Firefighters Local Union No. 1784 v. Stotts

Syllabus

SUPREME COURT OF THE UNITED STATES

467 U.S. 561

Firefighters Local Union No. 1784 v. Stotts

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

No. 82-206 Argued: December 6, 1984 --- Decided: June 12, 1984 [*]
Respondent Stotts, a black member of petitioner Memphis, Tenn., Fire Department, filed a class action in Federal District Court charging that the Department and certain city officials were engaged in a pattern or practice of making hiring and promotion decisions on the basis of race in violation of, inter alia, Title VII of the Civil Rights Act of 1964. This action was consolidated with an action filed by respondent Jones, also a black member of the Department, who claimed that he had been denied a promotion because of his race. Thereafter, a consent decree was entered with the stated purpose of remedying the Department's hiring and promotion practices with respect to blacks. Subsequently, when the city announced that projected budget deficits required a reduction of city employees, the District Court entered an order preliminarily enjoining the Department from following its seniority system in determining who would be laid off as a result of the budgetary shortfall, since the proposed layoffs would have a racially discriminatory effect and the seniority system was not a bona fide one. A modified layoff plan, aimed at protecting black employees so as to comply with the court's order, was then presented and approved, and layoffs pursuant to this plan were carried out. This resulted in white employees with more seniority than black employees being laid off when the otherwise applicable seniority system would have called for the layoff of black employees with less seniority. The Court of Appeals affirmed, holding that, although the District Court was wrong in holding that the seniority system was not bona fide, it had acted properly in modifying the consent decree.

Held:

1. These cases are not rendered moot by the facts that the preliminary injunction purportedly applied only to 1981 layoffs, that all white employees laid off as a result of the injunction were restored to duty only one month after their layoff, and that others who were demoted have been offered back their old positions. First, the injunction is still in force, and, unless set aside, must be complied with in connection with any [p562] future layoffs. Second, even if the injunction applied only to the 1981 layoffs, the predicate for it was the ruling that the consent decree must be modified to provide that the layoffs were not to reduce the percentage of black employees, and the lower courts' rulings that the seniority system must be disregarded for the purpose of achieving the mandated result remain undisturbed. Accordingly, the inquiry is not merely whether the injunction is still in effect, but whether the mandated modification of the consent decree continues to have an impact on the parties such that the cases remain alive. Respondents have failed to convince this Court that the modification and the pro tanto invalidation of the seniority system are of no real concern to the city because it will never again contemplate layoffs that, if carried out in accordance with the seniority system, would violate the modified decree. Finally, the judgment below will have a continuing effect on management of the Fire Department with respect to making whole the white employees who were laid off and thereby lost a month's pay and seniority, or who were demoted and thereby may have backpay claims. Unless that judgment is reversed, the layoffs and demotions were in accordance with the law. The fact that not much money and seniority are involved does not determine mootness. Pp. 568-572.

2. The District Court's preliminary injunction cannot be justified either as an effort to enforce the consent decree or as a valid modification thereof. Pp. 572-583.

(a) The injunction does not merely enforce the agreement of the parties as reflected in the consent decree. The scope of a consent decree must be discerned within its four corners. Here, the consent decree makes no mention of layoffs or demotions, nor is there any suggestion of an intention to depart from the existing seniority system or from the Department's arrangement with the union. It therefore cannot be said that the decree's express terms contemplated that such an injunction would be entered. Nor is the injunction proper as carrying out the stated purpose of the decree. The remedy outlined in the decree did not include the displacement of white employees with seniority over blacks, and cannot reasonably be construed to exceed the bounds of remedies that are appropriate under Title VII. Title VII protects bona fide seniority systems, and it is inappropriate to deny an innocent employee the benefits of his seniority in order to provide a remedy in a pattern-or-practice suit such as this. Moreover, since neither the union nor the white employees were parties to the suit when the consent decree was entered, the entry of such decree cannot be said to indicate any agreement by them to any of its terms. Pp. 573-576.

(b) The theory that the strong policy favoring voluntary settlement of Title VII actions permits consent decrees that encroach on seniority [p563] systems does not justify the preliminary injunction as a legitimate modification of the consent decree. That theory has no application when there is no "settlement" with respect to the disputed issue, such as here, where the consent decree neither awarded competitive seniority to the minority employees nor purported to depart from the existing seniority system. Nor can the injunction be so justified on the basis that, if the allegations in the complaint had been proved, the District Court could have entered an order overriding the seniority provisions. This approach overstates a trial court's authority to disregard a seniority system in fashioning a remedy after a plaintiff has proved that an employer has followed a pattern or practice having a discriminatory effect on black employees. Here, there was no finding that any of the blacks protected from layoff had been a victim of discrimination nor any award of competitive seniority to any of them. The Court of Appeals' holding that the District Court's order modifying the consent decree was permissible as a valid Title VII remedial order ignores not only the ruling in Teamsters v. United States, 431 U.S. 324, that a court can award competitive seniority only when the beneficiary of the award has actually been a victim of illegal discrimination, but also the policy behind § 706(g) of Title VII of providing make-whole relief only to such victims. And there is no merit to the argument that the District Court ordered no more than that which the city could have done by way of adopting an affirmative action program, since the city took no such action, and the modification of the decree was imposed over its objection. Pp. 576-583.

679 F.2d 541, reversed.

WHITE, J., delivered the opinion of the Court, in which BURGER, C.J., and POWELL, REHNQUIST, and O'CONNOR, JJ., joined. O'CONNOR, J., filed a concurring opinion, post, p. 583. STEVENS, J., filed an opinion concurring in the judgment, post, p. 590. BLACKMUN, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 593. [p564]



467 U.S. 561

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

No. 82-206 Argued: December 6, 1984 --- Decided: June 12, 1984 [*]
JUSTICE WHITE delivered the opinion of the Court.

Petitioners challenge the Court of Appeals' approval of an order enjoining the City of Memphis from following its seniority system in determining who must be laid off as a result of a budgetary shortfall. Respondents contend that the injunction was necessary to effectuate the terms of a Title VII consent decree in which the City agreed to undertake certain obligations in order to remedy past hiring and promotional [p565] practices. Because we conclude that the order cannot be justified, either as an effort to enforce the consent decree or as a valid modification, we reverse.

I

In 1977, respondent Carl Stotts, a black holding the position of firefighting captain in the Memphis, Tenn., Fire Department, filed a class action complaint in the United States District Court for the Western District of Tennessee. The complaint charged that the Memphis Fire Department and certain city officials were engaged in a pattern or practice of making hiring and promotion decisions on the basis of race in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as well as 42 U.S.C. §§ 1981 and 1983. The District Court certified the case as a class action and consolidated it with an individual action subsequently filed by respondent Fred Jones, a black firefighting private in the Department, who claimed that he had been denied a promotion because of his race. Discovery proceeded, settlement negotiations ensued, and, in due course, a consent decree was approved and entered by the District Court on April 25, 1980.

The stated purpose of the decree was to remedy the hiring and promotion practices "of the . . . Department with respect to the employment of blacks." 679 F.2d 541, 575-576 (CA6 1982) (Appendix). Accordingly, the City agreed to promote 13 named individuals and to provide backpay to 81 employees of the Fire Department. It also adopted the long-term goal of increasing the proportion of minority representation in each job classification in the Fire Department to approximately the proportion of blacks in the labor force in Shelby County, Tenn. However, the City did not, by agreeing to the decree, admit "any violations of law, rule, or regulation with respect to the allegations" in the complaint. Id. at 574. The plaintiffs waived any further relief save to enforce the decree, ibid., and the District Court retained jurisdiction "for [p566] such further orders as may be necessary or appropriate to effectuate the purposes of this decree." Id. at 578.

The long-term hiring goal outlined in the decree paralleled the provisions of a 1974 consent decree, which settled a case brought against the City by the United States and which applied city-wide. Like the 1974 decree, the 1980 decree also established an interim hiring goal of filling on an annual basis 50 percent of the job vacancies in the Department with qualified black applicants. The 1980 decree contained an additional goal with respect to promotions: the Department was to attempt to ensure that 20 percent of the promotions in each job classification be given to blacks. Neither decree contained provisions for layoffs or reductions in rank, and neither awarded any competitive seniority. The 1974 decree did require that, for purposes of promotion, transfer, and assignment, seniority was to be computed "as the total seniority of that person with the City." Id. at 572.

In early May, 1981, the City announced that projected budget deficits required a reduction of nonessential personnel throughout the city government. Layoffs were to be based on the "last hired, first fired" rule under which city-wide seniority, determined by each employee's length of continuous service from the latest date of permanent employment, was the basis for deciding who would be laid off. If a senior employee's position were abolished or eliminated, the employee could "bump down" to a lower ranking position, rather than be laid off. As the Court of Appeals later noted, this layoff policy was adopted pursuant to the seniority system "mentioned in the 1974 Decree and . . . incorporated in the City's memorandum of understanding with the Union." 679 F.2d at 549.

On May 4, at respondents' request, the District Court entered a temporary restraining order forbidding the layoff of any black employee. The Union, which previously had not been a party to either of these cases, was permitted to intervene. At the preliminary injunction hearing, it appeared [p567] that 55 then-filled positions in the Department were to be eliminated and that 39 of these positions were filled with employees having "bumping" rights. It was estimated that 40 least-senior employees in the firefighting bureau of the Department [n1] would be laid off, and that, of these, 25 were white and 15 black. It also appeared that 56 percent of the employees hired in the Department since 1974 had been black, and that the percentage of black employees had increased from approximately 3 or 4 percent in 1974 to 11 1/2 percent in 1980.

On May 18, the District Court entered an order granting an injunction. The court found that the consent decree "did not contemplate the method to be used for reduction in rank or lay-off," and that the layoff policy was in accordance with the City's seniority system, and was not adopted with any intent to discriminate. Nonetheless, concluding that the proposed layoffs would have a racially discriminatory effect, and that the seniority system was not a bona fide one, the District Court ordered that the City

not apply the seniority policy proposed insofar as it will decrease the percentage of black lieutenants, drivers, inspectors and privates that are presently employed. . . .

On June 23, the District Court broadened its order to include three additional classifications. A modified layoff plan, aimed at protecting black employees in the seven classifications so as to comply with the court's order, was presented and approved. Layoffs pursuant to the modified plan were then carried out. In certain instances, to comply with the injunction, nonminority employees with more seniority than minority employees were laid off or demoted in rank. [n2] [p568]

On appeal, the Court of Appeals for the Sixth Circuit affirmed despite its conclusion that the District Court was wrong in holding that the City's seniority system was not bona fide. 679 F.2d at 551, n. 6. Characterizing the principal issue as

whether the district court erred in modifying the 1980 Decree to prevent minority employment from being affected disproportionately by unanticipated layoffs,

id. at 551, the Court of Appeals concluded that the District Court had acted properly. After determining that the decree was properly approved in the first instance, the court held that the modification was permissible under general contract principles because the City "contracted" to provide "a substantial increase in the number of minorities in supervisory positions," and the layoffs would breach that contract. Id. at 561. Alternatively, the court held that the District Court was authorized to modify the decree because new and unforeseen circumstances had created a hardship for one of the parties to the decree. Id. at 562-563. Finally, articulating three alternative rationales, the court rejected petitioners' argument that the modification was improper because it conflicted with the City's seniority system, which was immunized from Title VII attack under § 703(h) of that Act, 42 U.S.C. § 2000e-2(h).

The Fire Department (and city officials) and the Union filed separate petitions for certiorari. The two petitions were granted, 462 U.S. 1105 (1983), and the cases were consolidated for oral argument.

II

We deal first with the claim that these cases are moot. Respondents submit that the injunction entered in these cases was a preliminary injunction dealing only with the 1981 layoffs, that all white employees laid off as a result of the injunction were restored to duty only one month after their lay-off, [p569] and that those who were demoted have now been offered back their old positions. Assertedly, the injunction no longer has force or effect, and the cases are therefore moot. For several reasons, we find the submission untenable.

First, the injunction, on its face, ordered that "the defendants not apply the seniority policy proposed insofar as it will decrease the percentage of black" employees in specified classifications in the Department. The seniority policy was the policy adopted by the City and contained in the collective bargaining contract with the Union. The injunction was affirmed by the Court of Appeals, and has never been vacated. It would appear from its terms that the injunction is still in force, and that, unless set aside, must be complied with in connection with any future layoffs.

Second, even if the injunction itself applied only to the 1981 layoffs, the predicate for the so-called preliminary injunction was the ruling that the consent decree must be construed to mean, and, in any event, must be modified to provide, that layoffs were not to reduce the percentage of blacks employed in the Fire Department. Furthermore, both the District Court and the Court of Appeals, for different reasons, held that the seniority provisions of the City's collective bargaining contract must be disregarded for the purpose of achieving the mandated result. These rulings remain undisturbed, and we see no indication that respondents concede, in urging mootness, that these rulings were in error and should be reversed. To the contrary, they continue to defend them. Unless overturned, these rulings would require the City to obey the modified consent decree and to disregard its seniority agreement in making future layoffs.

Accordingly, the inquiry is not merely whether the injunction is still in effect, but whether the mandated modification of the consent decree continues to have an impact on the parties such that the case remains alive. [n3] We are quite unconvinced [p570] -- and it is the respondents' burden to convince us, County of Los Angeles v. Davis, 440 U.S. 625, 631 (1979) -- that the modification of the decree and the pro tanto invalidation of the seniority system is of no real concern to the City because it will never again contemplate layoffs that, if carried out in accordance with the seniority system would violate the modified decree. [n4] For this reason alone, the case is not moot. [p571]

Third, the judgment below will have a continuing effect on the City's management of the Department in still another way. Although the City has restored or offered to restore to their former positions all white employees who were laid off or demoted, those employees have not been made whole: those who were laid off have lost a month's pay, as well as seniority that has not been restored; and those employees who "bumped down" and accepted lesser positions will also have backpay claims if their demotions were unjustified. Unless the judgment of the Court of Appeals is reversed, however, the layoffs and demotions were in accordance with the law, and it would be quite unreasonable to expect the City to pay out money to which the employees had no legal right. Nor would it feel free to respond to the seniority claims of the three white employees who, as the City points out, lost competitive seniority in relation to all other individuals who were not laid off, including those minority employees who would have been laid off but for the injunction. [n5] On the other hand, if the Court of Appeals' judgment is reversed, the City would be free to take a wholly different position with respect to backpay and seniority.

Undoubtedly, not much money and seniority are involved, but the amount of money and seniority at stake does not determine mootness. As long as the parties have a concrete interest in the outcome of the litigation, the case is not moot notwithstanding the size of the dispute. Powell v. McCormack, 395 U.S. 486, 496-498 (1969). Moreover, a month's pay is not a negligible item for those affected by the injunction, and the loss of a month's competitive seniority may later [p572] determine who gets a promotion, who is entitled to bid for transfers, or who is first laid off if there is another reduction in force. These are matters of substance, it seems to us, and enough so to foreclose any claim of mootness. Cf. Franks v. Bowman Transportation Co., 424 U.S. 747, 756 (1976); Powell v. McCormack, supra, at 496-498; Bond v. Floyd, 385 U.S. 116, 128, n. 4 (1966).

In short, respondents successfully attacked the City's initial layoff plan and secured a judgment modifying the consent decree, ordering the City to disregard its seniority policy, and enjoining any layoffs that would reduce the percentage of blacks in the Department. Respondents continue to defend those rulings, which, as we have said, may determine the City's disposition of backpay claims and claims for restoration of competitive seniority that will affect respondents themselves. It is thus unrealistic to claim that there is no longer a dispute between the City and respondents with respect to the scope of the consent decree. Respondents cannot invoke the jurisdiction of a federal court to obtain a favorable modification of a consent decree and then insulate that ruling from appellate review by claiming that they are no longer interested in the matter, particularly when the modification continues to have adverse effects on the other parties to the action. [n6]

III

The issue at the heart of this case is whether the District Court exceeded its powers in entering an injunction requiring white employees to be laid off, when the otherwise applicable [p573] seniority system [n7] would have called for the layoff of black employees with less seniority. [n8] We are convinced that the Court of Appeals erred in resolving this issue and in affirming the District Court.

A

The Court of Appeals first held that the injunction did no more than enforce the terms of the consent decree. This specific performance approach rests on the notion that because [p574] the City was under a general obligation to use its best efforts to increase the proportion of blacks on the force, it breached the decree by attempting to effectuate a layoff policy reducing the percentage of black employees in the Department even though such a policy was mandated by the seniority system adopted by the City and the Union. A variation of this argument is that, since the decree permitted the District Court to enter any later orders that "may be necessary or appropriate to effectuate the purposes of this decree," 679 F.2d at 578 (Appendix), the City had agreed in advance to an injunction against layoffs that would reduce the proportion of black employees. We are convinced, however, that both of these are improvident constructions of the consent decree.

It is to be recalled that the

scope of a consent decree must be discerned within its four corners, and not by reference to what might satisfy the purposes of one of the parties to it

or by what "might have been written had the plaintiff established his factual claims and legal theories in litigation." United States v. Armour & Co., 402 U.S. 673, 681-682 (1971). Here, as the District Court recognized, there is no mention of layoffs or demotions within the four corners of the decree; nor is there any suggestion of an intention to depart from the existing seniority system or from the City's arrangements with the Union. We cannot believe that the parties to the decree thought that the City would simply disregard its arrangements with the Union and the seniority system it was then following. Had there been any intention to depart from the seniority plan in the event of layoffs or demotions, it is much more reasonable to believe that there would have been an express provision to that effect. This is particularly true since the decree stated that it was not "intended to conflict with any provisions" of the 1974 decree, 679 F.2d at 574 (Appendix), and since the latter decree expressly anticipated that the City would recognize seniority, id. at 572. It is thus not surprising that, when the City anticipated layoffs and demotions, it in the first instance [p575] faithfully followed its preexisting seniority system, plainly having no thought that it had already agreed to depart from it. It therefore cannot be said that the express terms of the decree contemplated that such an injunction would be entered.

The argument that the injunction was proper because it carried out the purposes of the decree is equally unconvincing. The decree announced that its purpose was "to remedy past hiring and promotion practices" of the Department, id. at 575-576, and to settle the dispute as to the "appropriate and valid procedures for hiring and promotion," id. at 574. The decree went on to provide the agreed-upon remedy, but, as we have indicated, that remedy did not include the displacement of white employees with seniority over blacks. Furthermore, it is reasonable to believe that the "remedy", which it was the purpose of the decree to provide, would not exceed the bounds of the remedies that are appropriate under Title VII, at least absent some express provision to that effect. As our cases have made clear, however, and as will be reemphasized below, Title VII protects bona fide seniority systems, and it is inappropriate to deny an innocent employee the benefits of his seniority in order to provide a remedy in a pattern-or-practice suit such as this. We thus have no doubt that the City considered its system to be valid, and that it had no intention of departing from it when it agreed to the 1980 decree.

Finally, it must be remembered that neither the Union nor the nonminority employees were parties to the suit when the 1980 decree was entered. Hence, the entry of that decree cannot be said to indicate any agreement by them to any of its terms. Absent the presence of the Union or the nonminority employees and an opportunity for them to agree or disagree with any provisions of the decree that might encroach on their rights, it seems highly unlikely that the City would purport to bargain away nonminority rights under the then-existing seniority system. We therefore conclude that the injunction does not merely enforce the agreement of the [p576] parties as reflected in the consent decree. If the injunction is to stand, it must be justified on some other basis.

B

The Court of Appeals held that, even if the injunction is not viewed as compelling compliance with the terms of the decree, it was still properly entered because the District Court had inherent authority to modify the decree when an economic crisis unexpectedly required layoffs which, if carried out as the City proposed, would undermine the affirmative action outlined in the decree and impose an undue hardship on respondents. This was true, the court held, even though the modification conflicted with a bona fide seniority system adopted by the City. The Court of Appeals erred in reaching this conclusion. [n9] [p577]

Section 703(h) of Title VII provides that it is not an unlawful employment practice to apply different standards of compensation, or 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 because of race. [n10] It is clear that the City had a seniority system, that its proposed layoff plan conformed to that system, and that, in making the settlement, the City had not agreed to award competitive seniority to any minority employee whom the City proposed to lay off. The District Court held that the City could not follow its seniority system in making its proposed layoffs, because its proposal was discriminatory in effect, and hence not a bona fide plan. Section 703(h), however, permits the routine application of a seniority system absent proof of an intention to discriminate. Teamsters v. United States, 431 U.S. 324, 352 (1977). Here, the District Court itself found that the layoff proposal was not adopted with the purpose or intent to discriminate on the basis of race. Nor had the City, in agreeing to the decree, admitted in any way that it had engaged in intentional discrimination. The Court of Appeals was therefore correct in disagreeing with the District Court's holding that the layoff plan was not a bona fide application of the seniority system, and it would appear that the City could not be faulted for following the seniority plan expressed in its agreement with [p578] the Union. The Court of Appeals nevertheless held that the injunction was proper even though it conflicted with the seniority system. This was error.

To support its position, the Court of Appeals first proposed a "settlement" theory, i.e., that the strong policy favoring voluntary settlement of Title VII actions permitted consent decrees that encroached on seniority systems. But, at this stage in its opinion, the Court of Appeals was supporting the proposition that, even if the injunction was not merely enforcing the agreed-upon terms of the decree, the District Court had the authority to modify the decree over the objection of one of the parties. The settlement theory, whatever its merits might otherwise be, has no application when there is no "settlement" with respect to the disputed issue. Here, the agreed-upon decree neither awarded competitive seniority to the minority employees nor purported in any way to depart from the seniority system.

A second ground advanced by the Court of Appeals in support of the conclusion that the injunction could be entered notwithstanding its conflict with the seniority system was the assertion that

[i]t would be incongruous to hold that the use of the preferred means of resolving an employment discrimination action decreases the power of a court to order relief which vindicates the policies embodied within Title VII and 42 U.S.C. §§ 1981 and 1983.

679 F.2d at 566. The court concluded that, if the allegations in the complaint had been proved, the District Court could have entered an order overriding the seniority provisions. Therefore, the court reasoned,

[t]he trial court had authority to override the Firefighters' Union seniority provisions to effectuate the purpose of the 1980 Decree.

Ibid.

The difficulty with this approach is that it overstates the authority of the trial court to disregard a seniority system in fashioning a remedy after a plaintiff has successfully proved that an employer has followed a pattern or practice having a discriminatory effect on black applicants or employees. If individual members of a plaintiff class demonstrate that they [p579] have been actual victims of the discriminatory practice, they may be awarded competitive seniority and given their rightful place on the seniority roster. This much is clear from Franks v. Bowman Transportation Co., 424 U.S. 747 (1976), and Teamsters v. United States, supra. Teamsters, however, also made clear that mere membership in the disadvantaged class is insufficient to warrant a seniority award; each individual must prove that the discriminatory practice had an impact on him. 431 U.S. at 367-371. Even when an individual shows that the discriminatory practice has had an impact on him, he is not automatically entitled to have a nonminority employee laid off to make room for him. He may have to wait until a vacancy occurs, [n11] and if there are nonminority employees on layoff, the court must balance the equities in determining who is entitled to the job. Teamsters, supra, at 371-376. See also Ford Motor Co. v. EEOC, 458 U.S. 219, 236-240 (1982). Here, there was no finding that any of the blacks protected from layoff had been a victim of discrimination, and no award of competitive seniority to any of them. Nor had the parties in formulating the consent decree purported to identify any specific employee entitled to particular relief other than those listed in the exhibits attached to the decree. It therefore seems to us that, in light of Teamsters, the Court of Appeals imposed on the parties as an adjunct of settlement something that could not have been ordered had the case gone to trial and the plaintiffs proved that a pattern or practice of discrimination existed.

Our ruling in Teamsters that a court can award competitive seniority only when the beneficiary of the award has actually been a victim of illegal discrimination is consistent with the policy behind § 706(g) of Title VII, which affects the remedies [p580] available in Title VII litigation. [n12] That policy, which is to provide make-whole relief only to those who have been actual victims of illegal discrimination, was repeatedly expressed by the sponsors of the Act during the congressional debates. Opponents of the legislation that became Title VII charged that, if the bill were enacted, employers could be ordered to hire and promote persons in order to achieve a racially balanced workforce even though those persons had not been victims of illegal discrimination. [n13] Responding to these charges, Senator Humphrey explained the limits on a court's remedial powers as follows:

No court order can require hiring, reinstatement, admission to membership, or payment of backpay for anyone who was not fired, refused employment or advancement or admission to a union by an act of discrimination forbidden by this title. This is stated expressly in the last sentence of section 707(e) [enacted without relevant change as § 706(g)]. . . . Contrary to the allegations of some opponents of this title, there is nothing in it that [p581] will give any power to the Commission or to any court to require . . . firing . . . of employees in order to meet a racial "quota" or to achieve a certain racial balance. That bugaboo has been brought up a dozen times; but it is nonexistent.

110 Cong.Rec. 6549 (1964). An interpretative memorandum of the bill entered into the Congressional Record by Senators Clark and Case [n14] likewise made clear that a court was not authorized to give preferential treatment to nonvictims.

No court order can require hiring, reinstatement, admission to membership, or payment of back pay for anyone who was not discriminated against in violation of [Title VII]. This is stated expressly in the last sentence of section [706(g)]. . . .

Id. at 7214.

Similar assurances concerning the limits on a court's authority to award make-whole relief were provided by supporters of the bill throughout the legislative process. For example, following passage of the bill in the House, its Republican House sponsors published a memorandum describing the bill. Referring to the remedial powers given the courts by the bill, the memorandum stated:

Upon conclusion of the trial, the Federal court may enjoin an employer or labor organization from practicing further discrimination and may order the hiring or reinstatement of an employee or the acceptance or reinstatement of a union member. But title VII does not permit the ordering of racial quotas in businesses or unions. . . .

Id. at 6566 (emphasis added). In like manner, the principal Senate sponsors, in a bipartisan newsletter delivered during an attempted filibuster to each Senator supporting the bill, explained that,

[u]nder title VII, not even a court, much less the Commission, could order racial quotas or the hiring, reinstatement, admission to membership [p582] or payment of back pay for anyone who is not discriminated against in violation of this title.

Id. at 14465. [n15] The Court of Appeals holding that the District Court's order was permissible as a valid Title VII remedial order ignores not only our ruling in Teamsters, but the policy behind [p583] § 706(g) as well. Accordingly, that holding cannot serve as a basis for sustaining the District Court's order. [n16]

Finally, the Court of Appeals was of the view that the District Court ordered no more than that which the City unilaterally could have done by way of adopting an affirmative action program. Whether the City, a public employer, could have taken this course without violating the law is an issue we need not decide. The fact is that, in these cases, the City took no such action, and that the modification of the decree was imposed over its objection. [n17]

We thus are unable to agree either that the order entered by the District Court was a justifiable effort to enforce the terms of the decree to which the City had agreed or that it was a legitimate modification of the decree that could be imposed on the City without its consent. Accordingly, the judgment of the Court of Appeals is reversed.

It is so ordered.

* Together with No. 82-229, Memphis Fire Department et al. v. Stotts et al., also on certiorari to the same court.

1. The Memphis Fire Department is divided into several bureaus, including firefighting, alarm office, administration, apparatus, maintenance, and fire prevention. Of the positions covered by the original injunction, all but one were in the firefighting bureau.

2. The City ultimately laid off 24 privates, 3 of whom were black. Had the seniority system been followed, 6 blacks would have been among the 24 privates laid off. Thus, three white employees were laid off as a direct result of the District Court's order. The number of whites demoted as a result of the order is not clear from the record before us.

3. The Court of Appeals, recognizing that the District Court had done more than temporarily preclude the City from applying its seniority system, stated that the "principal issue" before it was

whether the district court erred in modifying the 1980 Decree to prevent minority employment from being affected disproportionately by unanticipated layoffs.

679 F.2d at 551.

4. Of course, if layoffs become necessary, both the City and respondents will be affected by the modified decree, the City because it will be unable to apply its seniority system, respondents because they will be given greater protection than they would otherwise receive under that system. Moreover, the City will be immediately affected by the modification even though no layoff is currently pending. If the lower courts' ruling is left intact, the City will no longer be able to promise current or future employees that layoffs will be conducted solely on the basis of seniority. Against its will, the City has been deprived of the power to offer its employees one of the benefits that make employment with the City attractive to many workers. Seniority has traditionally been, and continues to be, a matter of great concern to American workers.

"More than any other provision of the collective [bargaining] agreement . . . seniority affects the economic security of the individual employee covered by its terms."

Franks v. Bowman Transportation Co., 424 U.S. 747, 766 (1976) (quoting Aaron, Reflections on the Legal Nature and Enforceability of Seniority Rights, 75 Harv.L.Rev. 1532, 1535 (1962)). It is not idle speculation to suppose that the City will be required to offer greater monetary compensation or fringe benefits in order to attract and retain the same caliber and number of workers as it could without offering such benefits were it completely free to implement its seniority system. The extent to which the City's employment efforts will be harmed by the loss of this "bargaining chip" may be difficult to measure, but, in view of the importance that American workers have traditionally placed on such benefits, the harm cannot be said to be insignificant. Certainly, an employer's bargaining position is as substantially affected by a decree precluding it from offering its employees the benefits of a seniority system as it is by a state statute that provides economic benefits to striking employees. Super Tire Engineering Co. v. McCorkle, 416 U.S. 115, 122-125 (1974).

5. Since the District Court's order precludes the City from reducing the percentage of black employees holding particular jobs in the event of a layoff or reduction in rank, and since competitive seniority is the basis for determining who will be laid off or bumped down, there is some question whether, in light of the judgment below, the City could legally restore to the laid-off employees the competitive seniority they had before the layoffs without violating the order.

6. The present case is distinguishable from University of Texas v. Camenisch, 451 U.S. 390 (1981), on which the dissent relies, in that the defendant in Camenisch was not a party to a decree that had been modified by the lower court. When the injunction in that case expired, the defendant was in all respects restored to its pre-injunction status. Here, the City is faced with a modified consent decree that prevents it from applying its seniority system in the manner that it chooses.

7. Respondents contend that the memorandum of understanding between the Union and the City is unenforceable under state law, citing Fulenwider v. Firefighters Assn. Local Union. 1784, 649 S.W.2d 268 (Tenn.1982). However, the validity of that memorandum under state law is unimportant for purposes of the issues presented in this case. First, the Court of Appeals assumed that the memorandum was valid in reaching its decision. 679 F.2d at 564, n. 20. Since we are reviewing that decision, we are free to assume the same. Moreover, even if the memorandum is unenforceable, the City's seniority system is still in place. The City unilaterally adopted the seniority system city-wide in 1973. That policy was incorporated into the memorandum of understanding with the Firefighters Union in 1975, but its city-wide effect, including its application to the Fire Department, continues irrespective of the status of the memorandum.

8. The dissent's contention that the only issue before us is whether the District Court so misapplied the standards for issuing a preliminary injunction that it abused its discretion, post at 601, overlooks what the District Court did in this case. The District Court did not purport to apply the standards for determining whether to issue a preliminary injunction. It did not even mention them. Instead, having found that the consent decree did "not contemplate what method would be used for a reduction in rank or layoff," the court considered "whether or not . . . it should exercise its authority to modify the consent decree. . . ." App. to Pet. for Cert. in No. 82-229, p. A73. As noted above, the Court of Appeals correctly recognized that more was at stake than a mere preliminary injunction, stating that the "principal issue" was

whether the district court erred in modifying the 1980 Decree to prevent minority employment from being affected disproportionately by unanticipated layoffs.

679 F.2d at 551. By deciding whether the District Court erred in interpreting or modifying the consent decree so as to preclude the City from applying its seniority system, we do not, as the dissent shrills, attempt to answer a question never faced by the lower courts.

9. The dissent seems to suggest, post at 611, and n. 9, and JUSTICE STEVENS expressly states, post at 590, that Title VII is irrelevant in determining whether the District Court acted properly in modifying the consent decree. However, this was Title VII litigation, and in affirming modifications of the decree, the Court of Appeals relied extensively on what it considered to be its authority under Title VII. That is the posture in which the cases come to us. Furthermore, the District Court's authority to impose a modification of a decree is not wholly dependent on the decree.

[T]he District Court's authority to adopt a consent decree comes only from the statute which the decree is intended to enforce,

not from the parties' consent to the decree. Railway Employees v. Wright, 364 U.S. 642, 651 (1961). In recognition of this principle, this Court in Wright held that, when a change in the law brought the terms of a decree into conflict with the statute pursuant to which the decree was entered, the decree should be modified over the objections of one of the parties bound by the decree. By the same token, and for the same reason, a district court cannot enter a disputed modification of a consent decree in Title VII litigation if the resulting order is inconsistent with that statute.

Thus, Title VII necessarily acted as a limit on the District Court's authority to modify the decree over the objections of the City; the issue cannot be resolved solely by reference to the terms of the decree and notions of equity. Since, as we note infra at 577, Title VII precludes a district court from displacing a nonminority employee with seniority under the contractually established seniority system absent either a finding that the seniority system was adopted with discriminatory intent or a determination that such a remedy was necessary to make whole a proven victim of discrimination, the District Court was precluded from granting such relief over the City's objection in these cases.

10. Section 703 (h) provides that

it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority or merit system . . . provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin. . . .

42 U.S.C. § 2000e-2(h).

11. Lower courts have uniformly held that relief for actual victims does not extend to bumping employees previously occupying jobs. See, e.g., Patterson v. American Tobacco Co., 535 F.2d 257, 267 (CA4), cert. denied, 429 U.S. 920 (1976); Local 189, United Papermakers and Paperworkers v. United States, 416 F.2d 980, 988 (CA5 1969), cert. denied, 397 U.S. 919 (1970).

12. Section 706(g) provides:

If the court finds that the respondent has intentionally engaged in or is intentionally engaging in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay . . . or any other equitable relief as the court deems appropriate. . . . No order of the court shall require the admission or reinstatement of an individual as a member of a union or the hiring, reinstatement, or promotion of an individual as an employee, or the payment to him of any back pay, if such individual was refused admission, suspended, or expelled, or was refused employment or advancement or was suspended or discharged for any reason other than discrimination on account of race, color, religion, sex, or national origin or in violation of § 704(a) of this title.

86 Stat. 107, 42 U.S.C. § 2000e-5(g).

13. See H.R.Rep. No. 914, 88th Cong., 1st Sess., 72-73 (1963) (minority report); 110 Cong.Rec. 4764 (1964) (remarks of Sen. Ervin and Sen. Hill); id. at 5092, 7418-7420 (remarks of Sen. Robertson); id. at 8500 (remarks of Sen. Smathers); id. at 9034-9035 (remarks of Sen. Stennis and Sen. Tower).

14. Senators Clark and Case were the bipartisan "captains" of Title VII. We have previously recognized the authoritative nature of their interpretative memorandum. American Tobacco Co. v. Patterson, 456 U.S. 63, 73 (1982); Teamsters v. United States, 431 U.S. 324, 352 (1977).

15. The dissent suggests that Congress abandoned this policy in 1972, when it amended § 706(g) to make clear that a court may award "any other equitable relief" that the court deems appropriate. Post at 619-620. As support for this proposition, the dissent notes that, prior to 1972, some federal courts had provided remedies to those who had not proved that they were victims. It then observes that, in a section-by-section analysis of the bill, its sponsors stated that,

in any areas where a specific contrary intention is not indicated, it was assumed that the present case law as developed by the courts would continue to govern the applicability and construction of Title VII.

118 Cong.Rec. 7167 (1972).

We have already rejected, however, the contention that Congress intended to codify all existing Title VII decisions when it made this brief statement. See Teamsters, supra, at 354, n. 39. Moreover, the statement, on its face, refers only to those sections not changed by the 1972 amendments. It cannot serve as a basis for discerning the effect of the changes that were made by the amendment. Finally, and of most importance, in a later portion of the same section-by-section analysis, the sponsors explained their view of existing law and the effect that the amendment would have on that law.

The provisions of this subsection are intended to give the courts wide discretion exercising their equitable powers to fashion the most complete relief possible. In dealing with the present § 706(g), the courts have stressed that the scope of relief under that section of the Act is intended to make the victims of unlawful discrimination whole, and that the attainment of this objective rests not only upon the elimination of the particular unlawful employment practice complained of, but also requires that persons aggrieved by the consequences and effects of the unlawful employment practice be, so far as possible, restored to a position where they would have been were it not for the unlawful discrimination.

118 Cong.Rec. at 7168 (emphasis added).

As we noted in Franks, the 1972 amendments evidence

emphatic confirmation that federal courts are empowered to fashion such relief as the particular circumstances of a case may require to effect restitution, making whole insofar as possible the victims of racial discrimination.

424 U.S. at 764 (emphasis added).

16. Neither does it suffice to rely on the District Court's remedial authority under §§ 1981 and 1983. Under those sections, relief is authorized only when there is proof or admission of intentional discrimination. Washington v. Davis, 426 U.S. 229 (1976); General Building Contractors Assn. v. Pennsylvania, 458 U.S. 375 (1982). Neither precondition was satisfied here.

17. The Court of Appeals also suggested that, under United States v. Swift & Co., 286 U.S. 106, 114-115 (1932), the decree properly was modified pursuant to the District Court's equity jurisdiction. But Swift cannot be read as authorizing a court to impose a modification of a decree that runs counter to statutory policy, see n. 9, supra, here §§ 703(h) and 706(g) of Title VII.
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