435 U.S. 702 (1978), 76-1810, City of Los Angeles Department of Water and Power v. Manhart

Docket NºNo. 76-1810
Citation435 U.S. 702, 98 S.Ct. 1370, 55 L.Ed.2d 657
Party NameCity of Los Angeles Department of Water and Power v. Manhart
Case DateApril 25, 1978
CourtUnited States Supreme Court

Page 702

435 U.S. 702 (1978)

98 S.Ct. 1370, 55 L.Ed.2d 657

City of Los Angeles Department of Water and Power

v.

Manhart

No. 76-1810

United States Supreme Court

April 25, 1978

Argued January 18, 1978

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

This suit was filed as a class action on behalf of present or former female employees of petitioner Los Angeles Department of Water and Power, alleging that the Department's requirement that female employees make larger contributions to its pension fund than male employees violated § 703(a)(1) of Title VII of the Civil Rights Act of 1964, which, inter alia, makes it unlawful for an employer to discriminate against any individual because of such individual's sex. The Department's pension plan was based on mortality tables and its own experience showing that female employees had greater longevity than male employees, and that the cost of a pension for the average female retiree was greater than for the average male retiree because more monthly payments had to be made to the female. The District Court held that the contribution differential violated § 703(a)(1), and ordered a refund of all excess contributions antedating an amendment to the Department's pension plan, made while this suit was pending, that eliminated sexual distinctions in the plan's contributions and benefits. The Court of Appeals affirmed.

Held:

1. The challenged differential in the Department's former pension plan violated § 703(a)(1). Pp. 707-718.

(a) The differential was discriminatory in its "treatment of a person in a manner which, but for that person's sex, would be different." The statute, which focuses on fairness to individuals, rather than fairness to classes, precludes treating individuals as simply components of a group such as the sexual class here. Even though it is true that women as a class outlive men, that generalization cannot justify disqualifying an individual to whom it does not apply. There is no reason, moreover, to believe that Congress intended a special definition of discrimination in the context of employee group insurance, since in that context, it is common and not considered unfair to treat different classes of risks as though they were the same. Pp. 707-711.

(b) [98 S.Ct. 1373] Though the Department contends that the different contributions exacted from men and women were based on the factor of longevity, rather than sex, and thus constituted a statutory exemption authorized for a "differential based on any other factor other than sex," there is no

Page 703

evidence that any factor other than the employee's sex accounted for the differential here. Pp. 711-713.

(c) This case is readily distinguishable from General Electric Co. v. Gilbert, 429 U.S. 125, for here the pension plan discriminates on the basis of sex, whereas the plan in Gilbert discriminated on the basis of a special physical disability. Pp. 714-717.

2. It was inappropriate for the District Court to allow a retroactive monetary recovery in this case. Pp. 718-723.

(a) Though a presumption favors retroactive relief where a Title VII violation has been committed, Albemarle Paper Co. v. Moody, 422 U.S. 405, the appropriateness of such relief in an individual case must be assessed. Here the District Court gave insufficient attention to the equitable nature of Title VII remedies. This was the first litigation challenging pension fund contribution differences based on valid actuarial tables, which the fund administrators may well have assumed justified the differential, and the resulting prohibition against sex-differentiated employee contributions constituted a marked departure from past practice. Pp. 719-721.

(b) In view of the grave consequences that drastic changes in legal rules can have on pension funds, such rules should not be given retroactive effect unless plainly commanded by legislative action. Pp. 721-723.

553 F.2d 581, vacated and remanded.

STEVENS, J., delivered the opinion of the Court, in which STEWART, WHITE, and POWELL, JJ., joined, in all but Part IV of which MARSHALL, J., joined, and in Part IV of which BURGER, C.J., and BLACKMUN and REHNQUIST, JJ., joined. BLACKMUN, J., filed an opinion concurring in part and concurring in the judgment, post, p. 723. BURGER, C.J., filed an opinion concurring in part and dissenting in part, in which REHNQUIST, J., joined, post, p. 725. MARSHALL, J., filed an opinion concurring in part and dissenting in part., post, p. 728. BRENNAN, J., took no part in the consideration or decision of the case.

Page 704

STEVENS, J., lead opinion

MR. JUSTICE STEVENS delivered the opinion of the Court.

As a class, women live longer than men. For this reason, the Los Angeles Department of Water and Power required its female employee to make larger contributions to its pension fund than its male employee. We granted certiorari to decide whether this practice discriminated against individual female employees because of their sex in violation of § 703(a)(1) of the Civil Rights Act of 1964, as amended.1

For many years, the Department2 has administered retirement,

Page 705

disability, and death benefit programs for its employees. Upon retirement, each employee is eligible for a monthly retirement benefit computed as a fraction of his or her salary multiplied by years of service.3 The monthly benefits for men and women of the same age, seniority, and salary are equal. Benefits are funded entirely by contributions from the employees and the Department, augmented by the income earned on those contributions. No private insurance company is involved [98 S.Ct. 1374] in the administration or payment of benefits.

Based on a study of mortality tables and its own experience, the Department determined that its 2,00 female employees, on the average, will live a few years longer than its 10,000 male employees. The cost of a pension for the average retired female is greater than for the average male retiree because more monthly payments must be made to the average woman. The Department therefore required female employees to make monthly contributions to the fund which were 14.84% higher than the contributions required of comparable male employees.4 Because employee contributions were withheld from paychecks, a female employee took home less pay than a male employee earning the same salary.5

Since the effective date of the Equal Employment Opportunity

Page 706

Act of 1972,6 the Department has been an employer within the meaning of Title VII of the Civil Rights Act of 1964. See 42 U.S.C. § 2000e (1970 ed., Supp. V). In 1973, respondents7 brought this suit in the United States District Court for the Central District of California on behalf of a class of women employed or formerly employed by the Department. They prayed for an injunction and restitution of excess contributions.

While this action was pending, the California Legislature enacted a law prohibiting certain municipal agencies from requiring female employees to make higher pension fund contributions than males.8 The Department therefore amended its plan, effective January 1, 1975. The current plan draws no distinction, either in contributions or in benefits, on the basis of sex. On a motion for summary judgment, the District Court held that the contribution differential violated § 703(a)(1), and ordered a refund of all excess contributions made before the amendment of the plan.9 The United States Court of Appeals for the Ninth Circuit affirmed.10

The Department and various amici curiae contend that: (1) the differential in take-home pay between men and women was not discrimination within the meaning of § 703(a)(1), because it was offset by a difference in the value of the pension benefits provided to the two classes of employees; (2) the differential was based on a factor "other than sex"

Page 707

within the meaning of the Equal Pay Act of 1963, and was therefore protected by the so-called Bennett Amendment;11 (3) the rationale of General Electric Co. v. Gilbert, 429 U.S. 125, requires reversal; and (4) in any event, the retroactive monetary recovery is unjustified. We consider these contentions in turn.

I

There are both real and fictional differences between women and men. It is true that the average man is taller than the average woman; it is not true that the average woman driver is more accident-prone than the average man.12 Before the Civil Rights Act of 1964 was enacted, an employer could fashion his personnel policies on the basis of assumptions about the differences between men and women, whether or not the assumptions were valid.

It is now well recognized that employment decisions cannot be predicated on mere "stereotyped" impressions about the characteristics of males or females.13 Myths and purely habitual assumptions about a woman's inability to perform certain kinds of work are no longer acceptable reasons for refusing to employ qualified individuals, or for paying them less. This case does not, however, involve a fictional difference between men and women. It involves a generalization that the parties accept as unquestionably true: women, as a class, do live longer than men. The Department treated its women employees differently from its men employees because the two

Page 708

classes are in fact different. It is equally true, however, that all individuals in the respective classes do not share the characteristic that differentiates the average class representatives. Many women do not live as long as the average man, and many men outlive the average woman. The question, therefore, is whether the existence or nonexistence of "discrimination" is to be determined by comparison of class characteristics or individual characteristics. A "stereotyped" answer to that question may not be the same as the answer that the language and purpose of the statute command.

The statute makes it unlawful

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