Sasha Jetton
September 30, 2010
PA 725
Graded # 2
Supreme Court of the United States
Los Angeles Department of Water & Power V. Manhart
January 18, 1978, Argued
April 25, 1978, Decided
Legal Problem
In an Equal Employment Opportunity case, female employees filed a class action suit in district
court against the City of Los Angeles Department of Water and Power. The female employees argued
that the department’s retirement policy violated Title VII of the Civil Rights Act. Adopting a longevity
argument, the city required female employees to make higher contributions to the retirement plan. Under
the city’s plan, female contributions were approximately 14.84% higher than male contributions.
Department officials claimed that this was fair because women were likely to outlive men and would
receive benefits for a longer period. The department created such a policy using mortality tables and its
own experience showing that female employees have greater longevity than male employees.
Title VII, Section 703 (a) (1) of the Civil Rights Act of 1964, states that it shall be unlawful for an
employer to discriminate against any individual with respect to his compensation, terms, conditions, or
privileges of employment because of a person’s race, color, religion, sex, or national origin. The district
court ruled that the pension policy did in fact violate Title VII of the Civil Rights Act and ordered that a
refund of all excess contributions be returned to the department’s female employees. While the case was
being heard by the district court, the California Legislature passed a law making such differential
pensions unlawful. The case went on to the Ninth District Court of Appeals and they affirmed the lower
court’s decision. After the court of appeal’s ruling, the case moved onto the U.S Supreme Court. The
U.S. Supreme Court heard the case on January 18, 1978 and made its decision on April 25, 1978. At
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which time, the court vacated and remanded the case to the court of appeals ruling, maintaining that it was
unfair to award retroactive monetary relief (Los Angeles Dept. of Water & Power v. Manhart). Justice
Stevens delivered the opinion of the court.
Court’s Opinion
First, the court acknowledged that the contribution differences were discriminatory towards the
female employees. The court noted that women may live longer than men, but such a generalization does
not justify the increased contribution to a pension fund (Los Angeles Dept. of Water & Power v.
Manhart). Second, the court rejected the department’s claim that the contribution differences were based
on longevity and fall under the fourth exemption of Title VII. The court argued that the city did not
provide any evidence that the differential was based on “any” other factor other than gender. Third, the
court noted that this case is distinguishable from General Electric v. Gilbert. The department originally
argued that the General Electric case should be reversed if the court were going to support the plaintiffs in
the Manhart case. In the General Electric case, the Supreme Court ruled in favored GE, citing that it was
not a case of gender discrimination. The court’s opinion is clear on the distinction between the cases,
holding that the GE case would not be revisited to address the Manhart case. On the above three factors,
the court overwhelming agreed that the contribution differential was in fact discriminatory. Only Chief
Justice Burger and Justice Rehnquist dissented from the opinion on these matters. Finally, in a majority
opinion, the court ruled that it is inappropriate for the district court to award a refund of the excess
contributions.
The court noted that although the presumption favors monetary relief, it is not justified in this
case. In the opinion, the court noted that in Albemarle Paper v. Moody it was determined that monetary
relief needs should be assessed for each individual case and should not be viewed as automatic under
Title VII. In addition, the court felt that the legislation prohibiting gender-based contributions remedied
the problem. The court went on to highlight that any monetary awards may have had grave consequences
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on the pension fund and department employees. While the court upheld that the increased contributions
for female employees were discriminatory in nature, the majority decided that retroactive payments were
not justifiable. The majority ruled against any back pay and remanded the case to the court of appeals.
While I do agree with the court on the discrimination opinion, I remain hesitant to agree with the remand
decision.
My Opinion
The court recognized and I agree that the department violated Section 703 (a) (1) Title IV of the
Civil Rights Act of 1964. I understand that the department felt using a longevity analysis would provide
them with the necessary tools to determine the length of retirement. However, I feel that the court was
correct in questioning the fairness of the generalization. Title VII focuses on the fairness to individuals
and makes it unlawful to discriminate against any individual with respect to his or her compensation
based solely on the individual’s gender.
As did the lower courts, the justices maintained and I concur that the department failed to prove
that they used “any” other factor to determine contributions other than gender. I also agree with the court
regarding the third matter. The department argued that a reversal of General Electric v. Gilbert was
necessary to move forward in the current decision. The court held and I agree that the Manhart case is
distinguishable from GE case. The Manhart case involved discrimination on the basis of gender, while
the GE case was a matter physical disability. I do not believe it was necessary to reverse the GE case in
order to provide a decision in the Manhart case. I am also not in agreement with the Supreme Court’s
decision to deny retroactive payment to the female employees.
The court noted that such relief might be harmful to the pension fund and employees. I agree
that there may have been some unfortunate adjustments to the fund, but it was not clear that the
department was making such an argument. While there may have been some damage to the fund, there
was no clear evidence that the employees would be completely responsible for the award of excess
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contributions. The court suggested that the California legislation regarding pension differentiation
resolved the problem. I strongly disagree with such an analysis. The legislation may have remedied
future issues, but the past discrimination is of great concern. The court argued that the department
assumed the differentiation was fair and once the law prohibited the policy, the department readjusted its
procedures immediately. The court felt that this displayed good faith by the department. I agree that the
department showed good faith by responding instantaneously to the new legislation. However, I am not
sure that it made employees “whole”.
The increased contribution not only forced female employees to contribute more money, they
were also subjected to lower paychecks as a result of the higher pension contributions. As Justice
Marshall noted in his dissent, the court was right regarding liability, but disagreed with their reference to
the Albemarle Paper Co. v. Moody case. Justice Marshall noted that the Albemarle case clearly
established a presumption in favor of retroactive liability that could be “rarely overcome”. Marshall was
clear in his dissent when he spoke of the importance of the “rarely overcome” statement in the Albemarle
case. He felt that the female employees had a right to the excess funds. However, the court ruled that the
presumption could be overcome in the Manhart case, because reimbursement could damage the pension
fund. While I understand the court’s concern, I disagree with their opinion. If the pension fund were
managed appropriately, then retroactive reimbursement may not have caused great harm to the entire
system. In this case, I do not believe a remand was necessary, but I think the court did not want explore
such matters. I am sure that the court thought a decision in favor of the employees would have opened
the floodgates to cases regarding this issue. While I do not agree with the decision, I recognize the future
implications of the decision. However, as I read the case, I found no claim from the department that they
feared that their pension fund would be threatened. In addition, it does not appear that the employees or
retirees would pay for any part of the award. As emphasized in Albemarle, the central purpose of Title
VII was to make individuals “whole” for injuries suffered through past discrimination. I believe that the
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respondents in this case were not made “whole” because they did not receive a refund of the money
withheld from their paychecks.
As noted by Marshall and I fully agree, this case is quite compelling. In most cases, retroactive
pay is awarded for time not worked. However, in this case, individuals are seeking reimbursement for
discriminatory acts while working full-time. If female employees’ contributions were higher, then it is
logical to assume that their paychecks were substantially less than their male co-workers. Justice
Marshall highlighted this point in his dissent and I agree that such actions violated the Equal Pay Act.
The Equal Pay Act clearly states that employers are required to pay both genders the same wage for
equivalent work. Agreeing with Justice Marshall’s dissent, I feel that the pension contributions were in a
clear violation of such law. The female employees who endured years of lower pay were victims of
discrimination and should have been awarded monetary reimbursement for such discrimination. Like
many Supreme Court cases regarding employment issues, the decision affects Human Resource
Management on a number of levels.
HMR Implications
As we discussed in class, Equal Employment Opportunity is an important aspect of labor
relations and employment law. EEO demands that all individuals receive fair and equitable treatment in
the employment process regardless of race or gender (Klingner, Nalbanian, Llorens). Over the years
agencies and private sector companies have highlighted their adherence to the EEO statutes. The Manhart
case has had a significant impact on Human Resource Management. Prior to Manhart, there were no such
laws determining that it was unlawful to calculate pension contributions based on gender.
Since EEO is based on the organizational efforts to avoid violating employees or applicant’s legal
or constitutional rights, the Manhart case brought to light a fairly new form of discrimination. I am sure it
led HR managers across the state to reevaluate their pension policies. In this case, women were
discriminated against on the basis of their gender, which was already unlawful under EEO legislation.
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Taking it a step further, the case and the legislation that followed, reminds human resource managers that
social equity extends to include pension contributions. Since pension contributions fall in the realm of
compensation, this case should lead all HR managers to be aware of additional factors related to EEO
violations. It is clear that human resource managers need to strongly advocate developing a fair pension
policy.
In the Manhart case, the court felt that awarding retroactive pay would cause grave harm to the
pension plans, so they remanded to the lower court’s ruling. I feel that the legislation passed to address
pension contributions may have made it a clear process for HR managers. They will not spend their time
calculating the difference in longevity between men and women and will be able to format a fair and
socially equitable pension plan for all employees. Now, the decision to not award retroactive pay to
female employees saved HR managers from years of management problems. On a positive note, The
Manhart case has led HR managers to adhere to the legislation and make sure that their pension policies
are fair and equitable. Unfortunately, the Manhart case has given HR managers the assurance that they
will not have to reimburse employees for any past discrimination related to pension contributions. I could
not find any information indicating that the court of appeals actually reheard the case, but I am sure the
issue of retroactive pension payments may be of interest to future retirees.
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References
City of Los Angeles Department of Water and Power v. Manhart, 435 U.S. 702 (1978)
Civil Rights Act of 1964, Pub. L. 88-352 (Title VII),2000e, 42 (1972)
Klingner, D, Nalbandian, J, & Llorens, J. (2010). Public personnel management. New York: Longman
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