Petition — City of Los Angeles Department of Water v. Manhart
Supreme Court brief1978
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IN THE
Supreme Court of the United 5
October Term, 1976
a ee ae 76-1810
CITY OF LOS ANGELES, DEPARTMENT OF WATER AND
POWER, a body corporate and politic; MEMBERS OF THE
BOARD OF WATER AND POWER COMMISSIONERS OF
THE DEPARTMENT OF WATER AND POWER, CITY OF
LOS ANGELES; MEMBERS OF THE BOARD OF ADMIN-
ISTRATION OF THE DEPARTMENT OF WATER AND
POWER EMPLOYEES’ RETIREMENT, DISABILITY AND
DEATH BENEFIT INSURANCE PLAN; HENRY G. BOD-
KIN, JR.; KATHERINE B. DUNLAP; BURTON J. GIND-
LER; MICHAEL GLAZER. HERBERT C. WARD; LOUIS
J. WEIDNER, JR.; RALPH E. POWELL; LEO W. SUD-
MEIER, JR.; WILLIAM D. SACHAU; and ROBERT V.
Petitioners,
vs.
MARIE MANHART, CAROLYN MAYSHACK, MARGERIE
STOOP, ALICE F. MULLER and ETHEL L. LEHMAN, in-
dividually and on behalf of all other persons similarly situated;
COMMITTEE TO PROTECT WOMEN’S RETIREMENT
BENEFITS; and INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS, LOCAL UNION NO. 18,
Respondents.
Petition for Writ of Certiorari to the United States Court
of Appeals for the Ninth Circuit.
BURT PINES, City Attorney,
EDWARD C. FARRELL, Chief Assistant City
Attorney for Water and Power,
J. DAVID HANSON, Deputy City Attorney,
DAVID J. OLIPHANT, Deputy City Aitorney,
By DAVID J. OLIPHANT, Deputy City Attorney,
Me North pm Fog 2 obese, Box 111,
pag cine = ob Defendants-A ppellees.
Parker & Son, Inc., Law Printers, Los Angeles. Phone 724-6622
SUBJECT INDEX
Page
Citations to Opinions Below .................-.....---0--00++- 2
SII: = sicllacbidcindlsiencltecinsiohaciiestiitaiaeplitcnnihitindesiteiilaga 3
NE BN © ciasncstiiatapsiiniinniinsintaciasdlaclabecteisaiidtii 3
Statutes and Rules Involved ......................2...c---00000+0 4
SE Sete I III saeliticenintecicieshsescecsicpsacnicaesiobtpstihaiandlon 4
Reasons for Granting the Writ -........................--....- 9
I. The Court of Appeals Decided This Federal
Question in Direct Conflict With the Su-
preme Court’s Decision in General Electric
ae i EE deccinciectinterinshasitnigeniniiceeieniienne 9
A. The Will of Congress on Pay Differ-
IRIEED < sutnbcterenitisenicnaictieanutaeniianndtnchiutitebiinadten 10
B. Will of Congress on Administrative In-
ND | decisneciiclaivsstplictticieciaginichanipalesinatscen 17
II. The Decision of the Court of Appeals Pre-
sents an Important Federal Question Which
Has Nationwide Impact on the Pension, An-
nuity and Insurance Industry, as Well as on
Se I TINE who cchisincinischesnhhetlalscttreintlacintsctadhene 25
Ill. An Award of Back Contributions From a
Local Government Entity and the Permanent
Injunction Is in Excess of the Court’s Juris-
diction as Limited by Title VII and by Ar-
ticle III and the 10th, 11th and 14th Amend-
ments of the United States Constitution ........ 28
EES soe ee Tee ae a eT 35
ii.
INDEX TO APPENDICES
Page
Appendix A. Fair Labor Standards—29 U.S.C.
iy Y diehennbbdiiaalnadiphigiadibansinisintpeainihiatladaaasidlaaiinihiae App. A-1
42 U.S.C. § 2000e-2. Unlawful Employment
III -watnishietliinisishiaiiestinisiectieesapdibetenenibatasibaicindsdibiaiie A-2
ie Ts ND ctiietescnerlssiecitnseaeenntinasionn A-4
Appendix B. Memorandum and Order Granting
Plaintiffs’ Motion for Preliminary Injunction ...... B-1
TIT scsi cscrcses cients ci hdeleidetaialspehbidigeiteshutheibiate B-9
SE AE TT aE TTI B-11
Appendix C. Opinion of the Court of Appeals for
Se SE TIE shiteccsicseserienibmchapiehcetiidnamsaniaaionctiamnial C-1
Appendix D. Opinion of the Court of Appeals
SUE, SERINE ~ sicrusiceisissconstntpssistinamnmecelentiednecntih D-1
Kilkenny, Circuit Judge Dissenting .................... D-4
Letter to West Publishing Company for Changes
in Opinion Dated May 3, 1977 .................... D-10
IONS BOUND GO MEET Ccikespsisptiniaktnsdtinienienesibaitensaiitntote’ D-12
Appendix E. Legislative and Administrative His-
Se SI snichandtinsnssnsialncepiisisirniicliiesaeiiininianinies E-1
I.
ee IE. sitenniicaenseientntinincnttaianttiinns E-1
II.
Title VII of Civil Rights Act ..........................202- E-6
Ill.
Administrative Authority and Interpretations .. E-11
oe Page
1972 Congressional Action ...................-...-----+- E-16
V.
Legislative Intent vs. Interpretive Bulletin in
EY SERINE cicinstrditcieserasnviciientoctiinnibetios E-20
Appendix F. Charter Sections 220.1(1)(a) and
OG) annnvenervereveenerseressnsnnsnererenenneseoeesvonenecenesoenecsooonen F-1
iv.
TABLE OF AUTHORITIES CITED
Cases Page
American Nurses Assoc. et al. v. Board of Gov-
ernors of the University of North Carolina et al.
(USDC Mid. D. N. Carolina C 75-558-G) .. 27
Ammons v. Zia Co., 448 F.2d 116 (10th Cir.
EDVED wwneuctiate ~dtiesinisceatiiadaaie 11
Bailey v. Los Angeles County (75-3863 C.D. Cal.)
connsasestinsieieinienetemmeennseatinasegtaisasn ae
Califano v. Goldfarb, .... U.S. ..... 45 USLW 4237
(IGT) ermccienscenancevncosississinemmiaiaaan 7
Corning Glass Works v. Brennan, 417 U.S. 188,
41 L.Ed.2d 1, 94 S.Ct. 2223 (1974) ........ 7, 28, 30
Craig v. Boren, .... U.S. ...., 50 L.Ed.2d 397 (1976)
sevevescentessesasaimebetstintetinminiamann 7
Diana L. Spirt v. TIAA-CREF (N.Y., S.D. 74 Civ.
BIG) cncocecweevstininiontiinisticieaaan 27
Dred Scot v. Sanford, (1856) 19 How. 393, 15
a) 8 | a 32
Edelman v. Jordan (1974) 415 U.S. 651 ...... 31
EEOC v. Colby College (Maine D.C. S.D. 75-136)
ssievesvecenssvensecenseteieuiiensnsinsadsacuiasan ian 27
Espinoza v. Farah Mfg. Co., 414 U.S. 86, 38 L.Ed.
26 267, 94 BO. 3346 CIGTS) cccneccteee 26
Fitzpatrick v. Bitzer, 427 U.S. 445 .................... 32
Garland M. Fitzpatrick v. Frederick Bitzer, 427
oe 6, ) en ae 28
Geduldig v. Aiello (1974) 417 U.S. 484, 41 L.Ed.
y e~ e ee) . ee tp oo
v.
Page
General Electric Co. v. Gilbert, .... U.S. ...., 50 L.
Eu.2d 343, 97 S.Ct. ..... 45 USLW 4031 (1976)
----2, 3, 8, 9, 10, 15, 16, 17, 18, 20, 21, 24, 36
Henderson v. Oregon, 405 F.Supp. 1275 (1975) ..
Houghton v. Long Beach, 164 QGal.App.2d 298
Ce cceesumnetnens 30
International Brotherhood of Teamsters v. United
States, et al., ...... US. ......, 45 L.W. 4506
ELON LLL 13
Kahn v. Shevin, 416 U.S. 351, 40 L.Ed.2d 189, 94
a ceeemenes 7, 28
Lauf v. E. G. Skinner & Co., 303 U.S. 323 (1938)
ins siplinnsnnntinstetaetncetncecanssnsoneseusessdencsossneserececooces 34
Marbury v. Madison, 1 Cranch 137, 2 L.Ed. 60
Il ri centiedncmsevestbndindttivendininieséisenguacepetes 31
McCardle, Es Parte (U.S., 1869) 7 Wall. 506,
SE a ee 33, 35
National League of Cities v. Usery (1976) 426
U.S. 833, 49 L.Ed.2d 245, 96 S.Ct. 2... 2200. 30
Peters et al. v. Wayne State University et al. (Mich.
EEE 27
Rosina Smith et al. v. County of Los Angeles (Cal.
dh ca tiecenitcihtatneccncicsedecseocesnscese 27
Schlesinger v. Ballard (1975) 419 U.S. 498, 42
DG.26 GIO, 9S SCL. 72 ........0ccececceecseosccsee 28, 29
Vi.
Page
Schultz v. Wheaton Glass Co., 421 F.2d 259 (3d
Cir. 1970) cert. den. 398 U.S. 905 ............ 11, 29
Sheldon v. Sill (U.S. 1850) 8 How. 440, 12 L.Ed.
GIDUIT - <caussninnnenenintinictistiteniigambeidineisiibaanaieatonatuaied a, we
Skidmore, et al. v. Swift & Co., 323 U.S. 134
CUP TTTED dississhsceniinisinietstacuittantaiinepiaiitisisamstsiaunsaidainetasmmasiiad 18
Stanton v. Stanton, 421 U.S. 7, 95 S.Ct. 1373
III iad niecmssnnendnnesantnenetaiadiommamnaiea
United States v. Stapf, 375 U.S. 118, 84 S.Ct. 248,
Se Se GID deiisoninicninciniie 19
Federal Register
30 Federal Register 14926, 14928, Dec. 2, 1965,
I, TERED. scsitcnssnsnscrescinschicapacetenittigindaiiatene Ninna 21
40 Federal Register 24135, June 4, 1975 .......... 17
40 Federal Register 57980, 57982 ...................... 26
Miscellaneous
110 Congressional Record 7218, 5803, 5437, 7477
siopehiianiidetiingptanaiieinanitiainabdindlcetidisduiiadenamenmnidias 34
ere enre ay OO
Regulations
Code of Federal Regulations, Title 29, Sec. 800.116
GD CSOD | niensdccvttihineniniicnnpiigiiniaiimininianiaiintieraitil 16
Code of Federal Regulations, Title 29, Sec. 1604.9
GED CEP EEE ctacinsacinttcidnisupnivijnuminncegpiimeialiniiaanidgs 20
Code of Federal Regulations, Title 29, Sec. 2610 .. 26
Code of Federal Regulations, Title 29, Sec. 2611 .. 26
Code of Federal Regulations, Title 41, Secs. 60-20.3
CREE OD cenneisiasinscititiinstensiaonmasaiemiidie 17
Statutes Page
California Government Code, Sec. 45342 .......... 27, 30
California Statutes of 1937, Chap. 3, Resolutions, .
Fe ere CEE Tee ME an eee 30
OO. |) nee 4
Equal Employment Opportunity Act of 1972, 42
Ns I iia Ee 2
Equal Employment Opportunity Act of 1972, 42
U.S.C. §2000e-2, Title VII, Sec. 703 -....00.00000.2... 4
Equal Employment Opportunity Act of 1972, 42
U.S.C. §2000e-2, Title VII, Sec. 703(h) ......
Equal Employment Opportunity Act of 1972, 42
E.SUN. snsniaciiisciseensettnispindgniennisebeitiodinans 4
Equal Pay Act of 1963 (Pub. L. 88-38, 77 Stat.
PR TS UP. Giiintddaichasidtichcluicenteenda biedipaniesbinanh tnedanunsiei 4
Los Angeles City Charter, Sec. 220.1 ............. 30
Los Angeles City Charter, Sec. 220.1(1)(a)(g) .. 4
Pension Reform Act of 1974, P.L. 93-406, 88 Stat.
I, 26
United States Code, Title 26, (IRC 1954), Sec. 410
United States Code, Title 28, Sec. 1254(1) .......... 3
United States Code, Title 29, Sec. 206(a)(1) .... 14
Vill.
Page
United States Code, Title 29, Sec. 206(d)(1) ..
RESON SPON IESE MON LIONS ATO EOD i Ag)
United States Code, Title 42. Sec.2000e-2(a) ....4, 35
United States Code, Title 42, Sec. 2000e-5 ...... 25
United States Code, Title 42, Sec. 2000e-5(g) ..4, 36
United States Constitution, Art. I -.....................-.--.- 31
United States Constitution, Art. II, Sec. 3 .......... 23, 33
United States Constitution, Art. III -.....................
United States Constitution, Tenth Amendment ...... 3
28, 32, 36
United States Constitution, Fourteenth Amendment
BO OR eh a re 3, 25, 28, 29, 31, 32, 35, 36
United States Constitution, Fourteenth Amendment,
I a seinen 28, 29, 33
IN THE
Supreme Court of the United States
October Term, 1976
See
CITY OF LOS ANGELES, DEPARTMENT OF WATER AND
POWER, a body te and politic; MEMBERS OF THE
BOARD OF WA AND PO COMMISSIONERS OF
THE DEPARTMENT OF WATER AND POWER, CITY OF
LOS ANGELES; MEMBERS OF THE BOARD OF ADMIN-
ISTRATION OF THE DEPARTMENT OF WATER AND
POWER EMPLOYEES’ RETIREMENT, DISABILITY AND
DEATH BENEFIT INSURANCE PLAN; HENRY G. BOD-
KIN, JR.; KATHERINE B. DUNLAP; BURTON J. GIND-
LER; MICHAEL GLAZER; HERBERT C. WARD; LOUIS
J. WEIDNER, JR.; RALPH E. POWELL; LEO W. SUD-
MEIER, JR.; WILLIAM D. SACHAU; and ROBERT V.
PHILLIPS,
Petitioners,
vs.
MARIE MANHART, CAROLYN MAYSHACK, MARGERIE
STOOP, ALICE F. MULLER and ETHEL L. LEHMAN, in-
ee FAL ST similarly situated;
TO PROTECT WOMEN’S RE
BENEFITS; and INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS, LOCAL UNION NO. 18,
Respondents.
Petition for Writ of Certiorari to the United States Court
of Appeals for the Ninth Circuit.
Petitioners respectfully pray that a writ of certiorari
issue to review the judgment of the United States
Court of Appeals for the Ninth Circuit entered in
this action on November 23, 1976, as to which rehear-
ing was denied, with dissenting opinion, on April 18,
1977. That decision affirmed the granting of summary
judgment by the United States District Court for the
=
Central District of California in favor of respondent
plaintiffs on a cause of action alleged under Title
VII of the Civil Rights Act of 1964, as amended
in 1972 [42 U.S.C. §2000¢e et seq.}.
The first opinion of the Court of Appeals preceded
by just two weeks the decision of this honorable Court
in General Electric Co. v. Gilbert, .... U.S. ...., 50
L.Ed.2d 343, 97 S.Ct. ..... 45 USLW 4031 (1976).
The Court of Appeals rejected the legislative history
that this honorable Court expressly relied on in General
Electric. Such legislative history would directly control
this case even if General Electric had not been decided.
Petitioners filed for a rehearing on the day the General
Electric decision was announced. A divided Court of
Appeals denied rehearing. Judge John F. Kilkenny,
dissenting, stated in part:
“I am convinced that the legal principles enunci-
ated in General Electric Co. v. Gilbert, .... U.S.
.. (Dec. 7, 1976), are here controlling and that
the district court erred in granting a summary
judgment against the appellants. At a minimum,
the court should have conducted a trial on the
issue of whether the appellants’ retirement plan
was justified on the basis of recognized actuarial
tables showing the difference in longevity between
males and females.” (App. D-4.)’
Citations to Opinions Below.
The findings and conclusions on summary judgment
and opinion on the injunction of the United States
1Citations to “App. A-1, B-1, C-1” etc., are to pages of the
Appendices to this Petition.
—
intliiies
District Court for the Central District of California
reported at 387 F.Supp. 980, are printed as Appendix
B. The opinion of the United States Court of Appeals
for the Ninth Circuit (not yet officially reported) af-
firming the judgment of the District Court, is printed
as Appendix C. The opinion of the Court of Appeals
denying rehearing, with dissenting opinion, is printed
as Appendix D.
Jurisdiction.
The judgment of the Court of Appeals for the Ninth
Circuit was entered on November 23, 1976, and amend-
ed December 23, 1976. Petitioners’ timely petition for
rehearing was denied on April 18, 1977.
The jurisdiction of this Court is invoked panes
to 28 U.S.C. §1254(1).
Questions Presented.
1. Where females receive the same monthly pension
benefits as do males, but for longer life expectancies
than males, do Title VII and the Equal Pay Act
prohibit different pension plan contributions for females
and males?
2. In deciding the above question, did the Court
of Appeals properly follow the opinion of the Supreme
Court in General Electric Co. v. Gilbert?
3. May the lower courts adopt a rule of law re-
quiring a municipal employer to pay higher compen-
sation to females than m ‘e~ in view of the jurisdictional
limitations of Title VII, 1. .-,wal Pay Act, and Article
III and the 10th, 11th . i4ih *aendments of the
United States Constitution?
—4—
Statutes and Rules Involved.
Involved herein are Section 3 of the Equal Pay Act
of 1963 (Pub. L. 88-38, 77 Stat. 56), 29 U.S.C.
§206(d)(1); and Sections 703(a)(e)(h) and 706(g)
of Title VII of the Civil Rights Act of 1964, as
amended in 1972 (the Equal Employment Opportunity
Act of 1972), 42 U.S.C. §2000e-2(a), (e), (h) and
§2000e-5(g), the texts of which are printed in Appendix
A hereto. A summary of legislative history of the Equal
Pay Act, Title VII and the 1972 amendments is printed
in Appendix E. The Charter of the City of Los Angeles,
a state law, §220.1(1)(a)(g) is printed as Appendix F.
Statement of the Case.
This case was brought under Title VII of the Civil
Rights Act as amended in 1972 (hereafter “Title
VII"), claiming a violation of Section 703 of the
Act (42 U.S.C. §2000e-2).
Plaintiffs are civil service employees of the City
of Los Angeles Department of Water and Power and
as such are members of a compulsory retirement Plan
of such City Department (hereafter referred to respec-
tively as the “Plan” and the “Department”).
The Plan provides for several kinds of pension bene-
fits at the employee’s option. The most common is a
“formula pension”. Such formula is a monthly pay-
ment equal to 2% of average monthly salary paid
during the last year of employment times the number
of years of employment. This monthly benefit is guar-
anteed for life. It is a vested right of the employee.
—_ =
Because women outlive men, the total amount paid as
pension to a woman is greater than that paid to a man.
For clarity, this Plan should be contrasted with those
pension systems which pay men and women the same
total pension benefits during their respective life spans,
but pay women smaller monthly pension amounts. See,
e.g., Henderson v. Oregon, 405 F.Supp. 1275 (1975),
on appeal in the Ninth Circuit.
The two systems may be analogized to loaves of
bread accrued at the date of retirement. In the Hender-
son system, women receive the same size loaf as men
but because the life expectancy is longer, the monthly
“slices” received by a woman are smaller than those
received by a man. In contrast, under the Department’s
Plan, women are to receive the same size “slice” of
bread each month after retirement but because they
live longer they must have a longer loaf in order
to pay all the “slices”.
To fund the Plan, the employees and the Depart-
ment contribute thereto. To fund the “longer loaf”
payable to females, higher contributions are necessarily
required for women than for men. Although contribu-
tions made by the women themselves were slightly
higher than the contributions made by men, the Depart-
ment also contributed disproportionately more for wo-
men than for men.
Further, since each employee has an absolute right
to the return of all his or her contributions, plus
a vested pension right, the present worth of all compen-
-
sation paid to female employees is higher than the
present worth of all compensation paid to male em-
ployees.
The following table shows an example of the present
value at age 30 of pension benefits of a male and
a female; and the present value of contributions neces-
sary to fund a formula pension for each, retirement
being at age 65.
Male Female
1. Age hire 30 30
2. Monthly salary during career $1,000 $1,000
3. Monthly allowance at 65 700 700
4. Present Value of Pension discounted
at 542% interest and 1951 GA Mor-
tality Table: 9,257 11,886
5. Monthly employee contribution to Plan 22.20 25.49
(x 1.1484—
6. Department’s 110% monthly matching
contribution 24.42 28.04
7. Present value (at age 30) of contribu-
tions to fund above pension at 542%
and 1951 table:
a) Member Contribution 4,069 4,743
b) Department’s 110% matching 4,476 5,217
c) Additional Department contribution 712 1,926
d) Total Department contribution 5,188 7,143
The contributions by the Department for a woman
employee were always greater than for a corresponding
man. The total amount of compensation for a woman
was greater than for a corresponding man.
The plaintiffs herein contended in the trial court
that differential contributions by men and women were
per se illegal. The trial court erroneously held that
even rational differentiation was illegal if related to sex:
“In short, under the Equal Employment Opportunity
Act of 1972, all stereotypic treatment of persons based
on ... sex whether rational or irrational is dead.”
==
(Emphasis added) (App. B-7) (This Court has never
held that gender-based differentiations are per se il-
legal. )?
The District Court enjoined requiring larger contribu-
tions from females and ordered payment of prior “excess
contributions” with interest to be paid to plaintiffs
forthwith. The effect of this decision is to require
a City to compensate its female civil service employees
at an even higher rate than males.
Your petitioners appealed contending that by relying
on a 1972 EEOC “guideline” as if it were a regulation,
the trial court failed to exercise its explicit statutory
responsibility to impartially and independently interpret
the law de novo, and that in all events the “guideline”
was contrary to Title VII and the Equal Pay Act.
Your petitioners contended that they had committed
no unlawful employment practice and that the decision
penalized the employer and discriminated against men,
by requiring the employer to compensate women at
a higher rate than men.*
Similarly, to attempt to lump males and females to-
gether as in a so-called “unisex,table” would necessarily
result in males’ contributions subsidizing the females’
2Kahn v. Shevin, 416 U.S. 351, 40 L.Ed.2d 189, 94 §.
Ct. 1734 (1974); Stanton v. Stanton, 421 US. 7, 95 S.Ct.
1373, 1377 (1975); Geduldig v. Aiello, 417 U.S. 484, 495,
41 L.Ed.2d 256, 94 S.Ct. 2485 (1974); Craig v. Boren,
cians US. ......, 50 L.Ed.2d 397 (December 20, 1976); Califano
v. Goldfarb, ...... U.S. ....... 45 USLW 4237 (March 2, 1977).
8The Equal Pay explicitly prohibits this. “[A]n employer
who is paying a wage rate differential in violation of this sub-
section shall not, in order to comply with the provisions of this
subsection, reduce the wage rate of any ee [29 U.S.C.
§206(d)(1), Appendix A-1.] (Emphasis added.) To raise the
“wage rate” as to women generally, “reduces” the wage rate
as to men by comparison. See Corning Glass Works v. Brennan,
417 US. 188, 207, 41 L.Ed.2d 1, 17, 94 S.Ct. 2223 (1974).
—
benefits, and would consequently discriminate against
males (see footnote 4, Court of Appeals Dissent, App.
D-13). It’s like having men and women appear to
contribute to equal size “loaves” but then taking part
of the loaf of the shorter-living men, to pay “slices”
to the longer-living women.
The Court of Appeals repeated the errors of the
trial court. Even when the General Electric opinion
was issued, a majority failed to recognize those errors.*
Such ruling undermines this Honorable Court’s authority
and nullifies its holding and reasoning in General Elec-
tric Co. It interferes with sovereign authority, and
establishes an erroneous nationwide precedent for pen-
sion, annuity and insurance plans, mandating discrimi-
nation against males, and preferential compensation
for females.
Additionally, the holdings of the lower courts confer
on the agencies lawmaking powers that Congress spe-
cifically determined not to grant, which Congress spe-
cifically intended the agencies not exercise, and which
this Court in General Electric said the agencies did
not have. Your petitioners were thereby effectively de-
prived of an impartial de novo determination of issues
of law and fact, which Congress specifically intended
your petitioners be afforded by independent determina-
tion of the courts.
4We believe footnotes 17 and 18 (General Electric, supra, 50
L.Ed.2d 343, 356-357) specifically demonstrate the error of
the Court below and met the precise issues raised by this case.
vulien
REASONS FOR GRANTING THE WRIT.
I. The Court of Appeals Decided This Federal Ques-
tion in Direct Conflict With the Supreme Court’s
Decision in General Electric Co. y. Gilbert.
In its initial opinion, the Court of Appeals took
a position which was to p ove directly contrary to
the Supreme Court in General Electric Co. v. Gilbert,
_, ee aes , 50 L.Ed.2d 343. Then, when
the General Electric case came down two weeks later,
the majority of the Court of Appeals refused to follow
it.
The majority’s decision below is directly contrary
to the Supreme Court in the following particulars:
1. It fails to follow the will of Congress as to
pay differentials as found by the Supreme Court in
General Electric.
2. It results in the court below abdicating its re-
sponsibility to render impartial de novo judgment by
improperly deferring to edministrative interpretations of
the Equal Employment Opportunity Commission (here-
inafter “EEOC”) which were rejected by the Supreme
Court in General Electric.
3. It departs from the long standing meaning of
“discrimination” in the Constitutional sense. The Su-
preme Court in General Electric rightly indicated it was
not the intent of Congress to depart from that meaning
in adopting the “sex” provisions of Title VII. (Gen-
eral Electric, supra, ........ | , 50 L.Ed.2d 343,
356-357, fn 18, and 360.)
4. It fails to permit the use of actuarial tables
to afford equality of treatment in employment under
a city’s benefit plan, which the Supreme Court in
==
General Electric indicated was permissible so long as
not a mere pretext to effect invidious discrimination.
(General Electric, supra, ........ CRE cxcnndin , 50 L.Ed.2d
343, 351 and 355-356.)
A. The Will of Congress on Pay Differentials.
Congress never intended to prohibit the payment
of different compensation to males and females when
that differential was for a factor other than sex, even
though the factor might be directly correlated with sex.
The Court recognized this in General Electric,
‘nsinings U.S. ......... 50 L.Ed.2d 343, 358-359) when it
determined that the Bennett Amendment to Title VII
[§703(h) of the Civil Rights Act, 42 U.S.C. §2000e-2
(h)] permitted denial of disability benefits for preg-
nancy, a condition correlated with a sex classification.
But even if this Court had not reached that conclusion,
the legislation requires it.
“Differentiation upon the basis of sex” is not ipso
facto unlawful. The Bennett Amendment to Title VII
provides that it shall not be an unlawful employment
practice for an employer to “differentiate upon the
basis of sex” for purposes of employee compensation
“if such differentiation is authorized by the provisions
of section 6(d) of the Fair Labor Standards Act”
[42 U.S.C. §2000e-2(h) }.
Such Section 6(d) was added to the Fair Labor
Standards Act by the Equal Pay Act of 1963 (77
Stat. 56). Section 6(d) provides that employers may
not discriminate between employees in compensation
on the basis of sex “except where such payment is
pursuant to (1) a seniority system (2) a merit system
(3) a system which measures earnings by quantity or
— >
quality of production, or (iv) a differential based on
any other factor other than sex” [29 U.S.C. §206(d)
(1)] (Emphasis added).
It is the payment differential based on an “other
factor other than sex” which Congress thus inserted
in both Acts to allow differences in compensation for
factors such as pension payment or pension cost dif-
ferentials based on different longevity. (See Dissent
Op. at App. D-4.)
The pertinent legislative history of the Equal
Pay Act and Title VII is detailed in Appendix E,
and summarized below.
1. Equal Pcy Act. In enacting the Equal Pay
Act, The 88th Congress specifically intended that em-
ployers might continue to differentiate upon the basis
of sex for compensation purposes so long as the clas-
sification involved actual or good faith differences as
the basis for the differences in pay and was not a
mere subterfuge to pay women less. The concept was
equal pay for equal work. The House Committee noted,
for example, that an employer might pay male pack-
agers and female packagers differently where there
were real and not merely nominal differences as the
basis for the different pay. If the male packagers were
required to lift heavy boxes and the female packagers
were not, more compensation might be paid to the
sale *9ckagers. Previous cases have so understood
he ~: cal Pey Act. Schultz v. Wheaton Glass Co.,
4Zi <.2a 259 (3d Cir. 1970) cert. den. 398 US.
905; Ammons v. Zia Co., 448 F.2d 116 (10th Cir.
1971).
Congress also specifically intended that the employer
would not be required to classify men and women
— =
in the same way if to do so would penalize the employer
by requiring direct or indirect payment of more for
work done by one class (“women”) than for the same
work done by the other class (“men”). (App. E-
1.)
The House Committee rejected the administration’s
bill which would have prohibited differentiation on
the basis of sex.
To ensure the result it intended, the House adopted
statutory exceptions which were to be not merely “de-
fenses” but were rather “exemptions from the operation
of the statute.” (App. E-1, 2.) The Committee Report
stated that it was only prohibiting those pay differentials
that were based solely on sex, and that it had provided
the three specific exceptions and one broad general
exception to operate as “exemptions” from the Act.
Thus, the broad general exception for “any other factor
other than sex” was meant to permit classification
by sex for purposes of different compensation if there
were some other factor other than sex (e.g., lifting
heavy packages as opposed to light packages or dif-
ferences in other costs in employing women), that
was the basis of the pay differential.
The controlling legislative history demonstrates it
was not the intent of Congress to require the employer
to pay women more than men, but only to prohibit
paying women less when there was no rational basis
for the differential. Longevity and the cost of funding
for it was an “other factor” specifically recognized by
both houses. (App. E-4 fn.2.)
The Senate history shows the same intent. The Senate
Committee bill provided only the broad exclusion in its
bill. Its report stated that the broad exception would
aniiiices
be allowed not only in the specific cases the Committee
mentioned but also where “an employer will be eco-
nomically penalized by the elimination of a wage dif-
ferential.” The House history shows the House likewise
intended such as part of the broad exception (App.
E-3, 4.) The Senate adopted the House bill as better
expressing its intent. (App. E-5.)
2. Title VII. In enacting Title VII, the same 88th
Congress always intended to legislatively treat discrimi-
nation on account of “sex” differently than discrimina-
tion on account of “race or color.” After it was proposed
to add “sex” to the bill in the House, the one serious
argument advanced in favor of such amendment was
that the Amendment was necessary to ensure the “color-
blind” impact of the law among women in the labor
market. After the “sex” amendment was passed, the
House then added “sex” as a bona fide occupational
qualification (without objection of any member). In
conirast the House explicitly rejected an amendment
to make “race or color” a bona fide occupational
qualification. (App. E-6.)
When the House Bill (HR 7152) reached the Senate,
questions were raised by Senator Dirksen and others
as to the possible conflict with the Equal Pay Act.
Interpretive Memoranda’ were introduced to the ef-
fect that classification by sex “where there is a rational
basis” was not prohibited; and further that the standards
of the Equal Pay Act would be applicable even under
Title VII of the House Bill. (App. E-8.) This inter-
pretation was given as to the House Bill, before Senate
amendments enacted these points into express law.
5This Honorable Court also relied on such Memoranda in
International Brotherhood of Teamsters v. United States, et al.,
maiite US. ......, 45 L.W. 4506, 4513 (May 31, 1977).
anlitien
An amendment in the nature of a substitute bill
(Amendment No. 1052) was then introduced by Sen-
ators Dirksen, Humphrey, ef al. It provided that
three of the Equal Pay Act exceptions would also
be exceptions to the Title VII prohibitions—differen-
tials based on a good faith merit system, quantity
and quality of work or seniority system. (42 U.S.C.
§2000e-(h); A-3; 29 U.S.C. §206(a)(1); App. E-8).
The fourth exception of the Equal Pay Act and
its general policy were expressly adopted by the Bennett
Amendment. The manner in which the amendment
was adopted demonstrates the intent.
Prior to the introduction of the Dirksen-Humphrey
substitute, Senator Bennett proposed to amend the pend-
ing House Bill. Thereafter, both Senator Dirksen and
Senator Humphrey expressly accepted the Bennett pro-
posal as an amendment to their proposal in the nature
of a substitute bill. All three Senators explained the
effect of so accepting the Bennett Amendment. Senator
Dirksen explained that the pending amendment recog-
nized those exceptions that were carried in the earlier
Act. (App. E-9.)
The Senate then voted to substitute the language
of the Humphrey-Dirksen bill (as amended by the
Bennett Amendment) for the language of the House
bill. Such bill was then the pending business and subject
to amendment.®
®Proper procedure requires of course that an amendment in
the nature of a substitute be voted on “twice”. “Even if the
[amending] paragraph constitutes the entire resolution and the
motion to substitute is adopted, it is necessary then to vote
on adopting the resolution as amended since it has only been
voted to substitute one paragraph for another.” Roberts’ Rules of
Order (rev. ed.), p. 142. This procedure protects the right of
—_ =
Senator Humphrey was specifically asked about the
impact of the pending bill on retirement systems. Sen-
ator Randolph, who asked the question, had been co-
author of the Senate subcommittee’s equal pay bill.
Senator Humphrey was the floor manager of the pend-
ing civil rights bill and had introduced the Senate
Committee equal pay bill on the Senate floor. He
also had expressly accepted the Bennett Amendment
to clarify the intent of the Humphrey-Dirksen bill.
In answer to Senator Randolph’s question Senator
Humphrey said that accepting the Bennett Amend-
ment made it unmistakably clear that “differences of
treatment in industrial benefit plans, including earlier
retirement options for women, may continue in opera-
tion under this bill if it becomes law.” (Emphasis
added.) (See General Electric, supra, 50 L.Ed.2d 343,
359.)
The House thereafter adopted the Senate bill. In
so doing it specifically affirmed this intent. (App.
E-10, 11.)
When we set forth to the Court below the intent of
the law as expressed by Senator Humphrey, the Court
improperly rejected it as an “erroneous interpretation”.
(App. C-17, 18.) After this Honorable Court relied
on Senator Humphrey’s views as expressing the intent
of the law (General Electric, supra, 50 L.Ed.2d 343,
359) the Court of Appeals still failed to follow that
intent. Thus, while both Congress and the Supreme
Court had indicated the proper administration of the
Bennett Amendment and the specific legislative intent,
the Court of Appeals ignored them both.
an individual to vote in favor of substituting the language of
p osal “R” in reference to proposal “4 and then to vote
against enacting Be as law,
enditin
Its rationale on rehearing was the further erroneous
conclusion of law that this Honorable Court in the
General Electric case did not exercise its impartial
judgment on legislative intent but relied “more heavily”
on “finding” a conflict between interpretations of the
Wage and Hour Administrator and the EEOC, and
therefore deferred to the Wage and Hour Administrator
instead of the EEOC to decide General Electric. Such
rationale besides being incorrect, was also an egregious
error of law as to the Courts’ responsibility and the
effect to be given administrative interpretations.
While this Honorable Court in General Electric rec-
ognized the conflicts, the majority below chose to find
no conflict. (Compare the comments of the Dissent
noting clear conflicts among the agencies and internal
inconsistency within the rulings of the EEOC, App.
D-7, 8). Although legislative intent was clear the lower
courts “deferred” completely to a contrary adminis-
trative “interpretation”.
What the majority below ignored was the fact that
this Honorable Court exercised its independent, im-
partial judgment as to legislative intent and found
that the Bennett Amendment allowed pay differentials
for an “other factor other than sex” although the
factor was correlated with sex, e.g., pregnancy. In sup-
port of that position, this Honorable Court recognized
that “longevity” was another “other factor other than
sex” which could be the basis for differential compensa-
tion and was already accepted as such by the Wage and
Hour Administrator of the Department of Labor. 29
CFR §800.116(d) (1975). (General Electric, supra,
50 L.Ed.2d 343, 359; see Dissent at D-7.)
The lower courts refused to accept 29 CFR §800.116
(d) (1975) as administrative recognition of sex-corre-
| 7—
lated longevity as a factor other than sex allowing
pay differentials.
Yet, until this case, everyone has understood the
administrative bulletin to mean that longevity was an
“other factor other than sex” which would warrant
pay differentials by the employer.
For example, as recently as 1975 the Secretary of
Health, Education and Welfare said:
“Accordingly [the Secretary] continues to follow
the Executive Order regulations in requiring that
fringe benefit plans provide either equal periodic
benefits to members of each sex or equal contribu-
tions by the employer for members of each sex.
. . . (vol. 40 Fed. Reg. p. 24135, June 4,
1975) (emphasis added). (See also similar ruling
by Office of Federal Contract Compliance, 41 CFR
§60-20.3(c) (1970).)
Given greater female longevity it is impossible to
have equal periodic benefits unless either the females
or the employer or both contribute more for females,
or the males subsidize the females. These rulings thus
implicitly recognize the fact that longevity is a factor
other than sex for which differential compensation may
be paid to the sexes.
Congress enactment of the Pension Reform Act also
recognizes this fact. (See p. 26 infra.) For the Court
of Appeals to refuse to recognize longevity as an “other
factor other than sex” and to rule that a pay differen-
tial based thereon is prohibited is a failure to give
effect to the law as enacted by the Congress, and
as interpreted by this Court in General Electric.
B. Will of Congress on Administrative Interpretations.
In its original opinion the Court of Appeals also
found conflicts among administrative interpretations.
= =
(App. C-19.) In its subsequent opinion the majority
could “find” no inconsistency. (App. D-3.) Thus the
holding of the latter decision seems to be that lower
courts may use fluctuating and conflicting interpreta-
tions of administrative interpretations as the basis for
rejecting both the decision of this Honorable Court
and explicit Congressional intent in enacting the law.
Such view is contrary to this Court’s holding in
General Electric,—that the courts shall independently
and impartially construe the statute. It is also contrary
to specific legislative intent to the same effect, which
intent would be controlling even if General Electric
had not been decided. Further the conient of the specific
administrative interpretation relied on in the second
Court of Appeals’ decision contradicts the statutory
language and explicit legislative history. Finally, in
giving effect to one of the conflicting administrative
interpretations in order to hold against the defendant,
the Court of Appeals gave an effect thereto directly
opposite to Congressional intent, as to the effect to
be given any administrative intrepretation.
In enacting the Equal Pay Action, the 88th Congress
was well aware of the Skidmore decision construing
the Fair Labor Standards Act. (Skidmore, et al. v.
Swift & Co., 323 US. 134 (1944); See App. E-
12-13.) In view of that decision, Congress acted specifi-
cally to ensure that administrative interpretations not
be given the status of “interpretive regulations” and
not be used against the defendant. They are not to
be used as a substitute for the court’s impartial judgment
on matters of law or on matters of fact. One basic
reason for so limiting the administrator was to ensure
that the will of Congress as expressed in the statute
="
be given effect, and that any broader interpretations
by a partisan administrator not be substituted therefor.
(App. E-13.)
In considering legislative intent it is as important
to see what Congress rejected as what it enacted.
In the 88th Congress, the equal pay bill proffered
by the Administration would have given the adminis-
trator authority to issue “legislative regulations”. Con-
gress determined not to give either that authority or
the authority to issue “interpretive regulations”. Con-
gress expressly limited his authority to interpretative
bulletins, which “have no other significance, except
that if an employer relies on this interpretative bulletin,
he is protected. He is not in violation if he has done
something in reliance upon those interpretative bulletins
...” (App. E-13.) (Emphasis added. )
Under the Equal Pay Act, the Secretary is a prosecu-
tor. As a Prosecutor, the Secretary has inherent author-
ity to inform the public what cases he will prosecute,
and Congress expressly recognized that inherent author-
ity. However Congress specifically intended that the
Secretary’s interpretations could be used in court only
as a shield by the defendant, and not as a policy-
making sword in the hands of the administration (App.
E-13.)
It is well established that the weight (if any) “to
be given to interpretative rule varies with its statutory
and administrative context. . . .” United States v. Stapf,
375 U.S. 118, 127 n. 11, 84 S.Ct. 248, 255, 11
L.Ed.2d 195 (1963). And here Congress intended
that bulletins be given no weight in the scales of
justice against a defendant, but only in defendant's
favor.
—
It is significant that in 13 years under the Act,
no employer so far as we know, has been prosecuted
either for paying different pension benefits to men
and women or for requiring different contributions
from men and women, based on longevity.
Even if the Secretary were to issue a new bulletin
saying that Labor was going to prosecute plans requir-
ing differential contributions such bulletin would be
entitled to “no standing in court,” as a matter of
legislative intent. (App. E-13.) The defendant would
be entitied to rely as a defense, on the plain meaning
of the previou dministrative bulletin, just as the Su-
preme Court relied on the plain meaning of such bulle-
tins in General Electric. Finally, the question would
be not whether the defendant violated any bulletin
but whether the statute had been violated. The Legis-
lature has directed that the Secretary show that the
exceptions do not apply. On that issue the defendant
is entitled to the impartial decision of the court. To
give effect to a position advocated by the Secretary
because previously published in a bulletin denies the
defendant an impartial determination by the Court
that Congress intended the defendant have.
However, in the instant case five days before oral
argument in the Court of Appeals, an attorney for
the Secretary of Labor filed an “amicus” brief urging
the court to disregard the plain meaning of its bulletins
on pensions. Instead, the “amicus” urged that a different
bulletin was now “controlling” and it should now be
construed so that it did not conflict with a post-1972
EEOC position. That new EEOC position was that
a retirement plan had to have equal benefits and equal
employee contributions (29 CFR §1604.9(f) (1972);
onlin
compare prior position 30 F.R. 14926, 14928 Dec.
2, 1965, Section 1604.7).
Obviously the latter is impossible unless women as
a matter of law must be paid more compensation;
the several administrative positions are irreconcilable.
(See Dissent, App. D-7, D-8.)
The issue of law, however, is the intent of Congress
and not whether there is unanimity among administra-
tive interpretations. By giving “deference” to a supposed
lack of conflict among some of the administrative inter-
pretations, the lower court failed to exercise its consti-
tutional and statutory responsibility to independently
and impartially determine Congressional intent.
General Electric clearly holds the courts should not
so abdicate their responsibility. Further, the specific
Congressional intent under both the Equal Pay Act
and Title VII is that the courts, not the administrative
agencies, should be the law-interpreting body.
Moreover, even where an agency has express Con-
gressional authority to issue “legislative regulations”,
a defendant may challenge a regulation on the ground
that it is invalid because inconsistent with the statute
and the intent of Congress. Obviously where such a
challenge is raised, the agency’s interpretation of the
law as expressed by its regulation is not the measure
of the intent of the law. For the Court of Appeals
to have rejected the legislative history which showed
the law’s intent, as an “erroneous interpretation” of
the law’s intent, and to do so based on newly advanced
administrative interpretations, was not only fallacious
but also denied your petitioners a hearing and determi-
nation on one of the precise issues of law your peti-
—_ 2
tioners raised, namely that the content of the adminis-
trative interpretation was not in accordance with the
statute and its intent.
On that issue, the language of the Bennett Amend-
ment and the legislative history of the equal pay bills
flatly contradict the content of the administrator’s bulle-
tin that the majority relied on in its second opinion
below. The Bennett Amendment says “it shall not
be an unlawful employment practice . . . to differentiate
upon the basis of sex in determining the amount of
the wages or compensation paid or to be paid.
. . .”’ (Emphasis added.) On the equal pay bills,
the Senate Committee Report said that under the single
broad exception provided in its bill, wage differentials
based on employer cost differentials were not outlawed.
In the House, specific legislative history likewise shows
the same express intent not to prohibit differentiation
by sex as to wages and costs. (App. E-4.) The House
bill, noted Senator Dirksen, better expressed Senate
intent and was thereafter adopted by the Senate. (App.
E-4.)
In sharp contrast to this statutory language and
clear history that “to differentiate upon the basis of
sex” is not ipso facto unlawful, the bulletin of the
Secretary says that compensation differentials may not
be based on cost differentials because (it says) a com-
parison of cost differentials upon the basis of sex
is ipso facto unlawful because differentiation upon the
basis of sex is ipso facto unlawful. (App. E-18.) This
contradicts the statute and the bulletin on pensions.
Yet this is the bulletin the majority relied on in denying
rehearing. (App. D-3.)
=— =
The bulletin is not faithful to the law. It would
seem that even the issuance of that bulletin by the
Secretary exceeds the constitutional authority of the
executive branch which is constitutionally charged “to
take care that the laws be faithfully executed.” (Const.
Art. II, §3.)
For the Court of Appeals to rely on such bulletin
not only exalts the agent over the principal, when
the principal has expressly stated that the agents’ inter-
pretations shall have no standing in court except as
a defense for the defendant, but it also implies to
the executive branch that it is “above the law”, that
it has no duty to be faithful to the laws Congress
enacts, that it need not take care regarding the will
of Congress, but may instead follow the dictates of
its own will.
The Legislature directed that the Secretary must show
that a pay differential is not based on an “other factor
other than sex,” or any other statutory excention. For
the Court of Appeals to “rely” on the administrator’s in-
terpretation that compensation differentials may not
be based on employer cost differentials is tantamount
to a repeal of all the statutory exceptions, since all
depend on cost. It says not only are there no exemptions
but also that the courts will hear no defenses. It is
to adopt the erroneous rationale of one bulletin of
the administrator (that differentiation by sex is prohibit-
ed by the statute), when the statute on its face and
its legislative history states the exact opposite.
By hypothesis, any pay differential would rest in
part on differences in other costs as its practical justifi-
cation. So if costs correlated to sex differentiation were
no justification for a pay differential correlated to
aiiices
sex, there would be no statutory exceptions. But
Congress expressly stated and intended the contrary.
Finally, this Honorable Court has relied on bulletins
to hold in favor of defendant in General Electric, but
the court below relied on a bulletin to hold against
defendant. This also was contrary to congressional in-
tent.
Moreover, as recently as 1972 Congress specifically
rejected proposals to grant the EEOC quasi-legislative
and quasi-judicial authority, and rejected proposals to
define unlawful discrimination more broadly.
Having failed in the Legislature, the EEOC then
issued new “guidelines” post-1972 and sought as an
“amicus” in both courts in the instant case to have
the courts adopt those new interpretations as defining
prohibited conduct under the statute.
The success of this improper action by the EEOC
is shown by the fact that the District Court made
an express finding that the EEOC “amended its regula-
tions” in 1972, and the District Court based its judg-
ment on such “amended regulation.” (App. B-10-12.)
The EEOC had similar success in the Court of
Appeals. While this Court explicitly pointed out in
General Electric that “guidelines” are not regulations,
even the Dissenting Opinion expressly referred to them
as “regulations.” (App. D-8.)
The EEOC is a prosecutor. But it has clothed itself
with authority it does not have, which this Court has
plainly said it does not have, and yet which the lower
courts persist in erroneously assuming that it does
have, all to the injury of your petitioners.
In fact, Congress in 1972 declined to grant such
authority to the agency, based on its finding that the
= =
agency was not impartial, but an advocate of policies
beyond those which Congress chose to enact into
law. (App. E-16-17.)
For the lower courts to give effect to “guidelines”
as if they were impartial pronouncements above the
highest court and the Constitution was to act in excess
of the courts’ own jurisdiction as conferred by statute.
(42 U.S.C. §2000e-5, App. A-4.) Congress expressly
limited that jurisdiction in enacting Title VII in 1964.
It expressly reaffirmed certain of those limitations in
1972. App. E-16.)
The jurisdictional limitations of the statute contem-
plate that the courts give effect to the statute both
in respect to what conduct is prohibited and in respect
to the absence of quasi-legislative and quasi-judicial
authority in the agency. For the lower courts to have
disregarded the Congressional intent on either point
_is to act outside their own jurisdiction as expressly
limited by the statute. It also denies to the Petitioners
that right to an impartial determination of issues that
both the Constitution and the statutes guarantee. As to
your individual petitioners it is a denial of due process
of law guaranteed by the 14th Amendment.
Il. The Decision of the Court of Appeals Presents an
Important Federal Question Which Has Nationwide
Impact on the Pension, Annuity and Insurance
Industry, as Well as on Cities and States.
The funding of pensions, annuities and insurance
plans depends upon an actuarial determination of aggre-
gate risk, dividing the projected cost among the mem-
bers of the group covered. This is universally done by
the use of separate mortality tables for males and
females because of the significant difference in life ex-
pectancy between females and males. For example,
—26—
a graph offered by amicus for respondents in tiie
Court of Appeals, showed that given a sample of
100,000 males and 100,000 females who retire at
age 65 and live through age 107, by the median
age 83 where the two mortality curves intersect, 65,600
males will have died and only 48,800 females, 34,400
males would remain, and 51,200 females. This statistic
means there would be 48% more females to pro-
vide retirement benefits for at age 83 than for the
males at that age. In other words, beginning at age
65, and each year until age 83, more males die than
females. Couicecuently more funds must be available to
provide benefits to the larger number of females alive
after that age.
The entire industry depends upon actuarial tables
which thus separate males from females. Indeed, Con-
gress under ERISA [Pension Reform Act of 1974,
P.L. 93-406, 88 Stat. 829] set up three agencies for
federal pension law enforcement, the Internal Revenue
Service, the Department of Labor and the Pension
Benefit Guarantee Corporation. Actuarial requirements
are stressed under the Act [26 U.S.C. (IRC 1954)
§410 et seqg., Act §§302-305]. The Pension Benefit
Guarantee Corporation in December 1975 specifically
set up no less than six such sex-differentiated tables for
funding [40 F.R. 57980, 57982, 29 C.F.R. 2610,
2611]. The Court may properly look to recent Congres-
sional action in the pension area to assist in its inter-
pretation of other laws as applied to pension problems.
Espinoza v. Farah Mfg. Co., 414 U.S. 86, 38 L.Ed.2d
287, 94 S.Ct. 334 (1973). On the other hand there
are to our knowledge no unisex mortality tables. (Dis-
senting Op., D-4.) Even if there were, their use would
discriminate against males.
= =
The decision of the Court of Appeals will have
a heavy financial impact on retirement plans across
the country. For example, in an affidavit filed in the
New York case of Diana L. Spirt v. TIAA-CREF
(N.Y., S.D. 74 Civ. 1674), the actuary estimated
that changing that system alone (which involves
equal contributions for unequal monthly benefits) to
a unisex system, over the collective lifetimes of 100,000
retired males and 100,000 retired females would cost
2.3 billions of dollars. Whether a court orders equalizing
monthly employee contributions or monthly benefits,
the cost of the system must increase, not to mention
the additional cost of refunds ordered. Cases in this area
are now proliferating in the federal courts across the
country. To name a few: Spirt v. TIAA-CREF, supra;
Henderson v. Oregon, 405 F.Supp. 1271 (1975) on
appeal in the Ninth Circuit; Rosina Smith et al. v.
County of Los Angeles (Cal.C.D. 74-253); Peters et al.
v. Wayne State University et al. (Mich. E.D. 670-
165); EEOC v. Colby College (Maine D.C. S.D. 75-
136); Bailey v. Los Angeles County (75-3863 C.D.
Cal.); American Nurses Assoc. et al. v. Board of
Governors of the University of North Carolina et al.
(USDC Mid. D. N. Carolina C 75-558-G).
Your petitioners have been contacted by other public
retirement systems which have either unequal contribu-
tion rates or unequal benefit rates based upon recog-
nized actuarial tables. They await the outcome of this
case to decide whether they must change their systems
at great expense and face additional extensive liability
for “back pay,” as a result of complying with laws
such as California Government Code §45342 which
require actuarial soundness (See App. F).
—_ =
The Court of Appeals, in a simplistic error, said
that equalization could be arrived at by spreading
the cost over all of the members. Aside from the
fact that such discriminates against the male employees,
it would be in violation of the Equal Pay Act. This
Court held in Corning Glass Works v. Brennan, 417
U.S. 188, 207, 41 L.Ed.2d 1, 17, 94 S.Ct. 2223
(1974) that increasing the burden on one class of
employees to provide “equal pay” for another class
is in violation of the Equal Pay Act. (See also 29
U.S.C. §206(d)(1), A-1.)
To allow the decision below to stand will invite
an unnecessary multiplicity of lawsuits to “equalize”
benefits or contributions, or both; and to recover back
contributions or increase future benefits, or both.
Ill. An Award of Back Contributions From a Local
Government Entity and the Permanent Injunction
Is in Excess of the Court’s Jurisdiction as Limited
by Title VII and by Article III and the 10th, 11th
and 14th Amendments of the United States Con-
stitution.
There are several major jurisdictional limitations ex-
ceeded by the decisions below.
The 1972 Amendments to Title VII were enacted
by Congress pursuant to §5 of the Fourteenth Amend-
ment which empowers Congress to enforce the Four-
teenth Amendment by appropriate legislation. (Garland
M. Fitzpatrick v. Frederick Bitzer, 427 US. 445
(1976).
The Honorable Court has construed the Due Process
and Equal Protection provisions as not prohibiting clas-
sifications such as defendants’ Plan where there is a
rational basis therefor. Kahn v. Shevin (1974) 416
U.S. 351, 40 L.Ed.2d 189, 94 S.Ct. 1734; Schlesinger
ollie
v. Ballard (1975) 419 U.S. 498, 42 L.Ed.2d 610, 95 S.
Ct. 72; Geduldig v. Aiello (1974) 417 U.S. 484, 41
L.Ed.2d 256, 94 S.Ct. 2485. :
Similarly the statute on its face and its legislative
history show that a classification related to sex “where
there is a rational basis” (App. E-9) is not prohibited
unless the plaintiffs show such is not in good faith
or is a subterfuge. See Schultz v. Wheaton Glass Co.,
421 F.2d 259 (3d Cir. 1970) cert. den. 398 US.
905 (Dissent, D-9).
It cannot be supposed that Congress is empowered
by Section 5 of the 14th Amendment to enact legisla-
tion prohibiting classifications that are permitted by
the 14th Amendment. Hence if Congress had enacted
a law prohibiting rational classifications or requiring
irrational ones, it would be acting in excess of its
14th Amendment power.
Consequently, assuming arguendo that the trial court
was correct that “rational” classification is prohibited
(and irrational classification therefore required) by
Title VII, it would follow necessarily that to that
extent Congress acted in excess of its 14th Amend-
ment power.
Such exercise of power would therefore have to
be sustained, if at all, under some other grant of
power—the commerce clause, for example.
But this Honorable Court has held that the Tenth
Amendment is a limitation on the exercise of the
commerce clause power in respect to cities. Such amend-
ment provides that powers not delegated to the United
States are reserved to the States, and the authority
of Congress to regulate in a manner which invades
local sovereignty is limited thereby.
—_ =
Thus this Honorable Court has held that Congress
may not regulate compensation of civil service em-
ployees. The court stated in National League of Cities
v. Usery (1976) 426 U.S. 833, 49 L.Ed.2d 245,
tee.
“We have repeatedly recognized that there are
attributes of sovereignty attaching to every state
government which may not be impaired by Con-
gress, not bécause Congress may lack an af-
firmative grant of legislative authority to reach
the matter, but because the Constitution prohibits
it from exercising the authority in that manner.”
(Emphasis added. )
Management of the City Department’s retirement
plan is likewise a function of local government under
state law (Charter §220.1, California Stat. 1937, Chap.
3, Resolutions, p. 2627). (App. F.) The City Charter
Section 220.1, and similarly, California Government
Code Section 45342, require that the Plan be main-
tained on a sound actuarial basis. Requiring refunds
of previous contributions prior to retirement interferes
with actuarial soundness in a manner not required
by equal protection or due process.
Further, despite the Court’s Opinion (App. C-24)
that the Department could pass on the cost of refunds
by increasing all contributions or lessening bene-
fits, such is not permitted by State law or by the
Equal Pay Act. (State Law) Houghton v. Long Beach,
164 Cal.App.2d 298, 306 (1958); Henry v. City of
Los Angeles, 201 Cal.App.2d 299, 314; (Equal Pay
Act) (Corning Glass Works v. Brennan, 417 U.S. 188,
207, 41 L.Ed.2d 1, 17, 94 S.Ct. 2223 (1974), 29
U.S.C. §206(d)(1)). The Department is penalized by
—
the decision because it must now reach into other
city revenues to pay the difference. (See Edelman
v. Jordan (1974) 415 U.S. 651, 653.)
It is likewise interfered with by the permanent injunc-
tion. Any legislation of Congress under either the Four-
teenth Amendment or under the commerce clause, for
example, which interferes with the authority of local
governmental entities to establish pension plans for
its civil service employees would be an invalid invasion
of local sovereignty. So would a law requiring payment
of higher compensation to female civil service employees
than males.
For the same reasons, the permanent injunction of
the lower court and its award of back contributions
exceeds the limitations of the Tenth Amendment. Such
amendment is a limitation on al! the powers delegated
to the United States, including the judicial power dele-
gated by Article III, and not merely a limitation on
those legislative powers that have been delegated to
the Congress by Article I. As the Congress may not
enact a law which interferes with local sovereignty,
so the Court may not issue a decree which so interferes.
Assuming arguendo that by enacting Title VII Con-
gress had enacted a law which required the payment
of higher compensation to female civil service employees
than to males, for the courts to give effect to such
a law would exceed the constitutional limitations on
the courts’ power. The court may not so act. That
was the precise holding of Marbury v. Madison, 1
Cranch 137, 2 L.Ed. 60 (1803). The Court held
that it would not exercise a power (even though Con-
gress purported to confer or acknowledge it) when
to do so would have the effect of the Court exceeding
onlin
constitutional limitations upon it. The duty of the Court,
the Chief Justice said, is to “read and obey” the law
which limits the Court’s power.’
For the same reasons dealing with the Tenth Amend-
ment, we submit that there also is a violation of the
Eleventh Amendment by the decisions below. In Fitz-
patrick v. Bitzer, supra, 427 U.S. 445, 456, fn. 11,
the Court noted that such challenge was not raised
there. We have raised and do raise such « challenge.
There is another major jurisdictional limitation ex-
ceeded by the decisions below. Section 5 of the 14th
Amendment gives the Congress the authority to enforce
that article by appropriate legislation. That grant of
authority is, we submit, exclusive. Especially where
(as here) the Congress has exercised that authority,
where it has enacted certain policies into law, it is
not within the powers of either the executive or the
judicial branch to give effect to different policies even
for the purposes of “enforcing” the 14th Amendment.
Any different view would lead to governmental chaos.
7A different view of judicial power was indicated by the
infamous and erroneous Dred Scott decision more than half a
century later. The latter view was that the Constitution gives “pre-
rogative authority” to the Courts to “review” legislation. Dred
Scot v. Sanford, (1856) 19 How. 393, 15 L.Ed. 691. In contrast,
the rationale of Marshall, C.J. was that the Court did not have
prerogative power; it would give effect to a law of
unless by so doing the Court would itself exceed some constitu-
tional limitation, which limitations apply to the Court as well as
to Congress. The Dred Scott decision was the second in history
to nullify congressional action. In his first Inaugural Address,
President Lincoln rejected the Dred Scott theory of the Court's
power. The errors of Dred Scott have never been judicially
acknowledged.
= =
We have above noted the express jurisdictional limita-
tion on the executive’s following different policies. The
executive is charged that “the laws be faithfully exe-
cuted” (Art. II §3). The limitation of faithfulness
likewise applies to any agent (such as EEOC) that
is an agency of Congress, its principal.
Express limitations also exist with respect to the
courts’ authority. Congress has clear constitutional au-
thority to specify the jurisdiction of the courts. Const.
Art. Ill. Sheldon v. Sill (U.S. 1850) 8 How. 440,
12 L.Ed. 1147, Ex Parte McCardle (U.S., 1869) 7
Wall. 506, 19 L.Ed. 264. °
Thus, where, as here, Congress has not only exercised
the authority granted by Section 5 of the 14th Amend-
ment, but has also limited the courts’ jurisdiction under
that statute to those “adverse actions” as are defined
by the statute and are “intentionally engaged in”, it
is not within the courts’ power to develop broader
definitions of unlawful discrimination in terms of “sys-
tems or effects” or otherwise. In fact it was to prevent
that possibility that led to adopting the jurisdictional
limitation in 1964. While in 1972 it was proposed
to permit the development of a broader definition of
unlawful discrimination in terms of “systems and ef-
fects”, that proposal was rejected and the jurisdictional
limitations expressly reaffirmed. (App. E-15-18.)
Since 1972 the courts may now exercise broader
remedial authority than under the 1964 statute, after
it has been found that an “adverse action” as statutorily
ial
defined has been “intentionally engaged in”. However
Congress in 1972 again precluded the courts from
any “common-law-making” role in defining unlawful
employment practices by express reaffirmations of the
jurisdictional limitations of Title VII. (See App. E-
16.)
Of course Congress may so limit the courts. “There
can be no question of the power of Congress to define
and limit the jurisdiction of the inferior courts of
the United States.” Lauf v. E. G. Skinner & Co.,
303 U.S. 323, 330 (1938).
The trial judge herein seemed unconcerned with the
statutory language. He did not even make the findings
which the statute requires as the condition precedent
to the exercise of the courts’ remedial jurisdiction under
the statute (App. B-10-12), namely that the City was
“intentionally engaging in” an unlawful employment
practice as stautorily defined. The trial court likewise
ignored the jurisdictional limitation on an award of
“back pay”—that such shall not be awarded if the
action of the employer was “for any reason other”
than discrimination® on account of sex (App. A-5).
These lapses of the trial court, plus its reliance on
the EEOC “amended regulation” demonstrate that the
ere was extensive and careful attention given to the
mm of “discrimination” in the 1963-64 debates. The Con-
gressional Record is very clear that although the opponents of
the bill charged it had a new broad, sweeping a the
proponents of the bill whose intent is controlling said that
it had the same well established meaning it already had under
a number of already existing statutes. (110 Cong. Rec. 7218,
5803, 5437, 7477.)
= =
trial court was not exercising its statutory judicial juris-
diction, but some new legislative jurisdiction.
That the Court may not act in excess of statutory
jurisdiction (even if it had “enforcement” authority
under the Fourteenth Amendment) is one of the founda-
tions of the “checks and balances” of American gov-
ernment. See Sheldon v. Sill (U.S. 1850), 8 How.
440, 12 L.Ed. 114); Ex Parte McCardle, 7 Wall
506, 19 L.Ed. 264.
Conclusion.
Here, classification for purposes of the pension sys-
tem does not adversely affect the “employment status”
of any individual woman employee. While there is
differentiation between men and women, upon the basis
of sex there is no discrimination “against” an individual
with respect to compensation because of sex. Therefore
no adverse action or unlawful employment practice
as defined by statute has been shown under either
subsection of 42 U.S.C. §2000e-2(a).
Additionally Title VII specifically provides that it
shall not be an unlawful employment practice to “dif-
ferentiate upon the basis of sex in determining the
amount of wages or compensation” if such differential
in payment is for any “other factor other than sex.”
Here the factor was life expectancy or longevity. For
the courts below to expand the definition of unlaw-
ful employment practices to prohibit differential pay-
ment for that factor where made on a rational basis,
without any showing that such was done as a subter-
=
fuge and not in good faith, exceeded the courts’ power
as limited by Article III of the Constitution and Title
VII, (42 U.S.C. §2000e-5(g)) in addition to violating
the 10th, 11th and 14th Amendments.
Hence, a writ of certiorari should issue to review
the judgment and opinion of the United States Court
of Appeals for the Ninth Circuit or alternatively to
command the Court below to re-examine its decision
in the light of General Electric Co. v. Gilbert, the
statutes, the legislative history, and the United States
Constitution.
BuRT PINES,
City Attorney,
EDWARD C. FARRELL,
Chief Assistant City Attorney
for Water and Power,
J. Davip HANSON,
Deputy City Attorney,
Davip J. OLIPHANT,
Deputy City Attorney,
By Davip J. OLIPHANT,
Deputy City Attorney,
Attorneys for Defendants-A ppellees.
a
APPENDIX A.
Fair Labor Standards—29 U.S.C. § 206. .
(d) (1) No employer having employees subject to
any provisions of this section shall discriminate, within
any establishment in which such employees are em-
ployed, between employees on the basis of sex by paying
wages tc emrloyees in such establishment at a rate
less than the rate at which he pays wages to employees
of the opposite sex in such establishment for equal
work on jobs the performance of which requires equal
skill, effort, and responsibility, and which are performed
under similar working conditions, except where such
payment is made pursuant to (i) a seniority system;
(ii) a merit system; (iii) a system which measures
earnings by quantity or quality of production; or (iv)
a differential based on any other factor other than
sex: Provided, That an employer who is paying a
wage rate differential in violation of this subsection
shall not, in order to comply with the provisions of
this subsection, reduce the wage rate of any employee.
(2) No labor organization, or its agents, represent-
ing employees of an employer having employees subject
to any provisions of this section shall cause or attempt
to cause such an employer to discriminate against an
employee in violation of paragraph (1) of this subsec-
tion.
(3) For purposes of administration and enforce-
ment, any amounts owing to any employee which have
been withheld in violation of this subsection shall be
deemed to be unpaid minimum wages or unpaid over-
time compensation under this chapter,
anion
(4) As used in this subsection, the term “labor
organization” means any organization of any kind, or
any agency or employee representation committee or
plan, in which employees participate and which exists
for the purpose, in whole or in part, of dealing with
employers concerning grievances, labor disputes, wages,
rates of pay, hours of employment, or conditions of
work.
42 U.S.C. § 2000¢-2.
Unlawful Employment Practices.
(a) It shall be an unlawful employment practice
for an employer—
(1) to fail or refuse to hire or to discharge
any individual, or otherwise to discriminate against
any individual with respect to his compensation,
terms, conditions, or privileges of employment,
because of such individual’s race, color, religion,
sex, or national origin; or
(2) to limit, segregate, or classify his em-
ployees cr applicants for employment in any way
which would deprive or tend to deprive any in-
dividual of employment opportunities or otherwise
adversely affect his status as an employee, because
of such individual’s race, color, religion, sex, or
national origin.
* * *
(e) Notwithstanding any other provision of this sub-
chapter, (1) it shall not be an unlawful employment
practice for an employer to hire and employ employees,
for an employment agency to classify, or refer for
employment any individual, for a labor organization
to classify its membership or to classify or refer for
employment any individual, or for an employer, labor
—_<
organization, or joint labor-management committee con-
‘trolling apprenticeship or other training or retraining
programs to admit or employ any individual in any
such program, on the basis of his religion, sex, or
national origin in those certain instances where religion,
sex, or national origin is a bona fide occupational
qualification reasonably necessary to the normal opera-
tion of that particular business or enterprise, and (2)
it shall not be an unlawful employment practice for
a school, college, university, or other educational in-
stitution or institution of learning to hire and employ
employees of a particular religion if such school, college,
university, or other educational institution or institution
of learning is, in whole or in substantial part, owned,
supported, controlled, or managed by a particular reli-
gion or by a particular religious corporation, associa-
tion, or society, or if the curriculum of such school,
college, university, or other educational institution or
institution of learning is directed toward the propaga-
tion of a particular religion.
° * * *
Seniority or merit system; quantity or quality of produc-
tion; ability tests; compensation based on sex and
authorized by minimum wage provisions
(h) Notwithstanding any other provision of this sub-
chapter, it shall not be an unlawful employment prac-
tice for an employer to apply different standards of
compensation, or different terms, conditions, or priv-
ileges of employment pursuant to a bona fide seniority
or merit system, or a system which measures earnings
by quantity or quality of production or to employees
who work in different locations, provided that such
differences are not the result of an intention to discrim-
niiiglien
inate because of race, color, religion, sex, or national
origin, nor shall it be an unlawful employment practice
for an employer to give and to act upon the results
of any professionally developed ability test provided
that such test, its administration or action upon the
results is not designed, intended or used to discriminate
because of race, color, religion, sex or national origin.
It shall not be an unlawful employment practice under
this subchapter for any employer to differentiate upon
the basis of sex in determining the amount of the
wages or compensation paid or to be paid to employees
of such employer if such differentiation is authorized
by the provisions of section 206(d) of Title 29.
* * *
42 USC § 2000e-5(g).
Injunctions; appropriate affirmative action; equitable
relief; accrual of back pay; reduction of back pay;
limitations on judicial orders
(g) If the court finds that the respondent has in-
tentionally engaged in or is intentionally engaging in
an unlawful employment practice charged in the com-
plaint, the court may enjoin the respondent from en-
gaging in such unlawful employment practice, and order
such affirmative action as may be appropriate, which
may include, but is not limited to, reinstatement or
hiring of employees, with or without back pay (payable
by the employer, employment agency, or labor organiza-
tion, as the case may be, responsible for the unlawful
employment practice), or any other equitable relief
as the court deems appropriate. Back pay liability
shall not accrue from a date more than two years
prior to the filing of a charge with the Commission.
—v
Interim earnings or amounts earnable with reasonable
diligence by the person or persons discriminated against
shall operate to reduce the back pay otherwise allow-
able. No order of the court shall require the admission
or reinstatement of an individual as a member of
a union, or the hiring, reinstatement, or promotion
of an individual as an employee, or the payment to
him of any back pay, if such individual was refused
admission, suspended, or expelled, or was refused em-
ployment or advancement or was suspended or dis-
charged for any reason other than discrimination on
account of race, color, religion, sex, or national origin
or in violation of section 2000e-3(a) of this title.
ee ee
Yo
APPENDIX B.
Marie Manhart et al., Plaintiffs, v. City of Los
Angeles, Department of Water and Power, a body
corporate and politic, et al., Defendants. Civ. No. 73-
2272-HP.
United States District Court, C. D. California.
Jan. 15, 1975.
Female employees of city water and power depart-
ment brought action challenging requirement that
female employees make larger monthly contributions
than their male counterparts in order to receive the
same monthly retirement benefit as the male employees.
Plaintiff moved for a preliminary injunction. The Dis-
trict Court, Pregerson, J., held that such practice vio-
lated the Equal Employment Opportunity Act notwith-
standing that such differentiation was based on actuarial
tables indicating that women as a class tend to live
longer than men, that the Act requires that each
person be treated as an individual and not on the
basis of characteristics generally attributed to any racial,
religious or sex group and that a preliminary injunction
would issue.
Motion granted.
MEMORANDUM AND ORDER GRANTING
PLAINTIFFS’ MOTION FOR PRELIMINARY
INJUNCTION
PREGERSON, District Judge.
This matter arises upon a motion for preliminary
injunction. Plaintiffs, Marie Manhart, Carolyn May-
shack, and other employees of the Los Angeles Depart-
ment of Water and Power initiated this action against
the Los Angeles Department of Water and Power be-
—3B-2—
cause female employees of the Department are required
to make larger monthly contributions than their male
counterparts in order to receive the same monthly retire-
ment benefits as these male employees. In plaintiffs’
view, this practice violates § 703 of the Equal Employ-
ment Opportunity Act of 1972, 43 U.S.C.A. § 2000e-
2 (West 1974). According to defendants, however,
this differentiation between male and female employees
is justified by actuarial tables which indicate that
women as a class tend to live longer than men and
that therefore female employees are likely to receive
retirement benefits for a longer duration than their
male counterparts. In short, defendants argue that
women should pay more to get more.
In order to issue a preliminary injunction, the court
must make the following determination: (1) that plain-
tiffs are likely to prevail on the merits, (2) that plain-
tiffs will suffer irreparable harm without preliminary
relief, (3) that defendants will not be unduly injured
by the injunction, and (4) that an injunction promotes
the public interest. Seamen v. Spring Lake Park Inde-
pendent School District No. 16, 363 F.Supp. 944,
945 (D.Minn.1973); United States v. Local 638, 337
F.Supp. 217, 220 (S.D.N.Y.1972). See King v. Saddle-
back Junior College Dist., 425 F.2d 426 (9th Cir.
1970).
The major. question on this motion is whether
plaintiffs have a reasonable likelihood of success on
the merits. To make this determination, the court must
decide whether the Department’s practice of requiring
women to make larger monthly contributions to the
retirement plan than men constitutes “[ discrimination]
against any individual with respect to his compensation,
>
_— YY
terms, conditions, or privileges of employment, because
of such individual’s . . . sex . . .” within the meaning
of § 703(a)(1) of the Equal Employment Opportunity
Act of 1972. 42 US.C.A. § 2000e-2(a)(1) (West
1974).
Several sources of authority support the conclusion
that the Department’s practice in question here consti-
tutes sexual discrimination under § 703(a)(1). Initially,
it should be pointed out that this section applies to
retirement plans. Bartmess v. Drewrys USA, Inc., 444
F.2d 1186 (7th Cir. 1971); Rosen v. Public Service
Electric & Gas Co., 477 F.2d 90 (3d Cir. 1973).
Moreover, current regulations of the Equal Employ-
ment Opportunity Commission (EEOC) issued under
the authority of § 713 of the Act, 42 US.C.A. §
2000e-12 (West 1974), not only suggest that § 703(a)
(1) applies in this case, but also indicate that the
Department’s practice gives rise to sexual discrimina-
tion. According to these current regulations, “it shall
not be a defense under Title VII to a charge of
sex discrimination in benefits that the cost of such
benefits is greater with respect to one sex than the
other,” 29 C.F.R. § 1604.9(e), and “it shall be an
unlawful employment practice for an employer to have
a pension or retirement plan . . . which differentiates
in benefits on the basis of sex.” 29 C.F.R. § 1604.9(f).
The EEOC has recently applied these standards
to an analogous case in which retired female employees
received lower monthly payments under their annuities
than their male counterparts. Decision No. 74-118,
CCH EEOC Decisions 4 6431 (Employment Practices
Guide, 1974). Under the facts of that case, female
employees had contributed the same amounts for the
= vo
annuity benefits as male employees. In rejecting the
argument that equalization of monthly payments would
discriminate against males, who, as a class, would
receive less because they tend to die sooner, and in
favor of females, who would receive more because
they generally die later, the EEOC stated:
A argues that equal payments to female retirees
would in fact discriminate in their favor because
females, statistically, live longer than men. The
logic of this argument is that usually used to
support discrimination: an appeal to the average
characteristics of a particular sex, race, or other
group protected under Title VII. But no person
knows when he or she will die.
* * *
Thus we think that A’s argument misses the
point. All that A’s sex-segregated actuarial tables
purport to predict is risk spread over a large
number of people; the tables do not predict the
length of any particular individual's life.
In our view, any use of sex-segregated actuarial
table that results in payment of different periodic
pension benefits to males and females is highly
suspect. Because actuarial tables do not predict
the length of any individual’s life, any claim that
such tables may be used to assure equal pension
payments over a lifetime between males and fe-
males must fail. In order to achieve compliance
with Section 703(a) of Title VII and with the
Commission’s Guidelines on Discrimination Be-
cause of Sex the periodic pension benefits paid
to males and females in equivalent circumstances
must be equal. Moreover, it would not be a defense
to Charging Party’s charge that equalizing males’
iliiiinn
and females’ periodic pension benefits would result
in higher costs to Respondents if indeed this were
shown to be a fact. Guidelines on Discrimination
Because of Sex, 29 CFR Sec. 1604.9(3). See,
also, Taylor v. Goodyear Tire & Rubber Co.,
5 EPD Para. 8545, 6 FEP Cases 50 (N.D.Ala.,
1972).
(Footnotes omitted.) EEOC Decision 74-118, pp. 3-
5
As plaintiffs correctly point out, the only difference
between the facts of EEOC Decision 74-118 and the
facts of the case at bar is that instead of taking
equal contributions from both sexes and supplying lower
benefits to females, the defendants in the present action
take more contributions from females and supply equal
benefits to both sexes. In either case, the reason for
this differential treatment is the actuarial fact of female
longevity which, in effect, involves the application oi
characteristics that may be true of a class of people
to individuals within the class fur which the characteri-
zation May or may not be true. Therefore, EEOC
Decision 74-118 is directly applicable to the present
case, and dictates a finding of sexual discrimination
here. As such, it is entitled to great deference in
this court. Griggs v. Duke Power Co., 401 U.S. 424,
433-434, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971).
The conclusion that the defendants’ differential treat-
ment of female employees violates § 703(a)(1) is
supported by a recent Harvard Law Review comment,
Employment Discrimination and Title VII of the Civil
Rights Act of 1964, 84 Harv.L.Rev. 1109, 1172-1176
(1971). In its discussion of discrimination based on
statistical differences and life insurance benefit pro-
ailtiiiinn
grams, the comment takes the position that employers
must provide the same life insurance benefits to male
and female employees even though employers must
pay higher premiums for males than for females due
to actuarial female longevity. The comment reaches
this conclusion because “Title VII, in the field of
employment, requires evaluation on an individual basis
rather than a prediction made on the basis of a sex-
defined group,” and because “Title VII focuses on
presenting each employee in an individual light, free
from conclusions that may be drawn from the individ-
ual’s membership in one sex or the other.” 84 Harv.L.
Rev. at 1174.
The basic principle which emerges from these authori-
ties and from the case law is that sexual discrimination
under § 703(a)(1) exists whenever general fact charac-
teristics of a sex-defined class are automatically applied
to an individual within that class. See Phillips v. Martin
Marietta Corp., 400 U.S. 542, 91 S.Ct. 496, 27 L.Ed.2d
613 (1971); Rosenfeld v. Southern Pacific Co., 444
F.2d 1219 (9th Cir. 1971); Sprogis v. United Air
Lines, 444 F.2d 1194 (7th Cir. 1971); Willingham
v. Macon Telegraph Publishing Co., 482 F.2d 535
(Sth Cir. 1973). In passing Title VII, Congress estab-
lished a policy that each person must be treated as
an individual and not on the basis of characteristics
generally, and often falsely, attributed to any racial,
religious, or sex group. See Rosenfeld v. Southern Pacif-
ic Co., supra 444 F.2d at 1225. More particularly,
Congress intended in regard to sexual discrimination
cases to strike at the entire spectrum of disparate
treatment of individual men and women resulting from
sex stereotypes. Sprogis v. United Air Lines, Inc., supra
444 F.2d at 1198. In short, under the Equal Employ-
= * =
ment Opportunity Act of 1972, all stereotypic treatment
of persons based on race, religion, or sex whether
rational or irrational is dead. Because the Department
of Water and Power’s practice in question here violates
these considerations by applying the general actuarial
characteristic of female longevity to individual female
employees who in reality may or may not outlive
individual male employees, the court concludes that
plaintiffs have established a case of discrimination under
§ 703(a)(1) of the Equai Employment Opportunity
, Act.
Defendants attempt to establish a defense under §
703(h) of the Equal Employment Opportunity Act
of 1972. 42 U.S.C.A. § 2000e-2(h) (West 1974).
This section states in part that “it shall not be an
unlawful employment practice under this subchapter
for any employer to differentiate upon the basis of
sex in determining the amount of wages or compensa-
tion paid or to be paid to employees . . . if such
differentiation is authorizec by the provisions of section
206(d) of Title 29.” Section 206(d) states in part
that “no employer . . . shall discriminate . . . between
employees on the basis of sex by paying wages to
employees . . . at a rate less than the rate at which
he pays wages to employees of the opposite sex . . .
for equal work . . . except where such payment is
made .. . (iv) a differential based on any other
factor other than sex: Provided, That an employer
who is paying a wage rate differential in violation
of this subsection shall not, in order to comply with
the provisions of this subsection, reduce the wage rate
of any employee.” 29 U.S.C.A. § 206(d) (1).
Defendants fail to explain how § 206(d)(1) justifies
higher retirement contributions for women. Instead,
alive
they cite § 703(h) and immediately refer to 29 C.F.R.
§ 800.116(d), a regulation of the Wage-Hour Adminis-
trator which implies that segregated actuarial treatment
of men and women does not violate the Equal Pay
Act. Even if § 206(d)(1) applies to this case, the
court believes that differentiation based on sex segre-
gated actuarial tables constitutes a differential based
on the “factor” of sex in violation of that section.
The court also concludes that the other elements
necessary to support a preliminary injunction are pres-
ent in this case. Where statutory civil rights of em-
ployees are found to have been violated, irreparable
injury may be presumed from loss of human dignity
which such violations engender. See United States
v. Hayes International Corp., 415 F.2d 1038, 1045
(Sth Cir. 1969). Moreover, as plaintiffs’ affidavits
suggest, the potential for irreparable injury is great
in that we deal with the present ability of female
employees to provide the necessities of life for them-
selves and their families. Finally, the very subject of
this action, sexual discrimination, and the number of
persons affected by the Department’s practice, supports
the conclusion that a preliminary injunction would serve
the public interest.’
Accordingly, it is ordered that plaintiffs’ motion for
a preliminary injunction is granted.
It is further ordered that this Memorandum and
Order shall constitute the court’s findings of fact and
While this opinion was in draft form, the court was noti-
fied by defendants in a copy of a letter dated December
26, 1974 that the Department of Water and Power and the
Board of Administration of the Department of Water and Power
Employees Retirement Plan had adopted a resolution on Decem-
ber 23. 1974, equalizing male and female contributions to
the Retirement Plana.
onlin
conclusions of law as authorized by Rule 52 of the
Federal Rules of Civil Procedure.
It is further ordered that the Clerk of the Court
shall serve copies of this Memorandum and Order,
by United States mail, upon the attorneys of record for
the parties herein.
Findings of Fact.
It is true that:
1. The plaintiffs, Carolyn Mayshack, Margerie
Stoop, Alice F. Muller and Ethel L. Lehman, are
employees of the defendant, Department of Water and
Power of the City of Los Angeles (“Department”).
The plaintiff, Marie Manhart, is a former employee
of the Department. The plaintiff, Committee to Protect
Women’s Retirement Benefits, is an association of fe-
male, supervisory employees of the Department. The
plaintiff, International Brotherhood of Electrical Work-
ers, Local Union No. 18 (“Union”), is an unincorpo-
rated labor organization, whose members include certain
women who are employed by the Department.
2. The defendant, Department of Water and Power
of the City of Los Angeles, employs approximately
2,000 females. The defendant, Board of Commissioners
of the Department of Water and Power, directs the
affairs of the Departm ~.. The defendant, Board of
Administration of the Department of Water and Power
Public Employees’ Retirement, Disability, and Death
Benefit Insurance Plan, administers the benefit plans
maintained for employees of the Department.
3. The Department maintains a Public Employees’
Retirement, Disability, and Death Benefit Insurance
Plan (“Plan”). The Plan is funded by compulsory
—B-10—
employee contributions which are matched 110% by
compulsory employer contributions. The Plan is also
funded by earnings on all contributions.
4. Between March 24, 1972 and December 31,
1974, the Plan paid the same monthly benefits to
male and female retirants of the same age and length
of service. However, higher contributions were required
of female employees than males because acturarial
tables used in the administration of the Plan indicate
that women in general live longer than men and that
women would therefore tend to collect monthly pay-
ments for a longer period of time.
5. On or about June 5, 1973, the Union filed
with the Equal Employment Opportunity Commission
(“EEOC”) a charge alleging that the Plan discriminated
against females because it required them to contribute
more than their male counterparts. The United States
Department of Justice issued a notice of right to sue
letter on or about September 17, 1973. The plaintiffs
filed a complaint in this court on September 26, 1973.
6. The plaintiffs employed legal counsel, who ren-
dered valuable services to the classes in the litigation
of the issues presented in this case.
7. On April 5, 1972, the EEOC amended its regula-
tions to state: “It shall not be a defense under Title
[VII] to a charge of sex discrimination in benefits
that the cost of such benefits is greater with respect
to one sex than the other.” 29 C.F.R. 1604.9(e).
The following Conclusions of Law, insofar as they
may be considered Findings of Fact, are so found
by this court to be true in all respects.
—— ee
—B-11—
Conclusions of Law.
1. The court has jurisdiction of the plaintiffs’ action
which was brought pursuant to Section 706(f) of Title
VII of the Equal Employment Opportunity Act of
1972 (“Act”) (42 U.S.C. § 2000e-5(f) ).
2. The plaintiff Union filed a timely charge with
the EEOC. After receiving a notice of right to sue
letter from the United States Department of Justice,
the plaintiffs filed a timely complaint in this court.
The plaintiffs have satisfied the jurisdictional prerequi-
sites of the Act for bringing suit in this court.
3. The Department is an employer within the mean-
ing of Section 701(b) of the Act (42 U.S.C. §2000e
(b)).
4. With respect to the cause of action brought
under Title VII of the Act, on January 25, 1974,
the court certified classes which included (a) all female
employees presently working for the Department who
are members of the Plan, (b) all female members
of the Plan who retired from the active service with
the Department on or after March 24, 1972, (c)
all female employees who resigned from active service
with the Department on or after March 24, 1972
and who left their compulsory employee contributions
on deposit with the Plan, and (d) all women hired
by the Departr:ent who became members of the Plan
prior to the resolution of this action.
5. The Department’s practice of requiring females
to make larger monthly contributions to the Plan than
their male counterparts is an unlawful employment
practice within the meaning of Section 701(a)(1) of
the Act (42 U.S.C. § 2000e-2(a)) and no defenses
—B-12—
under Section 703(e) and (h) of the Act have been
stated (42 U.S.C. § 2000e-2(e), (h)).
6. The Eleventh Amendment to the United States
Constitution does not bar a money recovery against
the defendants in this action.
7. The defendants should have been placed on
notice that their practice of differential contributions
constituted an unlawful employment practice under Sec-
tion 701(a)(1) of the Act when the EEOC amended
its regulations on April 5, 1972 to include what is
now 29 C.F.R. 1604.9(e).
8. Under Section 706(g) of the Act, each meraber
of the classes defined in Paragraph 4 of these Con-
clusions of Law is entitled to a refund me “ed by
the difference between the contributions s as re-
quired to make on and after April 5, 1972 and the
contributions required of a male who entered the service
of the Department at the same age, and on the same
date, and earned the same rate of pay throughout
his service as the female member of the class. In
addition, each member of the class is entitled to interest
at seven percent (7%) on her overpayments running
from the date of contribution.
9. Counsel for the plaintiffs are entitled by Section
706(k) of the Act (42 U.S.C. § 2000e-5(k)) to
reasonable attorneys’ fees payable by the defendants.
Dated: June 20, 1975.
HARRY PREGERSON
Harry Pregerson
United States District Judge
— 1
APPENDIX C.
Opinion of the Court of Appeals for the Ninth Circuit.
(Amended: December 23, 1976)
United States Court of Appeals, for the Ninth Cir-
cuit.
Marie Manhart, et al., Plaintiffs-Appellees, vs. City
of Los Angeles, Department of Water and Power,
a body corporate and politic, et al., Defendants-Appel-
lants. No. 75-2729, No. 75-2807, No. 75-2905.
[November 23, 1976]
Appeal from the United States District Court for
the Central District of California
Before: CHAMBERS, DUNIWAY and KILKENNY,
Circuit Judges
DUNIWAY, Circuit Judge:
The question presented in this case is whether a
retirement plan which requires women employees to
contribute from their wages 15% more than similarly
situated male employees because of the longer average
life expectancy of women violates the Civil Rights
Act of 1964, Title VII, as amended by the Equal
Employment Opportunity Act of 1972, 42 U.S.C.
§ 2000e-2. The district court held that the plan violated
Title VII,’ enjoined the employer from charging the
1The relevant provision of Title VII reads:
§ 2000e-2
(a) It shall be an unlawful employment practice for an
employer—
(1) to fail or refuse to hire or to discharge any individual,
or otherwise to discriminate against any individual with
respect to his compensation, terms, conditions, or priv-
= of employment, because of such individual’s race,
or, religion, sex, or national origin.
-_ . e
higher contribution rate against women, and awarded
a refund of all excess contributions made on or after
April 5, 1972. Manhart v. City of Los Angeles, De-
partment of Water and Power, C.D. Cal., 1975, 387
F.Supp. 980.
This is a class action brought by women employees
and retirees of the City of Los Angeles, Department
of Water and Power [hereinafter “Department”]. The
defendants are the Department, the members of the
Board of Commissioners of the Department, the mem-
bers of the Board of Administration of the Department’s
Employees’ Retirernent, Disability, and Death Benefit
Insurance Plan, the Department’s chief accounting offi-
cer, and the Department’s general manager.
All employees of the Department are required to
participate in the established retirement plan which
is funded and managed solely within the Department.
Each employee must make a monthly contribution to
the retirement plan, and the Department matches that
contribution 110%. These funds are deposited with
the city treasurer but are kept separate and apart
from all other monies of the city. The chief accounting
employee of the Department is the only person au-
thorized to withdraw money from the retirement ac-
count.
The aspect of this program which gives rise to this
case is that women employees are required to contribute
approximately 15% more than men employees who
are identically situated. The Department’s justification
is that because women get the same monthly benefits
upon retiring and because, on the average, they live
approximately five years longer, they must, as a group,
contribute more.
~~
_—
In June of 1973, the International Brotherhood of
Electrical Workers, Local #18, representing the named
plaintiffs, filed a charge with the Equal Employment
Opportunity Commission [EEOC] alleging that the
higher contribution requirement for women was sex
discrimination in violation of the Civil Rights Acts
of 1871 and 1964. The United States Department
of Justice issued a Notice of Right to Sue letter in
September of 1973, and this action was filed during
that same month.
In their second amended complaint, filed on July
18, 1974, the plaintiffs stated four separate claims
for relief, each of which, however, was based upon
the same set of facts. The first claim was based upon
Title VII, the second upon the Civil Rights Act of
1871, 42 U.S.C. § 1983, the third upon the Fourteenth
Amendment to the Constitution, and the fourth, a
pendent claim, upon Article 1, §§ 1 and 21, of the
Constitution of California.
The plaintiffs’ first amended complaint had also as-
serted claims resting on the same four theories, but
had not set them up as separate claims. On March
26, 1974, the court granted in part and denied in
part the defendants’ motion to dismiss. It granted the
motion of the Department, the two boards, and their
members in their capacities as members, to dismiss
the claim that was based upon 42 U.S.C. § 1983,
on the ground that the Department and the Board
are not “persons” within the meaning of that section.
It denied the motion of the Board members in their
individual capacities to dismiss the § 1983 claim, hold-
ing that they are “persons,” and that they are not
immune from suit under § 1983. It granted the motion
Ye
of all defendants to dismiss the § 1983 claim insofar
as any of it accrued more than three years before
the action was filed on September 26, 1973. It denied
the motion to dismiss the Title VII claim, except that
it granted the motion as to any claim arising before
March 24, 1972. It dismissed the claim under the
California Constitution. It did not rule on the claim
under the Fourteenth Amendment. And it allowed 20
days for the filing of a second amended complaint.
After the second amended complaint was filed, no
motion was made by any of the defendants to strike
or otherwise dispose of those of the allegations that
were inconsistent with the court’s order of March 26,
1974.
On June 20, 1975, the court granted the plaintiffs’
motion for summary judgment, holding that the plan
violated Title VII. On the same day it entered a
judgment, declaring that the plan, insofar as it requires
larger contributions from female employees than from
their male counterparts, violates Title VII, and specifi-
cally § 701(a)(1) (42 U.S.C. § 2000e-2(a)). The
judgment also enjoins requiring larger contributions
from females and orders that the Department refund
the excess contributions collected on and after April
5, 1972, plus interest at 7%, and that defendants
pay counsel for plaintiffs’ reasonable attorneys’ fees.
The judgment says nothing about the claims based
on § 1983, the Fourteenth Amendment, or the Califor-
nia Constitution.
On July 7, 1975, the defendants appealed from
the judgment. This appeal is our No. 75-2729. On
July 11, 1975, the plaintiffs appealed from “that portion
of the judgment . . . which denies relief to the plaintiffs
_ va
based on the causes of action and defendants dismissed
by the Court in its Order Granting and Denying in
Part Defendants Motion to Dismiss, entered on or
about March 26, 1974.” This appeal is our No. 75-
2807. On July 17, the district judge denied a motion
by the defendants for a stay of the judgment. They
appealed on July 30, 1975. This is our No. 75-2905.
We later entered an order staying the judgment pending
appeal, insofar as it requires the refund of contributions.
After oral argument before us, and in response to
an inquiry from the bench, counsel for plaintiffs stipu-
lated, and we ordered, that the plaintiffs “have hereto-
fore abandoned all claims under 42 U.S.C. § 1983
against individual officials in their individual capaci-
ties.”
I. Our Jurisdiction.
A. No. 75-2729.
The judgment of J: ae 20, 1975, embodies an injunc-
tion against requiring large. contributions from women
than from men, and requiring restitution of excess
contributions previously paid. As an injunction, it is
appealable under 28 U.S.C. § 1292(a)(1). It is not
appealable as a final judgment under 28 U.S.C. §
1291. It does not dispose of any claim except the
claim under Title VII. It runs only against the defend-
ants, the Department, the two Boards, and their mem-
bers as such, but not the defendant members individual-
ly. It says nothing about the claims or defendants
dismissed in the district court’s order of March 26,
1974. There is no “express determination that there
is no just reason for delay” nor “express direction
for the entry of judgment.” (F. R. Civ. P. 54(b)).
—C-6—
B. No. 75-2807.
We have no jurisdiction of this appeal. The judg-
ment does not do what the notice of appeal says
that it does. The order of March 26, 1974, was inier-
locutory. It did not purport to determine any issue
finally. It permitted amendment of the complaint, and
the amendment restated, separately, all of the claims
asserted but commingled in the original complaint.
The plaintiffs were entitled to amend as they did,
and the defendants, to protect their record, should
have called to the attention of the court the fact
that the amended complaint did not fully comply with
the court’s order of March 26, 1974. The court was
not required to reconsider that order but the defendants
should have at least suggested that it embody in its
subsequent judgment the decision that it made in its
March 26, 1974, order, thus disposing of the plaintiffs’
claims. The claims remain pending because the judg-
ment does not dispose of them. We have no jurisdic-
tion in No. 75-2807.
It is no answer to say that the plaintiffs have volun-
tarily abandoned their claims under 42 U.S.C. § 1983
against the individual defendants. That abandonment
binds the plaintiffs, but it does not affect their claims
against the Department and its Boards and their mem-
bers and employees in their official capacities under
§ 1983. Those claims are still pending in the district
court and are not properly before us.
C. No. 75-2905.
Because we have granted a stay, and because we
are now affirming the judgment in No. 75-2729, this
appeal is moot.
_..
Il. The Merits of the Judgment.
The basis of the defendants’ appeal is that, while
requiring women to make larger contributions discrimi-
nates against women, there is a sound basis for the
requirement, making it a discrimination based on lon-
gevity, not sex, and therefore not the kind of invidious
discrimination that Title VII was intended to abol-
ish. We disagree.
It is undisputed that the overriding purpose of Title
VII is to require employers to treat each employee
(or prospective employee) as an individual, and to
make job related decisions about each employee on
the basis of relevant individual characteristics, so that
the employee’s membership in a racial, ethnic, religious,
or sexual group is irrelevant to the decisions. See
Griggs v. Duke Power Co., 1971, 401 U.S. 424, 436.
To require every individual woman to contribute 15%
more into the retirement fund than her male counterpart
must contribute because women “voi the average” live
longer than men is just the kind of abstract generaliza-
tion, applied to individual women because of their
being women, which Title VII was designed to abolish.
Not all women live longer than all men, yet each
individual woman is required to contribute more, not
because she as an individual will live longer, but because
the members of her sexual group, on the average,
live longer.
The Department argues, however, that Congress did
not intend Title VII to prohibit drawing sexual distinc-
tions when there is a statistically valid basis for doing
so and when it is impossible to determine ahead of
time when the individual employee is going to die.
Thus it is argued that, because it is undisputed that
_..
women on the average do live longer, and because
it is not possible to predict which women will actually
live longer, Title VII ought to permit a higher contribu-
tion requirement for all women.
The problem raised by this case is unique. There
have been two basic policies which have guided the
courts in prior Title VII litigation: (1) the policy
against attributing general group characteristics to each
individual member of the group, the major thrust of
the statute, and (2) the policy allowing relevant employ-
ment factors to be considered in differentiating among
individuals. See Bernstein & Williams, Title VII and
the Problem of Sex Classifications in Pension Programs,
74 Col. L. Rev. 1203, 1219 (1974). Heretofore, these
two policies have not conflicted because in cases where
general group characteristics were attributed to the
individual employee, the relevant employment character-
istics were capable of being individually measured. Id.
at 1220. For example, in Rosenfeld v. So. Pacific
Co., 9 Cir., 1971, 444 F.2d 1219, we held that refus-
ing to hire women for positions which entailed long
hours and heavy physical effort violated Title VII
because it entailed attributing the generally weaker
physique of women to all women. An important basis
of our decision was the fact that each individual woman
applicant could actually be tested to see whether the
relevant characteristic of strength was or was not in
fact lacking.
This same consideration has been present in cases
finding illegal: (1) the refusal to allow women to
work overtime because of a belief that women as
a group cannot work the long hours that men can,
Schaeffer v. San Diego Yellow Cabs, Inc., 9 Cir.,
- =
1972, 462 F.2d 1002; (2) the forced retirement of
all women at an earlier age than men because of
a belief that; on the average, men were capable of
adequate performance longer than women, Rosen v.
Public Service Electric and Gas Co., 3 Cir., 1973,
477 F.2d 90, Bartmess v. Drewrys U.S.A., Inc., 7
Cir., 1971, 444 F.2d 1186; (3) the termination of
women employees who married because of a belief
that, on the average, women could not work effectively
and keep an adequate home life, Sprogis v. United
Air Lines, Inc., 7 Cir., 1971, 444 F.2d 1194; (4)
the refusal to hire men as flight attendants because
men, on the average, are said to be emotionally unsuited
for that type of work, Diaz v. Pan Am. World Airways,
Inc.. 5 Cir., 1971, 442 F.2d 385; (5) the refusal
to hire women as telephone switchmen because of
a belief that, on the average, women are incapable
of working the long hours and doing the leavy lifting
involved, Weeks v. Southern Bell Telephone & Tele-
graph Co., 5 Cir., 1969, 408 F.2d 228; (6) requiring
pregnant women to take mandatory leave after six
months of pregnancy because, on the average, pregnant
women are supposed to be incapable of working ade-
quately after that point, Berg v. Richmond Unified
School Dist., 9 Cir., 1975, 528 F.2d 1208; (7) the
refusal to hire women with preschool children because
of a belief that family responsibilities would interfere
with their job performance, Phillips v. Martin Marietta
Corp., 1971, 400 U.S. 542.
In the present case a relevant characteristic in deter-
mining how large an individual’s retirement contribution
should be is an informed prediction as to how long
the person will live. But this characteristic, unlike those
1p
in the prior cases, is impossible to determine on an
individual basis at the time when the contribution must
be made. Thus, the policy of allowing relevant factors
to be considered can be met only by allowing the
group longevity statistics to be attributed to the in-
dividual members of the group. Yet this is exactly
what the thrust of Title VII prohibits. We are therefore
faced with the unique case in which the policy against
per se discrimination directly conflicts with the policy
of allowing relevant factors to be considered.
To support its argument that the actuarial distinctions
are permitted under Title VII, the Department points
to both the “bona fide occupational qualification excep-
tion” in 42 U.S.C. § 2000e-2(e) and the Bennett
Amendment to Title VII, 42 U.S.C. § 2000e-2(h).
Reconciliation of the conflicting policies noted above
would be easy if Congress had specifically covered
the kind of actuarial distinction that is before us in one
of the exceptions which the Department cites. Both,
however, are very general and have no language relating
to actuarially determined discrimination, much less to
pension plans.
A. The Bona Fide Occupational Qualification
[BFOQ] Exception.
Title 42 U.S.C. § 2000e-2(e) states that an employer
may discriminate on the basis of religion, sex, or na-
tional origin “where religion, sex, or national origin
is a bona fide occupational qualification reasonably
necessary to the normal operation of that particular
business or enterprise.” EEOC, which is charged with
administering and enforcing Title VII and whose inter-
pretations of that statute are entitled to great deference,
x)
Griggs v. Duke Power Co., supra, 401 U.S. at 433-
34; Hutchinson v. Lake Oswego School Dist. #7, 9
Cir., 1975, 519 F.2d 961, 965, has issued guidelines
directing that the BFOQ exception “be interpreted nar-
rowly.” 29 C.F.R. § 1604.2(a). In one of the few
cases ruling on this exception, the Fifth Circuit has
said:
the use of the word “necessary” in [§$ 2000e-
2(e)] requires that we apply a business necessity
test, not a business convenience test. That is to
say, discrimination based on sex is valid only
when the essence of the business operation would
be undermined... .
Diaz v. Pan Am. World Airways, Inc., supra,
442 F.2d at 388 [italics in original].
See also Weeks v. Southern Bell Telephone & Tele-
graph Co., supra, 408 F.2d at 232.
Discriminating against women in setting the amount
of retirement contributions in no way affects the ability
of the Department to provide water and power to
the citizens of Los Angeles. Even if it could be said
that the relevant business function here involved is
that of providing employees with a stable and secure
pension program there is no showing that sexual dis-
crimination is necessary to protect the essence of that
function. Actuarial distinctions arguably enhance the
ability of the employer and the pension administrators
to predict costs and benefits more accurately, but it
cannot be said that providing a financially sound pen-
sion plan requires an actuarial classification based whol-
ly on sex. This is especially true when distinctions
based on many other longevity factors (e.g., smoking
and drinking habits, normality of weight, prior medical
Sip
history, family longevity history) are not used in deter-
mining contribution levels. Thus, we find that the BFOQ
exception does not permit the sexual classification chal-
lenged in this case.
B. The Bennett Amendment.
In its original proposed form, 42 U.S.C. § 2000e-
2(h) stated that discrimination among employees was
permitted if based on a bona fide seniority or merit
system, a system rewarding quantity or quality of pro-
duction, different work locations, or professionally de-
veloped ability tests. Because the inclusion of “sex”
as one of the categories of discrimination made illegal
by Title VII was done by last minute amendment,
received almost no attention, and produced no legislative
history, see 110 Cong. Rec. 2720 (Rep. Green’s re-
marks, Feb. 10, 1964); Berstein & Williams, supra,
74 Col. L. Rev. at 1216-17, Senator Bennett became
concerned that the Act might inadvertently conflict
with the Equal Pay Act of 1963, which had received
careful attention the year before. Therefore, he pro-
posed, and Congress approved, an amendment to §
2000e-2(h), which reads:
It shall not be an unlawful employment practice
under this subchapter for any employer to differ-
entiate upon the basis of sex in determining the
amount of the wages or compensation paid or
to be paid to employees of such employer if such
differentiation is authorized by the provisions of
section 206(d) of Title 29 [the Equal Pay Act].
Title 29 U.S.C. § 206(d)(1), which was thus incor-
porated into the Civil Rights Act of 1964 by the
Bennett Amendment, says that it shall be unlawful
to discriminate on the basis of sex in paying wages:
—-13—
except where such payment is made pursuant to
(i) a seniority system; (ii) a merit system; (iii)
a system which measures earnings by quantity
or quality of production; or (iv) a differential
based on any other factor other than sex.
It is exception iv which the Department says permits
the kind of actuarially based discrimination that is
in question here. However, it does not seem reasonable
to us to say that an actuarial distinction based entirely
on sex is “based on any other factor other than sex.”
Sex is exactly what it is based on.
Additionally, the legislative history of the Equal Pay
Act indicates that the general language of § 206(d)(1)
was not intended to exempt pension plans, or any
actuarially based employee program, from its coverage.
The House Committee on Education and Labor, which
reported out the E.ual Pay Act, commented on the
exceptions as follows:
Three specific exceptions and one broad general
exception are also listed. It is the intent of this
committee that any discrimination based upon any
of these exceptions shall be exempted from the
operation of this statute. As it is impossible to
list each and every exception, the broad general
exclusion has been also included. Thus, among
other things, shift differentials, restrictions on or
differences based on time of day worked, hours
of work, lifting or moving heavy objects, differ-
ences based on experience, training, or ability
would also be excluded. It also recognizes certain
special circumstances, such as “red circle rates.”
This term is borrowed from War Labor Board
parlance and describes certain unusual, higher than
14
normal wage rates which are maintained for many
valid reasons. For instance, it is not uncom-
mon for an employer who must reduce help in
a skilled job to transfer employees to other less
demanding jobs but to continue to pay them a
premium rate in order to have them available
when they are again needed for their former jobs.
House Report #309 to accompany H.R. 6060,
May 20, 1963, Committee on Labor and Educa-
tion, reprinted in 1963 U.S. Code Cong. & Admin.
News 687, 689 (88th Cong., Ist sess. ).
This is the only legislative history coming from the
House concerning the exceptions upon which the De-
partment relies. It seems clear that, at least in the
House, exception iv was seen only as a catch-all cate-
gory which would permit distinctions similar to those
based on seniority, merit, or production but which do
not literally fall into any of those categories, and not a
disguised grant of legitimacy for pension plan discrim-
ination based on sex.”
The report of the Senate Committee on Labor and
Public Welfare indicates that, unlike the House com-
mittee, the Senate committee did specifically consider
how pension and insurance plans would fit into the
scheme of the Equal Pay Act. It commented:
Furthermore, questions can legitimately be raised
as to the accuracy of defining such costs as pension
and welfare payments as related to sex. It has
2It is especially significant that the Committee made no
mention of pension plans, because the problem was specifically
brought to its attention during the —s conducted on the
Equal Pay Act. Hearings before the House Special Subcommittee
on Education & Labor, 88th Cong., Ist sess., 1963 (Equal
Pay Act, H.R. 3861) at p. 103.
nf 3$-—
been pointed out that the higher susceptibility
of men to disabling injury can result in a greater
cost to the employer, and that these figures as
to health and welfare costs can only be applied
plant-wide. It may be that it is more expensive
to hire women in one department but it is more
expensive to hire men in another, and overall
cost figures may demonstrate conclusively that the
employer has made a sound decision to hire women
and pay them on an equal basis.
It is the intention of the committee that where
it can be shown that, on the basis of all of
the elements of the employment costs of both
men and women, an employer will be economical-
ly penalized by the elimination of a wage dif-
ferential, the Secretary can permit an exception
similar to those he can permit for a bona fide
seniority system or other exception mentioned
above. &
Senate Report #176 to accompany S. 1409, May
13, 1963, Committee on Labor and Public Welfare,
at p. 4 (88th Cong., Ist sess. ).
This seems to indicate that the Senate had a broader
view of exception iv than did the House in that, when
an employer can demonstrate that he incurs significant
costs because of employing a particular sex, exception
iv would allow the Secretary of Labor, through the
Wage-Hour Administrator, to grant an exception from
the provisions of the Act.
However, in this case there is nothing in the record
to show, and the Department does not claim, that
it requires higher contributions from women because
it would be economically penalized if it did not; it
a "
requires the higher contributions only because it be-
lieves that the pension fund itself will thereby be better
funded and easier to administer. Thus, whatever the
Senate committee had in mind about the Equal Pay
Act, it would not, when grafted onto the provisions
of Title VII, be the kind, of broad exception to the
rule against per se discrimination which the Department
needs to justify the contribution rate differential here
involved. Neither the clear language of the statute,
§ 206(d)(1), nor the legislaive history supports the
Department’s position.
Nonetheless, the Department -points to a dialogue
between Senator Humphrey, the floor manager of the
1964 Civil Rights Act, and Senator Randolph, which
occurred during the floor debate on the 1964 Act
(not the Equal Pay Act) and Title VII.
SEN. RANDOLPH: Mr. President, I wish to
ask of the Senator from Minnesota [Mr. Hum-
phrey], who is the effective manager of the pend-
ing bill, a clarifying question on the provisions
of title VII.
I have in mind that the social security system,
in certain respects, treats men and women different-
ly. For example, widows’ benefits are paid automat-
ically; but a widower qualifies only if he is dis-
abled or if he was actually supported by his de-
ceased wife. Also, the wife of a retired employee
entitled to social security receives an additional
old age benefit; but the husband of such an em-
ployee does not. These differences in treatment
as I recall, are of long standing. Am I correct,
I ask the Senator from Minnesota, in assuming
that similar differences of treatment in industrial
benefit plans, including earlier retirement options
—C-17—
for women, may continue in operation under this
bill, if it becomes law?
SEN. HUMPHREY: Yes. That point was
made unmistakably clear earlier today by the adop-
tion of the Bennett amendment; so there can be
no doubt about it.
110 Cong. Rec. 13663-64, June 12, 1964.
Although this does seem to give support to the
Department’s position, we do not find it to be persua-
sive legislative history. The discussion occurred hours
after passage of the Bennett Amendment and cannot
be said to be part of the legislative history of that
amendment. The Department claims that although the
statement was made after the Bennett Amendment was
adopted, it was still made before the Senate voted
on the entire Civil Rights Act. Thus, it claims that
Senator Randolph and others who may have wanted
to preserve such distinctions were misled into not offer-
ing a further amendment for that purpose. This argu-
ment might have some merit were it not for the fact
that the same Congress (the 88th) passed both the
Civil Rights Act and the Equal Pay Act, and it seems
unlikely that Senator Humphrey’s erroneous interpreta-
tion of the latter misled many, if any, senators. It
certainly misled no members of the House. So far
as appears, members of the House never heard of
it.
We note, too, that every case that has considered
whether sex-based early retirement options violate Title
VII has held that they do, although it does not appear
that the colloquy between Senators Randolph and Hum-
phrey was called to the attention of the courts. See
Chastang v. Flynn and Emrich Co., 4 Cir., 1976,
.... F.2d .... (slip op. June 10, 1976); Rosen v. Public
—f-1§—
Service Electric & Gas Co., supra; Bartmess v. Drewrys
U.S.A., Inc., supra; Fitzpatrick v. Bitzer, D. Conn.,
1974, 390 F. Supp. 278, 287-88, aff'd, 2 Cir., 1975,
519 F.2d 559, rev’d on other grounds, 1976, .... U.S.
iat See also Peters v. Missouri Pacific R. Co., 5
Cir., 1973, 483 F.2d 490, 492, n.3.
As we have noted, Senator Humphrey’s remark re-
flects an erroneous interpretation of the Equal Pay
Act. Because all that the Bennett Amendment did
was to incorporate the exemptions of the Equal Pay
Act into Title VII, it is questionable whether the Sena-
tor’s statement, made during the debates on the incorpo-
rating statute, would be significant when it erroneously
interprets the incorporated statute.
The Department cites as additional authority interpre-
tations of the Equal Pay Act by the Administrator
of the Wage and Hour Division of the Department
of Labor. As the official charged with enforcing and
interpreting the Equal Pay Act, his interpretations of
that Act are entitled to great deference. Udall v. Tal-
man, 1965, 380 U.S. 1. However, the interpretation
relied on by the Department, appearing at 29 C.F.R.
§ 800.116(d), merely states that in providing benefit
plans for employees through outside insurers an em-
ployer does not violate the Equal Pay Act if either
the amount contributed by the employer for each em-
ployee is the same and resulting benefits are different
or if the amount of the benefit is the same while
the employer contributions differ. While this reflects
the Wage-Hour Administrator’s general thinking, it does
not deal directly with our case of an employer requir-
ing greater pension plan contributions from women
employees when the plan is funded and administered
by the employer and its employees.
so
We note, too, that to the extent that the Wage-
Hour Administrator’s interpretation does deal with the
present case, his interpretation conflicts with that of
EEOC, which administers Title VII and whose interpre-
tations of Title VII must be given great deference.
Therefore, the EEOC interpretations of the Bennett
Amendment are worthy of more deference than are
those of the Wage-Hour Administrator relating to the
Equal Pay Act. The EEOC regulation, 29 C.F.R. §
1604.9(e & f), makes it a violation of Title VII
where a benefit plan provides unequal benefits to em-
ployees even if employer contributions are equal. How-
ever, like the Wage-Hour Administrator’s, these regula-
tions do not squarely cover the present case. Thus,
the Department’s reliance on administrative interpreta-
tion is misplaced.
Our opinion of the effect of Title VII in this case
is reinforced by the fact that following the passage
of Title VII Congress did expressly exempt actuarially
based pension and retirement funds from the provisions
of the Age Discrimination Act of 1967, 29 U.S.C.
§ 623(f)(2). In fact, during deliberations on the 1964
Civil Rights Act, Senator Smathers moved to add “age”
as one of the types of discrimination made illegal
by Title VII, but the amendment was defeated in
part because of a concern that inclusion of “age”
as a Title VII protected category might have “tre-
mendous implications” on industrial group insurance
and pensions. Equal Employment Opportunity Com-
mission, Legislative History of Titles VII and IX of
Civil Rights Act-of 1964, at 3174 (1968). This tends
to indicate that Congress did foresee that actuarially
based plans would fall under the provisions of Title
VII, and that it felt that age discrimination, but not
-62p—
sex discrimination, on such a basis was proper. Thus,
by not adding “age” to Title VII in 1964 and not
making a pension plan exception to its terms for “sex,”
and by later prohibiting age discrimination in a separate
bill which does make a pension plan exception to
its terms for age, Congress gave a strong indication
that it did intend to place sex discrimination in pension
and retirement plans, even when based on actuarially
sound tables, within the type of discrimination forbidden
by Title VII.
We emphasize that our holding rests on the clear
policy behind Title VII of requiring that each employee
be treated as an individual. Setting retirement contribu-
tion rates solely on the basis of sex is a failure to
treat each employee as an individual; it treats each
employee only as a member of one sex. We do not
pass judgment on the legality of a plan which determines
contribution rates based on a significant number of
actuarially determined characteristics, one of which is
sex. Our holding is limited to the proposition that
when sex is singled out as the only, or as a predom-
inant, factor, the employee is being treated in the
manner which Title VII forbids.
One district court case has dealt with a situation
very similar to ours. In Henderson v. Oregon, D.
Ore., 1975, 405 F. Supp. 1271, the court relied heavily
on the lower court decision in the present case in
holding a scheme similar to that involved here illegal
under Title VII.
Our holding agrees with the only administrative rul-
ing dealing with the exact question before us, one
made by the EEOC, EEOC Dec. #75-146, Jan. 13,
1975, 2 CCH Employment Practices 4190, ¢ 6447.
—O3i—
Relying in part on its earlier interpretation, noted supra,
the Commission held:
An inescapable corollary to this principle is that
an employer may not require a higher contribu-
tion from members of one sex where benefits
to members of both sexes are the same.
[This] is based upon the fundamental Title VII
precept that generalizations relating to sex, race,
religion, and national origin cannot be permitted
to influence the terms and conditions of an in-
dividual’s employment, even where the generaliza-
tions are statistically valid.
Ill. The Reimbursement Issue.
The Department finally argues that even if the higher
contribution required of women violates Title VII, it
would be unfair to refund to the plaintiffs the amounts
that they contributed in excess of the amounts that
similarly situated male employees contributed. The De-
partment says that it was acting in good faith in
that it believed that state law requiring that retirement
plans be run on a “sound actuarial basis” (Cal. Gov't
Code § 45342) mandated the use of sex-based actuarial
tables, and that paying these contributions back to
the women employees would leave the retirement plan
underfunded.
The rule that we have adopted relating to monetary
awards for past violations of Title VII is stated in
Schaeffer v. San Diego Yellow Cabs, Inc., 9 Cir.,
1972, 462 F.2d 1002.
In the case of damages of this naturs, a court
must balance the various equities between the
parties and decide upon a result which is consistent
—aa—
with the purposes of the Equal Employment Op-
portunities Act, and the fundamental concepts of
fairness. Jd. at 1006.
The defendant in Schaeffer argued that in denying
women overtime work it has relied in good faith on
a state statute requiring that women not work more
than eight hours a day, and that therefore it was
unfair to make it pay damages for an unwitting viola-
tion. We rejected that defense with the following com-
ment:
Rather than drawing any hard and fast rule con-
cerning the defense of good faith reliance on a
state statute, we believe that in each case the merits
of the plaintiff's claim and the public policy be-
hind it must be balanced against the hardship
on a good faith employer. Jd. at 1007.
Applying this test to the case at bar, we find that
the district court did not abuse its discretion in award-
ing plaintiffs a refund of their excess contributions.
In the first place, the state statute requiring that
such plans be administered on a sound actuarial basis
by no means requires that the Department use sex-
based, and only sex-based, distinctions. In Schaeffer.
where we found a back pay award proper, the statute
prohibiting women from working more than eight hours
a day placed a much greater compulsion on the em-
ployer to refuse women overtime work than the statute
in the present case placed on the Department to re-
quire higher retirement contributions.
Second, Schaeffer was a case where back pay was
awarded to women for work that they did not perform
but which they had sought. The plaintiffs did not
—AZG—
earn the award; they were merely denied the opportunity
to earn it. This case involves restitution, a situation
where the plaintiffs actually earned the amount in
question, but then had it taken from them in violation
of Title VII. It is one of the primary purposes of
Title VII, to “make persons whole for injuries suffered
on account of unlawful employment discrimination.”
Albemarle Paper Co. v. Moody, 1975, 422 U.S. 405,
418. In light of this purpose we find plaintiffs’ claim
to recover money rightfully theirs to be very compelling.
In contrast to the plaintiffs’ compelling claim, we
find the Department’s “good faith” defense to be less
than compelling. The Supreme Court has recently com-
mented on this “good faith” defense as follows:
But, under Title VII, the mere absence of bad
faith simply opens the door to equity; it does
not depress the scales in the employer’s favor. If
backpay were awardable only upon a showing
of bad faith, the remedy would become a punish-
ment for moral turpitude, rather than a compensa-
tion for workers’ injuries. This would read the
“make whole” purpose right out of Title VII,
for a worker’s injury is no less real siinply because
his employer did not inflict it in “bad faith.”
Albemarle Paper Co. v. Moody, supra, 42? U.S.
at 422.
The impact of returning the excess contributions
to the plaintiffs in this case is far from oppressive.
The amount involved is only 15% of the contributions
made by a minority of the Department’s employees
for the 33-month period from April 5, 1972, to De-
cember 31, 1974. This might leave the plan somewhat
underfunded, but a number of solutions to that problem
—C-24—
are readily available. Benefits could be lowered. Cur-
rent contributions from all employees could be in-
creased. The Department could raise its matching per-
centage on current contributions, or it could make
a lump sum payment into the fund to offset the reim-
bursements. However, whatever the adjustments that
would have to be made, we do not find that the
burden on the pension plan or the Department is
sufficient to offset the compelling claim of the plaintiffs
to recover the money which they were wrongfully re-
quired to contribute. See also Rosen v. Public Service
Electric and Gas Co., supra, 477 F.2d at 95-96.
In No. 75-2729, the judgment is affirmed.
In No. 75-2807, the appeal is dismissed.
In No. 75-2905, the appeal is dismissed as moot.
The stay heretofore granted by this court will expire
when the mandate issues.
APPENDIX D.
MANHART v. CITY OF LOS ANGELES, DEPT. OF WATER & POWER 699
Marie MANHART et al.,
Plaintiffs- Appellees,
v.
CITY OF LOS ANGELES, DEPART-
MENT OF WATER AND POWER, a
body corporate and politic, et al., De-
fendants-Appellants.
Nos. 75-2729, 75-2807 and 75-2905.
United States Court of Appeals,
Ninth Circuit.
April 18, 1977.
Suit was brought challenging retire-
ment plan which required women em-
ployees to contribute from their wages
15% more than similarly situated male
employees because of the longer average
life expectancy of women. On motion
for summary judgment, the United
States District Court for the Central Dis-
trict of California, Harry Pregerson, J.,
held that the plan violated Title VII of
the Civil Rights Act of 1964, enjoined
the municipal employer from charging
the higher contribution rate against
women, awarded a refund of all excess
contributions made on or after April 5,
1972, and the defendants appealed. The
Court of Appeals, Duniway, Circuit
Judge, held, inter alia, that the retire-
ment plan was violative of Title VII,
notwithstanding defendants’ claim that
the discrimination was based on longevi-
ty, not sex, and was not the kind of
invidious discrimination thai Title VII
intended to abolish. On petition for
rehearing, the Court of Appeals, Duni-
way, Circuit Judge, held that the Su-
preme Court’s recent “General Electric”
decision, which held that the exclusion of
pregnancy from a program of disability
insurance is not discrimination based on
sex as such, did not require a change in
the judgment entered.
Petition for rehearing denied.
Kilkenny, Circuit Judge, filed a dis-
senting opinion.
Federal Courts #925
Court of Appeals’ prior determina-
tion that retirement plan, which required
women employees to contribute from
their wages 15% more than similarly sit-
uated male employees, violated Title VII
of the Civil Rights Act of 1964 was not
affected by Supreme Court’s recent
“General Electric” decision, which held
that the exclusion of pregnancy from a
program of disability insurance is not
discrimination based on sex as such,
since the pension plan in question was
clearly discriminatory on the basis of
sex, since, unlike the situation in “Gener-
al Electric,” the plan was facially dis-
criminatory, and since, again unlike the
“General Electric” situation, there were
no inconsistent administrative rulings.
On Petition for Rehearing.
Before CHAMBERS, DUNIWAY and
KILKENNY, Circuit Judges.
DUNIWAY, Circuit Judge:
Appellants petition for a rehearing
and suggest a rehearing in banc. Their
principal reliance is upon the decision of
the Supreme Court in Genera! Electric
Co. v. Gilbert, 1976, US. --—-, 97
S.Ct. 401, 50 L.Ed.2d 343, which was de-
cided on December 7, 1976, just two
weeks after our decision was filed on
November 23, 1976. We conclude that
the General Electric case does not re-
quire a change in our judgment, for sev-
eral reasons.
Synopses, Syllabi and Key Number Classification
COPYRIGHT © 1977, by WEST PUBLISHING CO
The Synopses, Syllabi and Key Number Classifi-
cation constitute no part of the opinion of the court
a
ee ey OS 2 ee ee es ee
76 MANHART v. CITY OF LOS ANGELES, DEPT. OF WATER & POWER
First, in that case, as in Geduldig v.
Aiello, 1974, 417 U.S. 484, 94 S.Ct. 2485,
41 L.Ed.2d 256, upon which the Court
primarily relied, the facts were different
from the facts in the case at bar. In
each of those cases, a program of disabil-
ity insurance was involved, and in each
pregnancy was excluded as a disability.
The Court held that the exclusion was
not a discrimination based upon gender
as such. It pointed out that the exclu-
sion of pregnancy as a disability “divides
potential recipients [of benefits] into two
groups—pregnant women and nonpreg-
nant persons. While the first group is
exclusively female, the second includes
members of both sexes.” General Elec-
tric, supra, —— U.S. at , 97 S.Ct. at
407, quoting from Geduldig, supra, 417
U.S. at 496-97, n. 20, 94 S.Ct. 2485.
Thus, said the Court, the exclusion of
pregnancy “was not in itself discrimina-
tion based on sex,” —— US. , at
, 97 S.Ct. 401, at 407.
The same cannot be said of the pen-
sion plan of the Department in the case
at bar. A greater amount is deducted
from the wages of every woman employ-
ee than from the wages of every man
employee whose rate of pay is the same.
How can it possibly be said that this
discrimination is not based on sex? It is
based upon a presumed characteristic of
women as a whole, longevity, and it dis-
regards every other factor that is known
to affect longevity. The higher contri-
bution is required specifically and only
from women as distinguished from men.
To say that the difference is not based
on sex is to play with words.
In addition, as the Court pointed out
in Genera! Electric, under the disability
programs in that case and in Geduldig,
“The ‘package’ going to relevant identi-
fiable groups . . .—male and fe-
male employees—covers exactly the
same categories of risk, and is facially
nondiscriminatory in the sense that
‘{t}here is no risk from which men are
and women are not. Likewise,
there is no risk from which women are
protected and men are not.’ Geduldig,
417 U.S. at 496-97, 94 S.Ct. at 2492”
General Electric, —— U.S. »P- ;
97 S.Ct. 401, p. 409. “[G)jender-based dis-
crimination does not result simply be-
cause an employer's disability benefits
plan is less than all inclusive.” Id. at
———., 97 S.Ct. at 409 (footnote omitted).
The pension plan in the case at bar is
different. The monthly benefit is the
same for men and for women, but the
cost to women is higher than the cost to
men, and this is solely because they are
women. Thus the plan is facially dis-
criminatory because, while the plan is all
inclusive as to retirement benefits, it is
discriminatory, on the basis of sex alone,
as to costs to the employees.
Finally the Court’s opinion in General
Electric requires that we reconsider our
analysis of the legislative history of the
Bennett Amendment (see part II. B. of
our opinion). However, upon that recon-
sideration, we conclude that a different
result is not required in this case. Ap-
pellants stress the Court’s reliance, in
Genera! Electric, upon the colloquy be-
tween Senators Humphrey and Ran-
dolph, discussed in Genera] Electric at
— US. , at , 97 S.Ct. 401 at
412, and in our opinion at ——— - ——-
(slip op. at 12-13). We did not find it to
be persuasive legislative history; the Su-
preme Court did find it persuasive. We
are, of course, bound by that conclusion,
but we do not think that it follows that
the judgment in this case is erroneous.
In General Electric, the Court relied
also, and, we think, more heavily, on rul-
ings of the Wage and Hour Administra-
tor construing the Equal Pay Act, and
nell cin
MANHART v. CITY OF LOS ANGELES, DEPT. OF WATER & POWER 701
on the fact that EEOC rulings were in-
consistent with each other as well as
with the rulings of the Administrator
(—— U.S. ——-, at ——- - ——,, 97 S.Ct.
401 at 411-412). In our case, there are
no such inconsistencies.
In his brief as amicus curiae in this
case, the Secretary of Labor points out
that he (or the Administrator acting for
him) “has never approved a practice of
requiring women employees to make
contributions to a pension plan which are
larger than those required of similarly
situated men employees.” (Brief at 6)
The rulings of the Secretary on which
the Department relies do not deal with a
requirement that female employees must
make greater contributions to the plan
than male employees, a requirement
which diminishes the current available or
“take home” wages of women, as com-
pared to those of men.
In his June 18, 1964 opinion letter
(BNA’s WHM 95:607), the Administrator
disapproved of a wage differential be-
tween men and women based upon al-
leged higher costs of employing women,
a part of those costs being for pensions.
In an Interpretive Bulletin issued Febru-
ary 11, 1966 (3 F.R. 2657, 29 C.F.R.
§ 800.151), the Administrator said:
A wage differential based on claimed
differences between the average cost
of employing the employer’s women
workers as a group and the average
cost of employing the men workers as
a group does not qualify as a differen-
tial based on any “factor other than
sex,” and would result in a violation of
the equal pay provisions, if the equal
pay standard otherwise applies. To
group employees solely on the basis of
sex for purposes of comparison of costs
necessarily rests on the assumption
that the sex factor alone may justify
the wage differential—an assumption
plainly contrary to the terms and pur-
poses of the Equal Pay Act. Wage
differentials so based would serve only
to perpetuate and promote the very
discrimination at which the Act is di-
rected, because in any grouping by sex
of the employees to which the cost
data relates, the group cost experience
is necessarily assessed against an indi-
vidual of one sex without regard to
whether it costs an employer more or
less to employ such individual than a
particular individual of the opposite
sex under similar working conditions
in jobs requiring equal skill, effort.
and responsibility.
There are no rulings of the Secretary
or Administrator inconsistent with this.
The one which the Department cites, is-
sued September 9, 1965, and amended
May 6, 1966, 30 F.R. 11504 and 31 F.R.
6770, 29 C.F.R. § 800.116(d) deals with
employer contributions, not compulsory
employee contributions which are here
involved, and which, under 29 C.F.R.
§ 800.151 cannot be unequal.
No ruling of EEOC conflicts with 29
C.F.R. § 800.151. Nor has EEOC taken
inconsistent positions in relation to the
problem before us. Its position is stated
in 29 C.F.R. § 1604.9, issued April 5,
1972, 37 F.R. 6836, and in EEOC Dec.
# 75-146 of Jan. 13, 1975, 2 CCH Em-
ployment Practices 4190, 4 6447, both di--
cussed in our opinion. We know of no
prior inconsistent rulings. Thus this
case is quite unlike General Electric,
where there was conflict between EEOC
rulings and between rulings of EEOC
and those of the Secretary of Labor.
Here, the administrative rulings, as they
relate to the problem before us, are con-
sistent and support the result that we
have reached.
The petition for a rehearing is denied.
The suggestion of a rehearing in banc
a <a
—— a eee sew e
ee NE eR em ee ee wr ee
Oe a ee ee ee
=
702 MANHART v. CITY OF LOS ANGELES, DEPT. OF WATER & POWER
has been transmitted to all judges of the
court, and no judge has requested a vote
on the suggestion. Rule 35(b) F.R.
App.P. The suggestion of a rehearing in
banc is rejected.
KILKENNY, Circuit Judge, dissent-
ing:
I share the views of the majority on
the jurisdictional issues, but have serious
reservations with respect to the manner
in which the majority disposes of the
appellants’ claims in No. 75-2729. In my
opinion, they should have been allowed
to prove their case.
I am convinced that the legal princi-
ples enunciated in General Electric Co. v.
Gilbert, —— U.S. ——, 97 S.Ct. 401, 50
L.Ed.2d 343 (1976), are here controlling
and that the district court erred in
granting a summary judgment against
the appellants. At a minimum, the
court should have conducted a trial on
the issue of whether the appellants’
retirement plan was justified on the ba-
sis of recognized actuarial tables show-
ing the difference in longevity between
males and females. As it now stands,
the lower court here made the same mis-
take as the district court in General
Electric in its refusal to consider any
cost differential defense. As stated by
the Supreme Court:
“The District Court was wrong in as-
suming, as it did, 375 F.Supp., at 383,
that Title VII’s ban on employment
discrimination necessarily means that
‘greater economic benefit[s]’ must be
required to be paid to one sex or the
other because of their differing roles
in ‘the scheme of human existence.’”
Genera! Electric at , 97 S.Ct. at
410, n. 17.!
1. The Supreme Court also noted that the dis-
trict court “ . declined to find that the
present actuarial value of the coverage was
The uncontroverted affidavits in the
record before the district court and now
before us show clearly that women live
substantially longer than men and that
the higher female contribution [approxi-
mately 15% more then male employees]
is fully justified on an actuarial basis.
These affidavits further show that this
plan, like all annuity plans, is based upon
the life expectancy of its beneficiaries,
and that mortality tables in use through-
out the western commercial world sepa-
rate male mortality rates from female
mortality rates. Moreover, one affiant
states that the plan before us was adopt-
ed as a result of his 1972 study of the
mortality rates of the appellants’ em-
ployees. The plan follows the “1951
Group Annuity Mortality Table” publish-
ed in the Transactions of the Society of
Actuaries.
Consistent with all available studies
and plans, this particular plan uses sepa-
rate mortality tables for men and wom-
en and was used to determine the total
monies that had to be set aside for the
lifetime retirement allowances of em-
ployees. Many other relevant facts are
set forth in these affidavits, including
the undisputed statement that no tables
have as yet been developed which meas-
ure life expectancy on a unisex basis, as
required by the majority. Furthermore,
these affidavits attest to the fact that
unisex mortality tables, if developed,
could lead to a result which adversely
affects the financial integrity of annuity
or pension plans such as here before us.
GENERAL ELECTRIC v. GILBERT
Against this background, the majority
purports to distinguish General Electric.
From the general finding in General
~~ ve
y
MANHART v. CITY OF LOS ANGELES, DEPT. OF WATER & POWER 703
Electric that the exclusion of pregnancy
was not in itself discrimination based
upon sex, it is apparent to me that the
Supreme Court has rejected the broad
doctrines espoused by the majority.
Moreover, neither Craig v. Boren, — -
US. , 97 S.Ct. 451, 50 L.Ed.2d 397
(1976), nor Califano v. Goldfarb, —-
US. —-, 97 S.Ct. 1021, 51 L.Ed.2d
——— (1977), detract from what is said in
General Electric. To summarily con-
clude, like the majority, that “[t]o say
that the difference [here] is not based on
sex is to play with words. a
simply an inadequate response to the is-
sues presented. I am of the ir pression
that the majority, rather than he appel-
lants, is playing with words. The appel-
lants’ claim deserves more consideration
than this conclusory statement.
The majority similarly glosses over the
language in Genera! Electric regarding
the effect of the exclusion of pregnancy.
The Court recognized that a proper
showing of “gender-based effects” may
be sufficient to establish a prima facie
ease under Title VII, but it was not
‘oo present, and it is not here present.”
This is made manifest by a comparison
2. The Court recognized that a proper showing
of cause and effect may be sufficient:
“The instant suit was grounded on Title VII
rather than the Equal Protection Clause, and
of the circumstances here present with
those of General Electric. As stated in
General Electric:
' . As in Geduldig, supra, [417
US. 484, 94 S.Ct. 2485, 41 L.Ed.2d 256
(1974)] we start from the indisputable
baseline that {tJhe fiscal and actuarial
benefits of the program . ac-
crue to members of both sexes,’ 417
U.S., at 497 n. 20, [94 S.Ct. at 2492).
We need not disturb the findings of
the District Court to note that there is
neither a finding, nor was there any
evidence which would support a find-
ing, that the financial benefits of the
Plan ‘worked to discriminate against
any definable group or class in terms
of the aggregate risk protection de-
rived by that group or ciass from the
program,’ id., at 496 [, 94 SCt., at
2492]. The Plan, in effect (and for all
that appears), is not*ing more than an
insurance package, which covers some
risks, but excludes others, see id., at
494, 496-497, [94 S.Ct. at 2491 -2492).
The ‘package’ going to relevant identi-
fiable groups we are presently con-
cerned with—General Electric’s male
ar 1 female employees—covers exactly
Griggs v. Duke Power Co., 401 U.S. 424, 431,
{91 S.Ct. 849, 853, 28 L.Ed.2d 158] (1971).
Even assuming that it is not necessary in this
case to prove intent to establish a prima facie
violation of § 703(aX1), but cf. McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 802-806
{. 93 S.Ct. 1817, 1824-1826, 36 L.Ed.2d 668)
General Electric, —. US. at —-— -——, 97
S.Ct. at 408-409. [Emphasis Added] [Foot
notes Omitted.)
burden of proof:
burden of establishing that the acts they com-
plain of constituted discrimination in violation
of Title Vil. . . .” [Emphasis Added]
—
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704 MANHART v. CITY OF LOS ANGELES, DEPT. OF WATER & POWER
the same categories of risk, and is fa-
cially nondiscriminatory in the sense
that {‘jhere is no risk from which men
are protected and women are not.
Likewise, there is no risk from which
women are protected and men are
not.’ Geduldig, 417 U.S., at 496—497,
[94 S.Ct., at 2492]. As there is no
proof that the package is in fact worth
more to men than to women, it is im-
possible to find any gender-based dis-
criminatory effect in this scheme sim-
ply because women disabled as a result
of pregnancy do not receive benefits;
that is to say, gender-based discrimina-
tion does not result simply because an
employer's disability benefits plan is
less than all inclusive. For all that
appears, pregnancy-related disabilities
constitute an additional risk, unique to
women, and the failure to compensate
them for this risk does not destroy the
presumed parity of the benefits, accru-
ing to men and women alike, which
results from the facially evenhanded
inclusion of risks. To hold otherwise
would endanger the common-sense -no-
tion that an employer who has no dis-
ability benefits program at all does not
violate Title VII even though the ‘un-
derinclusion’ of risks impacts, as a re-
sult of pregnancy-related disabilities,
more heavily upon one gender than
upon the other. Just as there is no
facial gender-based discrimination in
that case, so, too, there is none here.”
General Electric at -—— --— —, 97
S.Ct. at 409-410. [Emphasis Added.]}
[Footnotes Omitted.]
Similarly, it is obvious here that the
fiscal and actuarial benefits of the plan
accrue to the members of both sexes.
As in General Electric, the plan is facial-
ly nondiscriminatory to the extent that
there is no risk for which one sex is
covered and the other is not. Because of
the additional contribution made by both
the employer and the women employees,
the aggregate risk protection for men
and women is identical. As a conse-
quence of objectively identifiable charac-
teristics [reflected in actuarial statistics],
this plan impacts more heavily upon
women than men. [But women live
longer than men and ultimately recover
as much if not more.] This was also the
case in Genera] Electric and the Court
there refused to find a Title VII viola-
tion. Its reasoning is made abundantly
clear in Footnote 17, which reads:
“Absent proof of different values,
the cost to ‘insure’ against the risks is,
in essence, nothing more than extra
compensation to the employees, in the
form of fringe benefits. If the em-
ployer were to remove the insurance
fringe benefits and, instead, increase
wages by an amount equal to the cost
of the ‘insurance,’ there would clearly
be no gender-based discrimination,
even though a female employee who
wished to purchase disability insurance
that covered all risks would have to
pay more than would a male employee
who purchased identical disability in-
surance, due to the fact that her insur-
ance had to cover the ‘extra’ disabili-
ties due to pregnancy. While respon-
dents seem to acknowledge that the
failure to provide any benefit plan at
all would not constitute sex-based dis-
crimination in violation of Title VII,
see note 18, infra, they illogically also
suggest that the present scheme does
violate Title VII because
‘A female must spend her own money
_ to buy a personal disability policy cov-
ering pregnancy disability if she wants
to be fully insured against a period of
disability without income, whereas a
male without extra expenditure is ful-
ly insured by GE against every period
—D-6—
MANHART v. CITY OF LOS ANGELES, DEPT. OF WATER & POWER 705
of disability.’ Supplemental! Brief for
Martha Gilbert et a/. on Reargument,
at 11. Yet, in both cases—the instant
case and the case where there is no
disability coverage at all—the ultimate
result is that a woman who wished to
be fully insured would have to pay an
incremental amount over her male
counterpart due solely to the possibili-
ty of pregnancy-related disabilities.
Title VII's proscription on discrimina-
tion does not require, in either case,
the employer to pay that incremental
amount. . . .” General Electric
at ——-, 97 S.Ct. at 409-410.
In one respect, at least, the present
facts are more compelling than those of
General Electric because the employer
here was actually paying more for each
female employee than for each male em-
ployee. The just quoted language woula
have allowed the employer/appellants to
pay the same amount for each, in which
case each female employee would have
received less insurance protection than
each male employee. If no insurance at
all was provided under the plan, each
female employee, if she purchased out-
side insurance, would have to pay more
than her male counterpurt for the same
amount of insurance. In either case, af-
ter General Electric it is illogical to ar-
gue that a Title VII violation would re-
sult.
Throughout its opinion, the majority
substantially exaggerates the strength of
its position. It suggests that the Su-
preme Court was more concerned with
inconsistent administrative interpreta-
tions than it was with our original and
erroneous view of the legislative history.
To support its position, the majority
finds that there are no such inconsisten-
cies in the case before us. I disagree.
The Wage and Hour Administrator of
the Department of Labor has promulgat-
ed a number of regulations. After Gen-
eral Electric, | question the vitality of
the one quoted by the majority; one [29
CFR § 800.116(d)] noted by the Supreme
Court in General Electric is more in
point. This regulation states
“If employer contributions to a plan
providing insurance or similar benefits
to employees are equal for both men
and women, no wage differential pro-
hibited by the equal pay provisions
will result from such payments, even
though the benefits which accrue to
the employees in question are greater
for one sex than the other. The mere
fact that the employer may make un-
equal contributions for employees of
opposite sexes in such a situation will
not, however, be considered to indicate
that the employer’s payments are in
violation of section 6(d), if the result-
ing benefits are equal for such em-
ployees.” [Emphasis Added.}
The majority’s tortured views on the ob-
vious breadth of Genera! Electric become
apparent in its writing around and fail-
ure to accept the Supreme Court's appli-
cation of this regulation. This regula-
tion, as I read it, contemplates the actu-
arial equivalent of the scheme before us.
If employer contributions are equal for
men and women, there is no statutory
violation even though the resulting bene-
fits are not equal as between men and
women. The majority fails to appreciate
the significance of this. In the context
of pension plans, this rule makes sense
only if it is read to impliedly authorize
the funding of employee pension plans
upon the basis of separate mortality ta-
bles. This regulatory justification for a
plan with equal contributions and un-
equal benefits cannot be ignored in the
variation before us.
In 1965, the EEOC promulgated regu-
lations under which it agreed to follow
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706 MANHART v. CITY OF LOS ANGELES, DEPT. OF WATER & POWER
the relevant interpretations of the Wage
and Hour Division. 29 CFR § 1604.7(b)
provided:
“Accordingly, the Commission will
make applicable to equal pay com-
plaints filed under Title VII the rele-
vant interpretations of the Adminis-
trator, Wage and Hour Division, De-
partment of Labor. These interpreta-
tions are found in 29 Code of Federal
Regulations, Part 800.119-800.163.
Relevant opinions of the Administrator
interpreting ‘the equal pay for the
equal work standard’ will also be
adopted by the Commission.” 30 F.R.
14928. [Emphasis Added.]}
This regulation was maintained until the
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