U.S. Railroad Retirement Bd. v. Fritz

Facts

Prior to 1974, federal law permitted persons who had worked in both railroad jobs and non-railroad jobs to receive dual benefits, under both Social Security and the railroad retirement system. The windfall benefits threatened the railroad retirement system with bankruptcy. In order to avoid bankruptcy, Congress passed a law that ended the dual benefits, but included a grandfather clause that preserved dual benefits for some classes of employees. Specifically, those employees who had already retired and were receiving dual benefits would continue to receive them. Workers who had not yet retired, but who qualified for dual benefits could only receive them if: 1) they performed some railroad work in 1974; or 2) they had a current connection with the railroad industry; or 3) they had completed twenty-five years of railroad service. Appellee, Mr. Fritz, sued, claiming that depriving one set of unretired workers of dual benefits while continuing to give dual benefits to those who sa tisfied certain criteria violated equal protection. The District Court agreed with Appellee that a differentiation based solely on whether an employee was “active” in a railroad business in 1974 was not “rationally related” to the congressional purposes of insuring the solvency of the railroad retirement system and protecting vested benefits.