The U.S. Supreme Court case Public Employees Retirement System of Ohio v. Betts, 1988, revolved around the legality of an employer's decision to deny certain benefits based on age under the Age Discrimination in Employment Act (ADEA). The plaintiff, John R. Betts, was a retired employee who claimed that his pension plan discriminated against him because it provided lower health insurance subsidies for retirees over 60 years old compared to younger retirees. However, the court ruled in favor of the defendant - Public Employees Retirement System of Ohio - stating that ADEA did not prohibit all forms of age discrimination but only those which were arbitrary or unreasonable and unrelated to age-based factors such as cost considerations or other legitimate business reasons. Therefore, if an employer could show its actions were justified by reasonable factors other than age (RFOA), they would be exempt from liability under ADEA.

The dissenting opinion in the case of Public Employees Retirement System of Ohio v. Betts argued that the majority's interpretation was inconsistent with Congress' intent when it enacted the Age Discrimination in Employment Act (ADEA). The dissenters believed that Congress intended to prohibit all arbitrary age discrimination, not just intentional discrimination. They pointed out that many employment practices may be neutral on their face but have a disparate impact on older workers, and these should also be covered by ADEA. Furthermore, they disagreed with the majority's view that employee benefit plans were exempt from ADEA scrutiny unless there was evidence of specific intent to discriminate based on age. Instead, they contended any differential treatment based solely on age within an employee benefit plan is inherently suspect and should trigger strict scrutiny under ADEA.