An employer can force a worker to retire before age 65 under a pension plan that was in operation before Congress enacted the Age Discrimination in Employment Act of 1967, the Supreme Court ruled yesterday, 7 to 2.
The Labor Department estimates that more than 11 million persons are members of pension plans that require retirement before age 65. The 1967 law forbids discrimination against persons in the 40-to-65 age range.
In the opinion for the court, Chief Justice Warren E. Burger wrote that "we find nothing to indicate Congress intended wholesale invalidation of retirement plans instituted in good faith before (the law's) passage, or intended to require employers to bear the burden of showing a business or economic purpose to justify bona fide pre-existing plans . . ."
By an overwhelming vote of 359 to 4, the House has passed a bill that would nullify the ruling by prohibiting force retirement before age 70. The Senate has passed a similar bill, 88 to 7.
Rep. Claude Pepper (D-Fla.), chief sponsor of the House bill, urged the House and Senate to convene a conference early in January to reconcile differences between by President Carter.
Pepper issued a statement contend- ing that the court ruling "runs counter to the congressional intent" and advised anyone compelled to retire under it to apply for reinstatement on the day the retirement takes effect.
"Since the retired person is surely qualified to perform his or her former job, such action could neutralize this unfortunate court interpretation, pending passage of my bill," Pepper said.
The court acted in a case involving a United Airlines retirement plan established in 1941. It required an employee who volunteered to join it to retire at age 60.
Harris S. McMann of Alexandria, who was a pilot when he went to work for United in 1944, joined the plan in 1964; he then held a management post. He signed an application for - that listed 60 as the normal retirement age.
McMann reached 60, in fine health, in 1973. The airline then retired him, just as it had retired everyone in the plan at 60. But he sued the company.
His complaint was that the 1967 law, even if enacted a quarter-century after United lauched the plan, barred his mandatory retirement. The Fourth U.S. Court Court of Appeals agreed, but was reversed yesterday.
The core issue was what COngress intended by exempting "bona fide" plans that aren't "a subterfuge to evade" the law's anti-discriminatory purposes.
No one disputed that the United plan was "bona fide" in the sense that it exists and pays benefits. But McMann, supported by the Labor Department, contended that the plan nonetheless as subterfuge.
The appellate court agreed, holding that a pre-65 retirement falls within the meaning of "subterfuge" unless an employer shows it has "some economic or business purpose other than arbitrary age discrimination."
Chief Justic Burger wrote that in the context of the 1967 law, "subterfuge" must be given its ordinary meaning and we must assume Congress intended it in that sense. So read, a plan established in 1941 to evade a statutory requirment not enacted until 1968 attributes, at the very least, a remarkable prescience to the employer."
The Chief Justic said the legislative history is devoid "of any indication of congressional intent to undermine the countless bona fide retirement plans existing in 1967 when the act was passed."
However, for the dissenters, William J. Brennan Jr. and Thurgood Marshall. Marshall wrote that the same history shows that Congress deleted from the original bill a specific authorization for involuntary retirements. In addition, he said, neither the House nor Senate committee reports on the bills they approved nor the floor managers or sponsors in floor debates suggested that the legislation permitted compulsory retirements.