Amicus Brief — City of Los Angeles Department of Water v. Manhart

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No. 76-1810

Hn the Supreme Gourt of the United States

OctoBerR Term, 1977

FOR ARGUMENT

Crry or Los Anories, DepaRtMENT oF WATER AND

POWER, ET AL., PETITIONERS

Vv.

Marie MANHART, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE EQUAL EMPLOYMENT

OPPORTUNITY COMMISSION AS AMICI CURIAE

WADE H. McCREE, Jr.,

Solioitor General,

DREW &. DAYS, III,

Assistant Atiorncy General,

LAWRENCE G. WALLACE,

Deputy Solicitor General,

THOMAS 8S. MARTIN,

Assistant to the Solicitor General,

BRIAN K. LANDSBERG,

CYNTHIA L. ATTWOOD,

Attorneys,

Department of Justice,

Washington, D.C. 20530.

ABNER W. SIBAL,

General Counael,

JOSEPH T. EDDINS,

Associate General Counsel,

BEATRICE ROSENBERG,

Assistant General Counsel,

MARY-HELEN MAUTNER,

Attorney,

Equat Employment Opportunity Commiasion,

Washington, D.C. 20506.

GmeetteR HONIG onc cetinw es connec ncnnsececescees

Interest of the United States and the Equal Employment

Opportunity Commission.-.......----.--------...-..

ED Griieeisenecenperesercccnnrsescecssecoccasuae

ee ee

Argument:

I. A policy of deducting greater amounts from the

wages of female employees than from those of male

employees in return for a contingent future right

to an equal monthly retirement allowance violates

EE EE a ee Se a oe

B. Petitioners have suggested no adequate basis for

an affirmative defense under Title VII__..-.____-

II. A requirement that female employees contribute more

to a pension plan than similarly situated male em-

ployees violates the equal pay act__..........._-

SD ctnitinnneneiinnialinthibinnnnciéiniaanans

CITATIONS

Cases :

Bartmess v. Drewrys U.S.A. Inc., 444 F. 2d 1186, cer-

tiorari denied, 404 U.S. 939_......._--__---______

Bowe v. Colgate-Palmolive Company, 416 F. 2d 711_--

Brennan v. Heard, 491 F. 2d 1....-.--------------.-

Brennan v. Veterans Cleaning Service, Inc., 482 F. 2d

EE LS Ee. oe

Brooklyn Bank v. O’ Neil, 324 U.S. 697_.---.---.--.-

Califano v. Goldfarb, 430 U.S, 199__.--.----------.-

Chastang v. Flynn & Emrich Co., 451 F. 2d 1040___---

Craig v. Boren, 429 U.S, 190............------..-.-

Diaz v. Pan American World Airways, Inc., 442 F. 2d

385, certiorari denied, 404 U.S. 950_....._._----..

252-902—77——-1

ao nwr-

Cases—Continued

Dothard v. Rawlinson, No. 76-422, decided June 27,

O° EEE LE OL EERE SRR 7, 14, 21, 22

Espinoza v. Farah Mfg. Co., 414 U.S. 86------------ 32

Fitzpatrick v. Bitzer, 390 F, Supp. 278, reversed on

other grounds, 427 U.S. 445----------------------- 15

General Electric Co. v. Gilbert, 429 U.S. 125_ 5, 6, 10, 19, 20, 32

Griggs v. Duke Power Co., 401 U.S. 424------------ 21

Henderson v. State of Oregon, 405 F, Supp. 1271,

appeal docketed (C.A. 9, No. 76-1706, March 30,

1976) .--.----.-------------------=------------ 17

International Brotherhood of Teamsters v. United

Bet A TE, Ck aisitinicsncnenenictaiapnemaphientes 33

Nashville Gas Co. v. Satty, No. 75-536, decided

December 6, 1977............-.---2----- === ~~ 19, 20

National Labor Relations Board v. Seven-up Bottling

Co., 944 U. S. 944...-------~--------------------- 32

National Labor Relations Board v. Weingarten, Inc.,

y 0) DS 32

Reilly v. Robertson, 360 N.E. 2d 171, certiorari denied,

No, 76-1635, October 3, 1977...-.--..------------- 17

Rigopoulos v. Kervan, 140 F. 2d 506----------------- 36

Robinson v. Lorillard Corp., 444 F. 2d 791, certiorari

Gismlessd, 606 US. 1006..ncccnenctccnwscaesccesss 8, 21

Roland Electrical Co. v. Black, 163 F. 2d 417, certiorari

Genfied, $98 UG. 606..ncccceccccssctinmedsentsinnce 36

Rosen v. Public Service Electric and Gas Co., 477 F.2d

9D ccc cwuncncnensmuiwnnnitinstntineantnnndinnte 7,15

Rosenfeld v. Southern Pacific Company, 444 F. 2d

GED nncncnatmincninnnanintinsnmetmmin 14

Shultz v. American Can Company Dixie Products, 424

i; GF GR ccccncunieninacenitasintnodcanitianinans 35

Shultz v. Hinojosa, 432 F, 2d 259_..-..-.----------- 36

Shultz, v. Wheaton Glass Company, 421 F, 2d 259... 35

Sprogis v. United Air Lines, Inc., 444 F, 2d 1194_____- 14

Wirtz v. Midwest Mfg. Corp., 58 CCH Lab Cas. 32,070

18 WH Cases 556 (S.D. Ill, decided August 9,

WEED cx.qtncnncansinnatnuaninbiidiibmmiiticinbnndiin 11, 43-44

Constitution, statutes and regulations:

United States Constitution, Fourteenth Amendment-_ 3

Ill

Statutes and regulations—Continued

California Constitution, Article 1: ae

i Ee ta De eee ne ae 3

co EE eae eae ee ee 3

Civil Rights Act of 1871, 17 Stat. 13, 42 U.S.C. 1983__ 3

Civil Rights Act of 1964:

Title VII, 78 Stat. 253, as amended, 42 U.S.C.

(and Supp. V) 2000~ et seg___.-_._.__________ 2-3

Section 703 (a) (1), 42 U.S.C. 2000e-2(a) (1)_____ 7,13

——— (2), 42 U.S.C. (Supp. V) 200e-2

i Tee aay ae 4

Section 703(h), 42 U.S.C. 2000e-(h)__-__________ 10,

Section 706, 42 U.S.C. (Supp. V) 2000e-5 ( f)(1)_- 2

Section 707, 42 U.S.C. (and Supp. V) 2000e-6____ 2

Section 717, 42 U.S.C. (Supp. V) 2000e-16_______ 2

Equal Pay Act, 77 Stat. 56:

NR aia wtih tuitidiatbnedsbsaidbakicecan ic, 35

udp 5S SERERTESSEAE eee ae 2, 35

_ 20 U.S.C, 206(d) (1) -------_-------_____- 33-34, 36, 44

Fair Labor Standards Act of 1938, 52 Stat. 1060), as

amended,

29 U.S.C. 201 et seq.:

Section 2(a), 29 U.S.C. 202(a)__-....___...____ 35

Section 6, 29 U.S.C. 906..................___ 35

29 U.S.C. (Supp. V) 1054(c)(2)__-..-.. 38

oar Government Code § 7500 (West, 1977 Cum.

AD intent inbmcitlttinceninttitiiniibdtleimereissnes nee

ele i TE TES ee a -

a. tt ee

fb 38

6 ee eee 38

29 C.F.R. 800.142-800.148_.......---!:CSts«éQ

PF TE Le 12, 41-49

A | ees ee 11, 12, 49-43

Miscellaneous : pets

Bergmann and Gray, “Equality in Retirement Bene-

fits” Civil Rights Digest (Fall 1975)_____________ 18

Bernstein, The Future of Private Pensions (1964)__._ 292-93

BNA Wage-Hour Mannal 95:607__......... 11, 44

109 Cong. Rec. 8916 PERT RE EIT "35

109 Cong. Rec. 9203 (1963)_............ 37

Miscellaneous—Continued Page

109 Cong. Rec. 9205-9206 (1963) ..--------------_-. 39

110 Cong. Rec. 13663, 13664 (1964)_._______--______- 32

Enstrom, “Cancer Mortality Among Mormons”, 36 Can-

PCED COE ccernttinttiiinnticnstathintiiniiationitadabibnimnne 16

Fauman and Mayer “Jewish Mortality in the United

State,” Shiloh and Selavan, Ethnic Groups of Amer-

ica: Their Morbidity, Mortality and Behavior Dis-

orders, Vol. ]—The Jews (1973) _--.-------------- 16

90 Fed. Bias, Maa nicctcwcsscticdstincesascnns 31

8 nes Oe 31

O60 POG, TIS, Biieateccccecnadectuceetstetsbisianece 31

SF ER Fe Ge ciinnctmwnsitinninidinsadedeus 31

48 FOG. TR GIG, Fac nccnmnncectntccnswsannsssue 38

42 TOG, Fa Ge acc ccccncinbeatasdnnstccsce 38

Fellers and Jackson, “Noinsured Pensioner Mortality:

The UP-1984 Table,” 25 Proceedings, Conference

of Actuarities in Public Practice (1976) ------ 24, 26, 27, 28

Greenless and Keh, “The 1971 Group Annuity Mortal-

ity Table,” 23 Transactions, Society of Actuaries

CORE cantnsnctnedtetendnanmiiniondianghibilibiled 5

H.R. Rep. No. 309, 88th Cong. 1st Sess. (1963) ...---- 11, 38

H.R. 6060, 88th Cong., 1st Sess. (1963) _...----------- 37

James, The Metropolitan Life: A Study in Business

Dee Fi cinessiaie titebisitietlictenisctpitsinsiiitleralaitindinniiaces 24

Kaladrubetz and Landay, “Coverage and Vesting of

Full-Time Employees Under Private Retirement

Plans, Social Security Bulletin (November 1973)... 23

Kolodrubetz, “Private Retirement Benefits and Rela-

tionship to Earnings: Survey of New Beneficiaries,”

Social Security Bulletin (May 1973) -------------- 23

Temon end Kuzma, “A Bilogic Cost of Smoking,” 18

Archives of Environmental Health, American Medi-

SE ee 16

Secretary of Labor’s Interpretative Bulletin on Equal

Pay Act:

en. FID FIO tccntdningtentitntentinilintmn 12, 41-42

Rectien BU a insincinsiialiatiindahitadinta velit 12, 42-43

Shepherd and Webster, Selection of Rieks (1957). = 25

$. 1409, 88th Cong., 1st Sess. (1963) ...-..---...--.. 37

Miscellaneous—Continued _—

S. Rep. No. 176, 88th Cong., 1st Sess. (1963)_...____- 37

S. Rep. No. 92-415, 92d Cong., 1st Sess. (1971)__ 32,39, 40-41

Sutton, “Assessing Mortality and Morbidity, Disad-

vantages of the Black Population of the United

States,” Shiloh and Selavan, Ethnic Groups of

America: Their Morbidity, Mortality and Behavior

Disorders, Vol. 1I—The Blacks (1974) -......_.__- 16

United States Department of Health, Education, and

Welfare, Public Health Service, Publication No.

CDC 75-7511 (revised 1972), Chart Book on Smok-

ing, Tobacco and Health......................... 26

Gn the Supreme Gourt of the Gnited States

OcToBER TERM, 1977

‘No. 76-1810

C ry or Los ANGELES, DEPARTMENT OF WATER AND

PowER, ET AL., PETITIONERS

MarRIE MANHART, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES AND THE EQUAL EMPLOYMENT

OPPORTUNITY COMMISSION AS AMICI CURIAE

QUESTION PRESENTED

Whether an employer’s policy of deducting greater

amounts from the wages of its female employees than

its male employees in return for the contingent future

right to an equal monthly retirement allowance con-

stitutes sex discrimination in violation of Title VII

of the Civil Rights Act of 1964.

INTER “* “¥ THE UNITED STATES AND THE EQUAL

Es .MENT OPPORTUNITY COMMISSION

Congres: _...s assi;,. *1 to the Equal Employment Op-

portunity Commission, the Department of Justice, and

(1)

the Civil Service Commission the responsibility for

federal enforcement of Title VII of the Civil Rights

Act of 1964. The Equal Employment Opportunity

Commission may bring civil actions against private

employers under 42 U.S.C. (Supp. V) 2000e-5(f) (1).

The Attorney General has enforcement responsibility

when the employer is a government, governmental

agency, or political subdivision. 42 U.S.C. 2000e-6.

The Civil Service Commission exerts oversight re-

sponsibility to insure nondiscrimination in federal

employment and serves as the administrative review-

ing authority for Title VII charges filed by individual

employees against federal agencies. 42 U.S.C. (Supp.

V) 2000e-16. Federal enforcement of the Equal Pay

Act is assigned to the Secretary of Labor. 29 U.S.C.

206(d).

STATEMENT

This suit was filed as a class action on behalf of

female employees and retirees of the City of Los

Angeles, Department of Water and Power (“the De-

partment’’) * alleging that the Department’s Employ-

ees’ Retirement, Disability, and Death Benefit Insur-

ance Plan [hereinafter “the Plan”] discriminated

against women*in violation of Title VII of the Civil

2 In addition to the Department of Water and Power, respond-

ents sued the Members of the Board of Commissioners of the De-

partment, the Members of the Board of Administration of the

Department's Employees’ Retirement, Disability and Death Bene-

fit Insurance Plan, the Department’s chief accounting officer, and

the Department’s general manager (Pet. App. C-2).

Rights Act of 1964, 78 Stat. 253, as amended, 42 U.S.C.

(and Supp. V) 2000e et seq.’

The Department’s plan covers most of its approxi-

mately 12,000 employees, of whom approximately

2,000 are women (Pet. App. B-9; A. 15). Participa-

tion by all eligible employees is compulsory (Pet.

App. C-2). The plan is entirely funded by monthly

contributions from the employees, supplemental con-

tributions from the Department, and earnings on

those contributions. No commercial insurance com-

pany is involved in the administration of the plan.

Under the plan a male and female employee of the

same age, length of service, and salary, receive an

identical monthly allowance upon retirement (Pet.

App. B-10).*° However, in return for these contingent

equal monthly benefits, the female employee was re-

quired until December 31, 1974, to make contributions

to the plan which were 14.84 percent greater than those

of an equivalent male employee (Pet. App. C-2). For

example, employee Joan E. Roberts contributed a total

(including earnings) of $18,670.59 to the Plan (R.

176). A similarly situated male employee would have

* Plaintiffs also alleged violations of the Civil Rights Act of

1871, 17 Stat. 13, 42 U.S.C. 1983, the Fourteenth Amendment to

the Constitution, and Article 1, Sections 1 and 21 of the Constitu-

tion of the State of California.

* Although the Department’s plan does not appear in the record,

such pension plans universally make the vesting of a pension con-

tingent upon a number of factors including a minimum term of

service, For statistics indicating the impact of such contingencies

on the probability that males and females will obtain vested pen-

sion rights, see note 18, infra.

252-902—77——-2

contributed $13,274.55 (ibid.). The stated justification

for requiring substantially differing contributions

based upon the sex of the employee was that “[s]ound

actuarial practice requires that annuity or pension

plans be based on averaging of life expectancies of

persons in ascertained classes (usually age and sex)

since the life expectancy of a specific person cannot be

predetermined”’ (A. 83).

Prior to the district court¥decision the Depart-

ment discontinued its use 6f higher contribution

rates for female employees pursuant to California

Government Code § 7500 (West, 1977 Cum. Supp.),

which made it unlawful after January 1, 1975, for cer-

tain municipal agencies to require differing employee

contributions based upon sex. The current retirement

plan operates with equal monthly employee contribu-

tions and equal monthly benefits for similarly situated

male and female employees (A. 102).

Respondents continued the litigation seeking restitu-

tion of the excess contributions made by female em-

ployees over the course of the preceding 2% years,

and successfully moved for summary judgment in the

district court which held that basing employee con-

tribution rates upon sex alone violates Title VII. The

district court enjoined the Department from charging

women a higher contribution rate, and awarded a

refund to the women of all excess contributions be-

tween April 5, 1972, and December 31, 1974 (A. 134-

135). The court of appeals affirmed (Pet. App. C),

holding that the sex-based contribution schedule re-

quiring increased payments by individual females,

based upon the longevity of females as a group,‘ “‘is

just the kind of abstract generalization, applied to

individual women because of their being women,

which Title VII was designed to abolish” (Pet. App.

C-7). The court of appeals also held that a classifica-

tion based explicitly and exclusively on sex’ was not

necessary to provide a financially sound pension plan,

and noted that “distinctions based on many other

longevity factors (¢.g., smoking and drinking habits,

normality of weight, prior medical history, family

longevity history) are not used [by the employer] in

determining contribution levels” (Pet. App. C-11 to

C-12).

Subsequently, the court of appeals, with one judge

dissenting,’ denied the Department’s petition for re-

hearing (Pet. App. D), finding that unlike the ex-

clusion of pregnancy from disability benefits (see

General Electric Co. v. Gilbert, 429 U.S. 125) the differ-

* Calculations based upon Greenlee and Keh, “The 1971 Group

Annuity Mortality Table,” 283 7'ransactions, Society of Actuaries,

Pt. 1, pp. 585-596 (1972), for example, show that women at age 65

on average will live 4.1 years longer than men at age 65.

*“[T]t 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” (Pet. App.

C-13).

* Judge Kilkenny, who had joined the original opinion, dis-

sented from the denial of rehearing on the ground that the

General Electric decision required, at a minimum, a trial on the

issue of whether the “retirement plan was justified on the basis

of recognized actuarial tables showing the difference in longevity

between males and females” (Pet. App. D-4 to D-9).

ential treatment of women in the Department’s retire-

ment plan was explicitly and exclusively based on

gender.’ The court explained (Pet. App. D-2) :

A greater amount is deducted from the wages

of every woman employee than from the wages

of every man employee whose rate of pay is the

same. How ean it possibly be said that this dis-

crimination is not based on sex? It is based

upon a presumed characteristic of women as a

whole, longevity, and it disregards every other

factor that is known to affect longevity. The

higher contribution 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.

SUMMARY OF ARGUMENT

A. Petitioners’ mandatory retirement allowance

plan under which a “greater amount [was] deducted

from the wages of every woman employee than from

the wages of every man employee whose rate of pay

[was] the same”’ discriminated “on the basis of sex

alone” (Pet. App. D-2). One of the factors that an

employer appropriately considers in funding a pen-

sion plan is the estimated longevity of his workforce,

and sex is one factor relevant to longevity predic-

tions. But petitioners not only separately determined

* The court also noted that unlike the under-inclusive disability

benefits plan in General Electric the retirement plan is all-inclu-

sive as to retirement benefits, but “it is discriminatory, on the

basis of sex alone, as to costs to the employees” (Pet. App. D-2).

the longevity risks for male and female employees,

but also allocated the total cost of the employee pen-

sion plan according to a solely sex-based classification.

As the court of appeals concluded “[t]o say that the

difference [in wage deductions] is not based on sex is

to play with » urds” (Pet. App. D-2).

B. Explicit sex discrimination in the terms and con-

ditions of employment is prohibited by Title VII of

the Civil Rights Act of 1964 even if based on accurate

generalizations concerning men and women as a class.

42 U.S.C, 2000e-2(a) (1), 42 U.S.C. (Supp. V) 2000e-

2(a)(2). See Dothard vy. Rawlinson, No. 76-422, de-

cided June 27, 1977. The Title VII prohibition extends

equally to discrimination in employment-related re-

tirement plans based upon generalizations with re-

spect to each sex, race, religion, or national origin.

See Chastang v. Flynn & Emrich Co., 541 F. 2d 1040

(C.A. 4); Rosen v. Public Service Electric and Gas

Co., 477 F. 2d 90 (C.A. 3). Indeed, assessment of de-

ductions from employee wages based upon generali-

zations related to the employee’s sex “is just the kind

of abstract generalization * * * which Title VII was

designed to abolish” (Pet. App. C-7).

C. The burden of paying approximately 15 percent

more in return for a contingent future right to equal

monthly pension payments substantially and adverse-

ly affected the take-home wages of individual women.

During the course of some wage earners’ careers, this

disparity translated into wage differences of several

thousand dollars. The contingencies associated with

the vesting of pension rights and the fact that most

women and men (more than 80 percent) die at the

same age means that most of these women will never

receive the benefits that are said to offset this disad-

vantage. Nevertheless, because a small percentage of

women live longer, all women were required to pay

more, solely because of their sex, to receive the same

contingent right to future periodic benefits. Similarly,

because an equally small percentage of men die young,

all men were accorded the benefit of reduced pension

contribution costs.

D. A distinction with respect to the terms and

conditions of employment explicitly based on mem-

bership in a class protected by Title VII (such as

sex), if it can be justified at all under Title VII, must

be justified by proof that “there exists an overriding

legitimate business purpose such that the practice

is necessary to the safe and efficient operation of the

business” and that there are “available no acceptable

alternative policies or practices which would * * *

accomplish the business purpose * * * equally well

with a lesser differential [discriminatory] impact.”

Robinson v. Lorillard Corp., 444 F. 2d 791, 798 (C.A.

4), certiorari dismissed, 404 U.S. 1006. The justifica-

tion offered by petitioners for requiring differing

contributions based upon sex was that “‘[sJound

actuarial practice requires * * * averaging of life

expectancies of persons in ascertained classes (usual-

ly age and sex)” (A. 83).

The assessment of actuarial risk has traditionally

heen accomplished by reference to sex classes, but

allocation of the cost by differential deductions from

employee wages based upon sex alone is “exceedingly

rare’ (Brief for the Society of Actuaries and the

American Academy of Actuaries as Amici Curiae, p.

18). In addition, petitioners’ plan has functioned with-

out a sex-based cost allocation since 1975. The court of

appeals therefore correctly held that petitioners could

not show that differential contribution rates based

upon sex were necessary to providé “a stable and se-

eure pension program” (Pet. App. C-11). ,

Title VII does not mandate the actuarial mechanics

of estimating the cost of ensuring employee risks, nor

does it inhibit the use of all relevant actuarial data

including the race or sex mix of a particular work-

force in order to estimate total costs accurately.

Nevertheless, sex-neutral actuarial tables that merge

the differing life expectancies of men and women are

an available and practical alternative. Merger of the

risks of group members is valid as an actuarial mat-

ter. The differing life expectancies of smokers and

non-smokers, for example, are curently merged in

petitioners’ actuarial tables, and a similar merger of

the life experiences of black and white persons fol-

lowed the abandonment of traditional race-based

acutuarial tables by the life insurance industry. Sex-

neutral tables do not assume that men and women have

the same life expectancies. These tables reflect the

impact of female longevity. experience on the work-

force and can be adjusted to reflect the female compo-

sition of a particular pension plan’s employee group.

Irrespective of how the employer calculates the

total risk, Title VII precludes funding that risk by

differential deductions from wages based upon a sex

classification. An available alternative to a sex-based

cost allocation is the system used by petitioners since

1975 under which all employees share equally the risk

of the longer life expectancy of a small percentage of

females and the shorter life expectancy of a small per-

centage of males, just as all of petitioners’ employees

share equally the life expectancy risks of smokers and

non-smokers and black and white employees. Since

plans that allocate costs by differential deductions

from wages based upon sex are rare, the practical

implications for employers of discontinuance of that

method would be minimal. In sum, petitioners have

offered no arguably adequate justification for denying

female employees rights “based upon the fundamental

Title VII precept that generalizations relating to

sex, race, religion, and national origin cannot be per-

mitted to influence the terms and conditions of an in-

dividual’s employment” (Pet. App. C-21).

A. The Bennett Amendment of Title VII of the

Civil Rights Act of 1964, 42 U.S.C. 2000e-2(h), in-

corporates the exceptions to the prohibitions of the

Equal Pay Act into Title VII. General Electric Co. v.

Gilbert, 429 U.S. 125, 144. Petitioners argue that the

fourth exception to the Equal Pay Act authorizing a

wage ‘‘differential based on any other factor other

than sex” insulates a practice of allocating pension

costs on the basis of sex irrespective of the Title VII

prohibition (Pet. Br. 24). But, as the court of appeals

stated, ‘‘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” (Pet. App. C-13).

B. Despite the plain meaning of the statutory lan-

guage, petitioners claim that the purpose of the fourth

exception was to permit overtly sex-based classifica-

tions (Pet. Br. 15). But the legislative reports accom-

panying the Equal Pay Act emphasize that Congress

intended the fourth exception as an authorization

hasically limited to sex-neutral classifications, “among

other things, shift differentials, restrictions on or dif-

ferences based on time of day worked, hours of work,

lifting or moving heavy objects, differences based

on experience, training or ability would also be ex-

cluded.” H.R. Rep. No. 309, 88th Cong., Ist Sess. 3

(1963). That understanding is reflected in the Secre-

tary of Labor’s Interpretative Bulletin on the Equal

Pay Act, which statesthat “[t]o 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-

nosey of the Equal Pay Act” (29 O.F.R. 800.151).

In litigation (Witz v. Midwest Mfg. Corp., 58

CCH Lab. Cases.~<

«32,070, 18 WH Cases 556 (S.D. IIL, devided Au-

gust 9, 1968) and in an opinion letter (BNA Wage-

Hour Manual 95;607), the_Secretary of Labor has

taken the position that the Equal Pay Act precludes

252-902—77——-3

_E_eEEECCOAESEI

differential deductions from wages based upon sex

irrespective of the alleged increased costs of provid-

ing benefits to females. This conclusion applies a for-

tiort to pension contributions, which afford many em-

ployees no coneurrent protection or benefits but only a

contingent future right to benefits.

C. Petitioners argue that the decision below con-

flicts with Section 800.116(d) of the Secretary of

Labor’s Interpretative Bulletin on the Equal Pay Act.

That section suggests that a pension plan which paid

greater benefits to one sex than another or under

which an employer made unequal contributions based

upon sex would not constitute an illegal wage dif-

ferential. But Section 800.116(d), which is now under

reconsideration by the Department of Labor, does not

sanction, or even purport to address, petitioners’

practice of requiring greater contributions from the

wages of women employees, a practice explicitly for-

bidden by Section 800.151 of the same Interpretative

Bulletin. No conflict exists, therefore, between the

position of the Department of Labor and the Equal

Employment Opportunity Commission with respect to

the issues raised and decided in this case. Indeed, the

language of the Equal Pay Act, its legislative history,

and the consistent interpretation of the Department

of Labor all lead to the conclusion that petitioners’

sex-based wage differential does not fall within the

claimed exception to the Equal Pay Act. That Act,

therefore, did not authorize petitioners’ explicitly sex-

based wage distinction which, for the reasons stated

in point I, supra, violated Title VII.

ARGUMENT

A POLICY OF DEDUCTING GREATER AMOUNTS FROM THE

WAGES OF FEMALE EMPLOYEES THAN FROM THOSE OF

MALE EMPLOYEES IN RETURN FOR A CONTINGENT FUTURE

RIGHT AT AN EQUAL MONTHLY RETIREMENT ALLOWANCE

VIOLATES TITLE VII

A. PETITIONFRS’ POLICY CONSTITUTED DISCRIMINATION BASED UPON

SEX

Petitioners’ retirement allowance plan classified em-

ployees into two contribution rate groups according to

a single criterion, that of their sex. Although peti-

tioners pay all similarly situated participants, male

or female, the same monthly post retirement benefits,

until December 31, 1974, they required women to make

contributions to the retirement plan that were 14.84

percent greater than those required of males. The sole

basis upon which the employee was assigned the lower

or the higher contribution rate was the employee’s

sex. If aman, he paid the lower rate; if a woman, she

paid the higher rate. This is an explicit gender-based

classification. Its use for determining pension con-

tributions violates Title VII, at least prima facie

(see pp. 19-31, infra), because it discriminates against

women on account of their sex in their compensation,

terms and conditions of employment (Section 703(a)

(1), 42 U.S.C. 2000e-2(a)(1)),*° and because it is a

® Section 703(a) (1) of Title VII makes it an unlawful employ-

ment practice for an employer to “* * * discriminate against any

individual with respect to his compensation, terms, conditions, or

privileges of employment, because of such individual’s * * * sex

** *” 42 U.S.C. 2000e-2(a) (1).

classification based upon sex that adversely affects in-

dividual female employees (Section 703(a)(2), 42

U.S.C. (Supp. V) 2000e-2(a) (2)).’

Title VII bars unequal treatment of individual

women and men based merely on stereotyped charac-

terizations of the sexes. See, e.g., Dothard v. Rawlin-

son, No. 76-422, decided June 27, 1977, slip op. 12;

Sprogis v. United Air Lines, Inc., 444 F’. 2d 1194, 1198

(C.A. 7). Accordingly, the courts have consistently

held that traits characteristic of the average person

of one sex may not be used to justify employment de-

cisions with respect to individual persons of that sex.

For example, though it may generally be true that

women as a class (“on the average’’) are less strong

than men as a class, individual women may not be

penalized by an employment decision excluding all

women from a particular job requiring a particular

degree of strength. E.g., Rosenfeld v. Southern Pa-

cific Company, 444 F. 2d 1219 (CA. 9); Bowe v.

Colgate-Palmolive Comany, 416 F. 2d 711 (C.A. 7).

Similarly, an employer ‘‘cannot exclude all males

[from the job of flight attendant] simply because

most males may not perform adequately” (em-

phasis in original). Diaz v. Pan American World Air-

* Section 703(a) (2) of Title VII, 42 U.S.C. (Supp. V) 2000e-

2(a) (2), states in relevant part that it shall be an unlawful em-

ployment practice for an employer “to limit, segregate, or classify

his employees * * * in any way which would deprive or tend to

deprive any individual of employment opportunities or other-

wise adversely affect his status as an employee, because of such in-

dividual’s * * * sex * * *.”

ways, Inc., 442 F. 2d 385, 388 (C.A. 5), certiorari de-

nied, 404 U.S. 950.”

By analogous reasoning, explicit sex-based diserim-

ination in retirement plans rationalized by statistically

based generalizations concerning men and women also

violates Title VII. It is unlawful to require women to

retire earlier than men (e.g., Bartmess v. Drewrys

U.S.A., Inc., 444 F. 2d 1186 (C.A. 7), certiorari denied,

404 U.S. 939), or to pay smaller periodic benefits to

men who retire early than to women who retire early.

Chastang v. Flynn & Emrich Co., 541 F. 2d 1040, 1042-

1043 (C.A. 4); Rosen v. Public Service Electric and

Gas Co., 477 F. 2d 90 (C.A. 3); Fitzpatrick v. Bit-

zer, 390 F. Supp. 278, 285-288 (D. Conn.), reversed

on other grounds, 427 U.S. 445. The same principles

require that individual women not be penalized by re-

quiring all women to make greater pension contribu-

tions than all men, even if it be generally true that

women as a class (“on the average’’) live longer than

men as a class. As the court of appeals stated, this “is

*° The policy at issue here differs somewhat from the policies

at issue in the cited cases in that, while it is generally possible to

predict prior to hire, on the basis of objective tests, which women

and men would be able to perform a particular job, it is more

difficult and probably not feasible for group insurance purposes

to predict even generally how long any individual will live. On

the other hand, it is not necessary for purposes of a group pension

plan to devise a method for determining with precision the prob-

able life expectancy of each individual in the group (see infra,

pp. 28-30).

just the kind of abstract generalization * * * which

Title VII was designed to abolish’’ (Pet. App. C-7).”

“ There is no reason to treat this distinction on account of sex

any differently under Title VII than one based upon race, religion,

or national origin, If it were lawful under Title VII to require

women to contribute more to a pension fund than similarly situated

men, because of their greater average longevity, then it would pre-

sumably also be lawful, for example, to require non-Jews to con-

tribute more than Jews (“By age 65 * * * [Jewish] mortality

rates were higher than those for the total population at age 65.”

Fauman and Mayer, “Jewish Mortality in the United States,” in

Shiloh and Selavan, Ethnic Groups of America: Their Morbid-

ity, Mortality and Behavior Disorders, Vol. 1—The Jews, p. 36

(1973) ) ; to differentiate between white and black employees (see

Sutton, “Assessing Mortality and Morbidity Disadvantages of the

Black Population of the United States,” in Shiloh and Selavan,

Ethnic Groups of America; Their Morbidity, Mortality and Be-

havior Disorders, Vol. 11—The Blacks, p. 25 (1974)); or to re-

quire Mormons and Seventh Day Adventists to contribute more

than persons of other religions (“* * * [T]he mortality rates for

Mormons are substantially lower than those of the general popula-

tion and similar to those of previously reported nonsmoking pop-

ulations in the United States, including Seventh-day Adventists

as a whole.” Enstrom, “Cancer Mortality Among Mormons”, 36

Cancer 825, 839 (1975) (footnotes omitted)),

In addition, although on the average women live longer than

men, the relative differences in life expectancy vary from popu-

lation to population. For example, while mortality data prepared

by the State of California show that in the California population

at large, women age 65-70 have a life expectancy 2.88 years greater

than men of that age, similar data collected in the California Sev-

enth Day Adventist (SDA) population show that California SDA

women age 65-70 have a life expectancy only 1.55 years greater

than California EDA men of that age. Lemon and Kuzma, “A

Biologic Cost of Smoking,” 18 Archives of Environmental Health,

American Medical Association, 950, 952-958 (1969). The life ex-

pectancy of California SDA men even exceeds that of women in

the California population at large until age 70 (id. at 953).

This burden of paying higher present contributions

for a contingent future right to identical monthly

pension payments substantially and adversely affects

the wages of individual women. Although the female

employee would receive precisely the same monthly

retirement benefits as her male counterpart, she is

required to pay approximately 15 percent more from

her wages. During the course of a wage earner’s

career this disparity may translate into wage differ-

ences of several thousand dollars. Even among those

who eventually qualify for a pension (see note 18,

infrd” most women do not ever receive benefits that

even arguably offset this wage disadvantage. Most

men and women (more than 80 percent) die at the

same age. Petitioners’ method of computing pen-

72 With respect to those employees who will never qualify for

a pension, the explicitly sex-based discrimination is more obvious.

Even if the non-qualifying employees’ contributions are returned

to them at the time of their separation from employment, Title

VIT is violated by the deferment of a larger proportion of the

compensation of women employees on the basis of their sex.

*® More than 80 percent of men and women share common death

ages. Henderson v. State of Oregon, 405 F. Supp. 1271, 1275 n. 5

(D. Ore.), appeal docketed, C.A. 9, No. 76-1706, March 30, 1976;

Reilly v. Robertson, 360 N.E. 2d 171, 176 (Ind. Sup. Ct.), certio-

rari denied, No. 76-1635, October 3, 1977. This can be demon-

strated using statistics attached to the Brief of the Teachers

Insurance and Annuity Association of America and College Re-

tirement Equities Fund as Amici Curiae in this case (Addendum

A). The figures used in Table I, “Survival Experience of 100,000

Males and 100,000 Females Retiring at Age 65, Using 1951 Group

Annuity Mortality Table” have been used below to show the distri-

bution of age at death for the 100,000 men and 100,000 women

represented in the TIAA-CREF Table:

sion contributions on the basis of sex thus puts the

burden of the higher annuity cost attributable to the

approximately 14-20 percent of the women who die

“late” on women exclusively, and assigns the cost

savings resulting from the deaths of the approx-

imately 14-20 percent of the men who die “early”

exclusively to the men (see, also note 18, infra).

Number of deaths Number of women who

can be paired with men

Age Men Women dying in the same year

OO 14, 188 8, ORT 8, OST

. 18, 656 138, 339 138, 339

Veccuccuneane 21, 914 19, 525 19, 525

21, 122 271, 49 21, 182

CP iecdennens 14, 477 18, 791 14, 477

RES ee 6, O40 12, 029 6, 959

06 and over_.... 2, 674 6, 280 2, 674

Total... .. 100,000 100, 000 86, 193

Thus, out of the original group of 100,000 men and 100,000 women,

approximately 86,193 men and 86,193 women can be paired as

dying within the same five year age span. The overlap in the dis-

tributions therefore covers more than 85 percent of the total group.

The difference in the average life expectancy of men and women

results from the percentage of men who die “early,” unmatched by

women’s deaths (in the example above, approximately 14 percent

of the men), and the percentage of women who die “late,” un-

matched by men’s deaths (in the example above, approximately

14 percent). Bergmann and Gray, “Equality in Retirement Bene-

fits,” Civil Rights Digest 26 (Fall 1975). The data used in the

chart above are divided into five year intervals. Use of data di-

vided into one year intervals would produce only slightly dif-

ferent results.

1 Petitioners’ statement (Pet. Br. 5) that “[t]he contributions

by the Department for a woman were always greater than for a

corresponding man,” is incorrect. Petitioners’ answers to interrog-

Nothing in this Court’s deeision in General Electric

Co. v. Gilbert, 429 U.S. 125, suggests that the imposi-

tion of these sex based burdens on employment is per-

missible under Title VII. In Gilbert, the Court found

that the exclusion from a comprehensive disability

plan of one physical condition with unique character-

isties—pregnancy—did not, in itself, discriminate on

the basis of sex. It considered the disability benefits

plan as differentiating between pregnant women and

all other nonpregnant persons, including nonpregnant

women, #.é., a distinction on a basis other than their

sex.’ By contrast, the pension plan here classified and

distinguished between two groups of employees ex-

plicitly and exclusively on the basis of sex. ‘‘The high-

atories below show that in half of the cases described in the

record, the Department would have contributed more to the pen-

sion plan in conjuttion with the employment of a male than in con-

juction with the employment of the similarly situated female (R.

176). This results from the fact that the Department’s contribu-

tion to the pension fund in conjunction with a given employee

consists not only of the accumulated 110 percent matching con-

tributions but also of “minimum pension” contributions, as well as

the amounts needed to fund survivor benefits under the plan (see,

e.g, R. 176, 238-239,

** Having found that the exclusion of pregnancy from the dis-

ability benefits plan was not per se gender-based discrimination,

the Court analyzed the plan to determine whether, as a facially

neutral plan, it had a gender-based discriminatory effect on one

class, and found that it did not. 429 U.S. at 137-140. Here, this

second inquiry into disparate impact is unnecessary because of

the gender-based discriminatory nature of the pension plan. Even

if inquiry into the effects of petitioners’ pension system were nec-

essaty in this case, it is clear that here the burden placed upon

female employees, with respect to their current compensation, is

greater than that placed upon male employees. Vashwille Gas Co.

v. Satty, No. 75-536, decided December 6, 1977, slip op. 5. See

infra, p. 36.

252-902—77——4

er contribution is required specifically and only from

women as distinguished from men” (Pet. App. D-2).”

B. PETITIONERS HAVE SUGGESTED NO ADEQUATE BASIS FOR AN AFFIRMA-

TIVE DEFENSE UNDER TITLE VII

What we have said thus far is sufficient, in our

view, to dispose of this case. Petitioners have sug-

‘* Judge Kilkenny, dissenting from the denial of the petition

for rehearing, concluded that this case is governed by General

Electric Co. v. Gilbert because “the plan is facially nondiscrimina-

tory to the extent that there is no risk for which one sex is cov-

ered and the other is not” and that there was no showing of gen-

der-based effects because “the aggregate risk protection for men

and women is identical” (Pet. App. D-6). This analysis fails to

appreciate that unlike the Gi/bert plaintiffs, respondents here do

not challenge the risk coverage of the pension plan, which is all

inclusive with respect to the risks faced by males and females

alike. Respondents’ challenge is instead addressed to the explicitly

sex-based differential in assessments against wages by which the

Department’s plan is financed. No similar issue was raised or con-

sidered in Gilbert (which involved neither a contribution sur-

charge for those employees desiring or requiring pregnancy in-

surance nor a sex-based differential in employee contributions).

Moreover, the aggregate analysis of class risks and benefits

has no place in a case challenging explicit sex discrimination. Ag-

gregate analysis may be a useful tool in demonstrating whether

facially neutral plans in fact have der-based effect. See Gen-

eral Electric Co. v. Gilbert, supra, S. at 1388; Nashville Gas

Co. v. Satty, supra, slip op. 8. However, this Court has never sug-

gested that explicit discrimination on the basis of sex or race can be

justified by a showing of offsetting benefits to the racial or sex

class. Such a defense would be inconsistent with the overriding

purpose of Title VII “to require employers to treat each employee

* * * as an individual, and to make job related decisions about

each employee on the basis of relevant individual characteristics,

so that the employees’ 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”(Pet. App. C-7).

gested, however, that they can justify the practices at

issue here by an affirmative defense analogous to a

showing of business necessity (see A. 109-110, 116).

It is established. under Title VII that practices

which are neutral on their face, but which have a dis-

criminatory effect on a class protected by Title VII,

may be justified by the employer, as an affirmative de-

fense, under the standards of business necessity ap-

plicable in Title VII cases. Griggs v. Duke Power Co.,

401 U.S. 424, 431. In order to establish a “business

necessity” defense, the employer must prove that

‘‘there exists an overriding legitimate business ._pur-

pose such that the practice is necessary to the safe

and efficient operation of the business’’ and that there

are “available no acceptable alternative policies or

practices which would better accomplish the business

purpose * * * or accomplish it equally well with a

lesser differential [discriminatory] impact.” Robin-

son Vv. Lorillard Corp., 444 F. 2d 791, 798 (C.A. 4),

certiorari dismissed, 404 U.S. 1006; see Dothard v.

Rawlinson, supra, slip op. 10 n. 14.

Because the practices at issue here are not neutral

on their face, the business necessity justification does

not apply. At most, petitioners might attempt to rely

on an analogous affirmative defense designed to show

that practices which appear discriminatory on their

face are not in fact discriminatory. If such a defense

for an explicitly sex-based (or race-based or religion-

based) policy is to be entertained at all, it should be

justified under standards at least as stringent as those

applicable to the business necessity defense, in order

to avoid unnecessary approval of precisely the sort

of differentiation by class characteristic that Title

VII was designed to eliminate. See Craig v. Boren,

429 U.S. 190, 208-209 n: 22."

Petitioners argue, and we. do not dispute, that the

financial plaming of a pension program requires the

use of actuarial averaging of the varying longevity

experiences of ascertainable groups because it is im-

possible to determine in advance when any particular

individual will die, and that actuarial grouping tra-

ditionally has been accomplished by reference to sex.

Initially, however, we have difficulty in understanding

how this can serve to justify sex-based differences in

the take-home pay of employees who do not currently

qualify, and a substantial number of whom may never

qualify, for pension rights. Unlike, for example, con-

* Cf. Dothard v. Rawlinson, supra, slip op. 12, holding that

the parallel bona fide occupational qualification (BFOQ) defense

to explicitly sex-based «lis¢riminatian must, be extremely narrowly

construed, The BFOQ defense is inapplicable to the type of dis-

crimination at issue here since, by its terms, BFOQ concerns only

allegations that the particular sex disefimination in “occupations”

(such as in hiring or job assignments) is justified because it is nec-

essary to the conduct of the business to have an employee of a

particular sex perform certain tasks. Dothard v. Rawlinson, supra,

slip op. 11-12. While the court of appeals here discussed petitioners’

proferred defense in terms of a BFOQ defense, its analysis is in

substance that applicable to a business necessity defense (see Pet.

App. C-10 to C-12).

“ Trideed, while life expectancies are relevant to the estimate of

pension plan costs, “[f]or any ;riven sehedule of benefits the actual

aa a plan depend principally upen the number of participants

who achieve benefit eligibility.” Bernstein, The Future of Private

BEST COPY AVAILABLE

tributions for disability insurance or life insurance,

the payment of pension contributions provides an

employee who has not yet qualified for a pension with

no present protection or benefit that could arguably

be a co-existing offset to the burden of a sex-based

reduction in current compensation. Moreover, since

1975 petitioners’ plan has functioned, as most plans do

{see p. 30, infra) without a sex-based contribution

schedule. The court of appeals was therefore obviously

correct in pointing out that while the use of sex as an

actuarial class may assist pension administrators in

predicting costs and benefits more accurately, that

does not mean that “providing a financially sound pen-

sion plan requires [establishing contribution rates ac-

cording to] an actuarial classification based wholly

on sex” (Pet. App. C-11).

The analogous practice of utilizing racial criteria in

assessing life insurance costs provides a useful refer-

ence for analyzing petitioners’ proferred justification

for sex-based distinctions. For years, it was customary

for the insurance industry to use race-based actuarial

criteria as the basis for charging blacks higher life

Pensions 39 (1964). One survey indicates that women, in general,

who are covered by pension plans are less likely \..an men to have

vested rights. Kolodrubetz and Landay, “Coverage and Vesting

of Full-Time Employees Under Private Retirement Plans,” Social

Security Bulletin 20,27 (November 1973). Among retiring workers

in another survey, 46 percent of the men and only 21 percent of

the women were entitled to pension benefits, and the median benefit

for entitled women was only $970 per year, as compared to $2,080

for men. Kolodrubetz, “Private Retirement Benefits and Relation-

ship to Earnings: Survey of New Beneficiaries,” Social Security

Bulletin 16 (May 1973).

insurance. rate than whites. See, e.g., James, The

Metropolitan Life: A Study in Business Growth 338-

339 (1976). This practice was defended as racially

neutral and non-discriminatory because it was “dic-

tated entirely by actuarial findings” (id. at 338). The

assessment of different life insurance rates for blacks

and whites on the basis of race, though a valid choice

as an actuarial matter, is now prohibited by state leg-

islation (ibid.). Actuaries have noted the parallel be-

tween the industry experience with race-based and

sex-based criteria:

Federal government pressure via the EEOC

for treating males and females in exactly the

same way recalls to mind the fact that the

government took a similar position some decades

ago with respect to race and imposed a require-

ment that insurance companies charge exactly

the same premiums for the same coverage ir-

respective of race, in spite of the fact that all

the published mortality experience then avail-

able, including the mortality statistics published

with every decennial census, indicated clearly

that there were very significant differences in

mortality rates and trends by race.”

19 “Mortality studies * * * showed that the colored death rates

were running substantially in excess of the white. It was clearly

improper to continue writing both on the same premium rates.

That would have been discrimination against the whites” (éd. at

339).

20 Fellers and Jackson, “Noninsured Pensioner Mortality: The

UP-1984 Table,” 25 Proceedings, Conference of Actuaries in

Public Practice 456, 459 (1976). “UP-1984” stands for Unisex

Pension—1984.

Similarly, actuarial tables based upon sex, while

customarily used, can be replaced by alternative

groupings that are equally valid as actuarial pools.

Since neither segregation nor merger of life expect-

ancy experience by sex is in itself actuarilly unsound,

at least with respect to group insurance,” the differ-

ing average life expectancies of women as a class and

men as a class can be merged in calculating total

* Risk classification in group insurance differs significant]

from risk classification in individual insurance. In the latter, the

factors affecting the particular individual’s risk are computed

as precisely as possible. See Shepherd and Webster, Selection of

Risks 6 (1957). But in group insurance, most of these different

risks are pooled among all the participants.

_ Amici Teachers Insurance and Annuity Association of Amer-

ica and College Retirement Equities Fund argue that under a

sex-neutral contribution scheme “the employer or insurer would

be forced to take some of the funds contributed by and for the

men and pay those funds to the women,” and that “[t]his would

be discriminatory in the extreme” (Br. 24). For reasons previ-

ously discussed, however, that argument is unpersuasive with re-

spect to pension contribution differentials (which are all that is

at issue here), which involve sex-based differences in take-home

pay in return for a contingent future right to pension payments.

Nor, in our view, do similar considerations mean that Title VII

requires the level of periodic payments to pensioners under a

plan to be differentiated according to sex. The essence of a group

pension benefit plan, like group disability insurance coverage, is

not that all covered individuals will receive proportional aggre-

gate benefits, but that all participants are assured of benefits for

their covered individual needs that actually arise. So long as a

plan provides for the same level of benefits for all covered indi-

viduals, male or female, for as long as individually needed. it is

consistent with Title VII. Title VII does not require differ-

entials in either pension contribution levels or pension payment

levels on the basis of sex, any more than it requires them on the

we of race or religion. See note 11, supra. See, also, notes 27, 33,

infra.

pension risks. The use of merged life expectancy

tables pools the risks of those groups with different

mortality experiences whose risks are not separately

calculated. In fact, numerous categories of risk are

merged in any single classification actuarial table.

For example, the different life expectancy experience

of smokers and non-smokers is “merged’’ in peti-

tioners’ actuarial calculations.” Use of a merged, sex-

neutral table involves a similar pooling, and “the use

of mortality rates on a single ‘unisex’ basis has been

found quite practical for non-insured plans.” * Fellers

and Jackson, supra, at 458.

Merging the longevity experiences of men and

women does not require “resort to an assumption

(women and men of the same age have equal life

expectancy) that is demonstrably false’ (Brief of

Teachers Insurance and Annuity Association, p. 23).

Sex-neutral tables reflect the impact of female longev-

ity experience on the workforce and can be adjusted

#2 See Chart Book on Smoking, Tobacco, and Health, U.S. De-

partment of Health, Education and Welfare, Public Health Serv-

ice, Publication No, CDC 75-7511, p. 12 (revised 1972). If smok-

ers and non-smokers receive the same periodic benefits in a merged

group, the smokers make greater contributions and the non-

smokers smaller contributions, than they would if their experi-

ence were segregated.

*8 Petitioners’ pension program is a non-insured plan. See Brief

for the Society of Actuaries, p. 5.

to reflect the female composition of a particular pen-

sion plan’s employee group.“ Title VII does not pre-

clude the consideration of all relevant actuarial data

including the sex or race mix of a particular work-

force in order to estimate as accurately as possible

the total cost of the pension plan. Actuaries them-

selves have recognized that the government “is not

questioning the fact that differences in mortality

rates for males and females have been observed in the

** Fellers and Jackson, who have developed a sex-neutral mor-

tality table, have explained how it would function:

The UP-1984 Table has been developed as a composite

mortality table which, if used without adjustment, is ap-

propriate for the valuation of pension plans covering groups

having a 10-30 per cent female content. The table can be

set forward one year in age for use with groups with less

than 10 per cent female content, set back one year in age for

groups having 30-50 per cent female content, and so on. The

use of a composite table for the actuarial valuation of

pension benefits should not be considered less accurate or

less scientific than the use of sex-segregated mortality tables,

because statistically significant data relative to the differ-

entials by sex in pay-increase factors, early retirement rates,

disability retirement rates, and rates of withdrawal from

service generally are not available on a company-by-com-

pany or even an industry-wide basis. The costs of projected

pensions must thus be based on so many estimates and

assumptions that are not subject to accurate delineation by

sex that the use of sex-segregated mortality rates is a

refinement in the actuarial valuation process that is not

justified on statistical or financial grounds.

Fellers and Jackson, supra, note 20, at 483-484,

past, nor that such differences must be considered in

estimating costs for the future.” ”

Title VII does, however, preclude differential de-

ductions from wages governed by a sex or race based

allocation of the total cost of a pension plan. An ob-

vious alternative is that used by petitioners since

1975—that employees share equally the risk of longer

life expectancy by a small percentage of females and

shorter life expectancy by a small percentage of

males. The American Council of Life Insurance (Br.

44) argues that such equal sharing of risks by all

employees “violate[s] the basic insurance concept * * *

that only applicants who are exposed to comparable

degrees of risk should be placed in the same premium

class.” Whatever the merits of that view as to indi-

vidual insurance,” it is unpersuasive in the context

** Fellers and Jackson, supra, note 20, at 482. Thus we do

not contest that the sex mix of a particular pensioner group may

be considered in order to determine the total estimated cost of a

pension plan. A plan with a pensioner population that is 90 per-

cent female will ultimately have to pay out a greater amount of

benefits than a plan with a pensioner population that is only 10

percent female. The same type of difference is true of a pensioner

population that has 90 percent nonsmokers as compared to only 10

percent nonsmokers.

*° The dissenting judge in the court of appeals thought it signifi-

cant that a female who purchased an annuity as an individual from

a commercial insurance company would have paid more than her

male counterpart (Pet. App. D-7). However, the fact that private

insurance companies make explicit sex based distinctions, as they

once made explicit race based distinctions, in setting rates does not

insulate employers who establish insurance programs from their

obligations under Title VII. The commercial sale of insurance is

not a term or condition of employment and therefore is not subject

of group insurance in which by definition costs are di-

vided equally among group members, many of whom

are differently situated. For example, under peti-

tioners’ plan the cost of longer average life expectan-

cies of non-smokers is shared equally by smokers and

non-smokers alike and both black and white employees

share equally in the cost of longer average life expec-

tancies of white employees. In any event, as the brief

of the Society of Actuaries and the American Acad-

emy of Actuaries acknowledges, there are important

exceptions to the concept of “actuarial equity,” one

of which is that ‘‘certain classifications which may be

perfectly feasible from an actuarial standpoint may

be barred by others for reasons of social policy” (Br.

11). Title VII represents a congressional policy deci-

sion that sex-based distinctions with respect to em-

ployment, however feasible, traditional or convenient,

cannot (except in certain narrowly limited circum-

stances) be the basis of decisions with respect to wages

and terms and conditions of employment.

The Brief Amicus Curiae of American Council of

Life Insurance suggests that “[t]he decision below * * *

will require radical] changes in the pension and retire-

ment coverage available to American workers” (Br.

42). Those fears are unsupportable. The decision below

held only that employer self-insured pension plans

cannot differentiate between men and women with

to the statutory prohibition in Title VII against race or sex dis-

crimination. By contrast, the provision of insurance as an incident

to employment does trigger the Title VII prohibition against dis-

crimination on the basis of sex or race.

respect to deductions from wages. As the Brief for

the Society of Actuaries and the American Academy

of Actuaries as Amici Curiae notes (p. 18), “[mJost

defined benefit plans are noncontributory.” As to the

minority that require employee contributions, those

contributions “are almost always—unlike the plan in

the case at bar—unrelated to age or sex’’ (tbid.). The

brief concludes, “[s]ince defined benefit plans which

provide for different contribution rates for male and

female employees are exceedingly rare, there would

not be a widespread effect if equal employee con-

tribution rates were to be required in the case at

bar’’ («bid.).

Tradition and ease of administration are therefore

insufficient justification for the use of a prohibited cri-

terion here, especially in light of the available nondis-

criminatory option of utilizing general, sex-neutral

actuarial tables that are of equal actuarial validity.

Petitioners’ discontinuance as of January 1, 1975, of

its sex-based policy in favor of equal contribution

rates for male and female employees belies any claim

that its previous sex differentiated contribution rates

were necessary to an actuarially sound pension plan.

The courts below therefore properly found that peti-

tioners’ proffered justifications could not, in the cir-

cumstances of this case, show that differential contri-

bution rates based exclusively on sex were essential to

the “business function’’ of providing employees with

“a stable and secure pension program’’ (Pet. App.

C-11). Nor, for the reasons we have previously dis-

cussed, could petitioners show that its plan of unequal

current takehome pay, in return for the possibility of

a future right to equal periodic pension payments, was

nondiscriminatory in operation. It was, accordingly,

proper to grant summary judgment in favor of the re-

spondents, and this Court should affirm the decision

of the court of appeals, which correctly is ‘‘based

upon the fundamental Title VII precept that gen-

eralizations relating to sex, race, religion, and na-

tional origin cannot be permitted to influence the

terms and conditions of an individual’s employment”

(emphasis in original) (Pet. App. C-21, quoting

EEOC Dee. No. 75-146, January 13, 1975, CCH Em-

ployment Practices Guide, 16447, p. 4191).

** In 1966 the EEOC’s General Counsel issued an opinion letter

which, without particular reference to pension plans, can be read

to approve generally the type of practice here. 401 F.E.P. Rep.

3011-3012. This was not a binding Commission opinion.

See 35 Fed. Reg. 18692. The EEOC’s position has evolved. The

EEOC’s original Sex Discrimination Guidelines primarily

addressed the most obvious forms of sex-based discrimination and

did not discuss retirement and pension plans, 30 Fed. Reg. 14926-

14928. In 1968, the EEOC amended its Guidelines, referring

formally for the first time to pension and retirement plans, stating

specifically that a difference in optional or compulsory retirement

ages based on sex violates Title VII, and, more generally, that

“[o]ther differences based on sex, such as differences in benefits

for survivors, will be decided by the Commission by the issuance

of Commission decisions in cases raising such issues.” 33 Fed. Reg.

3344. The EEOC issued the present more detailed Sex Discrim-

ination Guidelines in 1972. 37 Fed. Reg. 6835-6837. Those guide-

lines state that it is an unlawful employment practice for an

employer to “discriminate between men and women with regard

to fringe benefits,” or to have a pension plan which “differentiates

in benefits on the basis of sex” (29 C.F.R. 1604.9(b), (f)), and

“[i]t shall not be a defense under title VIII [sic] to a charge

A REQUIREMENT THAT FEMALE EMPLOYEES CONTRIBUTE

MORE TO A PENSION PLAN THAN SIMILARLY SITUATED

MALE EMPLOYEES VIOLATES THE EQUAL PAY ACT

The Bennett Amendment of Title VII of the Civil

Rights Act of 1964, 42 U.S.C. 2000e—4k, incorporates

the exceptions to the prohibitions of the Equal Pay

Act into Title VII by authorizing wage differences if

‘‘such differentiation is authorized by the provisions

of section 206(d) of Title 29 [the Equal Pay Act].””

The Equal Pay Act provides in pertinent part:

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)).

In an area as complex as employment discrimination, evolving

positions are to be expected. Congress recognized as much in

acknowledging in 1972 that its perception of the nature of employ-

ment discrimination had evolved. S. Rep. No. 92-415, 92d Cong.,

Ist Sess., p. 5 (1971). Even if the EEOC’s 1972 guidelines on this

matter did constitute a significant change in its interpretation,

they are nevertheless entitled to great weight because they are

based upon the Commission’s “cumulative experience.” National

Labor Relations Board v. Weingarten, Inc., 420 U.S. 251, 266;

National Labor Relations Board v. Seven-Up Bottling Co., 344

U.S. 344, 349. See Espinoza v. Farah Mfg. Co., 414 U.S. 86, 94; cf.

General Electric Co. v. Gilbert, 429 U.S. 125, 140-145.

°* General Electric Co. v. Gilbert, supra, 429 U.S. at 144, Peti-

tioners argue that a colloquy between Senators Randolph and

Humphrey (cited by this Court in General Electric Co. v. Gilbert,

supra, 429 U.S. at 144) during debate on Title VII demonstrates

that Congress contemplated that the practice here at issue would

be lawful under the Equal Pay Act. The exchange reads, in its

entirety, as follows (110 Cong. Rec. 13663-13664 (1964) ) :

Mr. Ranpotru. Mr. President. I wish to ask of the Sena-

tor from Minnesota [Mr. Humphrey], who is the effective

No employer * * * shall discriminate, within

any establishment * * *, between employees on

manager of the pending 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 differently. For example,

widows’ benefits are paid automatically; but a widower

qualifies only if he is disabled or if he was actually sup-

ported by his deceased wife. Also, the wife of a retired

employee entitled to social security receives an additional

old age benefit; but the husband of such an employee does

not. These differences in treatment as I recall, are of long

standing.

Am I correct, I ask the Senator from Minnesota, in as-

suming that similar differences of treatment in industrial

benefit plans, including earlier retirement options for

women, may continue in operation under this bill, if it

becomes law ?

Mr. Humenrey. Yes. That point was made unmistakably

clear earlier today by the adoption of the Bennett amend-

ment ; so there can be no doubt about it.

Although this interchange is not without ambiguity, it appears

to have been intended primarily as an assurance that the Equal

Pay Act and its exemptions would be incorporated into Title VII.

It does not purport to be a careful consideration of the meaning

of the Equal Pay Act itself as it applies to industrial benefit plans.

Since the interchange occurred one year after the passage of the

Equal Pay Act, it would hardly be a reliable indication of Con-

gress’ intent in enacting that legislation. See International

Brotherhood of Teamsters v. United States, 431 U.S. 324, 354 n.

39. In fact, the social security provisions referred to by Senator

Randolph were held unconstitutional in Califano v. Goldfarb, 430

U.S. 199; the retirement options (which do not constitute wage

differentials) are not covered by the Equal Pay Act, and differen-

tial retirement ages have consistently been held unlawful (see

cases cited, supra, at 15). At all events, the interchange makes no

reference to sex-based distinctions in deductions from wages, and

any attempt to read it as suggesting that such distinctions would

be authorized would be inconsistent with the balance of the legisla-

tive history as we demonstrate herein.

the basis of sex by paying wages to employees in

such establishment at a rate less than the rate

at which he pays wages to employees of -the

opposite sex * * * for equal work on jobs the

performance of which requires equal skill, ef-

fort, and responsibility, and which are per-

formed under similar working conditions, ex-

cept where such payment is made pursuant to

(i) a seniority system; (11) 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 * * *. [29 U.S.C. 206(d) (1).]

Petitioners argue that the fourth exception to the

Equal Pay Act, allowing “a differential based on any

other factor other than sex,” permits a sex-based

allocation of pension plan costs irrespective of what

would otherwise be a Title VII violation (Pet. Br. 24).

However, as the court of appeals stated (Pet. App.

C-13):

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.

The legislative history of the Equal Pay Act as well

as administrative interpretation by the Department

of Labor support the conclusion drawn from the plain

meaning of the statute that the fourth exception can-

not be invoked to insulate petitioners’ plan from Title

VII scrutiny.

Congress’ purpose in passing the Equal Pay Act was

to “eliminate the depressing effects on living stand-

ards of reduced wages for female workers and the eco-

nomic and social consequences which flow from

[them].”’ Shultz v. Wheaton Glass Company, 421 F.

2d 259, 265 (C.A. 3); see also Shultz vy. American Can

Company-Dizie Products, 424 F. 2d 356, 360 (C.A. 8).

See also Section 2(a) of the Equal Pay Act, 77 Stat.

56; Section 2(a) of the Fair Labor Standards Act of

1938, 52 Stat. 1060, 29 U.S.C. 202(a). As stated by

Senator Hart during the debates on the equal pay bill

(109 Cong. Ree. 8916 (1963)):

Women are working to earn a living, to sup-

port families or to contribute to the family’s

ability to send the children to college—in addi-

tion to whatever personal sense of achievement

may be involved. The supermarket does not have

a special price on its groceries for women, the

doctor does not have a special rate for them,

their rent is not based on sex. Why then do we

allow a pay differential to continue which gives

them a smaller paycheck than others perform-

ing the same work?

A violation of the Equal Pay Act occurs if the take-

home pay of members of one sex is less than that of

members of the other sex, performing the same work

regardless of whether they are paid the same basic

salary. Payments made to satisfy the wage require-

ments set forth in Section 6 of the Fair Labor Stand-

ards Act, 29 U.S.C. 206 (which contains the Equal

Pay Act, 29 U.S.C. 206(d)), must be “uncon-

ditional” —+.e., they must be “free and clear’, Brennan

v. Veterans Cleaning Service, Inc., 482 F. 2d 1362,

1369 (C.A. 5), and the employee must actually have

use of the money. See, e.g., Shultz v. Hinojosa,

432 F. 2d 259 (C.A. 5); Veterans Cleaning Serv-

ice, Inc., supra; Brennan v. Heard, 491 F. 2d 1, 3-4

(C.A. 5). Here the women’s wages were not “equal”

to the men’s since part of their wages» had to be

paid back in the form of an additional contribu-

tion to the pension plan.” The women thus had ‘‘un-

conditional” control of a smaller wage than the men;

they had less money “to allocate * * * among com-

peting economic and personal interests” (Brennan v.

Heard, supra, 491 F. 2d at 4). Absent some exception,

this unequal pay scheme would constitute a violation

of the Equal Pay Act.

To justify an exemption for their unequal pay

scheme from both the Equal Pay Act and Title VII,

petitioners claim that the purpose of the exemption

authorizing “a differential based on any other

factor other than sex” (29 U.S.C. 206(d) (1) (iv))

was to permit overtly sex-based classifications (Br.

15), but the 7 .in meaning of the language “other

2° Even if it is assumed (since there is no record on this point)

that a women terminating her employment with the petitioner em-

ployer could at that time withdraw her own contributions, which,

because of the higher contribution required by the plan, would

exceed the amounts accumulated by a similarly situated man, that

would not cure the equal pay violation even with respect to such

non-pensioners. The wages required by the Fair Labor Standards

Act must be paid promptly (/?igopoulos v. Kervan, 140 F. 2d 506,

507 (C.A. 2)). The possible recoupment of a lump sum many

months or years later does not satisfy the requirement of equal pay

(cf. Roland Electrical Co. v. Black, 163 F. 2d 417, 421 (C.A. 4),

certiorari denied, 333 U.S. 854) ; nor does it meet the Act’s purpose

of increasing the wages of women workers so that they can enjoy

a better living standard. Money which may or may not be recouped

at some later indefinite time does not pay bills or mortgage pay-

ments. Brooklyn Bank v. O'Neil, 324 U.S. 697, 707-708 and n. 20.

than sex’’ is to preclude rather than permit sex-based

pay decisions. Moreover, the reference to “any other

factor” suggests by its terms that the first three sex-

neutral exceptions, (1) seniority, (2) merit, and (3)

quantity or quality of production, are examples. Con-

gressman Griffin, a supporter of the Equal Pay Act,

made that understanding explicit, stating “[r]oman

numeral iv is a broad principle, and tliose preceding

it are really examples” (109 Cong. Rec. 9203 (1963) ).

The legislative reports emphasize that Congress

intended the fourth exception as an authorization

basically limited to sex-neutral classifications.” As re-

ported by the Senate Committee on Labor and Public

Welfare, the bill (S. 1409) provided one exception to

the equal pay for equal work principle, “where sucha

wage differential is based on any factor or factors

other than sex.’’ The exception examples cited in the

Committee Report make clear that the factors upon

which the differential is based must relate to sex-

neutral distinctions and not some generalization with

respect to women as a whole. Thus “‘seniority systems

are valid exceptions provided they are based on tenure

and not upon sex,” as is ‘“‘a merit system or piecework

system which measures either the quantity or quality

of production or performance”’ (S. Rep. No. 176, 88th

Cong., Ist Sess., p. 4 (1963)). The House Committee

bill (H.R. 6060) contained the general exception con-

tained in the Senate bill, as well as the three specific

exceptions that now appear in the Act. The House

*° The extremely narrow possible exception to this limitation

is discussed infra, pp. 39-11.

Committee on Education and Labor also emphasized

that its intent was to exempt sex-neutral distinctions

H.R..Rep. No. 309, 88th Cong., Ist Sess., p. 3

\43))3

‘A]ny 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 exclu-

sion has been also included. Thus, among other

things, shift differentials, restrictions on or dif-

ferences based on time of day worked, hours of

work, lifting or moving heavy objects, differ-

ences based on experience, training, or abzlity

would also be excluded.

Petitioners’ claim (Br. 15) that the exception was

intended to justify differential payments based upon

a sex classification is totally inconsistent with this leg-

islative history." Supporters of the Equal Pay Act

*1 The dissenting judge below noted (Pet. App. D-8) that the

Pension Benefit Guaranty Corporation (PBGC), which insures

benefit plans under the Employee Retirement Income Security

Act, had recognized the use of sex segregated actuarial tables in

adopting interim regulations. The PBGC has used sex-based mor-

tality tables to value benefits jn order to relate its valuation rates

to the anticipated actual cost@ruaranteeing participants’ pensions.

29 C.F.R. Part 2610, 41 Fed. Reg. 48484, 48489 (November 3,

1976). The PBGC has adopted final regulations for determining

the maximum benefits guaranteed each participant under Title IV

of ERISA (see 29 C.F.R. 2609.4) ; it there required the use of sex-

neutral factors because “it felt that all participants of the same

age should receive the same benefit protection from PBGC, regard-

less of the participant’s sex in recognition of the similar needs of

all retired workers” (41 Fed. Reg. 6194, 6195). Moreover, in pro-

viding in ERISA for the rights of participants in private pension

plans to an accrued benefit derived from their own contributio

€ongress required the annuity to be calculated on the basis of

specified factors which do not include any reference to sex. See 29

U.S.C. (Supp. V) 1054(c) (2).

did indicate that Congress intended to permit a fa-

cially sex-neutral classification even if it had a statis-

tically different effect on male and female workers.

Congressman Griffin stated (109 Cong. Rec. 9206

(1963) ) :

Some say that women are prone to absen-

teelsm—some women may be and other women

may not be prone to absenteeism. So long as

the differential is made on the basis of such

factors as absenteeism, or on the basis of

time actually worked, and not on the basis of

sex, then the wage differential will not violate

this legislation.

But Congress never indicated that a statistical show-

ing of the kind proferred by petitioners would justify

an overtly sexual classification as a proper basis for a

wage differential. See 29 C.F.R. 800.142-800.148.

Petitioners assert that both houses of Congress

“considered longevity as a basis for adding the gen-

eral exception to the Equal Pay Act” (Pet. Br. Exh.

C-3, n. 2). The Senate Report did consider the prob-

lem posed by “‘the longer life span of women in pen-

sion benefits” (S. Rep. No. 176, supra, at 4) and ap-

pears to have recognized the possibility that upon a

proper showing the Secretary ‘‘can permit an excep-

tion” based upon class-based costs (ibid.). That under-

standing is not reflected elsewhere in the legislative

history. More importantly, the Senate Report empha-

sizes that any such wage differentials cannot be justi-

fied, as petitioners attempt to do here, by reference

to a single item of cost, but only upon the > *is of a

demonstration with respect to “‘all of the elements of

the employment costs of both men and women”

(tbid.).

The Senate Report states (S. Rep. No. 176, supra,

at 4; emphasis added) :

During the course of the hearings, testimony

was introduced on the question of the cost

which employers encounter in the employment

of women which they do not encounter in the

employment of men. * * * Some employers

stated that the cost of their pension and wel-

fare plans were higher for women than men

because of maternity costs in their health bene-

fits and because of the longer life span of

women in pension benefits.

This question of added cost resulting from

the employment of women is one that can be

only answered by an ad hoc investigation.

Evidence was presented to indicate that while

there may be alleged added costs, these were

more than compensated for by the higher

productivity of women against men perform-

ing the same work and that the overall result

for the employer was a lesser production cost

than would result from the hiring of only men.

Furthermore, questions ean legitimately be

raised as to the accuracy of defining such costs

as pension and welfare payments as related

to sex. It has 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

ean only be applied plantwide. 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

economically penalized by the elimination of

a wage differential, the Secretary can permit

an exception similar to those he can permit

for a bona fide seniority system or other ex-

ception mentioned above.

Thus, nothing in the legislative history of the Equal

Pay Act indicates that wage differentials can be

justified on the basis of average cost of a single item

(€.g., pension insurance) grouped by sex.

Petitioners seek support for a contrary view of the

Act’s requirement in Section 800.116(d) of the Secre-

tary’s Interpretative Bulletin (29 C.F.R. 800.116(d)).

That Section provides that it shall not constitute an

illegal wage differentiai for a pension plan to pay

greater benefits to one sex than to the other if the em-

ployer’s contributions are equal for men and women,

and that the mere fact that the employer may make

unequal contributions for employees of opposite sexes

will not be considered to be an illegal wage differen-

tial if the resulting benefits are equal for similarly

situated employees.” Section 800.116(d) does not

*? The Interpretative Bulletin provides that :

If employer contributions to a plan providing insurance

or similar benefits to employees are equal for both men and

sanction petitioners’ practice of requiring greater con-

tributions from the wages of their women employees

in order to offset the average increased cost of their

pension benefits.” The Secretary of Labor has never

approved a practice of requiring female employees to

make contributions to a pension plan which are larger

than those required of similarly situated male em-

ployees. Indeed, the Secretary’s Interpretative Bul-

letin on Equal Pay states in pertinent part that (29

C.F.R. 800.151; emphasis added) :

A wage differential based on claimed differ-

ences between the average cost of employing

the employer’s women workers as a group and

women, no wage differential prohibited by the equal pay pro-

visions will result from such payments, even though the

benefits which accrue to the employees in question are

greater for one sex than for the other. The mere fact that

the employer may make unequal 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 resulting benefits are equal

for such employees. [29 C.F.R. 800.116(d).]

8 Amici have emphasized the conflict between the EEOC Guide-

lines and Section 800.116(d) of the Wage and Hour Administra-

tor’s Interpretative Bulletin. However, there is no conflict in this

case since it is Section 800.151 (discussed in the text, infra), not

800.116(d), which is applicable to the practice at issue. Even

though there is therefore no conflict for this Court to resolve in

this case, we note that the EEOC Guidelines were amended in

1968 and 1972, after experience with Title VII of the Civil

Rights Act, while the Wage-Hour interpretations were issued in

1965-1966 and have not been updated to reflect experience and

judicial interpretations. The Department of Labor is currently

reconsidering 29 C.F .R, 800.116(d).

the average cost of employing the men workers

as a group does not qualify as a differential

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 purpose of the Equal Pay Act. Wage dif-

ferentials so based would serve only to perpet-

uate and promote the very discrimination at

which the Act is directed, because in any group-

ing by sex of the employees to which the cost

data relates, the group cost experience is neces-

sarily assessed against an individual 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 responsibilty.

The Secretary of Labor has taken the same position

in litigation. In Wirtz v. Midwest Mfg. Corp., 58

CCH Lab Cases {1 32,070, 18 WH Cases 556 (S.D. IIL,

decided August 9, 1968), the Secretary of Labor

brought an Equal Pay Act suit to eliminate a sex-

based wage differential. The company claimed that

the differential was justified as “a factor other than

sex’’ because of the additional cost required to pro-

vide its women employees equal unemployment com-

pensation, workmen’s compensation, and accident and

health insurance. The eourt, in a consent decree filed

by the parties, ruled that.a wage differential based on

“claimed differences between the average cost of em-

ploying women employees as a group and the average

cost of employing men employees as a group * * *

does not qualify as a differential based on any ‘other

factor other than sex’” (Concl. of Law, 7, 18 WH

Cases at 560-561; emphasis in original).

Finally, in an opinion letter dated June 18, 1964,”

the Administrator of the Wage and Hour Divisiou

of the Department of Labor addressed the question

whether an employer could maintain an hourly wage

differential based on data showing that pension bene-

fits, hospitalization and medical insurance, turnover

costs and rest period benefits cost more per hour for

woman than for men. The Administrator disapproved

the wage differential, stating that the “factor other

than sex” exception (29 U.S.C. 206(d)(1)(iv))

could not be claimed where the employer had analyzed

only some but not “all of the elements of employment

costs.”

The issue involved in this case, in Midwest Mfg.

Corp. and in the Administrator’s opinion letter is basi-

cally the same—whether the asserted extra cost of pro-

viding female employees with pension or other benefits

permits the employer to compensate women with low-

er take-home pay than similarly situated male em-

ployees.” The language of the Equal Pay Act, its

* The opinion letter is published in BNA Wage-Hour Manual

95 :607.

*5 Indeed, the conclusion in the present case follows a fortiori

from Midwest and the opinion letter because women employees

here who have not yet qualified for a pension are receiving no

concurrent protection or benefit in return for the reduction in their

take-home pay.

legislative history and the consistent interpretation of

the Department of Labor compel the conclusion that

this practice does not fall within the exemptions to

the Equal Pay Act. That Act, accordingly, did not

authorize petitioners’ plan which, for the reasons

discussed in point I, supra, violated Title VII’s pro-

hibition of discrimination on the basis of sex.

CONCLUSION

The judgment of the court of appeals should be

affirmed.

Respectfully submitted.

Wave H. McCrer, Jr.,

Solicitor General.

Drew 8. Days, ITI,

Assistant Attorney General.

LAWRENCE G. WALLACE,

Deputy Solicitor General.

THomas 8. Martin,

Assistant to the Solicitor General.

Brian K. LANDSBERG,

Cyntuia L. Arrwoon,

Attorneys.

ABNER W. SpA,

General Counsel,

JoOsEPH T. EppDINs,

Associate General Counsel,

BEATRICE ROSENBERG,

Assistant General Counsel,

Mary-HELEN MAUTNER,

Attorney,

Equal Employment Opportunity Commis-

sion.

DECEMBER 1977.

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