McMann v. United Air Lines, Inc.
| Citation | 542 F.2d 217 |
| Decision Date | 01 October 1976 |
| Docket Number | No. 75-2206,75-2206 |
| Parties | 13 Fair Empl.Prac.Cas. 785, 12 Empl. Prac. Dec. P 11,209 Harris S. McMANN, Appellant, v. UNITED AIR LINES, INC., Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (4th Circuit) |
Francis G. McBride, McLean, Va., for appellant.
Carin Ann Clauss, Associate Sol., U. S. Dept. of Labor, Washington, D.C. (William J. Kilberg, Sol. of Labor, Jacob I. Karro, Atty., U. S. Dept. of Labor, Washington, D.C., on brief), as amicus curiae.
Joseph A. Rafferty, Jr., Washington, D.C. (Earl G. Dolan, Chicago, Ill., on brief), for appellee.
Before HAYNSWORTH, Chief Judge, and WINTER and CRAVEN, Circuit Judges.
This appeal presents a narrow issue: Does the Age Discrimination in Employment Act, 29 U.S.C. §§ 621, et seq., proscribe the retirement of an employee at age 60 when the retirement is brought about solely because of his membership in an employees' retirement plan which contains a provision making retirement mandatory at that age and when the effective date of the retirement plan preceded the effective date of the Act? The answer to the question turns on whether a preexisting pension plan which requires retirement prior to age 65 falls within the exception contained in 29 U.S.C. § 623(f)(2), "(i)t shall not be unlawful for an employer . . . to observe . . . any bona fide employees benefit plan . . . which is not a subterfuge to evade the purposes (of the Act)." The district court thought the exception applicable, relying principally on Brennan v. Taft Broadcasting Co., 500 F.2d 212 (5 Cir. 1974). Despite Brennan and other authorities, we conclude otherwise. We reverse the summary judgment awarded the employer and remand the case for further proceedings.
The relevant facts are largely stipulated. McMann was hired by United Airlines (United) in 1944, and served in various capacities, most recently as a "Technical-Specialist Aircraft Systems," until his retirement on February 1, 1973. At the time McMann was hired, United had in effect an employee retirement plan, participation in which was voluntary at the option of the employee. 1 Initially, McMann decided not to join the plan. However, in 1964, he elected to participate. The application card he signed, and subsequent documents he received, showed that the "normal retirement age" for employees in his job category was 60.
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. 2
McMann was retired at age 60, in compliance with the plan. It is conceded that the plan is "bona fide" in the sense that it exists and pays benefits. United presented no evidence, however, to show that the provision of its plan requiring retirement at age 60 had any purpose other than arbitrary age discrimination. It sought and obtained summary judgment solely on the theory that since its plan was indisputably adopted prior to the effective date of the 1967 Act (June 12, 1968), the mandatory retirement provision contained therein was not proscribed. 3
The Age Discrimination in Employment Act generally prohibits an employer from discharging any individual between the ages of 40 and 65 because of age. 29 U.S.C. §§ 623(a)(1), 631. However, as previously stated,29 U.S.C. § 623(f)(2) provides an exemption from this broad rule. 4 In pertinent part, that section provides that (i)t 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, which is not a subterfuge to evade the purposes of this chapter, except that no such employee benefit plan shall excuse the failure to hire any individual. . . .
The only reported appellate decision to construe this section is Brennan v. Taft Broadcasting Co., 500 F.2d 212 (5 Cir. 1974), decided over a sharp dissent by Judge Tuttle. 5 The Brennan majority rested its holding on a reading of the "unambiguous language of the statute," 500 F.2d at 217, and thus disregarded the legislative history and policy considerations which it conceded might support a different result. We believe the language of the statute is clear, but that the Brennan court's interpretation of it is erroneous.
Brennan 's only discussion of the "subterfuge" clause in the statute is as follows:
Taft's "Plan" was effectuated far in advance of the enactment of the law, eliminating any notion that it was adopted as a subterfuge for evasion. 500 F.2d at 215.
We find this statement unconvincing because what is forbidden is not a subterfuge to evade the Act, but a subterfuge to evade the purposes of the Act. These purposes are clearly spelled out in 29 U.S.C. § 621(b), and speak to concerns older than the Act itself:
It is . . . the purpose of this chapter 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.
Thus, in order to qualify for the exemption, a plan must not be a subterfuge to evade the Act's purpose of prohibiting arbitrary age discrimination. Stated otherwise, there must be some reason other than age for a plan, or a provision of a plan, which discriminates between employees of different ages. At this stage of the proceedings, United has offered no non-arbitrary justification for the age 60 retirement provision in its plan.
Any other reading of the "subterfuge" clause would produce the absurd result that an employer could discharge an employee pursuant to a retirement plan for no reason other than age, but then could not refuse to rehire the presumptively otherwise-qualified individual, for 29 U.S.C. § 623(f)(2) explicitly provides that "no such employee benefit plan shall excuse the failure to hire any individual. . . . " "(C)onceptually there is no difference between a mandatory retirement age of sixty-two and a refusal to hire anyone who is sixty-two years old." Hodgson, 329 F.Supp. at 229.
The result we reach is fully consistent with the legislative history. While it is often said that resort to legislative history is inappropriate where the statute is clear on its face,
when aid to construction of the meaning of words, as used in the statute, is available, there certainly can be no 'rule of law' which forbids its use, however clear the words may appear on 'superficial examination.' United States v. American Trucking Assns., 310 U.S. 534, 543-44, 60 S.Ct. 1059, 84 L.Ed. 1345 (1940) (footnotes omitted), quoted with approval in Train v. Colorado Public Interest Research Group, Inc., --- U.S. ----, ----, 96 S.Ct. 1938, 48 L.Ed.2d 434 (1976).
The joint House-Senate report on the section of the age discrimination bill that was to become 29 U.S.C. § 623(f)(2) states:
It is important to note that exception (3) applies to new and existing employee benefit plans, and to both the establishment and maintenance of such plans. This exception serves to emphasize the primary purpose of the bill hiring of older workers by permitting employment without necessarily including such workers in employee benefit plans. H.R.Rep.No.805, 90th Cong., 1st Sess., 2 U.S.Code Cong. & Admin.News, pp. 2213, 2217.
Thus, Congress in drafting the exemption was concerned that requiring equal participation in employee benefit plans by newly-hired older workers could discourage the employment of such workers, since their age would not permit them to accumulate the years of service necessary to make participation in the plans economically feasible. The fact that the exemption contains the proviso "that no such employee benefit plan shall excuse the failure to hire any individual" (emphasis added) confirms that Congress was addressing itself to the problem of the worker hired late in his career, and did not intend to validate plans which discriminate on the basis of age against employees such as McMann who have "earned" their benefits through many years of plan membership.
Although we conclude from the legislative history that Congress did not intend retirement plan provisions ever to excuse the failure to hire or the discharge of any individual, but only to permit exclusion of some workers from the plan on the basis of age where exclusion is justified by economic considerations, we recognize that the statute as drafted does permit an employer to discharge employees "to observe the terms of" a plan. However, as we have already observed, in order to escape condemnation as a "subterfuge," an early retirement provision must have some economic or business purpose other than arbitrary age discrimination.
At oral argument, United's counsel conceded that if its plan, with its involuntary early retirement provision, were adopted now, it would probably violate the Act. Thus, its position is that the plan is immunized because it predates the Act. United rests on the Brennan court's conclusion that any action required by a plan predating the Act is valid, since such a plan could never be a subterfuge. While we have already pointed out the fallacy in this reasoning, it is also refuted by the legislative history. The report states that the exemption "applies to new and existing employee benefit plans, and to both the establishment and maintenance of such plans." It is difficult to reconcile this language with a construction of the statute which would treat new and existing...
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