Florida v. Long
| Citation | 108 S.Ct. 2354,487 U.S. 223,101 L.Ed.2d 206 |
| Decision Date | 22 June 1988 |
| Docket Number | No. 86-1685,86-1685 |
| Parties | FLORIDA, et al., Petitioners v. Hughlan LONG et al |
| Court | United States Supreme Court |
Los Angeles Dept. of Water and Power v. Manhart, 435 U.S. 702, 98 S.Ct. 1370, 55 L.Ed.2d 657 (1978), held that unequal pension plan contributions for male and female employees based on actuarial tables reflecting women's greater life spans violated the sex discrimination prohibitions of Title VII of the Civil Rights Act of 1964. Arizona Governing Committee for Tax Deferred Annuity and Deferred Compensation Plans v. Norris, 463 U.S. 1073, 103 S.Ct. 3492, 77 L.Ed.2d 1236 (1983), extended this nondiscrimination principle to unequal benefits payments. Florida's Retirement System (Florida System) for state and local government employees has always required equal contributions and equal "normal" benefits for similarly situated male and female employees. Until Norris, the Florida System also offered three retirement benefit options that were calculated in accordance with sex-based actuarial tables yielding lower monthly benefits for male retirees. Immediately after Norris, Florida adopted unisex actuarial tables equalizing benefits under all of the offered plans for similarly situated male and female employees retiring after Norris' effective date. Respondents, male employees who had retired before that date as optional plan participants, filed a class action in Federal District Court, alleging that the optional plans violated Title VII. The court entered summary judgment for respondents, awarding relief to class members who retired after Manhart's, and before Norris', effective date, by retroactively "topping up" monthly benefits to the current unisex levels for the period between Manhart and the date of the court's judgment. Class members were also awarded topped-up future benefits, commencing on the latter date. The Court of Appeals affirmed.
Held:
1. Norris, rather than Manhart, establishes the appropriate date for commencing liability for employer-operated pension plans that offered discriminatory payment options, and liability may not be imposed for pre-Norris conduct. Pp. 229-238.
(a) Contrary to the Court of Appeals' holding, Manhart did not place Florida on notice that optional pension plans offering sex-based benefits violated Title VII. Manhart carefully limited its holding to unequal contributions, as distinct from benefits payments, and recognized an open market exception allowing each employee to purchase with the contributions made on his or her behalf the largest benefit commercially available. In view of the substantial departure from existing practice that Manhart ordered, pension fund administrators could have reasonably concluded that the decision was confined to sex-based contributions, and did not prohibit plans from offering optional sex-based annuities similar to those offered by insurance companies on the open market, as long as the options included a sex-neutral benefit. Thus, Florida's continuance of the optional plans until Norris—which expressly prohibited unequal benefits and excluded from the open market exception plans which offered annuities duplicating those available from private companies—does not justify imposition of a retroactive award. Pp. 230-235.
(b) In the pension context, retroactive awards are not necessary to further Title VII's purposes and to ensure compliance with this Court's decisions, since Florida acted immediately after Norris to correct its discriminatory optional plans, and there is no evidence that employers in general have not complied with the requirements of Manhart and Norris. P. 235.
(c) The imposition of retroactive liability on the States, local governments, and other employers that offered sex-based pension plans to their employees would be inequitable, particularly since it would impose financial costs that would threaten the security of both the plans and their beneficiaries. The appropriateness of retroactive relief must be based upon broad principle, and not solely upon the particular circumstances of a case. Thus, the fact that the Florida System currently possesses a surplus and can afford the awards against it cannot control here, since basing an award on a particular pension fund's current financial status would amount to imposing a penalty for prudent management. Similarly, the fact that Florida's pension administrators might have speculated in internal memoranda and discussions that Manhart prohibited the continuation of sex-based benefits cannot authorize retroactive awards, since the meaning and scope of a decision do not rest on subjective interpretations by discrete, affected persons and their legal advisers. Pp. 235-238.
2. Both awards made by the District Court are impermissible. The first award, which requires prejudgment benefits adjustments, is retroactive without doubt and is therefore prohibited by this decision. The second award, which requires postjudgment adjustments, is also fundamentally retroactive even though it relates to future payments, since it increases benefits that were meant to be fixed on the basis of contribution levels and actuarial assumptions applicable when the retirement occurred and funding provisions were made, thereby undermining the plan's basic financial calculus and affecting its ability to meet its accrued obligations. It is not correct to consider benefits payments based on a retirement that has already occurred as a sort of continuing violation, since this would ignore the essential assumptions of an actuarially funded pension plan and would in every case render employers liable for all past conduct, regardless of whether the liability principle was first announced by Manhart, Norris, or this decision. Pp. 238-240.
805 F.2d 1542 (CA11 1986), reversed.
STEVENS, J., filed a dissenting opinion, post, p. ---.
Charles T. Collette, Tallahassee, Fla., for petitioners.
Woodrow M. Melvin, Jr., Miami, Fla., for respondents.
The questions presented for decision here are the date upon which pension funds covered by Title VII of the Civil Rights Act of 1964 were required to offer benefit structures that did not discriminate on the basis of sex and whether persons who retired before that date are entitled to adjusted benefits to eliminate any sex discrimination for all future benefit payments. We revisit our decisions in Los Angeles Dept. of Water and Power v. Manhart, 435 U.S. 702, 98 S.Ct. 1370, 55 L.Ed.2d 657 (1978), and Arizona Governing Committee for Tax Deferred Annuity and Deferred Compensation Plans v. Norris, 463 U.S. 1073, 103 S.Ct. 3492, 77 L.Ed.2d 1236 (1983).
The issues before us turn on whether Manhart's invalidation of discriminatory contributions necessarily apprised employers that plans which were nondiscriminatory as to contributions must in every case be nondiscriminatory as to benefits. We conclude that Manhart neither resolved the issue nor gave employers notice that benefits necessarily were embraced by the decision. The point was not resolved in a definitive way until our decision in Norris. We hold further that employees who retired before the effective date of Norris are not entitled to a readjusted benefits payment structure.
Since 1970, the State of Florida has operated the Florida Retirement System (Florida System) for state employees and employees of over 1,100 participating local governments. Fla.Stat. § 121.011 et seq. (1987). The Florida System is a defined benefit pension plan, which guarantees retirement benefits that may not be lowered once the employee retires and selects a pension option. The Florida System's normal retirement benefit is a single life plan with monthly payments for the employee's life, calculated as a percentage of the employee's average highest salary upon retirement. § 121.091(1). Upon retirement, an employee also may select a pension plan from one of three retirement options: (1) a joint and survivorship option providing monthly payments for the retiree's lifetime and, in the event of the retiree's death within 10 years after retirement, the same monthly payments to the beneficiary for the balance of the 10-year period; (2) a joint annuitant option ensuring monthly benefits for the lives of the retiree and his beneficiary; and (3) a joint annuitant option providing monthly payments for the lives of the retiree and his beneficiary, but reducing by one third, upon the death of either, the monthly benefits to the surviving individual. § 121.091(6).
The state legislature periodically reviews the Florida System's finances and operation, and determines the appropriate contribution rates for government employers as a percentage of the gross compensation of participating employees. Fla.Stat. §§ 121.031, 121.061, 121.071 (1987). The State Constitution requires Florida to collect contributions sufficient to fund the System on a "sound actuarial basis." See Fla. Const., Art. X, § 14. The Florida System was funded originally by employer and employee contributions; but, since 1975, the System has been funded entirely by contributions from state and local government employers. Contributions for male and female employees with the same length of service, age, and salary always have been equal. The normal, or single life, plan, moreover, has provided equal monthly benefits to similarly situated male and female employees since the inception of the Florida System. Only the payment structure under the three joint options is in dispute here.
Florida calculates an employee's normal retirement benefit as a product of two variables,...
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