EEOC reiterates that   90F violates the ADEA          on  its  face.   Second,  the EEOC  maintains that  age,  and not          concerns over employee fitness, is the basis for   90F.  Finally,          the  EEOC argues that    90F does  not qualify for  the bona fide          employee benefit exception of the ADEA.                                           II.                    Rule  56(c) of  the  Federal Rules  of Civil  Procedure          provides that  summary judgment  "shall be rendered  forthwith if          the  pleadings,  depositions,  answers  to  interrogatories,  and                                         -6-                                          6          admissions on file,  together with the  affidavits, if any,  show          that there is no genuine  issue as to any material fact  and that          the moving party  is entitled to a judgment as  a matter of law."          Fed. R.  Civ. P. 56(c).    We exercise plenary  review of summary          judgment dispositions.  Olivera v.  Nestle Puerto Rico, Inc., 922                                  ____________________________________          F.2d  43, 44-45  (1st Cir.  1990).   The facts  of this  case, as          recounted above,  are not in dispute.   So, we turn  first to the          issue of whether   90F is preempted by the ADEA.                                          A.                      Congress has  the power to preempt  state legislation          under the  Supremacy Clause  of Article VI  of the  Constitution.          Federal  preemption  law  recognizes  two  types  of  preemption,          express  and implied.  Schneidewind v. ANR Pipeline Co., 485 U.S.                                 ________________________________          293,  300, 108 S.Ct. 1145, 99 L.Ed.2d 316 (1988); Wisconsin Publ.                                                            _______________          Intervenor,  et al. v. Mortier, 111 S.Ct. 2476, 2482, 115 L.Ed.2d          ______________________________          532 (1991); see  also Wood v. General Motors  Corp., 865 F.2d 395                      _________ _____________________________          (1st Cir. 1988).  Express preemption occurs  when Congress states          in  the  text of  legislation that  it  intends to  preempt state          legislation in  the area.   In  the  absence of  such a  specific          statement,  a federal statute  may also preempt  by implication a          state statute.   The United  States Supreme Court  has identified          the circumstances under which such implied preemption may occur:                     In the absence of explicit statutory language, however,                    Congress implicitly may indicate  an intent to occupy a                                         -7-                                          7                    given  field to  the exclusion  of state  law.   Such a                    purpose may be inferred  where the pervasiveness of the                    federal  regulation  precludes  supplementation by  the                    States,  where the  federal  interest in  the field  is                    sufficiently dominant,  or where the "object  sought to                    be  obtained by the  federal law  and the  character of                    obligations  imposed  by  it  .  .  .  reveal  the same                    purpose."     Finally,  even  where  Congress  has  not                                            _______________________________                    entirely displaced  state  regulation in  a  particular                    _______________________________________________________                    field,  state   law  is  pre-empted  when  it  actually                    _______________________________________________________                    conflicts with  federal law.   Such a conflict  will be                    ___________________________                    found "'when it is impossible to comply with both state                    and  federal law, or where  the state law  stands as an                    obstacle to the accomplishment of the full purposes and                    objectives of Congress.'"          Schneidewind, 485 U.S. at  299-300 (citations omitted)  (emphasis          ____________          added).                      Before  the  district court  the  EEOC  argued, and  on          appeal it reiterates, that    90F actually conflicts with    4(a)          due  to  the  impossibility  of  complying  with  both  statutes.          Specifically, the  EEOC maintains that, since  only employees who          are seventy  years of age or  older are required to  take and are          forced  to retire if they  fail an annual  medical examination,            90F  conflicts  with    4(a) of  the  ADEA providing  that  it is          unlawful  for  an  employer "to  discharge  .  .  . or  otherwise          discriminate against any  individual with  respect to his  . .  .          terms, conditions,  or privileges  of employment because  of such          individual's age." 29 U.S.C.  623(a)(1).                       The   district  court  rejected  the  EEOC's  argument,          finding  that in  ADEA cases,  Congress must  expressly state  an                                         -8-                                          8          intention in order  for courts to find federal preemption.    The          court  determined  that  the  recent Supreme  Court  decision  in          Gregory  v.  Ashcroft had  changed  the  standards for  resolving          _____________________          conflicts  between local  and  federal  government, deferring  to          state  sovereignty.   According to  the court,  "in an  effort to          preserve our federal system of government, the Supreme  Court has          indicated  that  Congress should  make  its  intention clear  and          manifest  if it  intends to  preempt the  historic powers  of the          states." quoting Gregory v.  Ashcroft, 111 S.Ct. at 2401.   Under                   ____________________________          this  new standard, the district court concluded that the ADEA is          ambiguous as to whether the statute was intended to apply to such          state legislation  as    90F: "[I]t  appears ambiguous,  and even          unlikely, that Congress intended to outlaw a method of assessment          utilized  by a  state  government which  requires annual  medical          examinations for its employees at the age of seventy."                     It is true that the Gregory Court was unwavering in its                                        _______          desire to protect state sovereignty and principles of federalism.          Id.  at 2399.   However, its reasoning and  holding were far more          ___          narrow  and limited  than the  broad and  sweeping interpretation          made  by the  district  court.   In  Gregory, the  United  States                                               _______          Supreme  Court rendered a decision on  the effects of the ADEA on          the  Missouri Constitution which required mandatory retirement of                                         -9-                                          9          judges.2  Mo.  Const. art. V,    26.  The relevant  clause of the          ADEA provided:                     The term "employee" means an individual employed by any                    employer  except that  the  term "employee"  shall  not                    include  any person  elected  to public  office in  any                    State  or political  subdivision  of any  State by  the                    qualified voters thereof, or  any person chosen by such                    officer to be on  such officer's personal staff,  or an                    appointee on  the policy  making level or  an immediate                    adviser   with  respect   to   the   exercise  of   the                    constitutional or legal powers of the office.           29 U.S.C.    630(f).   Due to  the method of  selection of  state          judges in  Missouri, it was  unclear whether they  were employees          within the meaning of   630(f).                      It was  ultimately the ambiguity of  the judges' status          as employees or policymakers which the Court found fatal to their          capacity  to be protected by  the ADEA.   Because Missouri judges                                              ____________________             2Three years before the Supreme Court decided Gregory, the                                                           _______             First Circuit adjudicated precisely the same issue.  EEOC v.                                                                  _______             Massachusetts, 858 F.2d 52 (1st Cir. 1988).  In that case,             _____________             the court had to determine the effect of the 1987 amendments             to the ADEA on a provision of the Massachusetts Constitution             which made age 70 the mandatory retirement age for all state             judges.  The court affirmed the district court's             determination that the Act did not override the state             constitutional provision, finding that the state's judges             fell within the policy-making exception to employees             protected by the ADEA, 29 U.S.C.   630(f).  The court even             relied on the same rationale of respect for principles of             sovereignty, as did the Court in Gregory: "Without question,                                              _______             the tenure of state judges is a question of exceeding             importance to each state, and a question traditionally left             to be answered by each state.  Any federal encroachment on a             state's freedom of choice in this area, therefore, strikes             very close to the heart of state sovereignty."  EEOC, 858                                                             ____             F.2d at 54.                                         -10-                                          10          were subject to retention  elections, they could be  construed as          elected  officials, thus excluded from the ADEA.  It was unclear,          however, whether state  court judges were state  officials on the          "policy-making level."  The Gregory Court aptly held that,  where                                      _______          provisions  are  ambiguous and  state  sovereignty  is at  issue,                                     ___          courts should  reason carefully when making  determinations as to          preemption.  Gregory,   111  S.Ct.  at   2401.     "Congressional                       _______          interference  with  this  decision  of the  people  of  Missouri,          defining  their constitutional  officers, would  upset  the usual          constitutional balance of  federal and  state powers.   For  this          reason, 'it is incumbent upon the federal courts to be certain of          Congress' intent before finding  that federal law overrides' this          balance."  Id.  (quoting Atascadero State  Hosp. v. Scanlon,  473                     ___           __________________________________          U.S. 234, 243, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985) (determining          whether  federal statute  abrogated sovereign immunity  of states          under the 11th Amendment)).  Based on that reasoning, the Gregory                                                                    _______          Court  concluded  that  the  ADEA did  not  preempt  the Missouri          Constitution's mandatory requirement for judges. Id. at 2408.                                                           ___                    Here,   the   district    court   misinterpreted    the          significance of the Court's  reliance on principles of federalism          and respect  for state sovereignty.   The Missouri constitutional          provision  was concerned,  not with  regulating health  care, but          with ensuring the qualifications  of the highest state officials.                                         -11-                                          11          "The[] cases [cited] stand in recognition of the authority of the          people of  the States  to determine the  qualifications of  their          most  important government  officials."   Gregory,  111 S.Ct.  at                                                    _______          2402;  see also  EEOC v.  Massachusetts., 858  F.2d 52  (1st Cir.                 ________  _______________________          1988), discussed supra note  3.  Relying on Sugarman  v. Dougall,                 _________ _____                      ____________________          413 U.S. 634,  93 S.Ct.  2842, 37 L.Ed.2d  853 (1973), the  Court          recognized that Gregory was  part of the body of  decisions which                          _______          involve  the Court in  adjudicating "the  unique nature  of state          decisions that  'go to the heart  of representative government.'"          Gregory,  111 S.Ct.  2401.   The  Court  made it  clear that  its          _______          deference  arises not from  a disdain for  preemption doctrine in          the context of the ADEA, but rather because:                     the  case concerns  a  state  constitutional  provision                    through  which  the  people  of  Missouri  establish  a                    qualification for those who sit  as their judges.  This                                                                       ____                    provision goes beyond  an area traditionally  regulated                    _______________________________________________________                    by the States; it is a decision of the most fundamental                    _______________________________________________________                    sort  for a sovereign entity.  Through the structure of                    _____________________________                    its government, and the character of those who exercise                    government  authority,  a  State  defines  itself as  a                    sovereign.            Id. at 2400 (emphasis added).            ___                    Thus,  while  Gregory   refused  to   find  the   state                                  _______          Constitution preempted by the ADEA, the opinion was unequivocally          clear in  the narrowness  of its  holding.  At  no point  did the          Court suggest that all state regulations of public employees  are          questions at the heart of state  sovereignty.  Nor did it suggest                                         -12-                                          12          that  Gregory  would be  controlling  on  the federal  preemption                _______          doctrine where there was not any ambiguity in the language of the          statute.   The Court stated:  "The ADEA plainly covers all  state          employees  except those excluded by one of the exceptions.  Where          it is unambiguous that  an employee does  not fall within one  of          the exceptions, the Act states plainly and unequivocally that the          employee is included."  Id. at 2404.                                  ___                    The   district   court   erred,   not   only   in   its          interpretation as to the breadth of the Gregory holding, but also                                                  _______          in its  applicability to the  instant case.   Here, there  are no          ambiguities in  the terms or provisions of   90F that should give          us  pause as to whether  those affected are  employees within the          meaning of   4(a).  The district court determined that the effect          of  the 1986 congressional amendment to the ADEA on statutes such          as  Massachusetts'  is  de  facto  ambiguous.    Such  reasoning,          however, begs the  threshold question of preemption.  In Gregory,                                                                   _______          the text of the ADEA itself is unclear as to its applicability to          judges, giving  rise to  ambiguity which  the  Court resolved  in          Missouri's favor.  Here, there is no textual uncertainty, and the          proper method of resolving  the issue is to analyze  the conflict          under  the  standards  of  preemption  doctrine,  something   the          district court never did.                                            B.                                         -13-                                          13                      To  recapitulate,  "in  the  absence  of  an  express          congressional  command,  state  law  is  preempted  if  that  law          actually conflicts with federal law." Cipollone v. Liggett Group,                                                ___________________________          Inc., 112 S.Ct.  2608, 2617, 120 L.Ed.2d  407 (1992).  State  law          ____          conflicts  with  federal  law  when compliance  with  both  is  a          physical  impossibility.    See,  e.g., Greenwood  Trust  Co.  v.                                      ___________ _________________________          Massachusetts, 971 F.2d 818 (1st Cir. 1992); Pedraza v. Shell Oil          _____________                                ____________________          Co., 942 F.2d 48 (1st Cir. 1991). 3           ___                    Under    90F,  retirement boards  are required  to take          specific action upon the  seventieth birthday of state employees.          The  possible result of this action is the involuntary retirement          of state employees who fail to pass the requisite tests.              Such action is not reconcilable with the plain purpose of    4(a)          which   prohibits  employers  from   discrimination  against  any          individual with respect  to his compensation,  terms, conditions,          or privileges of employment, because of such individual's age.                                                 ____________________             3The district court's opinion focuses on the reasonableness             of the state's method of implementing the dual goals of             enabling state employees to continue working and ensuring             their competency.  This is not, however, an equal protection             analysis in which rational and legitimate state interests             are to be respected by the courts.  Under preemption             analysis, the focus is not on the purposes of the             Commonwealth's statute, but on the interaction between the             state statute and the federal statute in question.  In the             context of the ADEA, reasonableness only enters into             judicial analysis in assessments of affirmative defenses             available under   4(f).                                         -14-                                          14                    For  example,  in EEOC  v. Wyoming,  460 U.S.  226, 103                                      ________________          S.Ct.  1054, 75 L.Ed.2d  18 (1983), the  Supreme Court considered          whether a Wyoming  statute, which required game  and fish wardens          who had reached age 55 to seek the approval of  their employer in          order   to  remain  employed,  violated  the  ADEA.      Much  as          Massachusetts  does  here, Wyoming  argued  that  the statute  in          question did not violate the ADEA on its face because the statute          served  in assuring  the  physical preparedness  of Wyoming  game          wardens to perform their duties.  The Court rejected the argument          and  concluded that Wyoming could continue the statute only if it          could demonstrate age was  a bona fide occupational qualification          for the job of game warden.  Id. at 239. Significantly, the Court                                       ___          wrote:                    Under the ADEA,  [] the  State may still,  at the  very                    least,  assess  the fitness  of  its  game wardens  and                    dismiss those  wardens whom  it reasonably finds  to be                    unfit.   Put another way, the Act requires the State to                    achieve its goals in  a more individualized and careful                    manner than  would otherwise be  the case, but  it does                    not  require the State  to abandon  those goals,  or to                    abandon the public policy decisions underlying them.          Id.           ___                    Similarly,  here Massachusetts  may  still  assess  the          fitness  of its  employees and  dismiss  those employees  whom it          reasonably  finds to  be unfit.   But it  must do  so "in  a more          individualized and careful manner"  than the scheme envisioned by             90F.   In other  words, Massachusetts  is not  being asked  to                                         -15-                                          15          abandon  the  public policy  of  determining the  fitness  of its          employees, just as  Wyoming was  not being asked  to abandon  the          public  policy of  determining the  physical preparedness  of its          game wardens.   Instead, pursuant  to the ADEA,  just as  Wyoming          could not  arbitrarily pick 55 years of age as the point at which          to  measure  the  physical  preparedness  of  its  game  wardens,          Massachusetts  may not arbitrarily set up seventy years of age as          the point at which to determine the fitness of its employees.                     The Supreme Court concluded in EEOC v. Wyoming:                                                   _______________                    [Wyoming] remain[s] free under  the ADEA to continue to                    do precisely  what  [it  is]  doing now,  if  [it]  can                    demonstrate  that  age  is a  "bona  fide  occupational                    qualification"  for the job of game warden. . ..  [T]he                    state's discretion to  achieve its goals in  the way it                    thinks best is not being overridden entirely, but it is                    merely   being  tested  against  a  reasonable  federal                    standard.          Id. at 240.  Here, Massachusetts' discretion to achieve its goals          ___          of determining  the  fitness of  its  employees is  being  tested          against a reasonable federal standard.  And, in the absence of an          affirmative defense,  we must conclude that  compliance with both          the  state  and federal  statutes  is  a physical  impossibility,          meaning that the ADEA must preempt the Massachusetts law.                    The two  statutes are  also in actual  conflict because          enforcement of the Massachusetts law creates an  obstacle for the          implementation  of the goals of  the ADEA.   Congress enacted the          ADEA  to   prevent   the  arbitrary   and  socially   destructive                                         -16-                                          16          discrimination  on  the  basis of  age.    Western  Air Lines  v.                                                     ______________________          Criswell,  472  U.S. 400,  409, 105  S.Ct.  2743, 86  L.Ed.2d 321          ________          (1985); Trans World Air Lines v. Thurston, 469 U.S. 111, 120, 105                  _________________________________          S.Ct.  613, 83  L.Ed.2d 523  (1985).   The United  States Supreme          Court has explained  that the  ADEA is of  particular force  when          mandatory  retirement is at issue, as it  is here.  Criswell, 472                                                              ________          U.S. at  410.   In  the words  of the  Court, "[t]he  legislative          history of the 1978 Amendments to the ADEA makes quite clear that          the  policies and  substantive provisions  of the Act  apply with          especial force  in the case of  mandatory retirement provisions."          Id.  Moreover, "[t]hroughout the legislative history of the ADEA,          ___          one  empirical  fact is  repeatedly  emphasized:  the process  of          psychological  and physiological  degeneration  caused  by  aging          varies with  each individual."  Id. at 409.   Thus, the  ADEA was                                          ___          enacted in  large part to  prevent mandatory retirement  based on          "innocent" misperceptions as to the abilities of older employees,          as well as more insidious "business" judgments as to their cost.                     Here, the  Commonwealth of Massachusetts allows  age to          be the determinant as to when an employee's deterioration will be          so  significant  that it  requires  special  treatment.   Such  a          conception  of and  use  of age  as  a criteria  for decline  and          unfitness for employment strikes at  the heart of the ADEA.   The          entire  point of  the statute  is to  force employers  to abandon                                         -17-                                          17          previous stereotypes about the  abilities and capacities of older          workers.  Employers may  still regulate and condition employment,          but they may no longer immediately  turn to age as a  convenient,          simple criterion.  They must be prepared  to justify their use of          age rather than individualized factors.                        In finding that  the ADEA  did not preempt    90F,  the          district  court reasoned that    90F is  "an Act  relating to the          qualifications  of  state  employees  which  was  lawful  and  an          eminently  reasonable expression  of state  power  when enacted."          Thus, the Court concluded, to hold   90F as preempted by the ADEA          would  be "to  indulge in  judicial  legislation to  override the          balance  of federal  and  state powers."    No one  disputes  the          proposition  that  the  historic  functions  of   regulating  the          relationship  between the  public  employer and  public employees          have traditionally been  left to the states.  But  it is also far          too  late in  the day to  argue that  Congress does  not have the          power to  require states  to regulate the  public employer\public          employee relationship in a non-discriminatory fashion. 4                      Because the district court  rested its grant of summary          judgment  for  the defendants  solely  on  its interpretation  of                                              ____________________             4Case law supports the application of other federal anti-             discrimination statutes to state employment relationships.              See EEOC v. County of Allegheny, 705 F.2d 679, 682 (3d Cir.             ___ ___________________________             1983); Rosenfeld v. Southern Pacific Co., 444 F.2d 1219,                    _________________________________             1225 (9th Cir. 1971).                                         -18-                                          18          whether the ADEA preempted facially the Massachusetts law, it did          not  reach  the other  defenses made  by  the Commonwealth.   The          appellees,  however, reassert  those  defenses on  appeal and  we          address them next.                                           III.                      Appellees   argue  that, even  if the  annual medical          examination requirement is found  to conflict with   4(a)  of the          ADEA,    90F is still  exempt from the  prohibitory provisions of          the  ADEA under exceptions denoted in    4(f)(1) and   4(f)(2) of          the ADEA.                                            A.                    Section 4(f)(1) provides that "It shall not be unlawful          for an employer, employment agency,  or labor organization (1) to          take any  action otherwise prohibited .  . . where age  is a bona          fide  occupational  qualification  reasonably  necessary  to  the          normal  operation  of  the  particular  business,  or  where  the                                                             ______________          differentiation is based on reasonable factors other than age . .          _____________________________________________________________          . ." (emphasis added).                    According to appellees, there is a possibility that the          physical examinations could be based on a reasonable factor other          than  age.   They argue  that in  interpreting    90F,  our focus          should be not on the age requirement which triggers the condition                                         -19-                                          19          of  continuing  employment,   but  rather,  on   the  examination          requirement  itself.     Employees  over  seventy   will  not  be          involuntarily retired because they  are over seventy, but because          their mental and or physical faculties are failing.                      We cannot accept this argument. In Los Angeles Dep't of                                                       ____________________          Water & Power v. Manhart, 435 U.S. 702, 98 S.Ct. 1370, 55 L.Ed.2d          ________________________          657  (1978), the Supreme Court  confronted and rejected a similar          argument.    Manhart  involved  a  policy  of   the  Los  Angeles                       _______          Department of Water and Power requiring larger contributions from          women  than men to the Department's pension fund because women as          a group live longer than do men as  a group.  A class made up  of          women employed or formerly  employed by the department challenged          the policy as a violation of Title VII of the Civil Rights Act of          1964.  Plaintiffs  claimed  that  the  contribution  differential          constituted  discrimination on the basis of  sex.  The Department          answered that sex was not the factor on which the distinction was          being  drawn;  it  was  longevity.    The   Court  rejected  this          contention,  holding that but for  their sex, women  would not be          required  to pay more for  their retirement benefits.   The Court          acknowledged that as a class women  tend to live longer than men.          Manhart,  435 U.S. at 707.  But the  Court found it to be equally          _______          true  that all individuals in the respective classes do not share          the   characteristics  that   differentiate  the   average  class                                         -20-                                          20          representatives.  Id. at 708.  Thus, the Court reasoned that even                            ___          where  characteristics  may  be class-based,  Title  VII requires          fairness to individuals rather than to classes. Id.   In response                                                          ___          to  the   Department's  specific  argument  that   the  different          contributions exacted from men and women were based on the factor          of longevity rather than sex, the Court wrote:                     It is plain [] that any individual's life expectancy is                    based on a number of factors, of which sex is only one.                    The record  contains no evidence that  any factor other                    than  the  employee's sex  was  taken  into account  in                    calculating the []  differential between the respective                    contributions by men  and women. . ..  [O]ne cannot say                    that an actuarial distinction  based entirely on sex is                    "based  on any other factor  than sex.   Sex is exactly                    what it is based on."          Id.          ___                                  Similarly,  here appellees  argue that  the requirement          that  employees aged  seventy  or older  pass  an annual  medical          examination is based  on fitness rather  than age.   But, as  the          Supreme  Court found in Manhart, it is clear that an individual's                                  _______          fitness to work is based on a number of factors,  of which age is          only  one.  And,  as in Manhart, the  record contains no evidence                                  _______          that  any factor  other than  the employee's  age was  taken into          account  in requiring an annual medical examination.  Thus, as in          Manhart, we are forced to conclude that age is exactly what   90F          _______          is  based on.   The reasonable  factor other than  age defense is          simply not applicable to   90F.                                          -21-                                          21                     Appellees  argue  that   Manhart  gave  only   cursory                                              _______          treatment  to this issue and that because it predated Gregory, it                                                                _______          has less weight.  Both assertions  are incorrect.  As an  initial          matter,  Manhart   is  clear   in  holding  that   the  sex-based                   _______          differentiation in question   could not be  justified.  Moreover,          in  Gregory  the  reasonable  factor defense  was  never  raised.              _______          Finally,  while Manhart does arise out of  Title VII  and not out                          _______          of the ADEA,   the First Circuit, like the  United States Supreme          Court, has made clear that the  ADEA tracks the law of Title VII.          Thurston, 469 U.S.  at 121; Rivas  v. Federacion de  Asociaciones          ________                    _____________________________________          Pecuarias de  Puerto Rico, 929 F.2d 814, 820 n.15 (1st Cir. 1991)          _________________________          ("As  the substantive provisions of the ADEA were derived in haec                                                                    _______          verba from Title VII .  . . we may  look to constructions of  the          _____          term [employer] in  the Title VII .  . . context  for guidance.")          (citing Lorillard  v. Pons, 434 U.S.  575, 584 & n.  12, 98 S.Ct.                  __________________          866, 55 L.Ed.2d 40  (1978); Zipes v. Trans World  Airlines, Inc.,                                      ____________________________________          455 U.S.  385, 395 n. 11, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1989));          Loeb v. Textron, Inc., 600 F.2d 1003, 1014, 1015 (1st Cir. 1979).          _____________________                    The alternative defense in    4(f)(1) -- the  bona fide          occupational qualification -- is an affirmative defense which the          Commonwealth does not  raise.   In EEOC v.  East Providence,  798                                             ________________________          F.2d 524, 528 (1st Cir. 1986), the First Circuit adopted the two-                                         -22-                                          22          pronged test articulated  by the United  States Supreme Court  in          Criswell.  Under the Criswell test, in assessing a BFOQ defense,           ________             ________                    an  employer   must  first   establish  that   the  job                    qualifications which  the  employer invokes  to justify                    his  discrimination are  "'reasonably necessary  to the                                               ____________________                    essence of his business.'"  If the employer succeeds in                    making this showing, it must then establish that it "is                    compelled to rely  on age  as a proxy  for the  safety-                    related  job  qualifications  validated  in  the  first                    inquiry."            East  Providence, 798 F.2d at  528 (citing Criswell,  472 U.S. at          ________________                           ________          413-414.) (emphasis in original)).  In East Providence the  Court                                                 _______________          found  that  the  city  had  successfully established  reasonable          necessity and its  reliance on  age as the  ordinance related  to          mandatory retirement of police  officers over age 60.   Here, the          Commonwealth has not tailored the statute to particular jobs, but          rather  to all.  See also Thurston, 469 U.S. at 122 ("In order to                           ________ ________          be   permissible  under      4(f)(1),   however,  the   age-based          discrimination must relate to a 'particular business.'").                                          B.                    We now  turn to  appellees'  argument that    90F  fits          under  the  4(f)(2) exemption of the ADEA.  That section provides          in relevant part:                    It shall  not be  unlawful for an  employer, employment                    agency,  or labor organization . . . to take any action                    otherwise prohibited under subsection (a), (b), (c), or                    (e) of this section--                    . . . .                    (B)  to  observe the  terms  of  a bona  fide  employee                    benefit plan--                                         -23-                                          23                    (i)  where, for  each benefit  or benefit  package, the                    actual  amount  of payment  made  or  cost incurred  on                    behalf of an older worker is no less than that  made or                    incurred on behalf of a younger worker . . .                    (ii)  that is  a voluntary  early retirement  incentive                    plan consistent  with the relevant  purpose or purposes                    of this chapter.                    Notwithstanding clause (i) or (ii) of subparagraph (B),                    no  such  employee  benefit  plan  or  voluntary  early                    _______________________________________________________                    retirement incentive plan shall  excuse the failure  to                    _______________________________________________________                    hire any individual, and  no such employee benefit plan                    _______________________________________________________                    shall []  require or permit the  involuntary retirement                    _______________________________________________________                    of any  individual specified by section  631(a) of this                    __________________                    title, because of the age of such individual.            29 U.S.C.   623 (4)(f)(2) (1992) (emphasis added).                     In  order  to  be  exempt pursuant  to     4(f)(2),  an          employment plan  must be a bona  fide plan which is  covered by            4(f)(2),  the employer's  actions must  be in  observance  of the          plan, and the plan must not be a subterfuge to evade the purposes          of  the ADEA.  Public  Employees Retirement System  v. Betts, 492                         _____________________________________________          U.S. 158, 109 S.Ct. 2854, 106  L.Ed.2d 134 (1989); EEOC v. Boeing                                                             ______________          Svcs. Int'l, 968 F.2d 549 (5th Cir. 1992); EEOC v. Orange County,          ___________                                _____________________          837 F.2d 420, 421 (9th  Cir. 1988).  The plan envisioned in   90F          facially violates the qualification that the plan may not require          or  permit involuntary  retirement.   The  United States  Supreme          Court  in Betts  concluded that  in order  for a benefit  plan to                    _____          qualify  for the   4(f)(2) exemption, it  must not be a method of          discriminating  in  the  "nonfringe" aspects  of  the  employment          relationship.  Betts, 492 U.S. at 177.  The Court elaborated that                         _____             4(a)(1) and    4(f)(2) could  both be  given effect  only if                                           -24-                                          24          4(f)(2)  exempts bona  fide  plans  that  are  not  a  method  of          discriminating in other  nonfringe benefit areas.  Id.;  see also                                                             ___   ________          EEOC  v. Westinghouse  Elec. Corp.,  925 F.2d  619, 623  (3d Cir.          __________________________________          1991) ("The  Court did not define 'nonfringe  benefit' [in Betts]                                                                     _____          but  its use of  the term makes  clear that the  terms 'bona fide          employee  benefit  plan'  and  'nonfringe  benefit' are  mutually          exclusive.").     Although  the  Court  remanded   the  case  for          resolution of  this issue,  it held:  "As  a result  of the  1978          amendments,   4(f)(2) cannot be used to justify forced retirement          on account  of age."  Betts, 492 U.S.  at 166 n.2.  Similarly, in                                _____          Thurston, 469 U.S. at 124,  the Court stated that in  the context          ________          of   4(f)(2), "any seniority  system that includes the challenged                                               ____________________________          practice is  not 'bona fide' under the  statute."  See also Betts          _______________________________________________    ________ _____          v.  Hamilton  County, 897  F.2d 1380,  1381  (6th Cir.  1990) (on          ____________________          remand  from  the   Supreme  Court,  determining   plan  required          involuntary retirement based on  age when disability choices were          restricted upon reaching age of sixty).                    Section 90F cannot qualify for the   4(f)(2) exemption.          Section 90F acts as a conditional involuntary retirement program,          which  some employees may escape through satisfaction of a burden          imposed  on  them  by the  statute.    It  regulates not  "fringe          benefits," but  the heart of the  employment relationship itself.          Section  90F clearly  forces retirement  in precisely  the manner                                         -25-                                          25          which the Supreme Court  explicitly found to be beyond  the scope          of the exemption.5                                         IV.                     In conclusion, we hold that   90F is violative of, and          is  preempted by, the ADEA  because it stands  in direct conflict          with    4(a)  of the  ADEA.   Specifically,  Massachusetts cannot          comply   with  the   ADEA  prohibition   that  no   employer  may          discriminate against  any individual because of  age with respect          to compensation,  terms, conditions or privileges  of employment,          while at the same  time requiring employees seventy years  of age          or older to pass an annual  medical examination as a condition of          continued employment pursuant to   90F.  We also hold  that   90F          is not exempt from the requirements  of the ADEA based on  either          of the two  exemptions provided in   4(f)(1) or    4(f)(2) of the          ADEA.  Under    4(f)(1),  we cannot  rationally conclude that the          distinction among employees for the purpose of implementing   90F          is  based on  any reasonable  factor other  than age.     Under            4(f)(2),  we cannot rationally find that   90F satisfies the bona          fide employee  benefit plan exemption.   In order for   a plan to                                              ____________________             5As is argued in the amicus brief, "Since   90F permits . .                                                             _______             . only those employees age seventy and older who pass the             annual examination to continue employment, the only             conclusion to be drawn is that those who do not pass the             examination are not permitted to continue employment."                             ___                                         -26-                                          26          qualify  under this exception, there may not be a provision which          requires  mandatory retirement.    Mandatory  retirement  is,  of          course, the point of   90F.                       For the  foregoing reasons, we will  reverse the order          of   the  district   granting  summary   judgment  in   favor  of          Massachusetts  and the BCRA, and  we will remand  to the district          court  for entry of  summary judgment  in favor  of EEOC  and for          further proceedings consistent with this opinion.          Reversed and Remanded.           ______________________                                         -27-                                          27
