PITTSBURGH (AP) _ Payments of $35 million, the largest age discrimination settlement ever reached by the Equal Employment Opportunity Commission, may be out of reach for 4,000 Westinghouse Electric Corp. retirees due to a U.S. Supreme Court ruling, a legal specialist said.

The court on Monday overturned a lower ruling that the Pittsburgh-based electronics and electric power giant had discriminated against the retirees when it offered them a choice between severence pay or early pensions. The employees could not have both under the company program.

Backed by a U.S. 3rd Circuit Court of Appeals ruling favoring the retirees, the EEOC negotiated a settlement with Westinghouse a year ago. The 4,000 employees would have shared $35 million, or an average of $8,700 per person, to settle their claims.

EEOC spokeswoman Deborah Graham in Washington said the Westinghouse case was the commission's largest age discrimination settlement.

The EEOC, however, decided instead to seek a court ruling, she said.

''It means they blew it. They got greedy, in my opinion,'' said Dick Lauver, a Pittsburgh pension lawyer who was not involved in the case. ''They chose to forgo a very favorable settlement to get a favorable court decision.

''The case is far from over,'' said Donald Livingston, special assistant to the EEOC general counsel in Washington. ''There are still a number of areas for the court to decide.''

''If the EEOC was a law firm, they could probably be sued for negligence,'' Lauver said. ''Those Westinghouse employees are probably very upset.''

Westinghouse said it was delighted with Monday's Supreme Court ruling. The company will ask the 3rd Circuit Court to reconsider its case in light of the new ruling and a Supreme Court ruling in June that puts more of a burden on the employee to prove discrimination.