                           QBfficeof tip Wttornep &neral
                                        &ate of Qexas
DAN MORALES                              August 13,1992
 ATTORNEY
      GENERAL




     Mr. Wayne Blevins                              Opinion No. DM-154
     Executive Secretary
     Teacher Retirement System of Texas             Re: Whether Government Code section
     1000 Red River Street                          824.304(c) conflicts with the federal Age
     Austin, Texas 78701-2698                       Discrimination in Employment Act of
                                                    1967, as amended by the Older Workers
                                                    Benefit Protection Act of 1990, and
                                                    related questions (RQ-371)

     Dear Mr. Blevins:

            You requested the attorney general’s opinion concerning whether Govem-
     ment Code section 824.304(c) conflicts with the federal Age Discrimination in
     Employment Act of 1967 (the “act”), Pub. L. No. 90-202, 81 Stat. 602 (1967), as
     amended by the Older Workers Benefit Protection Act, Pub. L. No. 101-433, 104
     Stat. 978 (1990), now codified at 29 U.S.C. 90 621-34. We conclude that section
     824.304(c) conflicts with the federal acts and is therefore pre-empted by federal law
     and void.

             Title 8, subtitle C of the Government Code created the Teachers Retirement
     System of Texas (IRS) to establish a system of benefits for retired teachers and to
     provide for administration and management of such a system. See Gov’t Code
     88 824.001-.701. The retirement benefits offered by the system are based on years
     of teaching service. See Gov’t Code 93 824.202-.204. If a member of the system
     becomes disabled, the member is entitled to a disability retirement annuity. Id
     5 824.302. If a disability retiree is restored to active service, the disability retirement
     annuity is discontinued and the retiree must again become a member of the
     retirement system. Id 5 824.307. However, Government Code section 824.304(c)
     states the following special provision applicable to TRS members older than 60
     years: “If a person receives a disability retirement annuity under Subsection (b) and
     the retirement begins after or continues until the person becomes 60 years old, the




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Mr. Wayne Blevins - Page 2              (m-154)




disability is conclusively presumed continuous for the rest of the person’s life.
Therefore, under the present Government Code, a disabled member who cures his
disability before the age of 60 may return to active service and earn additional years
of service credit toward retirement; however, a disabled member who cures his
disability after reaching the age of 60 is conchtsively presumed disabled for life,
cannot revoke his disability, and cannot earn additional years of service credit
toward retirement.

       In 1967 Congress passed the Age Diition             in Employment Act
(ADEA) with the express intent “to promote employment of older persons based on
their ability rather than age [and] to prohibit arbitrary age discrimination in
employment.” 29 USC. 8 621(b). The ADEA declares:

          It shall be unlawful for an employer
              (1) to fail or refuse to hire or to discharge any individual or
          otherwise discrimina te against any individual with respect to his
          compensation, terms, conditions, or privileges of employment,
          because of such individual’s age; [or]
               (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.
Id. 5 623(a). The term “employer” includes-“a State or political subdivision of a
State and any agency or instrumentality of a State or a political subdivision of a
State.” Id. 8 630(b)(2). The act’s prohibition against discrimination applies to
individuals at least 40 years of age and less than 70 years of age. Id. 0 631(a).

        Despite the ADRA’s broad prohibition against age di&mination, the
Supreme Court in Public Emp@vee.sRetin?mentSystem of Ohio v. Befts,492 U.S. 158
(1989) held that the act prohibited age disuimmation in hiring, firing, wages, and
salary, but did not prohibit discrimination in the fumishing of tkinge benefits such as
retirement or pension packages. Congress then passed the Older Workers Benefit
Protection Act of 1990 with the express intent of overturn@ B&r. Pub. L No. lOl-
433,s 101,104 Stat. 978 (1990); see alsO S. Rep. No. 101263,101st Gong., 2d Seas. 5,
14-19 (1990). reprinted in 1990 U.S.C.CAN. 1510, 1519-1524. The Senate




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Mr. Wayne Blevins - Page 3               CM-154)




Subcommittee on Labor and the Senate Special Committee on Aging endorsed the
amendments and the overruling of Berts as follows:

          Through this legislation, Congress intends to make unmistakably
          clear that the ADEA’s purpose of eliminating arbitrary age
          dismimination in all employment includes the elimination of age
          discrimination in all forms of employee benefits. It is little
          consolation to an older worker to be protected &om
          discriminatory wage payments if an employer is free to
          discriminate based on age in the broad range of employee
          benefits that are included as an individual’s compensation,
          benefits that often are valued between one-quarter and one-
          third of earned wages.

S. Rep. No. 101-263 at 16-17, rep&&d in 1990 U.S.C.C.AN. at 1521-22. The 1990
amendments to the ADEA added the following new subsection to make it clear that
Congress intended to prohibit d&imina tion as to fringe benefits: The term
‘compensation, terms, conditions, or privileges of employment’ encompasses all
employee benefits, including such benefits provided pursuant to a bona fide
employee benefit plan.” Pub. L No. 101-433, 0 102, now codified ut 29 U.S.C.
0 630(L). The amendments further provided that: “No.. . employee benefit plan or
voluntary early retirement incentive plan shall excuse the failure to hire any
individual, and no such employee benefit plan shah require or permit the
involuntary retirement of any individual specified by [this act], because of the age of
such individual.” Pub. L No. 101433.# 103, now co&W at 29 U.S.C. 0 623(f)(2).

        The present Government Code allows a disabled TRS member who cures his
disability before the age of 60 to return to active service and earn additional years of
service credit towards retirement. See Gov’t Code Q824.307. However, pursuant to
Government Code section 824304(c), a disabled TRS member who cures his
disability after reaching the age of 60 is deemed disabled for life, cannot revoke his
disability, camtot rejoin the TRS system, and uot       earn additional years of service
credit toward retirement. We conclude that denying an individual older than 60
years old an opportunity to rejoin the retirement system, while granting this same
opportunity to one younger than 60 years old, constitutes discrimination against an
individual between the ages of 60 and 70 years old “with respect to his
compensation, terms, conditions, or privileges of employment.” This violates ADEA
section 621(b)( 1). See American Ash of RetiedPersons        v. Famuxs Group, 943 F2.d
996,lOOlM (9th Cir. 1991) (pension plan provisions denying accruals of service and




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Mr. Wayne Blevins - Page 4                    (m-154)




salary credits to employees over 65 years old violated ADEA, 29 U.S.C.
P 623(a)( 1)). We also conclude that this disparity adversely affects the status of such
employees older than 60 years solely because of their age in violation of section
WW).


       Under the Supremacy Clause of the United States Constitution, article VI,
clause 2, state law is preempted where the state law conflicts with federal law.
English v. Geneml Electric Ca, 496 U.S. 72, 110 S.Ct. 2270, 2275 (1990). “[Tlhe
[Supreme] Court has found pre-emption where it is impossible for a private party to
comply with both state and federal requirements or where state law ‘stands as an
obstacle to the accomplishment and execution of the full purposes and objectives of
Congress.‘” Id. 110 S.Ct. at 2275. In the present case Government Code section
824304(c) conflicts with the federal ADEA as amended; therefore, section
824304(c) is pre-empted by the federal act and is void. See Maryland v. L.oukna
451 U.S. 725,748 (1981) (“[A] state statute is void . . . to [the] extent that it confl&
with [a] federal statute.“); see uko Attorney General Opinion DM49 (1991) at 7.’




         WC bdievc that the proper procedure for tbe repeal of section S24304(c) is for the Texas
Lc&+huc     to pars a bii unconditionally and eqcssly repealing the former law. The Texas
Conchtutionrcsc-thcpowutorcpePlskwtotheLegLLahvcin~I,redion28,whieh
provides: ‘No poww of suspclldiag laws in this state shall be exercised except by the Lcgishue.’ If
the Texas Legislahue ties      to remove Gowmmeat Code section S24304@) from the books, the
kgishhueshouldpassanewbiUupressIydoiogso.           Tex.Const.art.III,i30.   Inthemeantimeandfor
tbc reasons previously dimsed,    Gowmmcnt Code section &24304(c) is prc-emptcd by federal law
mdisvoid




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Mr. Wayne Blevins - Page 5             m-154)




                                   SUMMARY

             Texas Government Code section 824304(c) conflicts with
         the federal Age Dis crimination in Employment Act of 1967, as
         amended by the Older Workers Benefit Protection Act, codified
         at title 29 of the United States Code sections 621-34, and
         therefore section &324304(c)is preempted by the federal acts
         and is void.




                                                 DAN      MORALES
                                                 Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

RENEAHIcKs
Special Assistant Attorney General

MADE-          B. JOHNSON
Chair, Opinion Committee

Prepared by Geoffrey Hermessey
Assistant Attorney General




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