Murphy School District No. 21 in Phoenix, AZ used an early retirement incentive plan which granted greater economic benefits to employees based upon their younger age, the EEOC alleged in an age discrimination lawsuit.

The EEOC's suit had alleged that the school district adopted an early retirement incentive plan in the 1980s that clearly granted more favorable benefits to younger employees based on their age. The Older Workers Benefit Protection Act, which became effective in 1992, amended the Age Discrimination in Employment Act ("ADEA"), to outlaw early retirement incentive plans which discriminated on the basis of age. The school district's early retirement incentive plan then became facially discriminatory. 

Such alleged conduct violates the ADEA, which prohibits employers, including state and local governments with 20 or more employees, from discriminating against individuals because of their age.  

The settlement reached by the agency and school district and entered by the court as a consent decree, will substantially compensate over two dozen retired employees. It also requires the school district to change its policies about age discrimination and to provide training on the ADEA to its employees and administrators.

The EEOC Attorney said, "Early retirement incentive plans which are facially discriminatory need to be changed. Discrimination on the basis of age is simply illegal. People in their 60's should not be penalized merely because they want to continue working. A retirement plan which states, for example, that employees 52 years old will receive a greater economic benefit than an employee 61 years old for retiring early is discriminatory on its face."