Document: 463 U.S. 1073 103 S.Ct. 3492 77 L.Ed.2d 1236 ARIZONA GOVERNING COMMITTEE FOR TAX DEFERRED ANNUITY AND COMPENSATION PLANS, etc., et al., Petitioners,v.Nathalie NORRIS, etc. No. 82-52. July 6, 1983. PER CURIAM. 1 Petitioners in this case administer a deferred compensation plan for employees of the State Arizona. The respondent class consists all female who are enrolled or will enroll future. Certiorari was granted to decide whether Title VII Civil Rights Act 1964, as amended, 42 U.S.C. § 2000e seq., prohibits an employer from offering its option receiving retirement benefits one several companies selected by employer, which pay woman lower monthly than man has made same contributions; and whether, if so, relief awarded District Court proper. holds that practice does constitute discrimination on basis sex violation VII, derived contributions after decision today must be calculated without regard beneficiary. This position is expressed Parts I, II, III opinion Justice MARSHALL, post, Pp. 1076-1091, joined BRENNAN, WHITE, STEVENS, O'CONNOR. further prior may provided existing terms Arizona plan. Part POWELL, p. 1105, THE CHIEF JUSTICE, BLACKMUN, REHNQUIST, Accordingly, judgment Appeals affirmed part, reversed remanded proceedings consistent with opinion. Clerk directed issue August 1, 2 It so ordered. 3 whom O'CONNOR join III, concurring STEVENS IV. 4 In Los Angeles Dept. Water & Power v. Manhart, 435 702, 98 1370, 55 657 (1978), held 1964 requiring women make larger order obtain pension men. question presented also contributions. 5 * A. 6 Since 1974 offered opportunity administered Governing Committee Tax Deferred Annuity Compensation Plans (Governing Committee). Ariz.Rev.Stat.Ann. 38-871 seq.; Ariz.Regs. 2-9-01 seq. Employees participate thereby postpone receipt portion their wages until retirement. By doing they paying federal income tax amounts retirement, when receive those any earnings thereon.1 7 After inviting private submit bids outlining investment opportunities were willing offer employees, Many three basic options: (1) single lump-sum payment upon (2) periodic payments fixed sum period time, (3) annuity remainder employee's life. When employee decides take part plan, he designate company wishes invest his wages. choose plan; not free other way. At time enrolls select payout options chosen, but reaches age switch company's options. If at payment, purchase then being participating find contract most attractive option, since lump requires taxes entire year, choice speculate how long live. 8 Once chooses amount each month, responsible withholding appropriate sums channelling designated employee. bears cost making necessary payroll deductions giving off attend group meetings learn about it contribute monies supplement employees' 9 For elects following depends (and thereon), sex. All use sex-based mortality tables calculate benefits. App. 12. Under these receives retired age, because classify annuitants average live longer men.2 Sex only factor individuals age; do incorporate factors correlating longevity such smoking habits, alcohol consumption, weight, medical history, family history. 13. 10 As 18, 1978, 1,675 State's approximately 35,000 Of 681 women, 572 had elected some form future option. date, retired, four chosen life-time annuity. 6. B 11 On May 3, 1975, Nathalie Norris, Department Economic Security, She requested her invested Lincoln National Life Insurance Company's contract. Shortly thereafter approved respondent's request began $199.50 salary month. 12 April 25, exhausting administrative remedies, brought suit United States against State, Committee, individual members Committee. Respondent alleged defendants violating 703(a) 78 Stat. 255, 2000e-2(a), administering discriminates certify under Fed.Rules Civ.Proc. 23(b)(2) consisting "who Plan." Complaint ¶ V. 13 March 13, 1980, certified action summary plaintiff class,3 holding violates VII.4 486 F. Supp. 645. court petitioners cease using actuarial equal paid similarly situated men.5 Ninth Circuit affirmed, judge dissenting. 671 F.2d 330 (1982). We certiorari ordered --- ----, 205, 74 164 II 14 consider first would have violated run themselves, participation insurance companies. makes unlawful employment "to discriminate respect compensation, terms, conditions, privileges employment, individual's race, color, religion, national origin." 2000e-2(a)(1). There no constitutes "conditio[n] privileg[e] employment,"6 "compensation."7 we "because . sex" compensation. 15 fund male Noting VII's "focus unambiguous," id., 708, S.Ct., 1375, emphasized statute treating less favorably others sex, origin. Id., 708-709, 1375-1376. While men, 704, 1373, rejected argument exaction greater based "factor sex"—i.e., therefore permissible Equal Pay Act:8 16 "[A]ny life expectancy number factors, one. [O]ne cannot 'say distinction entirely "based sex." exactly what on.' " U.S., 712-713, 1377-1378, quoting 553 581, 588 (CA9 1976), Act. 17 concluded men simple reason treats 'in manner [her] [have been] different.' 710, 1376-1377, Developments Law, Employment Discrimination 84 Harv.L.Rev. 1109, 1174 (1971). 18 hesitation holding, courts considered question,9 classification more pay-out stage pay-in stage.10 reject petitioners' contention defer policies having present value.11 simply among different levels benefits, which, alone, equivalent where determined both required level paid. obtained man, she he, just Manhart particular might wish receive, make. fact range discriminatory benefit levels, rather level, obviously provides whatsoever distinguishing Manhart. asserting nondiscriminatory roughly value, incorrectly assume permits predicting longevity. Otherwise there postulating woman's policy value even though benefits.12 underlying assumption properly used predict longevity—is flatly inconsistent teaching Manhart: employers treat individuals, "as components racial, religious, sexual, class." 1375. squarely notion that, adopt every man. 716-717, 1379-1380. 19 observed "[a]ctuarial studies could unquestionably identify differences race origin, well 709, 1376 (footnote omitted). interpretation correct, justification another race. continue believe "a designed irrelevant market," ibid., citing Griggs Duke Co., 401 424, 436, 91 849, 856, 28 158 (1971), reasonably construed permit racial classification. And race-based tables, stands footing unless falls within few narrow exceptions plainly inapplicable here.13 20 What said repeating: "Congress decided classifications like origin unlawful." 1376. sex-segregated reflect accurate prediction class, "[e]ven true generalization [a] class" justify class-based treatment.14 Ibid. An men.15 Cf. Connecticut Teal, 102 2525, 73 130 (1982) (an object test promotion decisions impact member been disproportionately denied promotion). 21 conclude much 22 remaining liability conduct beyond reach 23 "primarily govern[s] relations between third parties."16 718, n. 33, 1380, 33. Recognizing limitation statute, noted 24 "Nothing our implies set aside let retiree largest accumulated command open market." Id. 717-718, 1379-1380 25 Relying caveat, contend annuities available market. cite statement stipulation facts entered into "[a]ll presently provide account guaranteed period." 10.17 26 defense immediately market tables. context clear rely means taking sex,18 conclusion depend petitioner's construction accepted rejected. insurers sex-neutral basis, did contrary, own invited supply benefits19 permitted companies, contracts them governing employees. enrolling contacted except State. 2-9-06.A, 2-9-20.A. 27 circumstances can serious legally Having created whereby advantages specifically disclaim responsibility features insurers' options.20 ultimately "compensation, [and] employment" adopts fringe-benefit scheme regardless parties involved discrimination.21 itself party concerning established liable provisions contains, initially suggested inclusion provisions.22 broad remedial purposes VII23 hold fringe avoid ground basis.24 confronts situation either himself, assistance party, all. IV turn finally Court. enjoined assure shall received employees.25 29 Albemarle Paper Co. Moody, 422 405, 95 2362, 45 280 (1975), m persons whole injuries suffered discrimination." 418, 2372. recognized strong presumption "[t]he injured placed, near be, occupied wrong committed." 418-419, 2372, Wicker Hoppock, Wall. 94, 99, L.Ed. 752 (1867). found, retroactive "should reasons applied generally, frustrate central statutory eradicating throughout economy through past 421, 2373 Applying standard, mere absence bad faith sufficient denying relief. 422-423, 2373-2374. 30 Although favor seldom overcome," 719, 1381, abused discretion refund excess demanded explained "conscientious intelligent administrators funds, extensive briefs arguments us, assumed program Department's lawful," silent question, agencies conflicting views." 720, 1381 "[d]rastic changes legal rules funds" "jeopardiz[e] insurer's solvency and, ultimately, insureds' benefits," 721, 1382, burden fall innocent parties. 722-723, 1382-1383. 31 here affects date Court's judgment, follow wholly prospective nature, injunction ordinarily is, should routinely once established. directs change before court's order, awarding fundamentally nature. represent return during working years intended additional source 32 A recognition partly beginning inquiry. Absent special victim entitled whatever undo damage resulting violation. See 2373. disparity attributable justifying denial Our ruling clearly foreshadowed That put notice benefits.26 To extent coming due unfairness t month bring up enjoyed post-Manhart treated way 33 extent, however, eliminate gave insufficient attention lawful. Insofar concerned, inquired petitioners, pre-Manhart contractual rights latter If, employee, right done prevent wake Manhart.27 contributions, fair compensate failure 34 hand, rights, inequitable award require lawful anything short expending funds. With category, need ensure 35 record indicate participants decided28 impaired application address remand. 36 REHNQUIST I dissenting part. 37 uses actuarially sound, far-reaching effect operation plans. Employers forced discontinue annuities, potentially disruptive long-established methods calculating pensions.1 Either course work major determined—to probable detriment contrary explicit 717, "was [not] revolutionize industries." 38 voluntary allows participate, withheld paycheck behalf. retires, accrued ways. withdraw total accrued, arrange 39 contributes fund. chooses. Nor anyone co tend two repaying discriminatory. Thus, adopted contribution repayment options, dispute complied disadvantages. substantial.2 second ameliorates problem spreading over time. guard possibility finite fail 40 option—the annuity—resolves problems. reduces out guarantees stream law prevents accepting financial uncertainty funding annuities. 38-871(C)(1) (1983). But achieve law, purchased Rev.Rul. 72-25, 1972-1 Cum.Bull. 127; 68-99, 1968-1 Cum.Bull 193. underwrite vast majority States, Arizona's allow saving otherwise 41 VII. majority's view, courses. unisex itself, Ante, 1091 (MARSHALL, J., part). largely illusory. Most resources ability Or, case, state providing available, them. stipulated, nor generally industry prevented so3 views unsound. course, decline substantial saving. difficult see virtue compelled choice. indicated above, consequences unlikely beneficial. prohibitive carriers write annuities—concededly advantageous plan—at cost.4 alternatively, heavy equalizing probably wil passed current evidence Congress change. support sweeping reading statute. expressly limited holding—a grounded legislative history inapplicability industry. 43 careful us narrow. stated: "All requirement unequal employer-operated fund." 1380 (emphasis added). precise us. stated "[a]lthough suggest 44 good recognizing area leave primary regulating respective States. McCarran-Ferguson Act, 59 1011 seq.5 reflects long-held view "continued regulation business public interest." 1011; SEC Securities, Inc., 393 453, 458-459, 89 564, 567-568, 668 (1969). Given entrusting justified assuming long-standing methods, decades commissions.6 Nothing language supports preemption jurisdiction. identified widespread modify previous grant exclusive jurisdiction regulate protection Rather, indicates precisely opposite. 46 reference occurs explanation Senator Humphrey debates Senate floor. He "unmistakably clear" prohibit treatment industrial plans.7 110 Cong. Rec. 13663-13664 (1964). "[alt]hough apparently little, any, plans." 714, 1378. sufficient, held, preclude -operated ibid. Humphrey's indirect 47 neither perception policy, broadly proscribe practices. focuses "precludes sexual specific focus little relevance insurance. 724, 1383 (BLACKMUN, judgment). exist impossible measure accurately determinations expectancy; instead identifiable groups. sufficiently large people, considerable reliability rate frequency deaths experience similar concern practices thus predictions writing C 48 accuracy predicts groups rates. according attributes significant correlation mortality. system verifiable divide people accordingly, undertaking prohibitive. Instead identifying relevant attributes, criteria efficient longevity, including person's These readily identifiable, stable, easily verifiable. Benston, Economics Gender Employee Fringe Benefits: Revisited, 49 U.Chi.L.Rev. 489, 499-501 practice—the classification—that condemns. ante, 1083-1086 supporting decision, strongly suggest—at least me—the opposite conclusion. enacted eradicate types pervasive society. thrust —disparate intentionally arbitrarily individual. BLACKMUN stated, "nonstigmatizing demonstrably differentiates females males measurable basis. [T]here nothing arbitrary, irrational, 'discriminatory' objective female-male expectancies computing rates (opinion Explicit classifications, sure, close examination, automatically invalid.8 Sex-based experience. Because entail normal understanding term,9 hesitate invalidate long-approved judgment. 50 forbid insurance, suggests certainly warrant extending Congress' intent. 51 retirees men.10 F.Supp. 645 (D.Ariz.1980). affirmed. affirms Appeals' insofar finding approving approve unprecedented manifestly unjust. 52 normally typical 1380. noted, 1381. More importantly, remedy employer's underwriting approximation risk. 1382. Reserves cover Should unforeseen contingency occur, drastic insured's jeopardized. 53 presents considerations. funds "requir[e] [the] fund," confirmed "open limitation, 54 retroactively devastating results. applies employer-sponsored plans, complying $817 $1260 million annually next years.11 Labor Cost Study 32. Presumably local governments affected directly today's decision. Imposing unanticipated burdens come many struggling meet fiscal deficits. Income, excise property increased. Court, particularly left impose magnitude public. only.12 O'CONNOR, concurring. 56 determine payments. important stress judicial role discern intent 88th enacting 1964,1 covering employment. we, sitting legislators, wise task. Nor, MARSHALL notes, 1078-1079, 4, constitutional challenge. Finally, ignore on) considerations barred purchases currently debating. S. 372, 98th Cong., 1st Sess. (1983); H.R. 100, 57 one, answer far self-evident. issues construction, general resolve question. polestar, Congress, guiding lights language, structure, inquiry somewhat easier City analyzed related found dispositive singling purpose imposing characteristic statistically empirically false cases. 708-710, 58 Despite POWELL's argument, am persuaded result distinguishable situation. note situation, independent classifies disadvantaged worker claim privilege complain pays community merchants charge identical items. stressed covers situations. Unlike examples, collect trust account, disburse checks women. escape mandate third-party bank manage account. here, remains essentially "privileg[e] employment," covered 2000e-2(a)(1).2 60 reasons, MARSHALL's retroactive. below, agree POWELL prospective. 61 Chevron Oil Huson, 404 97, 105-109, 92 349, 354-356, 296 forth determining apply prospectively. First, establish new principle overruling precedent deciding impression whose resolution foreshadowed. 106, 355. Ultimately, controlled principles articulated criterion sole consideration prospectivity, reflected dissent, foreshadows debatable compel retroactivity here. Therefore, examine well. 62 retard Chevron, supra 106-107, 355-356. 2373, (1975) (backpay purposes). workers characteristics. achievement purpose, goal retroactivity. administrators, thought extend plans involving insurers, now quickly conform insure allowed 720-721, 1381-1382.3 63 my criterion—whether results—compels circumstances. expectations certain existence adequate reserves pensions. re roactive collected jeopardize obligations, harm parties." real danger bankrupting Such equitable powers fashion remedy. 2000e-5(g); 718-719, 1380-1381. 64 then, sense. effective employee.4 past. 457; 72-25; 68-99; 60-31. Internal Revenue Service 1974. Different classifying Several separate Another table rates, calculates six-year "setback," i.e., six younger age. material agreed 4-13. went Protection Clause Fourteenth Amendment. F.Supp., 651. cross appeal ruling, subsequently motion amend include lost previously ruling. Peters Missouri-Pacific R. 483 490, 492, (CA5), cert. denied, 414 1002, 94 356, 238 (1973). 712, 23, 1377, (1978). Section 703(h) so-called Bennett Amendment, "differentiat[ing] differentiation authorized [the Act]." 257, 2000e-2(h). 56, 206(d), pertinent part: "No subject section discriminate, establishment employed, jobs performance skill, effort, responsibility, performed pursuant (i) seniority system; (ii) merit (iii) measures quantity quality production; (iv) differential sex: Provided, wage subsection not, comply subsection, reduce employee." 206(d). U. ., "wages" Amendment extends forms "compensation" Spirt Teachers Ins. Ass'n., 691 1054 (CA2 1982), pending, 82-791; Retired Public Employees' Assn. California California, 677 733 82-262; Women Gov't. New York, 515 295 (SDNY 1981); Hannahs York Teachers' Retirement System, Fair Emp.Prac.Cas. 527 Probe 1306 (CD Cal.1981), docketed, Nos. 81-5865, 81-5866 Shaw Internat'l Machinists Aerospace Workers, Emp.Prac.Cas 995 Cal.1980). EEOC Colby College, 589 1139 (CA1 1978). CFR 1604.9(f) ("It sex"). Only Sixth reached Wayne University, 235 (1981), 82-794. whereas voluntary. forbids aspects relationship emp oyee likewise includes options—the fixed-sum-for-a-fixed-period option—that offers Mississippi University Hogan, 8, 3331, 3336, 1090 multiplying (in retirement) promised probability, supplied table, annuitant payment. issued offset likelihood supra, F.2d, 1061-1062; Brilmayer, Hekeler, Laycock Sullivan, Employer-Sponsored Plans: Legal Demographic Analysis, 505, 512-514 (1980). exception bona fide occupational qualifications, 2000e-2(e), qualifications. possible sex; ' 1377 ("any one"). doubt reconciled General Electric Gilbert, 429 125, 97 401, 343 (1976). Gilbert divided exclusion pregnancy disability meaning reasoned distinguished pregnant nonpregnant sexes. 135, 407. dissenters asserted "it offends common sense revolving around minimum, 'sex related,' 149, (BRENNAN, dissenting) (citation omitted), capacity become primarily male." 162, 421 (STEVENS, dissenting). tension cases eliminated enactment Pregnancy 1978 (PDA), Pub.L. 95-555, 2076, overruled amending "the 'because sex' 'on pregnancy, childbirth, conditions." 2000e(k) (Supp. IV). Newport News Shipbuilding Dry Dock EEOC, 2622, 75 PDA buttresses REHNQUIST's relied heavily proof coverage 138-139, 409-410. PDA, disabilities add $200 costs, clarify original intent" H.R.Rep. 948, 95th 2d U.S.Code Admin.News 4749. principles, 16, 2628, despite ecial costs associated therewith 24, 2631, 24. 1604.9(e) other.") "insurance concerned events individually unpredictable, decisions" never deemed "resort proscribed VII." tests job qualifications advance die. jobs, skills testing. Yet religion proxy qualification, statistical logic referred 1098, sound. Neither "makes requirements establishment's considering [sexual] composition force," 34, exact example, Minnesota Mutual Company Northwestern equally. Chronicle Higher Education, Vol. 7, Oct. 1982, 25-26. "any agent" employer. 2000e(b). emph size elect "purchase bearing, discriminated pointed 10, provision contended exempted mention petition brief merits. "[O]nly exceptional raised petition," Stone Powell, 428 465, 481, 15, 96 3037, 3046, 1067 (1976); Sup.Ct.R. 21(a), discussion seen deliberately chose abandon Appeals. relies 1099-1102, think lay matter rest. "[n]o invalidate, impair, supercede relates insurance." 1012(b). reported indicating cited policies, affect explained, 333, plaintiffs challenged No defendant, practice: prohibited underwritten risks. Union Pireno, 3002, 3009, 647 (McCarran-Ferguson "intended protect 'intra -industry cooperation' risks") original), Group Health Royal Drug 440 221, 99 1067, 1078, 261 (1979); Variable 359 65, 69, 79 618, 620, 640 (1959) ("the concept 'insurance' [for Act] involves risk-taking company"). 1064; Wooster Brush 523 1256, 1266 (N.D.Ohio 1981), "specifically insurance" Gov't 302-306. natural statement, appears discussing procurement documents asked bidders quote 238; 1141; Van Alstyne, Equality Individuals Groups: Implications Supreme Decision Case, AAUP Bulletin 150, 152-155 analogy usefully drawn Ford Motor NLRB, 441 488, 1842, 420 (1979). in-plant food services ontract caterer. prices charged constituted "terms conditions Relations (NLRA) mandatory subjects collective bargaining. implicate 'an aspect employees.' 501, 1851, Allied Chemical Alkali Workers Pittsburgh Plate Glass 157, 176, 383, 396, 341 selection contractor employees." 1851. Just refused bargain 158(d), employment." Even prices, matters "of deep concern" 498, 1849, relationship. Indeed, compared "other kinds health implicating outside suppliers." 503, 1852, 15. difference engaged itself. Williams Orleans Steamship Ass'n, 673 742, 750-751 (CA5 1428, 789 Owens-Illinois, 665 918, 926 (CA9), mod. reh. Emp.Cas. 1820, 302, 283 (1982); Farmer ARA Services, 660 1096, 1104 (CA6 Grant Bethlehem Steel Corp., 635 1007, 1014 1980), 452 940, 101 3083, 69 954 (1981); N.L. Industries, 479 354, 379-380 (CA8 1973); Robinson Lorillard 444 791, 799 (CA4), dismissed, 1006, 573, 417-418, 2371-2372, (1975); 429-430, 852-853. anomalous where, effort neutral Contrast 25-26 (explaining agreements employees). Far bargaining seeking list separately. explain choosing respondents refusal damages 5, correctness 9, assert calculation Bulletin, (predicting involvement insurer noting funded advised act expeditiously himself compliance law). 12-13, market; open-market actual hands able pre-existing posed obstacle. However, exert influence depended generated why stand better themselves. presumably rights. continuing minimum equalize prospectively $85 $93 year years. Labor, Impact Benefits Rule Pension (1983) (hereinafter Study). assumes costly method adjusting unfounded. "top up" benefits—i.e., women's applicable women—the purely $428 $676 31. seriously on—in part—to beneficiaries or, governments, income. Cal.Ins.Code Ann. 790.03(f) (West) (requiring differentials insured); Assn., 1054, 1066 1982) (noting disapproved rates). happened case. Faced discontinued Tr. Oral Arg. 8. Any security savings withdrawn, likely sex-based. adverse government power South-Eastern Underwriters 322 533, 1162, 88 1440 (1944) (holding antitrust laws insurance), responded passing proposed, focus. only: "That contained 2, 1890, known Sherman October 1914, Clayton acts impair States." S.Rep. 1112, 78th (quoting proposed act). version, accepted. broader bill. recognized, had, accommodate H.Rep. 143, 79th Sess., (1945). Association questions validity Some reluctant regulatory authority, fearing actions. 2. thu legislation "so know desires continued adopted, accordingly commits presumptively introduction "silence barrier taxation [of insurance] 1011. 2(b) provides: supersede explicitly "unfair Bailey, Hutchinson Narber, Regulatory Challenge Classification, Drake L.Rev. 779, 783 "no unfair 20-448 Arizona, comports definition discrimination. intends enacts relate insurance," satisfactory concluding pre-empt regulation. states raise brief. 1087-1088, misses point. employees—pursuant congressional presume supra. applicability questions: "business "invalidate, supersede" law. doubts determination risk spread classes insureds integral 213, 1074, 73, 623, 640, (1959). argues, nevertheless, inapposite carriers, asserts 3500, formalistic ignores self-evident facts. laws, Arizona's, interprets it, purchasing begs reality say denies 67, 619. VII—to banned sale annuities—effectively authority. commands adoption amendment, incorporated affirmative defenses County Washington, Ore. Gunther, 161, 175, 2242, 2251, 68 751 (1981). ambiguity, ample explaining Act's defenses, Report "higher span women." (1963). employing "that answered ad hoc investigation." shown higher "similar above." meanings crucial viewed exists point demonstrates unmistakably perceived—with reason—that [Title VII] instance. aggregate 1092 deficiency retirees. varies factors: defined-contribution defined-benefit equalized prospectively; reallocate applying top efits. figures text assume, appeared hold, 645, 652, respect, 1111 (O'CONNOR, concurring). 92nd amendments 1972 Amendments substantive however. controlling employment-related ably discussed A.A.U.P. 150 (1975). retroactive, necessarily control words, workers. proviso, 206(d)(1) (proviso), curing violations reducing male-longevity although 2000e-2(h), incorporates disparate "wages," 22, proviso seems questionable Second, read function balance outgoing force. 36, (remedy "ordering sound plan").

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