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 Petition for a 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 This brief is submitted in response to the Court's invitation to the Solicitor General to express the views of the United States. TABLE OF CONTENTS Question Presented Statement Discussion Conclusion QUESTION PRESENTED Whether in the case of an employment discrimination charge alleging that the complainant was demoted pursuant to a facially-neutral, but intentionally discriminatory seniority policy, the statute of limitations of 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 employer first adopts the seniority policy, when the employee first becomes subject to the policy, or when the employee is first notified of the demotion. 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 "tester" 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). /2/ The new seniority plan was known as the "Tester Concept" (Pet. App. 4a). 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 peitioners (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). They also allege that application of this provision has had the effect of favoring male testers over female testers (id. Paragraph 18; see also id. Paragraph 6(f)). 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 his 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 because none had timely filed her charge with the EEOC (id. at 32a-33a n.6). 3. The 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 far 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/ DISCUSSION Like petitioners, we believe that the decision of the court of appeals is incorrect, conflicts with decisions of other courts of appeals, and presents an important question of federal employment discrimination law. We accordingly urge the Court to grant the petition for a writ of certiorari. 1. Section 706(e) of Title VII provides that where, as in this case, 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/ Hence, "(d)etermining the timeliness of (petitioners') EEOC complaint, and this ensuing lawsuit, requires us to identify precisely the 'unlawful employment practice' of which (they) complain()." Delaware State College v. Ricks, 449 U.S. 250, 257 (1980). "(T)he critical question is whether any present violation exists." United Air Lines, Inc. v. Evans, 431 U.S. 553, 558 (1977) (emphasis omitted). The gravamen of petitioners' complaint is that respondent AT&T violated Title VII by demoting them pursuant to a seniority policy that, while facially neutral, intentionally discriminates against them on the basis of their sex and, hence, falls outside the protective ambit of Section 703(h). /11/ Hence, if, as respondent AT&T contends, the unlawful practice "occurred" 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 clearly be time-barred because petitioners did not file their charges within 300 days of either of those events. If, on the other hand, the unlawful practice occurred on the date of petitioners' demotion, their filings with the EEOC would be timely. We agree with petitioners that their charges were timely filed because the date of their demotions was the date on which the "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 paycheck, "is a wrong actionable under Title VII." Bazemore v. Friday, 478 U.S. 385, 396 (1986) (discriminatory salary structure. /12/ In our view it is no bar to the bringing of a challenge confined to the current application of an allegedly discriminatory seniority policy that its 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. Contrary to the court of appeals' decision, neither this Court's decision in United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977), nor its ruling in Delaware State College v. Ricks, 449 U.S. 250 (1980), compels a different result. /13/ In both of those cases, the Court held that employment practices that merely perpetuate the consequences of prior discrimination are not themselves actionable wrongs under Title VII and, hence, the applicable limitations period begins to run on the date of the prior 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 was not restarted when the employer subsequently refused the employee's request to restore seniority rights she would have accrued had she remained employed instead of being 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). 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, present application of AT&T's intentionally discriminatory seniority system, and thus were themselves "unlawful employment practices" capable of triggering the Section 706(e) limitations period. Evans differs from this case in that the plaintiff there did not allege that her employer's seniority system was itself discriminatory, but instead urged as the source of the wrong the earlier discriminatory discharge (431 U.S. at 560; see Bazemore v. Friday, 478 U.S. at 396 n.6). And, while in Ricks the employer was, in a manner of speaking, applying its prior tenure decision in subsequently discharging the employer, the latter action was, unlike the demotion in this case, the "inevitable() consequence" of the prior decision (449 U.S. at 257-258). Hence, the announcement of the tenure denial in Ricks 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) (footnote omitted) (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"). /14/ By contrast, AT&T's announcement of its new seniority policy in this case did "not abundantly forewarn()" petitioners (449 U.S. at 262 n.16). It did not notify petitioners that they would in fact be demoted based on that policy at some future date certain. It merely created the theoretical possibility of some undefined future adverse consequences. Nor is there any merit in either the court of appeals' (Pet. App. 8a) or respondent AT&T's suggestion (Br. in Opp. 5-7) that Section 706(e) should be applied more strictly where the challenge is to the lawfulness of a seniority system because seniority systems are accorded special status in Title VII. Section 706(e) nowhere provides that challenges to seniority systems are governed by a different limitations period than other types of discrimination claims. Moreover, Section 703(h), which is the only provision in Title VII that identifies seniority systems for special treatment, does not speak, explicitly or implicitly, to limitations issues (see 42 U.S.C. 2000e-2(h)). 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.). /15/ 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, at most, within 300 days of the plan's adoption. /16/ 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). /17/ 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. Indeed, Section 703(h) does not define what is unlawful under Title VII in the first instance at all. It simply provides that "(n)otwithstanding any other provision of (Title VII)," certain employment practices shall not be unlawful. /18/ In this case, therefore, Section 703(h) does not shift the focus of petitioners' discrimination claim away from its assertion that AT&T's current operation of the plan (in demoting petitioners pursuant to that plan) constitutes a present violation of Title VII. /19/ Finally, there is likewise no merit in respondent AT&T's implicit suggestion that its seniority policy should be separated into two distinct parts in considering the timeliness of a Title VII claim: (1) a rule that the seniority of testers will be decided by service as a tester, not plant-wide service; and (2) a rule that employees will be entitled to certain benefits and the avoidance of certain burdens according to their seniority. AT&T argues, in effect, that petitioners cannot rely on the date of their demotions to support the timeliness of their charges because the only seniority rule applied by AT&T in demoting petitioners was the second rule, while petitioners' discrimination challenge is confined to the lawfulness of the first seniority rule, which was adopted and applied to petitioners at much earlier dates. There is no more merit to this argument, however, than there would have been to an analogous contention in Bazemore that each weekly paycheck is not an actionable wrong under Title VII because it is simply the product of the application of a second, 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 so-called second aspect of the employer's policy truly separable from the admittedly discriminatory portion of the policy, because in each case the second necessarily incorporates and applies the substance of the first. /20/ 2. We also agree with petitioners that there is a conflict in the circuits. As the First Circuit recently explained in the course of sharply criticizing the Seventh Circuit's decision in this case, "(m)ost circuit courts have * * * rejected (its) analysis. They have reasoned, instead, 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). /21/ There is a conflict in the circuits warranting this Court's review, moreover, even if the Seventh Circuit's analysis can, as AT&T suggests (Br. in Opp. 1), somehow be confined "to unique issues presented by seniority systems." /22/ As petitioners explain (Pet. 16-20), the Second, Fourth, and Sixth Circuits have, unlike the Seventh Circuit, each treated the application of facially neutral but discriminatory seniority plans as providing the basis for continuing violations of federal employment discrimination law. See Cook v. Pan American World Airways, Inc., 771 F.2d 635, 646 (2d Cir. 1985) ("(T)he alleged discriminatory violations in the present case must be classified as continuous ones, giving rise to claims accruing in favor of each plaintiff on each occasion when the merged seniority list was applied to him."), cert. denied, 474 U.S. 1109 (1986); Patterson v. American Tobacco Co., 634 F.2d 744, 751 (4th Cir. 1980) ("(C)ontinuing" violations of Title VII caused by the application of an employer's discriminatory seniority system were "not barred by failure to have challenged at its inception the policy which gave continuing rise to them."), vacated on other grounds, 456 U.S. 63 (1982); Morelock v. NCR Corp., 586 F.2d 1096, 1103 (6th Cir. 1978) ("(T)he adoption of a seniority system * * * constitutes a continuing violation * * * as long as that system is maintained by the employer. An employee's cause of action for an alleged act of * * * discrimination caused by a discriminatory seniority system, does not accrue until his employment opportunities are adversely affected by the application to him of the provisions of that seniority system."), cert. denied, 441 U.S. 906 (1979). /23/ Contrary to respondent AT&T's submission (Br. in Opp. 8-9), the force of this circuit conflict is not dissipated by any meaningful distinction that can be made between the rulings of the Second, Fourth, and Sixth Circuits and the Seventh Circuit's decision in this case. To be sure, both Cook and Morelock involved allegations of age discrimination under the Age Discrimination in Employment Act (ADEA) and not, as in this case, gender discrimination under Title VII, but as this Court has repeatedly noted, "the filing provisions of the ADEA and Title VII (are) 'virtually in haec verba,' the former having been patterned after the latter." EEOC v. Commercial Office Products Co., slip op. 15 (quoting Oscar Mayer & Co. v. Evans, 441 U.S. 750, 755 (1979)). /24/ Hence, the circuit courts' conflicting construction of these provisions in Title VII and the ADEA present a circuit conflict warranting further review. Nor is there any persuasive reason to expect that any of these other circuits might reconsider their prior rulings in light of intervening developments. Contrary to AT&T's suggestion (Br. in Opp. 8), the Fourth Circuit's ruling in American Tobacco that the application of a discriminatory seniority system constituted a "continuing" violation of Title VII was not in any manner "premised" or otherwise dependent on its other ruling in that case that "Congress intended the immunity accorded seniority systems by Section 703(h) to run only to those systems in existence at the time of Title VII's effective date, and of course to routine post-Act applications of such systems" (634 F.2d at 749). Indeed, the two rulings were made with respect to two different seniority systems -- a pre-Act seniority system and a post-Act system of lines of progession. The Fourth Circuit first concluded that Section 703(h) did apply to the pre-Act seniority system, and remanded to the district court for further fact-finding (see 634 F.2d at 747, 750). The court of appeals then concluded that the employees' challenge to that system was not time-barred because the system constituted a "continuing violation" (id. at 751). It is that holding that conflicts with the Seventh Circuit's ruling here. The Fourth Circuit's conclusion that Section 703(h) did not apply to seniority systems adopted after the effective date of the Act applied only to the post-Act lines of progression also at issue in the case (see 634 F.2d at 748-750); American Tobacco Co. v. Patterson, 456 U.S. 63, 67-68 & n.2 (1982). This Court reversed only the latter holding (see id. at 68-77). Hence, this Court's subsequent reversal of the Fourth Circuit's construction of Section 703(h) (see 456 U.S. at 68-77) provides no basis for speculating that the Fourth Circuit might now reconsider its ruling on the timeliness issue. As discussed above, moreover, we find unpersuasive AT&T's argument that the meaning of Section 703(h) bears on the timeliness issue and expect that the Fourth Circuit would be equally unreceptive to that contention. We also find unconvincing AT&T's contention (Br. in Opp. 9) that the Sixth Circuit might reconsider its decision in Morelock in light of this Court's subsequent decision in Ricks. As described above, Ricks, is distinguishable from the present case because while the denial of tenure provided the employee in Ricks with formal notification of the "inevitable" termination of his employment, neither the adoption of the seniority plan nor petitioners' becoming subject to it provided them with formal notification of their subsequent demotion. There is, for that reason, no grounds for supposing that Ricks would (or should) persuade the Sixth Circuit to reconsider its ruling in Morelock. /25/ We do not share respondent AT&T's view that the inconsistent statements in both Cook and Morelock should be given no significance by this Court on the ground that they are mere "dictum" (Br. in Opp. 9). Both courts squarely addressed the same basic legal issue presented in this case and expressly described their conclusions of law as holdings (see 771 F.2d at 646; 586 F.2d at 1103). That the Seventh Circuit's rationale in this case would have led the Second Circuit in Cook to the same result it actually reached does not alter the fact that it rested its judgment on starkly conflicting reasoning. Nor does the fact that the Sixth Circuit in Morelock ultimately upheld the employer's claim that his seniority policy was lawful convert that court's flat rejection of the employer's threshold timeliness defense into mere dictum. As the employer argued in that case, had the court accepted that threshold procedural defense, it would have "eliminate(d) the necessity for th(e) Court to reach the merits of th(e) appeal" (586 F.2d at 1102). 3. Finally, review is warranted because the question presented by the petition is important. Congress "ordained that its policy of outlawing * * * discrimination should have the 'highest priority'" (Franks v. Bowman Transportation Co., 424 U.S. at 763 (citations omitted), quoting Alexander v. Gardner-Denver Co., 415 U.S. 36, 47 (1974)) and, as this Court has repeatedly recognized, "(s)eniority rights are of 'overriding importance' in collective bargaining" (American Tobacco Co. v. Patterson, 456 U.S. at 76 (quoting Humphrey v. Moore, 375 U.S. 335, 346 (1964)); see Franks v. Bowman Transportation Co., 424 U.S. at 766 (citation omitted) ("Seniority systems and the entitlements conferred by credits earned thereunder are of vast and increasing importance in the economic employment system of this Nation.")). This case concerns the intersection of these two important rights of an employee and the relationship of Sections 703(h) and 706(e) of Title VII. The decision of the court of appeals warrants review because it threatens these important employee rights and the employment relationship. As described by Judge Cudahy in dissent in this case (Pet. App. 10a), employees would under this rule be required to bring suit at a time when "they had not really been injured and might never be injured." The likely upshot of the Seventh Circuit's rule will therefore be, on the one hand, the proliferation within that jurisdiction of unnecessary and premature lawsuits against employers to the detriment of the employer/employee relationship and, on the other hand, the dismissal of any suit by an employee who, like each of the petitioners in this case, awaits the development of a concrete injury prior to taking the drastic action of suing his employer. /26/ We cannot estimate what proportion of the millions of employees who are subject to seniority systems will be affected by the court of appeals' ruling either within the jurisdiction of the Seventh Circuit, or in other circuits, should any of them adopt a similar construction of Title VII. The EEOC has considered the date of the application of the allegedly discriminatory seniority system as the most logical date for the running of Section 706(e)'s limitations period, and has not heretofore compiled data regarding either the date on which a discriminatory seniority plan was first adopted or the date on which the complaining employee first became subject to the plan now being challenged. /27/ Although we have not undertaken an empirical study, we expect that the relatively low number of decisions raising this question in the seniority context under either Title VII or the ADEA can be similarly explained. Unlike AT&T and the Seventh Circuit in this case, employers have most likely assumed that where, as in this case, the employee was claiming that the seniority system was itself discriminatory, the limitations period logically began to run on the date that they allegedly injured the employee through the application of their seniority systems. /28/ Until the court of appeals' ruling in this case, every court to reach the issue had adopted that very view. The defense will undoubtedly now be increasingly raised in the aftermath of the Seventh Circuit's ruling, but because of the existing circuit conflict there is no need to await further development of the issue in the lower courts. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. CHARLES FRIED Solicitor General WM. BRADFORD REYNOLDS Assistant Attorney General DONALD B. AYER Deputy Solicitor General RICHARD J. LAZARUS Assistant to the Solicitor General DAVID K. FLYNN LINDA F. THOME Attorneys CHARLES A. SHANOR General Counsel GWENDOLYN YOUNG REAMS Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel STEPHEN P. O'ROURKE Attorney Equal Employment Opportunity Commission SEPTEMBER 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 (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, 1983. 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 respondents (Pet. App. 34a-50a). /7/ AT&T argues that Title VII's 180-day limitation period applies rather than its 300-day limitations period, but the courts below 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 claims that the applicable limitations period in this case is 180 (not 300) days because, although there is a state fair employment practice agency with overlapping jurisdiction, respondents "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). We note, however, that to the extent that respondent AT&T's assertion 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 by the petition because petitioners Lorance and Bueschen filed their charges with the EEOC within 180 days after their demotions (see notes 3, 4, supra). /11/ 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 or merit system * * * provided that such difference are not the result of an intention to discriminate * * *."). /12/ Indeed, seniority systems and salary may merge 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). /13/ 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). They are not akin to 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" (slip op. 15). /14/ We assume that petitioners did not receive formal prior notification of their imminent demotion prior to the demotion itself. If they did, the limitations period might be deemed to have commenced at that earlier time. 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 an employee receives when he is first hired would also set the statute to run; it surely would not."). 703(h) to support its ruling. /16/ Indeed, as the court of appeals recognized (Pet. App. 8a), such a view leads 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. Seniority systems, however discriminatory in purpose and effect, would operate with impunity, immune from legal challenge, just 300 days after being put into effect, as would all of those enacted before the adoption of Title VII. This Court's decisions, however, reflect a quite different view of the import of Section 703(h). See, e.g., American Tobacco Co. v. Patterson, 456 U.S. 63, 69-70 (1982) ("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."); United Air Lines, Inc. v. 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 v. Bowman Transportation Co., 424 U.S. 747, 761 (1976) ("(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."). Nor can we suppose that Congress intended such a harsh result, particularly in Title VII where this Court has recognized "that the 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" (Delaware State College v. Ricks, 449 U.S. at 262 n.16) and "the difficulty of fixing an adoption date" (American Tobacco Co. v. Patterson, 456 U.S. at 76 n.16). /17/ 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). /18/ Indeed, Section 703(h) does not even require an employee to show that a seniority system was adopted with discriminatory intent. It is well settled that a seniority system loses its exemption under Section 703(h) if it is either adopted or maintained for discriminatory reasons. International Brotherhood of Teamsters v. United States, 431 U.S. at 355-356; Pullman-Standard v. Swint, 456 U.S. at 289. /19/ While proof of AT&T's discriminatory intent at the time its seniority plan was adopted or maintained is necessary in order to overcome the Section 703(h) defense, it is not alone sufficient to establish petitioners' claim that the seniority plan amounts to a present violation of Title VII. Cf. Bazemore v. Friday, 478 U.S. at 396-397 n.6, 402; Hazelwood School District v. United States, 433 U.S. 299, 309-310 & n.15 (1977). For this reason, AT&T's reliance (Br. in Opp. 7) on International Ass'n of Machinists v. NLRB, 362 U.S. 411 (1960) is misplaced. 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 that 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 overcoming a possible defense to their claim based on Section 703(h), and -- as we understand them -- 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, in this case, unlike International Machinists, the contractual provision being challenged is not "wholly benign" and the evidence of AT&T's motive in adopting and maintaining the seniority plan is simply evidence deemed necessary by Congress to prove "the true character" of the plan's current operation (id. at 416-417 (footnote omitted)). /20/ In contrast, the seniority policy at issue in Evans was wholly benign and distinct from the employer's prior discriminatory discharge of the employee. /21/ See, e.g., Furr v. AT&T Technologies, Inc., 824 F.2d 1537, 1543 (10th Cir. 1987) (systematic company policy restricting promotions; Age Discrimination in Employment Act (ADEA)); Abrams v. Baylor College of Medicine, 805 F.2d 528, 532-533 (5th Cir. 1986) (policy restricting assignments; Title VII); 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); Crosland v. Charlotte Eye, Ear & Throat Hospital, 686 F.2d 208, 211-212 (4th Cir. 1982) (policy restricting pension plan benefits; Title VII); 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 with respect to 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); Satz v. ITT Financial 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). /22/ A subsequent Seventh Circuit opinion authored by Judge Cudahy, who dissented in that court's decision below (see Pet. App. 10a-11a), also suggests that possibility. In Torres v. Wisconsin Dep't of Health & Social Services, 838 F.2d 944, 948 n.3 (1988), a Seventh Circuit panel rejected an employer's claim that the plaintiffs' complaints were not timely filed with the EEOC, where plaintiff-employees were challenging a facially discriminatory employer plan adopted in 1980 that restricted certain jobs to women, but did not file charges "until after their demotions, pursuant to the full implementation of the Plan, in September 1982." The court ruled "that the relevant discriminatory act was the Plan's implementation and the plaintiffs' resulting demotions in 1982. The plaintiffs' status * * * was not directly affected by the mere adoption of the Plan in 1980, nor were their future demotions assured at that time" (ibid.). The court preceded a cite to its prior decision in this case with a "But, cf." signal and intimated that its holding there was confined to a "'narrow' set of cases involving 'facially-neutral but discriminatory seniority system(s)'" (ibid., quoting 827 F.2d at 167 (Pet. App. 9a)). The Seventh Circuit has since vacated its opinion in Torres and agreed to hear the case en banc. See 838 F.2d at 957-958. There is no indication, however, that the full court agreed to rehear the case in order to address the timeliness issue. /23/ The Seventh Circuit in this case implicitly acknowledged that its ruling conflicted with the Fourth Circuit's decision in American Tobacco Co., which it cited as supporting petitioners' contention "that the continued application of any intentionally discriminatory seniority system constitutes a continuing violation of Title VII" (Pet. App. 7a). /24/ The Second Circuit in Cook stressed (771 F.2d at 644) the common features shared by Section 703(h) of Title VII and the ADEA's analogous provision governing seniority systems (Section 4(f)(2)). See 29 U.S.C. 623(f)(2) ("It shall not be (an) unlawful (practice) to observe the terms of a bona fide seniority system * * * which is not a subterfuge to evade the purposes of th(e) (ADEA)."). /25/ Morelock, like this case and unlike Ricks, involved a challenge to the application of an allegedly discriminatory seniority system. /26/ As Judge Cudahy also explained (Pet. App. 10a), the majority's rule will not even ably serve the one objective it sought to promote -- prompt resolution of challenges to seniority systems -- because under the majority's rule (unlike AT&T's), future employees are "not barred by the statute of limitations and * * * can bring challenges to tester seniority in the future." /27/ For the reasons described by this Court in American Tobacco Co. v. Patterson, fixing an adoption date is often a difficult task (456 U.S. at 76 n.16). /28/ For instance, as described by petitioners (Pet. 31-32 & n.18), in at least two cases previously before this Court, it seems that neither employer questioned the timeliness of Title VII charges challenging the lawfulness of seniority plans where the plaintiff-employee had first become subject to the plan long before the bringing of the lawsuit, which instead was filed following injury caused by the plan's operation. See California Brewers Ass'n v. Bryant, 444 U.S. 598, 601-602, 610-611 (1980); Nashville Gas Co. v. Satty, 434 U.S. 136, 138-143 (1977).