Klahr, and of Actuary Lawrence F. Wilson. Respondent's Exhibits 1 through 16 were received into evidence.
As requested by the parties, final arguments and Respondent's Proposed Order were submitted on July 14, 2009. No transcript of the hearing was provided.
Petitioner Kenneth Fritz (Petitioner or Mr. Fritz) has been a firefighter with the City of Pembroke Pines (Respondent or the City) since 1991. His date of birth is June 6, 1948, and he entered the Deferred Retirement Option Program (DROP) on December 1, 2006, at age 58.5 years old.
As Respondent's employee, Mr. Fritz participated in the City's Pension Plan for Firefighters and Police Officers (the Plan).
The DROP option that Mr. Fritz chose allowed him to name a joint annuitant and contingent survivors. Mr. Fritz, who has been divorced since 1986, chose his daughter who on
December 1, 2006, was 32.25 years old, and his son who was
29.333 years old, as his surviving beneficiaries. Each will receive a 50 percent share of the retirement income upon his death payable for the remainder of their lives.
Mr. Fritz alleged that the pension fund benefit system discriminates against him based on marital status. There is no factual dispute that his benefits, with a 32-year-old daughter are $3,938.12 a month, as compared to $4,366.59 a month if he had a 32-year-old wife. The benefits are not affected by his having named his son as an additional beneficiary.
Mr. Fritz brought his concerns to the attention of Patricia Shoemaker, the Benefits Administrator for Municipal
Police Officers' and Firefighters' Retirement Funds for the State of Florida Department of Management Services. On January 29, 2008, March 17, 2008, July 9, 2008, and September 25, 2008, Ms. Shoemaker sent letters to Mr. Anthony Napolitano, Chairman of the Pembroke Pines Firefighter's Pension Plan, requesting an explanation of the apparent violation of the following statutory provisions:
§ 175.333. Discrimination in benefit formula prohibited; restrictions regarding designation of joint annuitants.
For any municipality, special fire control district, chapter plan, local law municipality, local law special fire control district, or local law plan under this chapter:
and
(1) No plan shall discriminate in its benefit formula based on color, national origin, sex, or marital status.
§ 175.071(2) Any and all acts and decisions shall be effectuated by vote of a majority of the members of the board; however, no trustee shall take part in any action in connection with the trustee's own participation in the fund, and no unfair discrimination shall be shown to any individual firefighter participating in the fund. (Emphasis added.)
In her letter of September 25, 2008, Ms. Shoemaker noted that she had received no responses to her previous letters and that "[W]hile state premium tax moneys were released this year based on our understanding that the Board was researching
this matter, future state tax moneys will not be released unless the plan is determined to be in compliance with Chapters (sic) 175, F.S."
On October 15, 2008, Deputy City Attorney Julie F. Klahr finally responded to Ms. Shoemaker as follows:
Your letter to the Pembroke Pines Police and Fire Retirement Plan has been referred to this office for reply. The issue is whether a spouse only benefit is discriminatory on the basis of marital status. For the reasons which follow, the benefit is fully in compliance with Florida law.
Section 175.333(2)(a), Florida Statutes, clearly recognizes the propriety of a plan offering a spouse only survivorship benefit that alone should resolve this issue. The benefit at issue in Pembroke Pines is a spouse-only benefit, which not only exceeds the minimums required by Chapter 175, but also pre-dates the enactment of Ch. 99-1, Laws of Florida (1999). The complaining employee sought to designate a child as a beneficiary but without an age appropriate actuarial reduction. Nothing in Chapter 175, or any other law, mandates a retirement plan to provide a costly, generation skipping benefit without providing for actuarial equivalence.
To the extent that your view is that the plan provision must be altered, it is a "minimum benefit" which is required, only if unencumbered Chapter 175 insurance premium tax rebates are present to pay the full cost as provided in §175.351. The City does not concede this is a correct interpretation, nor does any such Chapter money exist. Any required action to the contrary is an improper unfunded mandate.
Moreover, the provisions of the Internal Revenue Code and corresponding regulations of the Department of the Treasury mandated the use of the actuarial factors at issue. Nothing in Chapter 175, Florida Statutes, directs a plan to violate tax provisions necessary to maintain qualification. It is the City's position that according a benefit to a spouse of a deceased member, provided the plan otherwise exceeds minimum benefits under Chapter 175, is a matter reserved to the City under its home rule powers in the Florida Constitution and Chapter 166, Florida Statutes. If any member feels aggrieved by the structure of the Ordinance Code, that person may seek remedies under Chapter 760, Florida Statutes. It should be observed, however, that the status at issue is that of the purported survivor and not the member. As a result, no violation of Florida's civil rights law is presented.
See, Donato v. AT & T, 767 So.2d 1146 (Fla. 2000). Further §760.10(8)(b), Florida Statutes, exempts bona fide retirement plans from coverage under this law.
The first provision cited as support for the City's position is as follows:
§ 175.333(2)(a) If a plan offers a joint annuitant option and the member selects such option, or if a plan specifies that the member's spouse is to receive the benefits that continue to be payable upon the death of the member, then, in both of these cases, after retirement benefits have commenced, a retired member may change his or her designation of joint annuitant or beneficiary only twice.
Although the Deputy City Attorney asserted that this section alone should resolve the matter, Mr. Fritz observed the subsection does not authorize discrimination based on marital
status but only limits the number of times that a joint annuitant or beneficiary may be changed.
The City also relied on the fact that the Plan predates Chapter 99-1, Laws of Florida, but the statement of legislative intent indicates that the law is applicable to existing plans, and reads as follows:
Legislative declaration.
It is hereby declared by the Legislature that firefighters, as hereinafter defined, perform state and municipal functions; . . . and that their activities are vital to the public safety. It is further declared that firefighters employed by special fire control districts serve under the same circumstances and perform the same duties as firefighters employed by municipalities and should therefore be entitled to the benefits available under this chapter. Therefore, the Legislature declares that it is a proper and legitimate state purpose to provide a uniform retirement system for the benefit of firefighters as hereinafter defined and intends, in implementing the provisions of
s. 14, Art. X of the State Constitution as they relate to municipal and special district firefighters' pension trust fund systems and plans, that such retirement systems or plans be managed, administered, operated, and funded in such manner as to maximize the protection of the firefighters' pension trust funds . . .
This chapter hereby establishes, for all municipal and special district pension plans existing now or hereafter under this chapter, including chapter plans and local law plans, minimum benefits and minimum standards for the operation and funding of such plans, hereinafter referred to as
firefighters' pension trust funds. The minimum benefits and minimum standards set forth in this chapter may not be diminished by local charter, ordinance, or resolution or by special act of the Legislature, nor may the minimum benefits or minimum standards be reduced or offset by any other local, state, or federal law that may include firefighters in its operation, except as provided under s. 112.65. (Emphasis added.)
The City claimed, but Ms. Shoemaker's reference in her letter to the release of state premium tax moneys appears to contradict its claim, that it does not have to pay minimum benefits required by Chapter 175, although not conceding its applicability, because it has no unencumbered insurance premium tax money, a prerequisite the imposition of the following requirement:
§ 175.351. Municipalities and special fire control districts having their own pension plans for firefighters.
For any municipality, special fire control district, local law municipality, local law special fire control district, or local law plan under this chapter, in order for municipalities and special fire control districts with their own pension plans for firefighters, or for firefighters and police officers, where included, to participate in the distribution of the tax fund established pursuant to s. 175.101, local law plans must meet the minimum benefits and minimum standards set forth in this chapter.
* * *
However, local law plans in effect on October 1, 1998, shall be required to comply
with the minimum benefit provisions of this chapter only to the extent that additional premium tax revenues become available to incrementally fund the cost of such compliance as provided in s. 175.162(2)(a). (Emphasis added.)
Apparently, not satisfied with the answer, on January 20, 2009, Ms. Shoemaker wrote again, this time to Ms Klahr, as follows:
Dear Ms. Klahr
This is to acknowledge receipt of your October 15, 2008 letter in response to my July 9, 2008 letter to the Board of the Firefighters' Pension Plan.
While we appreciate your response regarding the propriety of a plan offering a spousal benefit and the appropriateness of an age appropriate actuarial reduction, our question for the Board was a different one relating to the plan's compliance with the provisions of ss. 175.333(1) and 175.071(2),
F. S. as they relate to discrimination based on marital status.
Based on our understanding of the issue relating to the calculation of the member's benefits, Mr. Fritz does not have a spouse, but wishes to designate his daughter as his beneficiary. He understands and agrees that it is appropriate to actuarialty [sic] adjust his benefit based on the age of his daughter. The actuary provided two calculations, one based on a spouse that was his daughter's age and one based on a beneficiary that was his daughter's age.
His benefit when calculated with a young age spouse was greater than his benefit when calculated with the same young age beneficiary. It appears that the only difference in the two calculations is the marital status of the member and not the age
of the joint annuitant. If our understanding of the facts relating to this issue are incorrect, please let me know.
We have asked that the Board review the plan provisions with their plan attorney and actuary and provide an explanation as to how the plan meets the statutory provisions, specifically ss. 175.333(1) and 175.071 (2),
F. S.
Mr. Fritz pointed out that, in addition to the statutory provisions cited in Ms. Shoemaker's letter and various others that he cited, the City's Employee Handbook also includes a statement that the City does not discriminate based on marital status.
The City's actuary noted that, however outdated, the additional benefit is based on the assumption that a firefighter's spouse is more dependent on the employee's income and pension then any other adult relative. In addition, the deputy city attorney testified that the Plan was adopted in the firefighters' collective bargaining agreement.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action in accordance with Sections 120.569 and 120.57(1), Florida Statutes (2009).
Section 760.10(1)(a), Florida Statutes, provides that it is an unlawful employment practice to "discharge or fail or
refuse to hire any individual, or otherwise to discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment, because of the individual's race, color, religion, sex, national origin, age, handicap, or marital status."
The Florida Civil Rights Act of 1992 codified in Sections 760.01 through 760.11, is patterned after Title VII of the Federal Civil Rights Act, and case law construing Title VII has been held persuasive when construing Chapter 760, Florida Statutes. See City of Hollywood v. Hogan, 986 So. 2d 634 (Fla. 4th DCA 2008); and Castleberry v. Edward M. Chadbourne, Inc., 810 So. 2d 1028, 1030 n.3 (Fla. 1st DCA 2002).
Florida cases rely on the presentation of proof for a claim of disparate treatment that was set forth with regard to racial discrimination by the United States Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973), and in Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981). Petitioner has the initial burden of establishing, by a preponderance of the evidence, a prima facie case of discrimination, by demonstrating: (1) that he or she is a member of a protected class; (2) that he or she suffered an adverse employment action; (3) that the employer treated similarly situated employees outside the class more favorably; and (4)
that he or she was qualified for the same level of pay as similarly situated employees. See Maniccia v. Brown, 171 F.3d 1364, 1368 (11th Cir. 1999); Knight v. Baptist Hospital of Miami, 330 F.3d 1313 (11th Cir. 2003); and Burke-Fowler v.
Orange County, Fla., 447 F.3d 1319, 1323 (11th Cir. 2006).
Applying the requirements to this case, there is no dispute that Petitioner is qualified to receive a pension and that the pension benefits are lower because his contingent annuitant/beneficiary is not his spouse.
The City argued, unpersuasively, that Petitioner is, in effect, not in a protected class because the issue is not the marital status of the pension plan member, but that of a surviving spouse. In support of this position, the City cited Donato v. AT&T, 767 So. 2d 1146 (Fla. 2000), in which the Florida Supreme Court considered and answered in the negative the certified question: Can an individual proceed under the Florida Civil Rights Act by alleging that he was discharged, in violation of the prohibition on marital status discrimination, because he is married to an individual who filed suit against his employer?
The Court held that:
. . . the Florida Civil Rights Act does not recognize a cause of action for marital status discrimination where the discrimination is allegedly based on the
actions of the claimant's spouse, rather than on the marital status of the claimant.
Donato at 1147.
The Court concluded in Donato that:
As noted, we have consistently held that words or phrases in a statute must be construed in accordance with their common and ordinary meaning. In applying that rule to the phrase "marital status" we agree with the observations of the New York Court of Appeals quoted above from Manhattan Pizza Hut. Typically, for example, we believe that when one is asked for his or her marital status, the answer usually sought is whether that person is married, single, divorced, widowed, or separated. See, e.g., Fla. R. Civ. P. Form 1.984 (Juror Voir Dire Questionnaire) ("5. Marital Status: (married, single, divorced, widow, or widower) . . ."). Thus, under the common usage of the term, marital status refers only to the state of being married or not married. If we were to give the term a broader definition by requiring courts to consider the specific person to whom someone is married, we would be expanding the term beyond its common, ordinary use and would give meaning to the term that was not intended by the Legislature. This would be an abrogation of legislative power.
* * * Accordingly, we hold that the term
"marital status" as used in section 760.10 of the Florida Statutes means the state of being married, single, divorced, widowed or separated, and does not include the specific identity or actions of an individual's spouse.
Id. at 1154-1155.
Unlike Mr. Donato, who alleged that he was fired because his wife sued their employer for sexual harassment, there are no actions by another person that cause Mr. Fritz to receive lower benefits. Mr. Fritz has demonstrated that his own monthly pension plan benefits are lower because he is not married and, therefore, cannot name a spouse as a joint annuitant and contingent beneficiary.
A prima facie case of marital status discrimination has been shown, creating an inference of discriminatory intent, and shifting the burden to Respondent to produce evidence that its actions were taken for a legitimate, non-discriminatory reason. To rebut the inference of discriminatory intent, an employer must clearly articulate a reasonably specific legitimate non-discriminatory reason for the adverse employment action, although the ultimate burden remains with the plaintiff throughout the case. Brooks v. County Commission of Jefferson County, 446 F. 3d 1160, 1162 (11th Cir. 2006); and EEOC v. Joe's Stone Crabs, Inc., 296 F. 3d 1265, 1272-1273 (11th Cir. 2002).
The City claimed an exemption under the following provision of the Florida Civil Rights Act:
§760.10(8) Notwithstanding any other provision of this section, it is not an unlawful employment practice under ss. 760.01-760.10 for an employer, employment agency, labor organization, or joint labor- management committee to:
* * *
(b) Observe the terms of a bona fide seniority system, a bona fide employee benefit plan such as a retirement, pension, or insurance plan, or a system which measures earnings by quantity or quality of production, which is not designed, intended, or used to evade the purposes of ss. 760.01-
760.10. (Emphasis added.)
Although not decided on the basis of an exemption in Section 760.10(8)(b), the decision in Prieto v. City of Miami Beach, 190 F. Supp. 2d 1340 (S.D. Fla. 2002), supports the contention that evidence of a discriminatory intent is lacking in this case. Like this case, Prieto involved discrepancies in compensation.
On February 12, 1997, the plaintiffs filed charges of discrimination with the Equal Employment Opportunity Commission and the Florida Commission on Human Rights, alleging that the City discriminated against them because it paid them 15% less than it paid officers hired before June 10, 1993, based on a two-tier wage system. Mr. Prieto and Mr. Olivera alleged discrimination based on national origin, and Ms. Wolfe alleged discrimination based on race. As explained below, the two-tier wage system was implemented pursuant to terms negotiated in a collective bargaining agreement between the City and the Fraternal Order of Police William Nichols Lodge No. 8 (FOP), the collective bargaining representative for a bargaining unit comprised of the City's police officers, including the plaintiffs.
Id. at 35.
The Court in Prieto, found that the City's extensive efforts to cope with nine years of basic budget imbalances to avoid lower, bond ratings, and other fiscal concerns were the basis of the agreement and justified the wage differential. There was no evidence of discriminatory intent. In this case, the articulated intent for the differences in pension benefits is the legitimate anticipated need for larger contributions to a household unit that includes a firefighter's spouse.
Petitioner has failed in his ultimate burden to demonstrating a discriminatory intent of the disparate impact on his benefits.
