Chastang v. Flynn & Emrich Co.

ALBERT V. BRYAN, Senior Circuit Judge

(dissenting):

The major difficulty I have with the majority opinion is its retroactive application of the Civil Rights Act to the pension plan’s benefits for the years (the pre-Act years) before the statute became' effective. I find no fault with the Act’s vitiation of the forfeiture of benefits for the years after the Act (the post-Act years) was effective. The following sketch of appellee Chastang’s participation is offered to illustrate the two periods:

As the majority carefully explains, for every year of their employment after the first, each of the appellees in accordance with the plan were credited by the Company with a specified percentage of his interest in the retirement fund, which would be the share payable to him on the date fixed by the plan for his mandatory retirement. Earlier retirement was permitted all employees but a male employee retired under pain of forfeiture of one-half of the share in the fund then credited to him, that is, 50% of the total of the yearly contributions made by the Company to the fund for the credit of the employee. No such penalty was exacted of female employees and this is the asserted discrimination in suit.

Both appellees took advantage of early retirement; whereupon the Company paid each of them 50% of the total sum to his credit in the fund. This amount was half of the total of the employer’s annual contributions for both of the two employment periods: (1) the years before the Act’s effective date, July 2, 1965, and (2) the years running from that date to the day of early retirement. The majority now requires the Company to pay these employees the remaining 50% for both the pre- and post-Act years holding that the Act forbids the reduction on early retirement, terming it discrimination against the appellees on the basis of sex.

My disagreement is with so much of the decision as applies the Act to the pre-Act contributions. This legislation had no effect prior to July 2, 1965, Robinson v. Lorillard Corp., 444 F.2d 791 (4 Cir.), cert. denied, 404 U.S. 1006, 92 S.Ct. 573, 30 L.Ed.2d 655 (1976). Thus, of necessity it could not preclude the plan’s reduction in the pre-Act years’ entitlements. The majority puts its ruling on this syllogism: the early retirement occurred post-July 2, it triggered the reduction, and so the reduction was effectuated post-July 2, and so not retroactively. This conclusion, even if accepted arguendo, responds to only a part of the question here; it wholly ignores the areas of impact of the forfeitures. No matter when activated, the forfeiture has provinces of effect. The essential inquiry is what was the scope of the reaction. The answer, obviously, is that the play of the forfeiture was on the pre-Act years as well as the post-Act years. The majority allows the Act to nullify the reduction in the pre-Act period and so adapts the law retrospectively.

The unreality of applying a post-Act early retirement plan to pre-Act accrued benefits is revealed by a simple demonstration. Supposing the early retirement occurred one day after the effective date of the Act, July 3, 1965, it would strain reason not to apply the forfeiture to the pre-Act accruals. Just as illogical is it when the forfeiture occurs three years, as here, after the inception of the Act. Retroactivity of the Act to pension plans has been twice denied by the Third Circuit: Rosen v. Public Service Electric & Gas Co., 477 F.2d 90 (1973) and eo nomine, 527 F.2d 645 (1976) with opinion unpublished.

As if significant, the majority observes that the 50% deduction upon early retire*1047ment resulted each time in a “windfall” to the fund. I fail to grasp how this circumstance argues the majority’s position. The fact that the money reverted to the fund is no ground for disbursing it to early retirees. The windfalls do not enter the Company’s coffers. It, not the employees, contributes all the moneys comprising the trust, but the Company is not the beneficiary of the reversions. The fund is the recipient. The 50% cancellations of the credits may well give added strength to the fund against unforeseeable obligations. For these reasons I think, too, that no monetary judgment in this case would lie against the Company.

Finally, the plan’s payments are in no aspect akin to the employment seniority rights which have been the subject of litigation under the Civil Rights Act. See, e. g., Franks v. Bowman Transportation Co., 424 U.S. 747, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976) and Robinson v. Lorillard Corp., supra, 444 F.2d 791 (4 Cir.), cert. denied, 404 U.S. 1006, 92 S.Ct. 573, 30 L.Ed.2d 655 (1976). There employees who were denied seniority post-Act were allowed to invoke proof of pre-Act discrimination practices to establish that post-Act denials were but a continuation of a prior pattern of discrimination. The pre-Act conduct was properly looked to as responsible for the loss of rightful claims of seniority. It included charges of unwarrantable suppression of rights, unfair classifications of standings as well as unjust treatment generally. There is, plainly, no likeness in these issues to those in this action. Here, no claimant’s entitlement is shaped by antecedent circumstances.

I would vacate the order of the District Court insofar as it directs any of the defendants to pay the plaintiffs the 50% reduction of their benefits for the years preceding July 2, 1965.