PATRICIA A. LORANCE, ET AL., PETITIONERS V. AT&T TECHNOLOGIES, INC., ET AL. No. 87-1428 In the Supreme Court of the United States October Term, 1988 On Writ of Certiorari to the United States Court of Appeals for the Seventh Circuit Brief for the United States and the Equal Employment Opportunity Commission as Amici Curiae Supporting Petitioners TABLE OF CONTENTS Interest of Amici Curiae Statement Summary of argument Argument: In a Title VII challenge to the application of an allegedly discriminatory seniority system, the "unlawful employment practice" that triggers the commencement of Section 706(e)'s limitations period occurs on the date the employer applies the seniority system to the employee and not on the date the employer adopted the system or the employee first became subject to the system A. The limitations period for filing a Title VII charge commences each time a discriminatory policy is used to make an employment decision B. Challenges to the application of discriminatorily motivated seniority systems are not governed by more restrictive statute of limitations principles under Title VII C. Commencement of the limitations period before the challenged seniority system is applied and injures the employee would frustrate Title VII's purposes and lead to absurd results Conclusion QUESTION PRESENTED Whether in the case of an employment discrimination charge alleging that the complainant was demoted pursuant to a seniority system that was adopted for a discriminatory purpose and continues to operate with discriminatory effect, the limitations period established by Section 706(e) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-5(e), begins to run when the employee is first notified of the demotion, rather than when the employer first adopted the seniority system or when the employee first became subject to it. INTEREST OF AMICI CURIAE This case concerns the timeliness of employment discrimination charges filed with the Equal Employment Opportunity Commission (EEOC) pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., where the basis of the charge is an employee's demotion resulting from the application of an allegedly discriminatory seniority system. The EEOC is the federal agency primarily responsible for administering federal fair employment statutes in the private sector, including Title VII, and both the Attorney General and the EEOC have substantial responsibility for enforcement of Title VII (see 42 U.S.C. 2000e-5(a) and (f)(1)). In addition, the federal government is covered by Title VII in its capacity as the nation's largest employer (42 U.S.C. 2000e-16). Hence, the resolution of the issue presented in this case will directly affect the government's enforcement responsibilities and could also affect the government's compliance obligations. At the Court's invitation, the Solicitor General filed a brief on behalf of the United States and the EEOC as amici curiae in support of the petition for a writ of certiorari. STATEMENT 1. Petitioners Patricia A. Lorance, Janice M. King, and Carol S. Bueschen are hourly wage employees at the Montgomery Works plant of respondent AT&T Technologies, Inc. (AT&T), in Aurora, Illinois. /1/ They are also members of respondent Local 1942, International Brotherhood of Electrical Workers, AFL-CIO (Union). Pet. App. 4a. Petitioners Lorance and Bueschen have been employed at the plant by AT&T since 1970, and petitioner King commenced work there in 1971 (ibid.). At that time, promotions and demotions at the plant were based on plant-wide seniority (ibid.). Most hourly wage jobs at the plant are semi-skilled jobs and have traditionally been filled by women (Pet. App. 15a). Among the highest paying hourly wage jobs at the plant are "testers" jobs (id. at 4a, 15a). Tester positions were traditionally filled by men who were either promoted from among the relatively few men in the lower paying wage jobs or hired directly into tester positions (id. at 15a). All three petitioners were originally employed in nontester positions. By 1978, an increasing number of women obtained tester positions based on their plant-wide seniority (Pet. App. 4a). In July 1979, AT&Tand the Union modified the collectively bargained seniority system applicable to the Montgomery Works plant to provide that promotions and demotions of testers with less than five years of tester service, who have not completed a training program for the tester job, would be governed by seniority as a tester rather than plant-wide seniority (ibid.; Compl. Paragraph 17 (J.A. 21)); plant-wide seniority continued to govern all other matters, including, for example, lay-offs and determination of benefits (Pet. App. 16a). The new seniority plan was known as the "Tester Concept" (id. at 4a). /2/ Petitioner Lorance was a tester at the time the seniority system was changed (id. at 5a). Petitioners Bueschen and King became testers in 1980 (ibid.). In late 1982, AT&T began a reduction in force and, based on its new seniority system, demoted all three petitioners (Pet. App. 5a). Petitioners Lorance and King were demoted from senior testers to junior testers and petitioner Bueschen was demoted to a nontester position (ibid.). /3/ Petitioners would not have been demoted if AT&T had implemented the reduction in force on the basis of each petitioner's plant-wide seniority (ibid.). Within 300 days of their demotions, petitioners filed administrative charges with the Equal Employment Opportunity Commission (EEOC) claiming that their demotions violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq. /4/ The EEOC determined that there was not reasonable cause to believe that petitioners' allegations were true and, accordingly, issued them right-to-sue letters (Pet. App. 5a). 2. Petitioners subsequently brought this lawsuit in the United States District Court for the Northern District of Illinois pursuant to Section 706(f) of Title VII, 42 U.S.C. 2000e-5(f). /5/ In their complaint, petitioners allege that respondents AT&T and Union changed the seniority system in 1979 "in order to protect incumbent male testers and to discourage women from promoting into the traditionally-male tester jobs" (Compl. Paragraph 14 (J.A. 20)). They also allege that application of this provision has had the effect of favoring male testers over female testers (id. Paragraph 18 (J.A. 21-22); see also id. Paragraph 6(f) (J.A. 15-16)). The district court granted respondent AT&T's motion for summary judgment and, sua sponte, also granted summary judgment in favor of respondent Union (Pet. App. 12a-33a). /6/ The court agreed with AT&T that petitioners' challenge was time-barred because they had failed to file their charges with the EEOC within the applicable limitations period established by Section 706(e) of Title VII (42 U.S.C. 2000e-5(e)). /7/ The court ruled that the limitations period started to run when each petitioner first became subject to the new seniority policy as a tester (Pet. App. 26a, 32a). In doing so, it rejected petitioners' contention that the limitations period commenced when they were demoted in 1982 (id. at 25a-27a), and likewise rejected AT&T's claim, which the magistrate had accepted (id. at 43a-44a), that the limitations period commenced for all petitioners in 1979 when AT&T first adopted the seniority policy (id. at 27a-31a). Because, as the court found, each petitioner filed her charge more than 300 days after the time each first became subject to the new policy as a tester, the court concluded that petitioners' complaint should be dismissed since none had timely filed her charge with the EEOC (id. at 32a-33a n.6). 3. A divided court of appeals affirmed (Pet. App. 3a-11a). The court agreed that petitioners' argument was "logically appealing," but concluded that it was "compelled to reject it" because "(i)f we were to hold that each application of an allegedly discriminatory seniority system constituted an act of discrimination, employees could challenge a seniority system indefinitely" (id. at 8a). Like the district court, however, the court of appeals also rejected AT&T's argument that the "adoption" of the seniority system constituted the relevant act that triggered the running of Title VII's limitations period (ibid.). According to the court, such a rule would "encourage needless litigation" by employees not even yet formally subject to the seniority plan and would also "frustrate the remedial policies that are the foundation of Title VII" by providing future employees with no recourse against a seniority system they thought discriminatory (ibid.). The court of appeals determined that to strike a "balance that reflects both the importance of eliminating existing discrimination, and the need to insure that claims are filed as promptly as possible," the rule should be that "the relevant discriminatory act that triggers the period of limitations occurs at the time an employee becomes subject to a facially-neutral but discriminatory seniority system that the employee knows, or reasonably should know, is discriminatory" (Pet. App. 9a). The court concluded that because affidavits submitted by petitioners established that they knew they were subject to the new seniority policy on the day they became subject to it as testers, the limitations period commenced on that date. Hence, the court found, petitioners' charges were not timely filed with the EEOC because they were filed two to three years after each petitioner was first subject to the new policy, which is beyond the 300-day limitations period provided by Title VII (ibid.). See note 4, supra. /8/ Judge Cudahy dissented (Pet. App. 10a-11a). He agreed that the majority's policy concerns were "important," but contended that they "find dubious application in the result here" (id. at 11a). He explained that the majority's rule would not achieve its goal of preventing suits against seniority plans adopted long ago, but instead would merely limit the plaintiffs who could maintain a lawsuit to those more recently hired (id. at 10a). Judge Cudahy also faulted the majority for announcing a legal rule that would require employees to bring premature lawsuits. When an employee is first subject to a seniority policy, the dissent explained, he has not yet been injured by it and does not know whether he ever will be. Ibid. /9/ SUMMARY OF ARGUMENT Under Section 706(e) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-5(e), the limitations period commences to run on the date on which "the alleged unlawful employment practice occurred." In our view, where, as in this case, employees claim that they were demoted pursuant to a discriminatory seniority system, the "unlawful employment practice occurred" on the date that the employees were first notified of their demotions. In this respect, challenges to the application of discriminatory seniority systems are like challenges to other continuing discriminatory employment policies under Title VII. The limitations period is measured from the last asserted application of the discriminatory policy. Neither United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977), nor Delaware State College v. Ricks, 449 U.S. 250 (1980), suggests otherwise. Those cases stand for the proposition that Title VII's limitations period is not measured from the date of the application of employment policies (including seniority systems) that merely perpetuate the consequences of prior discrimination, but are not themselves discriminatory. In this case, petitioners claim that the seniority system is itself discriminatory, and thus its application is in fact actionable. Contrary to respondent AT&T's contention, moreover, Section 703(h) of Title VII, 42 U.S.C. 2000e-2(h), does not mandate the application of more restrictive statute of limitations principles to challenges to the application of discriminatory seniority systems. Section 703(h) simply requires an employee to include in his proof of unlawful discrimination a showing of actual intent to discriminate on the part of those who negotiated or maintained the system. It does not suggest that only the adoption of the seniority system, as distinguished from its specific applications to define employees rights, can be an "alleged unlawful employment practice" that triggers the running of Section 706(e)'s limitations period. In this case, therefore, Section 703(h) does not shift the focus of petitioners' discrimination claim away from respondent AT&T's current application of its seniority system. Finally, the date on which the application of an allegedly discriminatory seniority system has a concrete adverse impact on the employee is the only sensible date on which to commence Title VII's limitations period. Respondent AT&T's view that the limitations period should be measured from the date of a seniority system's adoption cannot be correct. Under that view, seniority systems, however discriminatory in purpose and in effect, would operate with impunity, immune from legal challenge under Title VII, just a few months after their adoption. Nor is the court of appeals' alternative suggestion -- measuring the limitations period from the date the employee first became subject to the allegedly discriminatory seniority system -- any more sensible. Under that view, as under AT&T's, employees would be required to take the drastic action of suing their employer before they could know if they would ever suffer any concrete injury from operation of the seniority system. ARGUMENT IN A TITLE VII CHALLENGE TO THE APPLICATION OF AN ALLEGEDLY DISCRIMINATORY SENIORITY SYSTEM, THE "UNLAWFUL EMPLOYMENT PRACTICE" THAT TRIGGERS THE COMMENCEMENT OF SECTION 706(e)'S LIMITATIONS PERIOD OCCURS ON THE DATE THE EMPLOYER APPLIES THE SENIORITY SYSTEM TO THE EMPLOYEE AND NOT ON THE DATE THE EMPLOYER ADOPTS THE SYSTEM OR THE EMPLOYEE FIRST BECOMES SUBJECT TO THE SYSTEM. Section 706(e) of Title VII provides that where there is a state fair employment practice agency with overlapping jurisdiction, an employment discrimination charge must be filed with the EEOC within 300 days "after the alleged unlawful employment practice occurred" (42 U.S.C. 2000e-5(e)). /10/ If the unlawful practice at issue in this case "occurred" on the date of petitioners' demotions, their charges would be timely because they were filed with the EEOC within 300 days thereafter (see notes 3, 4, supra). If, on the other hand, the unlawful practice occurred, as respondent AT&T contends, only at the time when AT&T first adopted the seniority policy or, as the court of appeals held, when it was made known to each petitioner that her seniority rights would be determined under the new policy, then petitioners' charges would be time-barred because they were not filed within 300 days of either of those events. Hence, "(d)etermining the timeliness of (their charges) * * * requires us to identify precisely the 'unlawful employment practice' of which (they) complain()." Delaware State College v. Ricks, 449 U.S. 250, 257 (1980). A. The Limitations Period for Filing a Title VII Charge Commences Each Time a Discriminatory Policy Is Used to Make an Employment Decision. 1. Petitioners allege that respondent AT&T violated Title VII by demoting them pursuant to a seniority policy that, while facially neutral, was adopted with a discriminatory purpose and has the effect of favoring male testers over female testers. We agree with petitioners that their charges were timely filed because the date of their demotions was the date on which this "alleged unlawful employment practice occurred," within the meaning of Section 706(e). Each application of a discriminatory seniority system to alter an employee's employment status, like each application of a discriminatory salary structure to determine an employee's weekly pay check, "is a wrong actionable under Title VII." Bazemore v. Friday, 478 U.S. 385, 395 (1986). /11/ It is no bar to the bringing of a challenge to the current application of an allegedly discriminatory seniority policy that previous applications of the same policy are not now subject to legal challenge under Title VII, either because the limitations period has expired or because Title VII was not then in effect. Cf. id. at 395-396 n.6. As this Court explained in Bazemore, /12/ an employment policy or practice "that would have constituted a violation of Title VII, but for the fact that the statute had not yet become effective, became a violation upon Title VII's effective date, and to the extent an employer continued to engage in that act or practice, he is liable under that statute" (id. at 395 (emphasis supplied)). /13/ To similar effect is this Court's decision in Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982), a case brought pursuant to the Fair Housing Act of 1968, 42 U.S.C. 3601 et seq., challenging a continuing pattern, practice, and policy of unlawful racial steering in real estate sales. In Havens Realty, the Court concluded that the 180-day limitations period for a judicial enforcement action then established by Section 812(a) of the Fair Housing Act (42 U.S.C. 3612(a)) did not begin until the "last asserted occurrence of that practice" (455 U.S. at 381). /14/ "Where the challenged violation is a continuing one," the Court explained (455 U.S. at 380), "the staleness concern disappears." Where, as in this case, the "last asserted occurrence" of a discriminatory policy is also the only application of that policy alleged by the plaintiff, Havens Realty seems clearly to indicate that the statute begins to run from that event. /15/ Finally, decisions of this Court raising analogous limitations issues but arising in nondiscrimination contexts likewise support our view. See, e.g., Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 502 n.15 (1968) ("Although Hanover could have sued (under the Sherman Act) in 1912 for the injury then being inflicted, it was equally entitled to sue in 1955."); Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338 (1971) ("In the context of a continuing conspiracy to violate the antitrust laws, * * * each time a plaintiff is injured by an act of the defendants(,) a cause of action accrues to him to recover the damages caused by the act and * * * , as to those damages, the statute of limitations runs from the commission of the act."). /16/ It is therefore not surprising that, as the First Circuit recently noted in criticizing the Seventh Circuit's decision in this case, other courts of appeals have consistently held "that the application of a discriminatory system to a particular substantive decision (e.g., to promote, demote, fire, or award benefits) constitutes an independent discriminatory act which can trigger the commencement of the statute of limitations." Johnson v. General Electric, 840 F.2d 132, 135 (1st Cir. 1988). /17/ 2. Contrary to the court of appeals' decision, this Court's decisions in United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977), and Delaware State College v. Ricks, 449 U.S. 250 (1980), do not support a different result in this case. /18/ In both of those cases, the Court held that the plaintiffs were not challenging any current discrimination because, the Court explained, employment practices that merely perpetuate the consequences of prior discrimination but are not themselves discriminatory do not constitute actionable wrongs under Title VII. See Ricks, 449 U.S. at 257 ("If Ricks intended to complain of a discriminatory discharge, he should have identified the alleged discriminatory acts that continued until, or occurred at the time of, the actual termination of his employment."); Evans, 431 U.S. at 558 ("(Plaintiff) has not alleged that the system discriminates against former female employees or that it treats former employees who were discharged for a discriminatory reason any differently from former employees who resigned or were discharged for a nondiscriminatory reason."); see also Bazemore, 478 U.S. at 396 n.6 (distinguishing Evans) ("Because the employer was not engaged in discriminatory practices at the time the respondent in Evans brought suit, there simply was no violation of Title VII."). In the absence of an allegation of current discriminatory conduct, the Court concluded in both cases that the applicable charge-filing limitations period began to run on the date of a prior, allegedly discriminatory act. Thus, in Evans, the limitations period began to run at the time the employee was allegedly discharged in violation of Title VII and not when, after she was subsequently rehired, the employer applied the provisions of the seniority system to deny her credit for prior years of service or for years she presumably would have served had she not been discriminatorily discharged (431 U.S. at 557-558). Likewise, in Ricks, the limitations period began to run at the time the employer notified the employee of his denial of tenure and not when, as the "inevitable consequence" of that denial, the employee was later discharged upon completion of a one-year terminal contract (449 U.S. at 256-259). "The emphasis is not upon the effects of earlier employment decisions; rather it 'is (upon) whether any present violation exists'" (id. at 258, quoting Evans, 431 U.S. at 558 (emphasis omitted)). In this case, however, petitioners' demotions were not merely present consequences of a previous, time-barred discriminatory decision or act. They were instead a direct, discriminatory effect of the application of a seniority system that petitioners allege was adopted with a discriminatory purpose. Hence, the demotions were themselves "unlawful employment practices" capable of triggering the Section 706(e) limitations period. /19/ Furthermore, unlike the discharge in Ricks, petitioners' demotions were not the "inevitable" result of the seniority system's adoption. AT&T's announcement of its seniority policy did "not abundantly forewarn()" petitioners of their demotions (449 U.S. at 262 n.16). It did not notify petitioners that they would, in fact, ever be demoted based on that policy at some future date. It merely created the theoretical possibility of some undefined future adverse employment consequences. /20/ B. Challenges to the Application of Discriminatorily-Motivated Seniority Systems Are Not Governed By More Restrictive Statute of Limitations Principles Under Title VII There is no merit in either the court of appeals' (Pet. App. 8a) or respondent AT&T's suggestion (Br. in Opp. 5-7) that an especially strict interpretation of the Section 706(e) limitations period is appropriate for challenges to the application of a seniority system. Section 706(e) nowhere provides that challenges to seniority systems are governed by different limitations rules than other types of discrimination claims. Section 703(h), /21/ which is the only provision in Title VII that identifies seniority systems for special treatment, does not address, explicitly or implicitly, the time limits for filing charges. /22/ It simply provides that differences in treatment that would otherwise be unlawful under Title VII are lawful where they are "pursuant to a bona fide seniority * * * system * * * provided that such (differences) are not the result of an intention to discriminate" (ibid.). Unlike AT&T, we do not believe that the legal effect of Section 703(h) is to require that any challenge to a seniority plan under Title VII must be brought no more than 300 days after the plan's adoption. Section 703(h) requires that the employee include in his proof of unlawful discrimination a showing "of actual intent to discriminate on * * * the part of those who negotiated or maintained the system." Pullman-Standard v. Swint, 456 U.S. 273, 289 (1982); American Tobacco Co. v. Patterson, 456 U.S. 63, 65, 69-70 (1982). /23/ It does not suggest that only the adoption of the seniority system, as distinguished from its specific applications to define employee rights, can be an "alleged unlawful employment practice" that triggers the running of Section 706(e)'s limitations period. /24/ Section 703(h) simply provides that "(n)otwithstanding any other provision of (Title VII)," certain employment practices shall not be unlawful. /25/ Because petitioners have alleged an "intention to discriminate" in the formulation of the seniority system and a current discriminatory effect from the application of that system, the employer conduct they challenge is in no way protected by Section 703(h). /26/ Section 703(h)'s limited legislative history likewise provides no support for AT&T's view of its effect on the running of Title VII limitations periods. As previously recounted by this Court, Section 703(h) was part of the compromise substitute bill fashioned by Senators Mansfield and Dirksen that cleared the way for Title VII's passage. See generally Teamsters, 431 U.S. at 350-353; Franks v. Bowman Transportation Co., 424 U.S. 747, 758-762 (1976). The legislative history shows that Section 703(h) had the important but limited purpose "to make clear that the routine application of a bona fide seniority system would not be unlawful under Title VII" (Teamsters, 431 U.S. at 352; see also Franks, 424 U.S. at 761). There is no indication in the legislative history that Section 703(h) was intended to have any effect on challenges to non-bona fide seniority systems, including the date on which the limitations periods for such challenges would commence to run under Section 706(e). Indeed, in underscoring the legitimacy of challenges to post-Act "use" of non-bona fide seniority systems, the legislative history suggests Congress's understanding that the application of a discriminatory seniority system would itself constitute the "unlawful employment practice" for the purpose of triggering Section 706(e)'s limitations period. See 110 Cong. Rec. 7213 (1964) (interpretive memorandum of Senators Clark and Case) (emphasis added) ("However, where waiting lists for employment or training are, prior to the effective date of the title, maintained on a discriminatory basis, the use of such lists after the title takes effect may be held an unlawful subterfuge to accomplish discrimination."). /27/ Finally, this Court's decisions regarding the meaning of Section 703(h) are consistent with our view. While they do not address the precise issue before the Court, those decisions make clear that a current application of a previously adopted seniority system may sometimes be open to Title VII challenge. See American Tobacco Co. v. Patterson, 456 U.S. at 69-70 ("The adoption of a seniority system which has not been applied would not give rise to a cause of action. A discriminatory effect would arise only when the system is put into operation and the employer 'applies' the system. Such application is not infirm under Section 703(h) unless it is accompanied by a discriminatory purpose."); Evans, 431 U.S. at 560 (Section 703(h) "does not foreclose attacks on the current operation of seniority systems which are subject to challenge as discriminatory."); Franks, 424 U.S. at 761 ("(T)he thrust of (Section 703(h)) is directed toward defining what is and what is not an illegal discriminatory practice in instances in which the post-Act operation of a seniority system is challenged as perpetuating the effects of discrimination occurring prior to the effective date of the Act."). C. Commencement of the Limitations Period Before the Challenged Seniority System Is Applied and Injures the Employee Would Frustrate Title VII's Purposes and Lead to Absurd Results. AT&T and the court of appeals do not agree on the precise date on which Title VII's limitations period begins to run in a challenge to the application of an allegedly discriminatory seniority system, but they agree that it commences before the employee is concretely affected. As their own inability to agree on a particular date makes clear, however, the date the policy is applied in a manner that actually has a concrete adverse impact on a particular employee is the only sensible date on which to commence the limitations period, especially in light of the remedial purposes of Title VII. 1. First, as the court of appeals itself recognized (Pet. App. 8a), AT&T's view that all challenges to provisions of seniority systems must be brought within 300 days of their adoption would lead to nonsensical results. An individual injured by a seniority system adopted long before he became employed by the company would have no standing to complain until after his claim was time-barred. Thus, "(t)he principal focus of (Title VII)" -- "the protection of the individual employee, rather than the protection of the minority group as a whole" (Connecticut v. Teal, 457 U.S. 440, 453-454 (1982)) -- would be defeated. Of even broader concern, seniority systems, however discriminatory in purpose and in effect, would operate with impunity, immune from legal challenge under Title VII, just 300 days after being put into effect. Indeed, all seniority systems adopted prior to the enactment of Title VII would be immune from challenge. Absent compelling evidence to the contrary, and AT&T offers none, it cannot plausibly be supposed that Congress intended such a bizarre result, particularly in light of "the difficulty of fixing a() (seniority system's) adoption date" (American Tobacco Co. v. Patterson, 456 U.S. at 76 n.16). As this Court has observed, Title VII's "limitations periods should not commence to run so soon that it becomes difficult for a layman to invoke the protection of the civil rights statutes" (Ricks, 449 U.S. at 262 n.16). 2. The court of appeals' substitute proposal -- under which the limitations period commences to run when the employee first becomes subject to the allegedly discriminatory seniority plan -- is no more tenable. The court of appeals selected that compromise date in order to strike a balance "between eradicating existing discrimination and protecting the (seniority) rights of all employees" (Pet. App. 8a). As Judge Cudahy explained in his dissent to the majority opinion (id. at 10a), however, the court of appeals' ruling fails to serve either of those important interests. On the one hand, it undermines its own goal of preventing suits against seniority plans adopted long ago by permitting employees not covered at the time of a seniority system's enactment to challenge the plan when they first become subject to it. On the other hand, the court of appeals' approach suffers from the same flaw it found in AT&T's position. It requires employees to make irrevocable decisions whether to challenge an employment system at a time when "they ha(ve) not really been injured and might never be injured" (ibid.). The employee therefore is faced with a Hobson's choice either to bring what may be an unnecessary and premature lawsuit against his employer, to the detriment of the employment relationship, or to forego any possibility of recovery in the event that the plan ever should operate to injure him. 3. There is also no merit to the court of appeals' contentions that a Title VII challenge to a facially neutral seniority system should be governed by different rules for the commencement of limitations periods than a challenge to an employer's action "pursuant to a seniority system that is facially discriminatory" (Pet. App. 9a). An act of intentional discrimination that is facially neutral is no less unlawful under Title VII. Section 703(h) requires only that those challenging seniority systems establish that, in addition to having a discriminatory effect, the seniority system was adopted, or is currently maintained, with an intention to discriminate. See Teamsters, 431 U.S. at 353, 356; Swint, 456 U.S. at 277. The critical issue in seniority cases is not whether the plan is facially neutral or discriminatory, but whether an intent to discriminate can be proven. Hence, when a seniority system not only has a discriminatory impact, but was "adopted because of its * * * discriminatory impact" (Swint, 456 U.S. at 277), the facial neutrality of the system is simply irrelevant. In this case, therefore, the employer's alleged discriminatory purpose in seeking to discourage women from becoming testers and to disadvantage women who currently are testers is equally repugnant to Title VII and injurious to employees, whether accomplished by a facially neutral or an overtly discriminatory seniority system. Nor is the court of appeals' approach justified by the difficulties perceived by that court in ordering relief in challenges brought long after a seniority system's adoption (Pet. App. 8a). As this Court explained in Franks, 424 U.S. at 779 n.41, district courts may use their equitable powers to limit the award of retroactive seniority to victims of discrimination where an award of full seniority would have an "unusual adverse impact." By analogy, district courts should be permitted to address other equitable concerns arising out of challenges to seniority systems, and thus be able to craft a case-specific remedy that properly balances the make-whole purposes of Title VII relief and the interests of innocent employees in particular cases. CONCLUSION The judgment of the court of appeals should be reversed. Respectfully submitted. CHARLES FRIED Solicitor General DONALD B. AYER Deputy Solicitor General RICHARD J. LAZARUS Assistant to the Solicitor General CHARLES A. SHANOR General Counsel GWENDOLYN YOUNG REAMS Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel DONNA J. BRUSOSKI Attorney Equal Employment Opportunity Commission DECEMBER 1988 /1/ Because the courts below awarded summary judgment to respondents based solely on the untimeliness of the charge, our statement, like those contained in the lower courts' opinions, is based on the facts alleged in petitioners' complaint. /2/ The Union approved the new plan by a vote of ninety votes to sixty, which was approximately the ratio of men to women voting (Pet. App. 5a). /3/ King was downgraded on August 23, 1982. Lorance and Bueschen were downgraded on November 15, 1982, and Bueschen was downgraded a second time on January 23, 1984. Pet. App. 17a. /4/ Petitioners Lorance and Bueschen filed charges with the EEOC on April 13, 1983, and petitioner King filed her charge on April 21, 1983 (Pet. App. 18a). /5/ Petitioners brought this suit as a class action, but the district court has yet to rule on their motion to certify the class (see Pet. App. 6a n.1). /6/ The district court adopted the recommendation of the magistrate that summary judgment should be entered in favor of all respondents (Pet. App. 34a-50a). /7/ AT&T argued below that Title VII's 180-day limitations period applies rather than its 300-day limitations period, but the lower courts did not address the issue because under their analysis petitioners' charges were untimely in either event (see Pet. App. 6a n.2, 19a-20a n.3). /8/ The court described (Pet. App. 9a) its holding as "a narrow one," noting that the relevant act of discrimination may be different where, unlike this case, the seniority policy is facially discriminatory or the employer exercises discretion provided by the plan in a discriminatory fashion. /9/ The court of appeals denied petitioners' petition for rehearing and suggestion for rehearing en banc (Pet. App. 1a-2a). Judges Easterbrook, Ripple, and Cudahy voted in favor of rehearing en banc (id. at 2a n.*). /10/ As previously noted (see note 7, supra), AT&T argued below that the applicable limitations period under Section 706(e) is 180 (not 300) days in this case because, although there is a state fair employment practice agency with overlapping jurisdiction, petitioners "failed to file timely charges with the applicable state 'deferral' agency" (Appellee AT&T C.A. Br. 12 n.10). The lower courts did not address this question because the resolution of that issue would not have affected their disposition of the case (see Pet. App. 6a n.2, 19a-20a n.3), and respondent has not reasserted that argument before this Court (see Br. in Opp. 2). We note, however, that to the extent the argument rests on an allegation that state proceedings were not timely instituted under state law, it cannot survive this Court's recent decision in EEOC v. Commercial Office Products Co., No. 86-1696 (May 16, 1988), slip op. 14 ("state time limits for filing discrimination claims do not determine the applicable federal time limit"). In any event, the question whether the 180 or 300-day limitations period applies does not preclude review of the question presented here because petitioners Lorance and Bueschen filed their charges with the EEOC within 180 days after their demotions (see notes 3, 4, supra). /11/ Indeed, seniority systems and salary structures may both play a part in shaping the same challenged employment action, because under some employment contracts "earnings are * * * to some extent a function of seniority." Franks v. Bowman Transportation Co., 424 U.S. 747, 767 (1976). /12/ In Bazemore, this Court held that each pay check issued pursuant to a discriminatory salary structure constituted a present Title VII violation, even if the current pay disparities had their origins in pre-Act discrimination. In that case, prior to the enactment of Title VII, the Agricultural Extension Service of the State of North Carolina "maintained two separate, racially-segregated branches and paid black employees less than white employees" (478 U.S. at 394). After the Service merged its black and white branches into a single organization in 1965, "'(s)ome pre-existing salary disparities continued to linger on,' and * * * these disparities continued after Title VII became applicable to the Extension Service in March 1972" (ibid.). This Court reversed the court of appeals' conclusion that the current salary disparities did not violate Title VII because they merely reflected the employer's failure to eliminate entirely the vestiges of prior discrimination (ibid.). /13/ The Section-by-Section Analysis of the 1972 Amendments to Title VII makes clear that the limitations period in Section 706(e) is to be measured from the final discriminatory event (118 Cong. Rec. 7167, 7564 (1972)): Court decisions under the present law have shown an inclination to interpret this time limitation so as to give the aggrieved person the maximum benefit of the law; it is not intended that such court decisions should be in any way circumscribed by the extension of the time limitations in this subsection. Existing case law which was (sic) determined that certain types of violations are continuing in nature, thereby measuring the running of the required time period from the last occurrence of the discrimination and not from the first occurrence is continued, and other interpretations of the courts maximizing the coverage of the law are not affected * * * . /14/ Compare 42 U.S.C. 2000e-5(e) ("A charge under this section shall be filed within one hundred and eighty days after the alleged unlawful employment practice occurred * * * .") with 42 U.S.C. 3612(a) ("A civil action shall be commenced within one hundred and eighty days after the alleged discriminatory housing practice occurred * * * ."). /15/ The Fair Housing Amendments Act of 1988 made significant changes in the Fair Housing Act of 1968, including establishment of an administrative enforcement mechanism and extension of the applicable statute of limitations. See Pub. L. No. 100-430, 102 Stat. 1619, Section 8, 102 Stat. 1625, 1633. The 1988 legislation also reaffirmed "the concept of continuing violations, under which the statute of limitations is measured from the date of the last asserted occurrence of the unlawful practice," by providing that either an agency complaint or a federal court lawsuit "must be filed within one year from the time the alleged discrimination occurred or terminated." H.R. Rep. 100-711, 100th Cong., 2d Sess. 33, 39 (1988) (footnote omitted; emphasis added); see 102 Stat. 1625, 1633. /16/ The limitations periods for suit challenging continuing tortious conduct is similarly measured. See Restatement (Second) of Torts Section 899 comment c (1979); 1 F. Harper, F. James, & O. Gray, The Law of Torts Section 1.30, at 120-121 (2d ed. 1986); Gross v. United States, 676 F.2d 295, 300 (8th Cir. 1982). /17/ See e.g., EEOC v. O'Grady, No. 87-1996 (7th Cir. Sept. 12, 1988), slip. op. 5 n.7 (mandatory retirement policy; Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. 621 et seq.); Johnson v. General Electric, 840 F.2d at 135 (promotions; Title VII); Furr v. AT&T Technologies, Inc., 824 F.2d 1537, 1543 (10th Cir. 1987) (systematic company policy restricting promotions; ADEA); Abrams v. Baylor College of Medicine, 805 F.2d 528, 532-533 (5th Cir. 1986) (policy restricting assignments; Title VII); Cook v. Pan American World Airways, Inc., 771 F.2d 635, 646 (2d Cir. 1985) (application of intentionally discriminatory seniority system; ADEA), cert. denied, 474 U.S. 1109 (1986); EEOC v. Westinghouse Electric Corp., 725 F.2d 211, 219 (3d Cir. 1983) (policy restricting layoff benefits; ADEA), cert. denied, 469 U.S. 820 (1984); Bartelt v. Berlitz School of Languages of America, Inc., 698 F.2d 1003, 1004 (9th Cir.) (policy of paying lower wages to female employees; Title VII), cert. denied, 464 U.S. 915 (1983); Crosland v. Charlotte Eye, Ear & Throat Hospital, 686 F.2d 208, 211-212 (4th Cir. 1982) (policy restricting pension plan benefits; ADEA); McKenzie v. Sawyer, 684 F.2d 62, 72 (D.C. Cir. 1982) (policy restricting promotions; Title VII); Williams v. Owens-Illinois, Inc., 665 F.2d 918, 924-925 (9th Cir.) (systematic discrimination in assignments and promotions; Title VII), cert. denied, 459 U.S. 971 (1982); Association Against Discrimination in Employment, Inc. v. City of Bridgeport, 647 F.2d 256, 274 (2d Cir. 1981) (giving and using discriminatory hiring examination; Title VII), cert. denied, 455 U.S. 988 (1982); Patterson v. American Tobacco Co., 634 F.2d 744, 751 (4th Cir. 1980) (application of intentionally discriminatory seniority system; Title VII), vacated on other grounds, 456 U.S. 63 (1982); Satz v. ITT Fin. Corp., 619 F.2d 738, 743-744 (8th Cir. 1980) (discriminatory pay and denial of promotions as evidenced by discrete acts over a period of time; Title VII); Morelock v. NCR Corp., 586 F.2d 1096, 1103 (6th Cir. 1978) (application of intentionally discriminatory seniority system; ADEA), cert. denied, 441 U.S. 906 (1979). /18/ This Court's more recent decision in Florida v. Long, No. 86-1685 (June 23, 1988), also does not support the court of appeals' decision in this case. Current seniority rights, like current salary payments, relate to "work presently performed" (slip op. 15). The allocation of employment opportunities pursuant to a seniority system is not akin to the issuance of payments under the pension plan at issue in Florida v. Long, which, "funded on an actuarial basis, provides benefits fixed under a contract between the employer and retiree based on a past assessment of an employee's expected years of service, date of retirement, average final salary, and years of projected benefits" (ibid.). Seniority systems, by contrast, are always subject to change, by renegotiation or other means, and their impact on particular employees is affected by many variable factors, such as increases and decreases in the size of the workforce. /19/ There is no merit to AT&T's suggestion that petitioners' demotions were not discriminatory acts because they were merely the result of the application of a neutral, general rule that certain benefits and burdens of employment will be determined according to seniority, while the challenged unlawful practice was actually the adoption of an allegedly discriminatory rule that the seniority of testers will be decided by service as a tester. There is no more merit to this argument than there would have been to an analogous contention in Bazemore that each weekly pay check is not an actionable wrong under Title VII because it is simply the product of the application of a wholly benign, discrete rule -- that individuals would be paid salaries pursuant to the salary structure -- while the employees' discrimination charge focussed on the salary structure itself, which had been adopted at an earlier time. In neither instance is the rule that employment decisions are made pursuant to an employer's general policy separable from the discriminatory portion of the policy. /20/ In Ricks, the announcement of the tenure denial also amounted to formal prior notification of termination of his employment and, for that reason, triggered the running of Title VII's limitations period. Cf. Chardon v. Fernandez, 454 U.S. 6, 8 (1981) (Limitations period begins to run in a Section 1983 action based on unlawful employment discrimination at the time "the operative decision was made -- and notice given -- in advance of a designated date on which employment terminated."). We assume that petitioners did not similarly receive formal notification of their imminent demotions prior to the demotions themselves. If they did, the limitations period might be deemed to have commenced at the date of such specific notice. See Heiar v. Crawford County, 746 F.2d 1190, 1194 (7th Cir. 1984) (While "specific notice of termination * * * starts the * * * statute of limitations running, it does not follow that the notice (of an employment policy) an employee receives when he is first hired would also set the statute to run; it surely would not."). /21/ See 42 U.S.C. 2000e-2(h) ("(I)t shall not be an unlawful employment practice for an employer to apply * * * different terms, conditions, or privileges of employment pursuant to a bona fide seniority * * * system * * * provided that such (differences) are not the result of an intention to discriminate * * * ."). /22/ The court of appeals never relied on Section 703(h) to support its ruling. /23/ AT&T's erroneous contention (Br. in Opp. 7) that the court of appeals' decision in this case is "compelled" by this Court's decision in American Tobacco Co. v. Patterson, supra, rests on a mischaracterization of the Court's opinion in that case. The Court in American Tobacco Co. found that, "taken together, Teamsters and Evans stand for the proposition stated in Teamsters that '(s)ection 703(h) on its face immunizes all bona fide seniority systems, and does not distinguish between the perpetuation of pre- and post-Act' discriminatory impact" (456 U.S. at 75-76 (emphasis and brackets in original), quoting International Brotherhood of Teamsters v. United States, 431 U.S. 324, 348 n.30 (1977) (emphasis added)). AT&T omits the Court's critical qualification that the seniority system must be "bona fide." The Court's statement does not "compel" a particular result in this case because petitioners assert that AT&T's seniority system was adopted with a discriminatory intent and, hence, is not "bona fide" within the meaning of Section 703(h). /24/ In fact, it is clear that discriminatory purpose in the adoption of a seniority system is not essential at all to the finding that the plan's application constitutes a violation of Title VII. A seniority system loses its exemption under Section 703(h), and thus violates Title VII, if it is either adopted or maintained for discriminatory purposes. Teamsters, 431 U.S. at 355-356; Pullman-Standard v. Swint, 456 U.S. 273, 289 (1982). /25/ Indeed, Section 703(h) does not define what is unlawful under Title VII in the first instance at all. It is Section 703(a), 42 U.S.C. 2000e-2(a), that affirmatively sets out those employment practices that are unlawful under Title VII. /26/ AT&T mistakenly relies (Br. in Opp. 7) on International Ass'n of Machinists v. NLRB, 362 U.S. 411 (1960), to support its contrary view. In International Machinists, the Court held that a claim of unfair labor practice based on the enforcement of a clause in a collective bargaining agreement was untimely under the National Labor Relations Act, 29 U.S.C. 160(b), because the exclusive ground for the clause's asserted illegality was an error in its execution, and challenges to the execution itself were no longer timely. The Court explained that "the use of the earlier unfair labor practice * * * serves to cloak with illegality that which was otherwise lawful. And where a complaint based upon the earlier event is time-barred, to permit the event itself to be so used in effect results in reviving a legally defunct unfair labor practice" (362 U.S. at 417). In this case, however, petitioners have not sought "to cloak with illegality that which was otherwise lawful." Petitioners instead were simply meeting a possible defense to their discrimination claim based on Section 703(h), and -- as we understand it -- contend only that "earlier events may be utilized to shed light on the true character of matters occurring within the limitations period" (362 U.S. at 416). Hence, unlike International Machinists, the contractual provision being challenged in this case is (like the pay structure at issue in Bazemore) not "wholly benign"; it favors male testers over female testers. The evidence of AT&T's motive in adopting and maintaining the seniority plan is therefore simply evidence deemed necessary by Congress, under Section 703(h), to prove "the true character" of the plan's current operation (362 U.S. at 416-417 (footnote omitted)). /27/ "While these statements were made before Section 703(h) was added to Title VII, they are authoritative indicators of that section's purpose" (Teamsters, 431 U.S. at 352). See ibid., quoting 110 Cong. Rec. 12723 (1964) (remarks of Sen. Humphrey) (brackets in original) ("(T)he addition of Section 703(h) 'merely clarifies (Title VII's) present intent and effect.'").