Case Information
*2 Before WOLLMAN, HEANEY, and BOWMAN, Circuit Judges.
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HEANEY, Circuit Judge.
This appeal reaches us after the district court granted the defendant’s motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). The plaintiffs in this consolidated action are: Noreen Maki, Lucille J. Johnston, and Dolly Hable who assert claims under Title VII, the Equal Pay Act (EPA), and the Employment Retirement Income Security Act (ERISA); and Ann M. Stenstrom who asserts claims under the Minnesota Human Rights Act (MHRA), [1] the EPA, and ERISA. The defendant is ALLETE, Inc., formerly known as Minnesota Power & Light Company. For the reasons listed below, we reverse and remand for proceedings consistent with this opinion.
BACKGROUND
The plaintiffs worked for the defendant in the 1950s and 1960s until they were terminated pursuant to company policies which first prohibited married women, and then pregnant married women, from working at the company. These policies were abrogated by the defendant after the plaintiffs were terminated, but prior to the passage of Title VII and the Pregnancy Discrimination Act (PDA), which prohibit such policies. The plaintiffs were rehired by the defendant in the 1980s. They have all since retired and are collecting pension benefits from the defendant.
*3 The defendant’s pension plan provides benefits based on years of continuous employment. Since the passage of Title VII, the defendant has amended its pension plan to include non-continuous prior service when calculating pension benefits at least twice. In 1976, the defendant amended the plan to “bridge” any prior employment if the length of the bridge was shorter than the length of the prior employment. In 1987, the plan was again amended to bridge prior employment if the break in employment was less than five years. In 1998, the most recent version of the plan was adopted: It includes both the 1976 and 1987 bridging provisions. Since 1998, various female employees of the company have requested that the defendant amend its bridging provision to include women terminated due to the defendant’s past discriminatory marriage and pregnancy policies. The defendant has repeatedly refused to do so, ultimately stating in April 2002, that after a “careful review” by its Law Department, “no other changes will be made” to its bridging provisions. (Stenstrom Compl. at ¶ 16, J.A. at 21.)
The plaintiffs’ prior service does not qualify under the current bridging provisions. As a result, the plaintiffs prior employment has not been included in calculating their pension benefits. In their complaints, the plaintiffs allege that the defendant intentionally structured the bridging provisions to exclude women who were terminated in the 1960s under the defendant’s marriage and pregnancy policies, and that such exclusion is discriminatory on the basis of sex, marital status, and pregnancy. The district court granted the defendant’s motion to dismiss as to all of the plaintiffs’ claims.
ANALYSIS
We review a district court’s grant of a motion to dismiss de novo, accepting all
the allegations in the complaint as true and drawing all reasonable inferences in favor
of the nonmoving party. Young v. City of St. Charles,
The district court granted the defendant’s motion to dismiss on two theories.
First, the district court held that because the plaintiffs were terminated in the 1960s, prior to the passage of Title VII, their complaints must be dismissed because Title VII cannot be applied retroactively. Second, the district court held that the statute of limitations on discriminatory acts that took place in the 1960s had long since expired. The defendant’s brief in this appeal tracks this same analysis. We read the plaintiffs’ complaints quite differently, however. This case is not about discriminatory acts which took place when the plaintiffs were terminated in the 1960s, prior to the passage of Title VII or the PDA. Rather, it is about alleged discriminatory acts which took place in 1976, 1987, and 1998 when the defendant adopted allegedly discriminatory bridging policies to its pension plan and affected the plaintiffs when they retired in 1999, 2001, 2002, and 2003, respectively. Such a reading of the complaint warrants a different analysis in this case.
The district court granted the defendant’s motion to dismiss as to Stenstrom and Hable based on the theory that Title VII cannot be applied retroactively. That is, because Stenstrom and Hable were first terminated prior to the passage of Title VII, the plaintiffs’ claims violate the ex post facto laws. Their claims, however, do not allege a violation of Title VII at the time they were automatically terminated in the 1960s. Instead, the plaintiffs allege that the bridging provisions in the defendant’s pension plan, adopted long after Title VII was passed, discriminate against them in violation of the statute. See, e.g., (Maki Compl. at ¶ 8, J.A. at 11.) (“Defendants have each discriminated and continue to discriminate against female employees because of their sex by limiting or denying eligibility and benefits under the [Retirement Plan].”); (Stenstrom Compl. at ¶ 14, J.A. at 21.) (“As Defendant well knew and *5 believed, the said bridging provisions would exclude the women who had been terminated due to its anti-marriage and anti-childbearing policies.”) Therefore, the plaintiffs are not seeking a retroactive application of Title VII and their claims can not properly be dismissed on this ground.
The district court also held that the plaintiffs’ claims are time-barred. Two
lines of cases have developed in which plaintiffs allege discrimination involving
actions which began before, and continued after, Title VII was passed. The district
court and the defendant rely on United Air Lines, Inc. v. Evans,
In Evans, a female flight attendant for United Air Lines was automatically
terminated pursuant to company policy in 1968 when she married. Subsequently, in
a different case brought by a different party, it was determined that United’s marriage
policy violated Title VII. Evans was rehired by United as a new employee in 1972
and shortly thereafter brought an action against the airline alleging that United’s
refusal to credit Evans with her prior service for determining seniority violated Title
VII. The district court dismissed the case as time-barred and the Supreme Court
affirmed that result. The Court found that the seniority system did have a continuing
impact on Evans’s pay and benefits, but stated that “the emphasis should not be
placed on mere continuity; the critical question is whether any present
violation
exists.” Evans,
*6 In the case before us, the district court applied Evans and dismissed the complaints as time-barred stating that, “[l]ike United’s system, ALLETE’s current system is gender neutral.” (Appellant’s Addendum at 8.) We disagree. Unlike the plaintiff in Evans, the plaintiffs in this case have alleged that the pension plan is discriminatory and results in a present violation. As noted above, the absence of such an allegation was central to the Court’s analysis in Evans. Therefore, we find Evans to be inapposite to this case.
In Bazemore, a case on which the plaintiffs rely, a government agricultural
agency merged its segregated branches in response to the passage of Title VII. The
integration, however, did not eliminate the salary disparities between white and black
employees. The district court and the court of appeals held that there was no
violation of Title VII because the salary disparities were the result of policies that
existed prior to the passage of Title VII. The Supreme Court reversed, holding that
“[e]ach week’s paycheck that delivers less to a black than to a similarly situated white
is a wrong actionable under Title VII, regardless of the fact that this pattern was
begun prior to the effective date of Title VII.” Bazemore,
The plaintiffs in this case rely heavily on Bazemore and the Court’s language
that each paycheck consists of a new discriminatory act. We, however, do not find
Bazemore dispositive. First, the discriminatory pay structure in Bazemore was
adopted prior to Title VII and the central issue in that case was whether the pay
structure could be found to violate the Act even though it was put into place before
Title VII was passed. In the present case, the allegedly discriminatory acts – the
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adoption of discriminatory bridging provisions – occurred long after Title VII was
passed. Second, the Bazemore case involved paychecks, which are different from
pension checks. Paychecks are payments for a prior term of work. For example, an
employee works for a week, then the salary structure is applied and the paycheck is
issued. Pension checks, however, are based on a pension structure that is applied
only once, when the employee retires, and the pension checks merely flow from that
single application. See Florida v. Long,
In our view, there are arguably four potential points when the statute of
limitations could have begun. The first is in 1976 and 1987, when the allegedly
discriminatory bridging provisions were adopted by the defendant. Such a starting
point, however, would ignore the fact that the plaintiffs’ rights to their pension
benefits had not yet vested, and the defendant could have amended the bridging
provision again before the plaintiffs retired. If the plaintiffs would have brought suit
in 1976 or 1987 it would, no doubt, have been dismissed as not ripe as the plaintiffs
would have not yet suffered any damages. See, e.g., Auerbach v. Bd. of Educ., 136
F.3d 104, 109 (2nd Cir. 1998) (dismissing as unripe claims that provision in
retirement plan was discriminatory because employees had yet to retire); Stewart v.
M.M. & P. Pension Plan,
CONCLUSION
We hold that the district court misread the plaintiffs’ complaints and dismissed this case prematurely. Rather than alleging that the defendant discriminated against them in the 1960s when they were originally terminated, we find that the plaintiffs’ complaints allege that the bridging provisions in the defendant’s pension plan were adopted in a discriminatory manner resulting in a present violation of Title VII. We further hold that the statute of limitations period began when the allegedly discriminatory pension plan was applied to the plaintiffs; that is, when each of them retired and became eligible for benefits. As the district court is in the best position to determine the actual date the statute of limitations began running for each claim brought by each individual plaintiff, we leave the application of our holding to the district court, along with any further proceedings consistent with this opinion.
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Notes
[1] Stenstrom had not yet received a right to sue letter from the EEOC when she brought this action so her Title VII claims were brought under the MHRA.