Can Texas treat a disabled teacher who recovers after age 60 as disabled for life, blocking their return to work, when younger teachers can come back?

Plain-English summary

The Teacher Retirement System of Texas asked the Attorney General whether one of its governing statutes had been overtaken by federal age-discrimination law. The state provision, Government Code section 824.304(c), dealt with teachers who retire on disability. Normally, if a disabled member of the system gets better and returns to teaching, the disability annuity stops and the person goes back to being an active, contributing member who can keep building up service credit toward a regular retirement. But section 824.304(c) added a special rule pegged to age 60: if the disability retirement began at or continued past the member's 60th birthday, the law conclusively presumed the person was disabled for life. There was no rebutting it. The result was a sharp line. A member who recovered before turning 60 could come back, work, and earn more service credit. A member who recovered after turning 60 was treated as permanently disabled, could not undo that status, could not rejoin the system, and could not earn any more credit.

The Attorney General concluded this collided with the federal Age Discrimination in Employment Act. The ADEA makes it unlawful for an employer to discriminate against an individual because of age with respect to compensation, terms, conditions, or privileges of employment, and to classify employees in a way that adversely affects their status because of age. The law defines "employer" to include a state and its agencies, and its protection runs to individuals at least 40 and under 70. For a time there had been a gap: in Public Employees Retirement System of Ohio v. Betts, the Supreme Court held the ADEA reached hiring, firing, wages, and salary but not fringe benefits like pensions. Congress closed that gap in 1990 with the Older Workers Benefit Protection Act, passed expressly to overrule Betts and to state that the ADEA covers all employee benefits, including those under a bona fide benefit plan, and that benefit plans cannot force involuntary retirement because of age.

With that federal law in place, the opinion found the state provision discriminatory. Denying a person over 60 the chance to rejoin the retirement system, while giving that same chance to a person under 60, treats people between 60 and 70 worse purely because of their age, with respect to the terms and privileges of their employment, and adversely affects their employment status because of age. The opinion cited a Ninth Circuit decision striking down pension provisions that denied service and salary credit to older employees. Because a state law that conflicts with federal law is preempted under the Supremacy Clause of the United States Constitution, the Attorney General concluded that Government Code section 824.304(c) is preempted by the ADEA as amended and is void. The opinion added a practical note: although the provision is already void, the cleanest fix is for the Texas Legislature to pass a bill expressly repealing it, since the Texas Constitution reserves the power to suspend or repeal laws to the Legislature.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The federal ADEA's upper age limit and provisions have changed since 1992, and the Government Code provisions governing the Teacher Retirement System have been amended, so confirm current law before relying on anything described here.

Background and statutory framework

Title 8, subtitle C of the Government Code created the Teachers Retirement System of Texas (TRS) to establish a system of benefits for retired teachers and to provide for administration of the system. See Gov't Code §§ 824.001-.701. The retirement benefits are based on years of teaching service. See Gov't Code §§ 824.202-.204. A disabled member is entitled to a disability retirement annuity. Id. § 824.302. If a disability retiree is restored to active service, the annuity is discontinued and the retiree again becomes a member of the system. Id. § 824.307. However, Government Code section 824.304(c) provides that 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 disability is conclusively presumed continuous for the rest of the person's life. Thus, a disabled member who cures a disability before age 60 may return to active service and earn additional service credit, while a member who cures a disability after reaching age 60 is conclusively presumed disabled for life, cannot revoke the disability, and cannot earn additional service credit.

In 1967 Congress passed the Age Discrimination 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 U.S.C. § 621(b). The ADEA makes it unlawful for an employer to fail or refuse to hire or to discharge any individual, or otherwise discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment because of age, or to limit, segregate, or classify employees in any way that would deprive an individual of employment opportunities or adversely affect status as an employee because of age. Id. § 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. § 630(b)(2). The act's prohibition applies to individuals at least 40 and less than 70 years of age. Id. § 631(a).

Despite the ADEA's broad prohibition, the Supreme Court in Public Employees Retirement System of Ohio v. Betts, 492 U.S. 158 (1989), held that the act prohibited age discrimination in hiring, firing, wages, and salary but did not prohibit discrimination in the furnishing of fringe benefits such as retirement or pension packages. Congress then passed the Older Workers Benefit Protection Act of 1990 with the express intent of overturning Betts. Pub. L. No. 101-433, § 101, 104 Stat. 978 (1990). The 1990 amendments added a new subsection providing that the term "compensation, terms, conditions, or privileges of employment" encompasses all employee benefits, including benefits provided pursuant to a bona fide employee benefit plan, Pub. L. No. 101-433, § 102, now codified at 29 U.S.C. § 630(l), and provided that no employee benefit plan or voluntary early retirement incentive plan shall excuse the failure to hire any individual, and no such plan shall require or permit the involuntary retirement of any individual because of age, Pub. L. No. 101-433, § 103, now codified at 29 U.S.C. § 623(f)(2).

The Attorney General concluded that denying an individual older than 60 an opportunity to rejoin the retirement system, while granting that opportunity to one younger than 60, constitutes discrimination against individuals between 60 and 70 years old with respect to compensation, terms, conditions, or privileges of employment, in violation of the ADEA, section 623(a)(1). See American Ass'n of Retired Persons v. Farmers Group, 943 F.2d 996, 1001-04 (9th Cir. 1991) (pension plan provisions denying accruals of service and salary credits to employees over 65 violated the ADEA, 29 U.S.C. § 623(a)(1)). The opinion also concluded that the disparity adversely affects the status of such employees solely because of age, in violation of section 623(a)(2).

Under the Supremacy Clause of the United States Constitution, article VI, clause 2, state law is preempted where it conflicts with federal law. English v. General Electric Co., 496 U.S. 72, 110 S. Ct. 2270, 2275 (1990) (preemption exists where it is impossible to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment of the full purposes and objectives of Congress). Because Government Code section 824.304(c) conflicts with the federal ADEA as amended, it is preempted and void. See Maryland v. Louisiana, 451 U.S. 725, 748 (1981) (a state statute is void to the extent it conflicts with a federal statute); see also Attorney General Opinion DM-49 (1991) at 7. The opinion added that the proper procedure for repeal is for the Texas Legislature to pass a bill expressly repealing the provision, noting that the Texas Constitution reserves the power to suspend laws to the Legislature in article I, section 28 ("No power of suspending laws in this state shall be exercised except by the Legislature").

Common questions

What did the Texas provision do?
The opinion explained that Government Code section 824.304(c) conclusively presumed a Teacher Retirement System disability retiree was disabled for life if the disability retirement began at or continued past age 60. That stopped older recovered members from returning to work and earning more service credit, while younger ones could.

Why was that a problem under federal law?
Because the federal Age Discrimination in Employment Act bars treating workers between 40 and 70 worse because of their age in the terms and privileges of employment, including benefits. The opinion concluded the over-60 cutoff did exactly that.

Didn't the Supreme Court once say the ADEA didn't cover pensions?
It did, in the Betts decision, but the opinion noted Congress passed the Older Workers Benefit Protection Act in 1990 specifically to overrule Betts and confirm the ADEA covers all employee benefits.

Is the Texas provision still on the books?
The opinion concluded it was preempted and void, but recommended the Legislature formally repeal it, since under the Texas Constitution only the Legislature can suspend or repeal a statute.

Citations

• Government Code §§ 824.001-.701, 824.202-.204, 824.302, 824.304(b), 824.304(c), 824.307
• 29 U.S.C. §§ 621-34, 621(b), 623(a), 623(a)(1), 623(f)(2), 630(b)(2), 630(l), 631(a)
• Pub. L. No. 90-202, 81 Stat. 602 (1967); Pub. L. No. 101-433, §§ 101, 102, 103, 104 Stat. 978 (1990)
• U.S. Const. art. VI, cl. 2; Tex. Const. art. I, § 28
• Public Employees Retirement System of Ohio v. Betts, 492 U.S. 158 (1989); American Ass'n of Retired Persons v. Farmers Group, 943 F.2d 996 (9th Cir. 1991); English v. General Electric Co., 496 U.S. 72 (1990); Maryland v. Louisiana, 451 U.S. 725 (1981)
• Attorney General Opinion DM-49 (1991)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0154
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1992/dm0154.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; an illegible constitutional citation in a footnote is marked rather than guessed. The linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

August 13, 1992

Mr. Wayne Blevins
Executive Secretary
Teacher Retirement System of Texas
1000 Red River Street
Austin, Texas 78701-2698

Opinion No. DM-154

Re: Whether Government Code section 824.304(c) conflicts with the federal Age 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 Government 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. §§ 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 (TRS) to establish a system of benefits for retired teachers and to provide for administration and management of such a system. See Gov't Code §§ 824.001-.701. The retirement benefits offered by the system are based on years of teaching service. See Gov't Code §§ 824.202-.204. If a member of the system becomes disabled, the member is entitled to a disability retirement annuity. Id. § 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. § 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 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 conclusively presumed disabled for life, cannot revoke his disability, and cannot earn additional years of service credit toward retirement.

In 1967 Congress passed the Age Discrimination 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 U.S.C. § 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 discriminate 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. § 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. § 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. § 631(a).

Despite the ADEA's broad prohibition against age discrimination, the Supreme Court in Public Employees Retirement System of Ohio v. Betts, 492 U.S. 158 (1989) held that the act prohibited age discrimination in hiring, firing, wages, and salary, but did not prohibit discrimination in the furnishing of fringe benefits such as retirement or pension packages. Congress then passed the Older Workers Benefit Protection Act of 1990 with the express intent of overturning Betts. Pub. L. No. 101-433, § 101, 104 Stat. 978 (1990); see also S. Rep. No. 101-263, 101st Cong., 2d Sess. 5, 14-19 (1990), reprinted in 1990 U.S.C.C.A.N. 1510, 1519-1524. The Senate Subcommittee on Labor and the Senate Special Committee on Aging endorsed the amendments and the overruling of Betts as follows:

      Through this legislation, Congress intends to make unmistakably clear that the ADEA's purpose of eliminating arbitrary age discrimination 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 from 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, reprinted in 1990 U.S.C.C.A.N. at 1521-22. The 1990 amendments to the ADEA added the following new subsection to make it clear that Congress intended to prohibit discrimination 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, § 102, now codified at 29 U.S.C. § 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 shall require or permit the involuntary retirement of any individual specified by [this act], because of the age of such individual." Pub. L. No. 101-433, § 103, now codified at 29 U.S.C. § 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 § 824.307. However, pursuant to Government Code section 824.304(c), a disabled TRS member who cures his disability after reaching the age of 60 is deemed disabled for life, cannot revoke his disability, cannot rejoin the TRS system, and cannot 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 623(a)(1). See American Ass'n of Retired Persons v. Farmers Group, 943 F.2d 996, 1001-04 (9th Cir. 1991) (pension plan provisions denying accruals of service and salary credits to employees over 65 years old violated ADEA, 29 U.S.C. § 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 623(a)(2).

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. General Electric Co., 496 U.S. 72, 110 S. Ct. 2270, 2275 (1990). "[T]he [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 824.304(c) conflicts with the federal ADEA as amended; therefore, section 824.304(c) is pre-empted by the federal act and is void. See Maryland v. Louisiana, 451 U.S. 725, 748 (1981) ("[A] state statute is void . . . to [the] extent that it conflicts with [a] federal statute."); see also Attorney General Opinion DM-49 (1991) at 7.[1]

                               SUMMARY

         Texas Government Code section 824.304(c) conflicts with the federal Age Discrimination 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 824.304(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

RENEA HICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Geoffrey Hennessey
Assistant Attorney General

[Footnote 1: We believe that the proper procedure for the repeal of section 824.304(c) is for the Texas Legislature to pass a bill unconditionally and expressly repealing the former law. The Texas Constitution reserves the power to repeal laws to the Legislature in article I, section 28, which provides: "No power of suspending laws in this state shall be exercised except by the Legislature." If the Texas Legislature wishes to remove Government Code section 824.304(c) from the books, the legislature should pass a new bill expressly doing so. Tex. Const. [article and section illegible in scan]. In the meantime and for the reasons previously discussed, Government Code section 824.304(c) is pre-empted by federal law and is void.]