Document: 492 U.S. 158 109 S.Ct. 2854 106 L.Ed.2d 134 PUBLIC EMPLOYEES RETIREMENT SYSTEM OF OHIO, Appellantv.June M. BETTS. No. 88-389. Argued March 28, 1989. Decided June 23, Syllabus The Public Employees Retirement System of Ohio (PERS), established by statute in 1933, provides retirement benefits for state and local government employees. Benefits are payable based on age service or, persons under the 60 at retirement, disability. disability retirees' requirement has remained unchanged since 1959. However, 1976, PERS was amended to provide that payments could not constitute less than 30% ret ree's final average salary. No corresponding floor applies age-and-service payments. Individuals continue receive type benefit they retired throughout regardless age. In 1985, appellee, who had been employed a county agency 1978, 61 because her health. Despite medical condition, she ineligible Her monthly amount approximately one-half would have received retirement. She filed charge against with Equal Employment Opportunity Commission (EEOC), then suit District Court, claiming PERS' refusal grant application violated Age Discrimination Act 1967 (ADEA). court granted summary judgment favor, finding scheme discriminatory its face it denied certain employees account It rejected reliance § 4(f)(2) ADEA, which exempts from Act's prohibitions actions taken observance "the terms . any bona fide employee plan such as pension, or insurance plan, is subterfuge evade purposes [the Act]." Rather, court, relying EEOC's interpretive regulations, held plans qualify exemption only if age-related reductions justified increased cost providing those older employees, case here. Court Appeals affirmed, agreeing available can justifications establish substantial business purpose. United Air Lines, Inc. v. McMann, 434 192, 98 444, 54 402, which, upholding an age-based mandatory ruled adopted prior ADEA's enactment need be purpose, defined "subterfuge" mean "a scheme, strategem, artifice evasion." Instead, concluded Congress expressly repudiatedMcMann when ADEA 1978 adding clause forbidding end 4(f)(2). Held: Section all provisions purview unless discrimination non-fringe-benefit aspects employment relationship, appellee therefore inappropriate. Pp. 165-182. (a) An cannot subterfuge. While amendment changed specific result did change controlling, general language statute. Since add definition modify 4(f)(2)'s way other new last phrase, there no reason depart McMann holding should given ordinary meaning. this reaffirmation does insulate provision being attacked—the floor—from challenge, added until after became applicable PERS. 165-169. (b) protect distinctions costs workers. Thus, 29 CFR 1625.10, recites definition, invalid. found itself. Moreover, 1625.10's entitled deference term "subterfuge," interpreted includes subjective-intent element objective fails acknowledge; regulation, contrary suggestion, contemporaneously enactment; appellee's relianc legislative history misplaced. cost-justification rule also supported argument statutory phrase "any plan" intended limit protection justification differentials benefits. appears nothing more listing types fall within "employee category rather exclusive listing. Nor apparent specified were intentionally selected employers provided these tend increase addition, regulatory support proffered interpretation. 175-180. (c) Both construction so long method discriminating other, relationship. post-Act purpose banning arbitrary discriminates manner forbidden substantive provisions. If read encompass plans, mandated allowed facially irreconcilable Act, intended. (d) seeking challenge bears burden proving actually serve some aspect redefines elements plaintiff's prima facie case, much defense description employer conduct prohibited context. This interpretation consistent Court's longstanding analogous Title VII Civil Rights 1964. Summary inappropriate failed meet proof issue. On remand, give opportunity demonstrate existence genuine issue material fact. 181-182. 848 F.2d 692, reversed remanded. KENNEDY, J., delivered opinion REHNQUIST, C.J., WHITE, BLACKMUN, STEVENS, O'CONNOR, SCALIA, JJ., joined. MARSHALL, dissenting opinion, BRENNAN, joined, post, p. 182. Andrew Ian Sutter, Columbus, Ohio, appellant. Robert F. Laufman, Cincinnati, appellee. Christopher J. Wright, Washington, D.C., amicus curiae supporting special leave Court. Justice KENNEDY 1 (ADEA), 81 Stat. 602, amended, U.S.C. 621 et seq. (1982 ed. Supp. V), forbids public private Under 623(f)(2), however, decisions pursuant of" exempt ADEA. before us, we must consider meaning scope exemption. 2 * A. 3 State (PERS) benef ts covered make contributions fund maintained pay two forms upon termination their employment. Age-and-service paid time (1) least 5 years credit age; (2) 30 credit; (3) 25 55 Rev.Code Ann. §§ 145.33, 145.34 (1984 Supp.1988). Disability suffer permanent disability, five total credit, 145.35. retirees included original statute, 4 take treated absence first Should conditions improve during time, rehired. 145.39. receiving hand, placed absence, but permitted apply full-time 18 months 145.381(C) (1984). Once individual retires either benefits, he continues B Appellee Betts hired Hamilton County Board Mental Retardation Developmental Disabilities speech pathologist 1978. board agency, 1984, problems, unable perform job adequately reassigned demanding position. Appellee's condition continued deteriorate, May age, longer able capacity. choice retiring undergoing testing determine whether unpaid leave. chose retire, option gave eligibility Because over despite condition. 6 Before fact disqualified little practical significance, formula calculating almost same used event percent retiree's 145.36 difference significance case: $158.50 per month, nearly twice that, $355 instead. 7 Commission, States Southern face, Bd. Retardation, 631 F.Supp. 1198, 1202-1203 (1986). Act]. ." 623(f)(2). Relying regulations promulgated EEOC, reduction 60, shown considerations cost, claim F.Supp., 1203-1204.1 8 A divided panel affirmed. Disabilities, 692 (CA6 1988). majority agreed purpose" Id., 694. 402 (1977), concluding "expressly repudiated" decision F.2d, evidence workers considerations, appropriate. 9 Judge Wellford dissented. Noting argued supra, "subterfuge purposes" Act. requiring statute's imposed requirement. We noted probable jurisdiction, 488 907, 256, 102 245 (1988), now reverse. II 10 4(a)(1) unlawful 11 "to fail refuse hire discharge otherwise discriminate respect his compensation, terms, conditions, privileges employment, individual's age." 623(a)(1). 12 Notwithstanding prohibition, 13 observe chapter, except shall excuse failure individual, require permit involuntary individual." 14 renders once attained 60. 145.35 applicatio qualifies action plan. All parties apparently concede, moreover, "bona fide," " 'exists pays benefits.' U.S., 194, S.Ct., 446; see id., 206-207, 451-452 (WHITE, concurring judgment). Finally, whatever precise plan," infra, 173-175, fn. 4, falls squarely category. Cf. 1625.10(f)(1)(ii) (1988). Accordingly, Act.2 15 construed supra. employer's required retire After forced sued violation protected Act.3 both positions. With proposition forbid 16 Turning conclusion below basis deemed absent economic distinction. stratagem, 203, 450. Viewed light, possibly characterized 1941, enacted. As observed, "[t]o spell out intent 1941 enacted attributes, very least, remarkable prescience employer. reject se show order satisfy Act." Ibid. 17 initial matter, asserts good law. points year decided, overrule validation See Pub.L. 95-256, 2(a), 92 189. addition what contains various references subterfuge, according reveal clear congressional disapprove reasoning McMann. Conference Committee Report amendment, example, discusses rejects stating "[p]lan effect date section virtue antedate act amendments." H.R.Conf.Rep. 95-950, (1978), U.S.Code Cong. & Admin.News pp. 504, 511. 124 Cong.Rec. 7881 (1978) (remarks Rep. Hawkins) ("The conferees specifically disagree Supreme [McMann], particularly predates ADEA"); 8219 Sen. Javits); 7888 Waxman). 19 disputes history, asserting refers pre-Act circumstances. resolve dispute, however. way, inserting observed one occasion (or committee Member thereof) earlier assistance discerning Weinberger Rossi, 456 25, 35, 1510, 1517, 71 715 (1982); Consumer Product Safety Comm'n GTE Sylvania, Inc., 447 102, 118, n. 13, 100 2051, 2061, 64 766 (1980); Southwestern Cable Co., 392 157, 170, 88 1994, 2001, 20 1001 (1968); Rainwater States, 356 590, 593, 78 946, 949, 996 (1958); 200, 7, 449, 7. 4(f)(2), amend relevant language, our meaning, EEOC Cargill, 855 682, 686 (CA10 1988); Orange, 837 420, 422 (CA9 According PERS, case. system may made 1974. 93-259, 28(a)(2), 74, codified 630(b)(2). age-60 argues 21 remains considerable relevance here, dispositive. true 1974, thus insulated attacked automatically minimum salary while disabled do not. extent disparity caused limitation, challenge. 686, 4; 423; Home Ins. 672 252, 259, (CA2 1982). "remarkable prescience" 1976 formulate necessary autom tic inapplicable. turn inquiry into context plans. III 22 amici say protects They cite regulation Department Labor, initially charged enforcing 1979. 44 Fed.Reg. 30658-30662 (1979), 860.120 (1980), redesignated 1625.10 "is where significant considerations," "benefit levels reduced achieve approximate equivalency younger workers." 1625.10(a)(1). particular, "[r]eductions level duration justifiable considerations. 1625.10(f)(1)(ii). provisions, reduce value equalize ages, exclude coverage altogether. 23 cost-based nowhere contends drawn portion limiting plan." Brief Amicus Curiae 9-14. alternatives turn. 24 define follows: "In general, prescribes lower 'subterfuge' considerations." 1625.10(d) Various courts accepted definition. E.g., Mt. Lebanon, 842 1480, 1489 (CA3 Cipriano Education North Tonawanda School Dist., 785 51, 57-58 1986). analysis makes apparent, approach squared plain Although holding, never dispositive nonetheless stated means evasion," connotes "intent requirement." subjective regulation's acknowledge. Ignoring inconsistency suggest represents contemporaneous agencies responsible enforcement deference. Associated Dry Goods Corp., 449 600, 17, 101 817, 823, 66 762 (1981); Chevron U.S.A. Natural Resources Defense Council, 467 837, 104 2778, 694 But, course, due interpretations odds f Even conflict language. 26 Contrary suggestion genesis bulletin issued Labor January 1969. 34 322, 323, 860.120(a) (1970). To sure, "be considered compliance statute" purport requirement.4 version safe harbor, nonexclusive test use determining qualifying 1979 harbor transformed escaping classification 27 rely large part amendments. view requirement, Davis Michigan Dept. Treasury, 489 803, 808, 3, 1500, 1504, 103 891 (1989); 199, 448. exception limited suggested regulation. 28 second possible source authority argues, held, "such Westinghouse Electric 725 211, 224 1983), cert. denied, 469 820, 105 92, 83 38 (1984); Borden's, 724 1390, 1396 1984). listed share common characteristic g nerally rises beneficiaries. suggests cover rise obvious explanation limitation continues, overall There number difficulties Perhaps most obvious, requires us great deal seems imply broad exemption, as" enumeration mentioned tends Indeed, many categories particular attribute all, defined-contribution pension perhaps example.5 find quite difficult believe chosen circuitous route urged EEOC. weakened further itself it. 1625.10(b) "[a]n 'employee plan' frequently referred 'fringe mention indeed sufficiently wide variety fringe increases discussion reserved subsection defining "subterfuge." 1625.10(d).6 circumstances, little, any, Bowen Georgetown University Hospital, 204, 212-213, 468, 473-474, 493 31 For reasons, conclude reasonably construing include IV 32 Having invalid, somewhat task applied begin, always, 33 unavailable "which set forth 2(b) promote ability prohibit employment; help ways meeting problems arising impact employment." 621(b). facts evade" goal eliminating "arbitrary presence exemptions affirmative defenses contained 4(f) illustrates, recognized "arbitrary." sought eliminate arbitrary, look guidance itself, best nature evils eradicate. compels approach, contention distinguished itself: "The distinction relied untenable vehicle expressed carried out; conceive other." 198, 35 4(a), primary mechanism employers, 36 "(1) 37 "(2) limit, segregate, classify deprive opportunities adversely affect status employee, "(3) wage rate comply w th chapter." 623(a). 39 "compensation, employment" Such interpretation, render nugatory Any and, therefore, how mandates disparate treatment inconsistent said purposes, 40 viewed exempting effect. reflect restrictions enacting left battle another day, legislated hiring firing, wages salaries, 41 words plausible one. But alternative eviscerate WHITE wrote separate concurrence "[b]ecause necessarily I bill through, impose meet." 207, 452. 42 Not surprisingly, self-defeating shows envisioned far broader role When S. 830, become originally proposed administration 1967, differentiated age.7 Senator Javits, principal moving forces behind legislation, generally favored administration's bill, believed needed. substantially along lines present-day 113 7077 (1967). 43 One factor motivating Javits' concern might "actually encourage faced necessity paying greatly premiums, excuses done law granting them degree flexibility matters." 7076.8 Reducing Its goals comprehensive. Javits put it, proper place fight" ensuring "adequate olde workers," fairly seniority systems." Later, referring "[i]f worker chooses waive obtain act. 31255. And finally, views accompanying Senate observed: "I improved adoption offered, systems prohibitions." S.Rep. 723, 90th Cong., 1st Sess., (1967) (emphasis added). Other Members similar views. Yarborough, sponsor manager "when man 31255 Congressman opposed precisely participation altogether result. 34745 Smith). 45 Reports address matter detail, "serves emphasize bill—hiring permitting without including plans." H.R.Rep. 805, That narrow reading Reports, refute "applies existing establishment maintenance 4. short, confirms correct one, relation. 46 permits latitude structuring "not subterfuge" proviso dead letter. attempt avoid cloaking guise will outside Examples violations kind given. 4(d) "opposed by" participated filing age-discrimination complaints litigation. Nothing liability formulated retaliate employee. 1625.10(d)(5) Similarly, salaries increasing inference utilizing wages, activity 4(a)(1). These examples exhaustive, suffice illustrate not-insignificant protections V 47 above, By showing actual relationship instead establishing seeks 48 VII, derived haec verba." Lorillard Pons, 575, 584, 866, 872, (1978). 703(h) states 49 "[n]otwithstanding subchapter, practice different standards system, differences intention race, color, religion, sex, national origin. 2000e-2(h). 50 703(h), like describe defense, "regarded [§ ] 'delineates practices illegal thereby not.' Lorance AT T Technologies, 490 900, 908, 2261, 2267, 961 (1989) (quoting Franks Bowman Transportation 424 747, 758, 96 1251, 1261, 444 (1976)). Act]" structure supports plaintiffs bear 51 Applying follows PERS's subject request relation, Celotex Corp. Catrett, 477 317, 2548, 91 265 Appeals, remanded proceedings opinion. 52 ordered. 53 whom BRENNAN joins, dissenting. today immunizes virtually programs (ADEA Act), .S.C. V). Henceforth, attach even denying ones receive, indeed, abject hostility to, unfounded stereotypes, them. reaching surprising result, casts aside estimable wisdom Courts applicability programs, federal administered Acting Solicitor General behalf (EEOC) curiae, contravenes text immunize Agreeing authorities, majority's "plain language" impossibly tortured antithetical eradicating baseless workers, dissent. ground appellant discriminated Ante, 163-165. Had before, after, turning $355.02 month rest life, double collect. passage antidiscrimination command, 4(a)(1), 623(a)(1), ante, 169,1 liable between sums above 165-166/ offer age-specific provides, lacked whatsoever; varied employee's 164-165.2 want better explanation, solely wished cut outlays—and convenient target budgetary belt tightening. 56 presents arbitrarily imposes burdens succor liability. arrives novel di criminatory justification, implicates unrelated violates 176. acknowledges shelters few hypothetical discrimination,3 leaving unprotected insofar affects often compensation comprised 177, 181. scuttles heretofore consensus, my correct, whose 57 reach does, uses methodology, purportedly parsing language," manipulative invite result-orientation. Ordinarily, ascertain looking text, unclear, history. Blum Stenson, 465 886, 896, 1541, 1547, 79 Where barometers ambiguous Congress' intent, defer articulated enforcement, "based permissible statute." 843, 2782, Bethesda Hospital Assn. Bowen, 485 399, 403, 108 1255, 1258, 99 460 (1988); K mart Cartier, 486 281, 291, 1811, 1818, 313 58 Eschewing begins glean launching no-holds-barred attack 169-170. Disaggregating sentence 4(f)(2)4 portions, concludes portion, 170-172, inferred enumerating 173-175. En interring consensus pauses moment provision's Only burial, afterthought, come up own hastily proceeding divine capacious outlined earlier. 59 deep chief among unwillingness unforgiving textual reading, selective contemplated draconian divines. conventional illu inates methodological lapses, yields Beginning thing about spare offers explicit command heuristic applying use. dispatching "[t]he itself." 170. truism, is, equally complex adopts, species exempted non-exemption shouldered plaintiff.5 enumerates eligible nondiscrimination strongly undercuts assertion blood squeezed stone, sources involving clauses, enumerating, reason, three second, clause, making created "specific 'intent evade' 171 (citation omitted). perverse consequence subtle acts effected through stratagem discrimination, intact though brazenly disentitling warrant characterization. Congress, passing unabashed 62 sensible structural regards synthetic whole. serves concrete purpose: gives content ensuing word enumerated commonly—indeed, invariably—entail beneficiary; thus, treats favorably spending each typically doing so. properly having resorted irrelevant distinctions. Unlike artificial bifurcation holis ic express unjustified PERS', punishing evasive discrimination. Significantly, correlate sheds light exemption.6 possibility admitted, sole rejecting interpretation—that clashes statute," 171—necessarily away. 63 puzzling concession "construction one." 177. using analysis: succeeds preclude Given, then, ambiguity fair structure, appropriate consult convincingly holistic therefrom. introduced Ralph Yarborough recognize circumstances authorize sheltered "separate[s] involuntarily policy merely Sess. (1967).7 65 Several Senators, led Jacob fashioning ones. During hearings criticized depending hired." Employment: Hearings 830 788 Subcommittee Welfare, Employers "faced premiums," feared, "look George Smathers, cosponsor acknowledged response vary greater expense 29-30. He amending variations. following proposed, incorporating Smathers' concerns, incorporated essentially present proposal, ultimately underwent peripheral changes enactment, designed ensure, sponsor's words, "an compelled afford exactly not, extremely high discouraged 31254-31255 militates favor several respects. First, demonstrates sponsors treating disparately, intend categorically FEA Algonquin SNG, 426 548, 564, 2295, 2304, (1976) (statements "deserv[e] accorded weight interpreting statute").8 Second, Act" coverage. predated broadening behest, import test. Third, point debate legislator remotely close endorsing majority. silence hardly surprising, unqualified overarching protecting test, advances goal, playing radical exists treatment, saddled shared employer.9 67 informed rests still admonishment agencies' reasonable Western Criswell, 472 400, 412, 2743, 2750, 86 321 (1985) (deferring ADEA). Shortly passage, allow expensive concluded, scrutiny programs. 860.120(b) ("Not provision," profit-sharing lacking 4(f)(2)); 9709 (1969) (same).10 responsibility transferred 1979, toto Labor's 1625.10(a)(1) (1988) added).11 derogation dual leaves wonder why, important civil rights laws issue, adhere consiste cy espoused deferring expert questions. See, e.g., Co. Gilbert, 429 125, 155-156, 97 401, 417-418, 343 (BRENNAN, dissenting). 68 puts tools invention, assuredly contemplate, let alone share, now. accept free hand fashion impermissibly 1204-1205. amendments, justify contends, found, question, resolution remand. contain excluding "require 1969, provided: "Section employer, labor organization 'to individual. .' differential accordance lesser amounts group payment made, incurred, equal incurred worker, coverage." contribution fixed receives contributed provide." Alabama Power Davis, 431 581, 18, 2002, 2009, 595 (1977); 1002(34). completely dissent wrong "commonly—indeed, invariably entail beneficiary. Post, 187. Regulations 1969 "[n]ot provision." 9708, (1969), appear [the] terms" reflects Department's "would shield 10-11 suggested, exclusion contrary, served rose beneficiaries: "However, essential financed profits apply. 'bona fides' circumstances." hold bill's "[i]t 2794 Elsewhere, explained 31254-31255. agree neither nor controls 167-169. answer surmise equivalent life full attaining drew concerned cumulative remaining predicted lifespans shorter refuses retaliation challenging cognizable. 180. heavy nonbenefit discriminate, strikes blow prove considerably undertook motives. severe evidentiary obstacles, nonfringe-benefit proved, born improper intent. Wards Cove Packing Atonio, 642, 668, 2115, 2130-2131, 733 (STEVENS, 1988) (case below); 1480 Karlen City Colleges Chicago, 314 (CA7 Ed. 1986); Elec. 211 1390 took slightly divergent analytic paths result: ab initio others deferred effect; imputed attributed generally. divergence, vitiates Appeals' unanimity reflected aware regard major benefit-program associated Secretary 1964, Older American Worker: (1965) ("Relatively cited barriers persons"). attempts stringing together fragments comments floor. cites statement 'the fight' 'adequate workers.' 179, quoting 7076 notes, remark, context, ADEA," lengthy vesting periods "should comprehensive legislation eve tually won of, legislation. 1053 'a systems,' (1967), fully accords legitimate basis—leaving presumably band bounded was, anything, confirmed (1977). declined "per requir[ed] statement, pre-ADEA open passage. Reiterating debate: exception, 1967] colloquy floor, 'employer affords 8218 "[w]elfare dismissal administrative disingenuous. view, "safe harbor" revised adopt 171-172. adduces 'considered statute' justified. 171, suggests, explicitly corollary non-cost-justified tenuous explain why saw qualification exemption; discriminating, pronouncement, changing ("A coverage"); ("[A] considerations").

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