434 U.S. 192 (1977), 76-906, United Air Lines, Inc. v. McMann
|Docket Nº:||No. 76-906|
|Citation:||434 U.S. 192, 98 S.Ct. 444, 54 L.Ed.2d 402|
|Party Name:||United Air Lines, Inc. v. McMann|
|Case Date:||December 12, 1977|
|Court:||United States Supreme Court|
Argued October 4, 1977
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
The Age Discrimination in Employment Act of 1967, which applies to persons between the ages of 40 and 65, makes it unlawful for an employer to discharge any individual or otherwise discriminate against him with respect to his compensation, terms, conditions, or privileges of employment because of such individual's age. The Act specifies, however, in § 4(f)(2) that it shall not be unlawful for an employer to observe the terms of a bona fide seniority system or any bona fide employee benefit plan such as a retirement, pension, or insurance plan that is not a "subterfuge" to evade the Act's purposes. Petitioner inaugurated a retirement income plan in 1941, which respondent employee voluntarily joined in 1964 after he had signed an application form that showed the normal retirement age for participants in his category as 60 years. After respondent was retired upon reaching that age, he brought this suit under the Act, contending that his retirement was solely because of his age, and violated the Act. The District Court granted a motion for summary judgment filed by petitioner, which had contended that respondent was retired in compliance with a bona fide retirement plan that he had voluntarily joined. The Court of Appeals reversed. Though it had been conceded that petitioner's plan was bona fide "in the sense that it exists and pays benefits," the court ruled that a pre-age-65 retirement is a "subterfuge" within the meaning of § 4(f)(2) unless the employer can show that the "early retirement provision . . . has some economic or business purpose other than arbitrary age discrimination."
Held: Petitioner's retirement plan comes within the § 4(f)(2) exception, in the context of which "subterfuge" must be given its ordinary meaning as a scheme or stratagem to avoid the application of the Act. There is nothing to suggest that Congress intended to invalidate plans that were instituted in good faith before the Act's passage or that it intended to require employers to show a business or economic purpose to justify bona fide plans that antedated enactment of the statute. Pp. 195-203.
542 F.2d 217, reversed and remanded.
BURGER, C.J., delivered the opinion of the Court, in which BLACKMUN, POWELL, REHNQUIST, and STEVENS, JJ., joined. STEWART, J., post, p. 204,
and WHITE, J., post, p. 204, filed opinions concurring in the judgment. MARSHALL, J., filed a dissenting opinion, in which BRENNAN, J., joined, post, p. 208.
BURGER, J., lead opinion
MR. CHIEF JUSTICE BURGER, delivered the opinion of the Court.
The question presented in this case is whether, under the Age Discrimination in Employment Act of 1967, retirement of an employee over his objection and prior to reaching age 65 is permissible under the provisions of a bona fide retirement plan established by the employer in 1941 and joined by the employee in 1964. We granted certiorari to resolve a conflict between the holdings of the Fifth Circuit in Brennan v. Taft Broadcasting Co., 500 F.2d 212 (1974), and the Fourth Circuit now before us. See Zinger v. Blanchette, 549 F.2d 901 (CA3 1977), cert. pending, No. 76-1375.
The operative facts were stipulated by the parties in the District Court and are not controverted here. McMann joined United Air Lines, Inc., in 1944, and continued as an employee until his retirement at age 60 in [98 S.Ct. 446] 1973. Over the years, he held various positions with United, and, at retirement, held that of technical specialist-aircraft systems. At the time
McMann was first employed, United maintained a formal retirement income plan it had inaugurated in 1941, in which McMann was eligible to participate, but was not compelled to join.1 He voluntarily joined the plan in January, 1964. The application form McMann signed showed the normal retirement age for participants in his category as 60 years.
McMann reached his 60th birthday on January 23, 1973, and was retired on February 1, 1973, over his objection. He then filed a notice of intent to sue United for violation of the Act pursuant to 29 U.S.C. § 626(d). Although he received an opinion from the Department of Labor that United's plan was bona fide and did not appear to be a subterfuge to evade the purposes of the Act, he brought this suit.
McMann's suit in the District Court seeking injunctive relief, reinstatement, and backpay alleged his forced retirement was solely because of his age, and was unlawful under the Act. United's response was that McMann was retired in compliance with the provisions of a bona fide retirement plan which he had voluntarily joined. On facts as stipulated, the District Court granted United's motion for summary judgment.
In the Court of Appeals, it was conceded the plan was bona fide "in the sense that it exists and pays benefits."2 But McMann, supported by a brief amicus curiae filed in that court by the Secretary of Labor, contended the enforcement of the age 60 retirement provision, even under a bona fide plan instituted in good faith in 1941, was a subterfuge to evade the Act.3
The Court of Appeals agreed, holding that a pre-age-65 retirement falls within the meaning of "subterfuge" unless the employer can show that the "early retirement provision . . . ha[s] some economic or business purpose other than arbitrary age discrimination." 542 F.2d 217, 221 (1976). The Court of Appeals remanded the case to the District Court to allow United an opportunity to show an economic or business purpose and United sought review here.
Section 2(b) of the Age Discrimination in Employment Act of 1967, 81 Stat. 602, recites that its purpose is
to promote employment of older persons based on their ability rather than age; to prohibit arbitrary age discrimination in employment; to help employers and workers find ways of meeting problems arising from the impact of age on employment.
29 U.S.C. § 621(b). Section 4(a)(1) of the Act, 81 Stat. 603, makes it unlawful for an employer
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. . . .
29 U.S.C. § 623(a)(1). The Act covers individuals between ages 40 and 65, 29 U.S.C. § 631, but does not prohibit all forced retirements prior to age 65; some are permitted under § 4(f)(2), 81 Stat. 603, which provides:
It shall not be unlawful for an employer . . . or labor organization to observe the terms of a bona fide seniority system or any bona fide employee benefit plan such as a retirement, pension, or insurance plan, which is not a
subterfuge to evade the purposes of this [Act], except that no such employee benefit plan shall excuse the failure to hire any individual. . . .
29 U.S.C. § 623(f)(2). See infra at 198-202.
McMann argues the term "normal retirement age" is not defined in the plan other than in a provision that "A Participant's Normal Retirement Date is the first day of the month following his 60th birthday." From this he contends normal retirement age does not mean mandatory or compelled retirement at age 60, and United therefore did not retire him "to observe the terms" of the plan as required by § 4(f)(2). As to this claim, however, we accept the analysis of the plan by the Court of Appeals for the Fourth Circuit:
While the meaning of the word "normal" in this context is not free from doubt, counsel agreed in oral argument on the manner in which the plan is operated in practice. The employee has no discretion whether to continue beyond the "normal" retirement age. United legally may retain employees such as McMann past age 60, but has never done so: its policy has been to retire all employees at the "normal" age. Given these facts, we conclude that, for purposes of this decision, the plan should be regarded as one requiring retirement at age 60, rather than one permitting it at the option of the employer.
542 F.2d at 219. (Emphasis supplied.)
McMann had filed a grievance challenging his retirement since, as a former pilot, he held a position on the pilots' seniority roster. In that arbitration proceeding, he urged that "normal" means "average," and, so long as a participant is in good health and fit for duty, he should be retained past age 60. The ruling in the arbitration proceeding was that
"[n]ormal" means regular or standard, not average, not only as a matter of linguistics but also in the general context of retirement and pension plans and the settled practice at
It was also ruled that the involuntary retirement of McMann "was taken in accordance with an established practice uniformly applied to all members of the bargaining unit."
Though the District Court made no separate finding as to the meaning of "normal" in this context, it had before it the definition ascribed in the arbitration proceeding, and that award was incorporated by reference in the court's findings and conclusions. In light of the facts stipulated by the parties and found by the District Court, we also accept the Court of Appeals' view as to the meaning of "normal."4
In Brennan v. Taft Broadcasting Co., 500 F.2d at 215, the Fifth Circuit held that establishment of a bona fide retirement plan long before enactment of the Act, "eliminat[ed] any notion that it was adopted as a subterfuge for evasion."5 In
rejecting [98 S.Ct. 448] the Taft reasoning, the Fourth Circuit emphasized that it distinguished between the Act and the purposes of the Act. The distinction relied on is untenable because the Act is the vehicle by which its purposes are expressed and carried out; it is difficult to conceive of a...
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