author: Justice Powell

text:
    BOWEN, SECRETARY OF HEALTH AND HUMAN SERVICES, et al. v. PUBLIC AGENCIES OPPOSED TO SOCIAL SECURITY ENTRAPMENT et al.
    No. 85-521.
    Argued April 28, 1986
    Decided June 19, 1986

      Powell, J., delivered the opinion for a unanimous Court.

      Assistant Attorney General Willard argued the cause for appellants. With him on the briefs were Solicitor General Fried, Deputy Solicitor General Geller, Charles A. Rothfeld, William Kanter, and Douglas Letter.

      Andrew D. Hurwitz argued the cause for appellees. Ernest F. Schulzke filed a brief for appellees Public Agencies Opposed to Social Security Entrapment et al. John K. Van de Kamp, Attorney General, N. Eugene Hill, Assistant Attorney General, and Charles C. Kobayashi, Supervising Deputy Attorney General, filed a brief for appellee State of California.

        Benna Ruth Solomon and Andrew D. Hurwitz filed a brief for the Council of State Governments et al. as amici curiae urging affirmance.

   Justice Powell

delivered the opinion of the Court.

On this appeal we review a decision of the District Court for the Eastern District of California that § 103 of the Social Security Amendments Act of 1983, 97 Stat. 71, 42 U. S. C. §418(g) (1982 ed., Supp. II), effected a taking of property within the meaning of the Fifth Amendment by preventing States from withdrawing state and local government employees from the Social Security System.

I — I

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The Social Security Act of 1935, 49 Stat. 620, as amended, 42 U. S. C. § 301 et seq. (1982 ed. and Supp. II), established an insurance program for “persons working in industry and commerce as a long-run safeguard against the occurrence of old-age dependency.” H. R. Rep. No. 1300, 81st Cong., 1st Sess., 3 (1949). From that relatively humble beginning, the coverage of the Act has been expanded to provide benefits not only to the “insured worker in his old age,” ibid., but also to “individuals and families when workers retire, become disabled, or die.” S. Rep. No. 98-13, vol. 2, p. 78 (1983). The “basic idea” of Social Security “is that, while they are working, employees and their employers pay earmarked social security contributions (FICA taxes) .... Then, when earnings stop, or are reduced because of retirement in old-age, death, or disability, cash benefits are paid to partially replace the earnings that were lost.” Ibid. The System operates on a “pay as you go” basis, with current contributions “largely paid out in current benefits,” ibid. In the words of Congress, the System now functions “as the Nation’s basic social insurance program.” H. R. Rep. No. 98-25, p. 19 (1983). To ensure that this important program could evolve as economic and social conditions changed, Congress expressly reserved to itself “[t]he right to alter, amend, or repeal any provision of” the Act. 42 U. S. C. § 1304.

As of 1983, more than 90% of the Nation’s paid employees, a total of more than 115 million people, participated in the Social Security System. H. R. Rep. No. 98-25, at 13. Participation in the System is, and has been since its inception, “basically mandatory.” Id., at 19. Therefore, most workers covered by the System and their employers have no choice whether or not to participate. In 1935, when the Act was adopted, Congress faced questions as to whether it could compel the States and their political subdivisions to include their employees in the System. Therefore, the Act at that time excluded such employees from its coverage. See 42 U. S. C. § 410(a)(7). Responding to subsequent pressure from States that sought Social Security coverage for their employees, in 1950 Congress enacted § 418, the provision at the heart of the controversy in this case.

Section 418 authorizes voluntary participation by States in the Social Security System. Under § 418(a), States may obtain coverage for their employees and employees of their political subdivisions, enrolling all or only specified “coverage groups” of workers. 42 U. S. C. § 418(a)(1) (1982 ed., Supp. II); see § 418(b)(5) (defining coverage group). States enter the System by executing “an agreement” (§ 418 Agreement) with the Secretary of Health and Human Services (Secretary). While §418 gives States some authority over the content of the Agreements, i. e., States may identify the covered employees, the provisions of a § 418 Agreement are required to be “not inconsistent with the provisions of” § 418. § 418(a)(1). From its enactment in 1950 through 1983, § 418 permitted States to terminate their § 418 Agreements “[u]pon giving at least two years’ advance notice in writing to the [Secretary].” §418(g)(1). Once a State exercised its option to withdraw, it could not thereafter reenter the System. § 418(g)(3).

Following adoption of § 418, all 50 States entered into § 418 Agreements with respect to their own employees, local government employees, or both. “By the early 1960’s most States had made coverage agreements,” H. R. Rep. No. 98-25, at 18, and the percentage of state and local employees enrolled in the System increased from 11% in 1951 to 70% in 1970, H. R. Comm. Print 97-34, at 25. Since 1970, “[c]overage of State and local employees has remained fairly constant at 70-72 percent.” H. R. Rep. No. 98-25, at 18. As of 1983, “some 9.4 million out of the approximately 13.2 million State and local employees” participated in the Social Security System. Id., at 17.

For the first 20 years of their participation, “very few” States exercised their option under § 418(g) to withdraw from the System. Id., at 18. Until the mid-1970’s, the number of state and local employees “leaving the system was always greatly exceeded by the number of newly-covered employees — in most years, by 50,000 or more.” Ibid. Starting in 1976, however, this trend reversed, and the “numbers of positions being terminated from coverage” began to exceed “the numbers of newly-covered positions. ” Ibid. From 1977 through 1981, “termination activity was greater than in the previous ten years,” with coverage “terminated for 96,000 State and local government employees.” Ibid. As of 1982, coverage was “terminated for 595 State entities employing 190,000 workers.” Ibid. Finally, “for the two-year period of 1983-84, terminations [were] pending for 634 State and local entities employing 227,000 workers.” Ibid.

After studying the trend towards termination of §418 Agreements and the reasons for it, Congress determined that the increasing rate of withdrawals was threatening the integrity of the System in a number of important respects. As an initial matter, Congress observed that the current rate of withdrawals would cost the System between $500 million and $1 billion annually. H. R. Comm. Print 97-34, at 13-14. Congress further concluded that States’ ability to withdraw was “inequitable both for the employees who lose coverage and for the vast majority of the nation’s workforce who continue to pay into the system.” H. R. Rep. No. 98-25, at 18-19. While States terminating § 418 Agreements often did so in the course of designing benefit packages that would attract long-term workers, Congress believed that sound social policy also required protection of employees who move from job to job. Id., at 19. Moreover, “the shifting of the tax burden of social security from those workers who withdraw, but who remain entitled to future benefits based on their past earnings,” created resentment on the part of workers whose participation in the System was mandatory. Ibid.

Accordingly, Congress decided to amend § 418(g) by repealing the termination provision. As amended, § 418(g) provides that no § 418 Agreement “may be terminated, either in its entirety or with respect to any coverage group, on or after April 20, 1983.” The amendment expressly prevents States from withdrawing employees from the System even if a termination notice had been filed prior to enactment of the amendment.

B

On March 9, 1951, California and the Secretary entered into a §418 Agreement, effective as of January 1,1951, under which the parties agreed to extend Social Security coverage to employees of the State and its political subdivisions. The Agreement recited that its provisions were “in conformity with” §418, and authorized the State to modify the Agreement to include additional groups of employees, “such modification to be consistent with the provisions of” §418. The Agreement also included a clause that permitted the State to terminate the Agreement either in its entirety or with respect to particular coverage groups. The terms of the clause exactly mirrored the statutory termination provision embodied in § 418(g).

When Congress amended § 418(g) in 1983, California had filed termination notices on behalf of 71 of its political subdivisions, employing approximately 34,000 persons. When the amendment prevented the termination notices from taking effect, appellees commenced the lawsuits underlying this appeal, naming as defendants the United States and the Secretary and Undersecretary of the Department of Health and Human Services. The first lawsuit was brought by several public agencies of California, their employees and taxpayers, and by an organization calling itself Public Agencies Opposed to Social Security Entrapment. These parties alleged, among other claims, that amended § 418(g) had deprived them of their “contract rights” without just compensation in violation of the Fifth Amendment. In the second lawsuit, the State of California sought to enjoin enforcement of § 418(g) as well as a declaration that the section was unconstitutional. The State claimed that the federal defendants had acted in excess of their constitutional authority and had violated the Tenth Amendment by breaching their contract with the State and by impairing the State’s “ability . . . to structure its relationships with its employees.” App. 26-27.

Ruling on cross-motions for summary judgment, the District Court held that § 418(g) was unconstitutional. Public Agencies Opposed to Social Security Entrapment v. Heckler, 613 F. Supp. 558 (ED Cal. 1985). The court decided that the § 418 Agreement created a “contractual right” to withdraw from the Social Security System that ran in favor of both the State and its public agencies. This contractual right existed independently of the statutory termination provision, and Congress derived no authority from § 1304 to amend the § 418 Agreement, as opposed to § 418.

The contractual right to withdraw, reasoned the District Court, constituted “private property” within the meaning of the Just Compensation Clause of the Fifth Amendment. Amended § 418(g) effected a taking of that property without providing the requisite just compensation. In the court’s view, the “only rational compensation would be reimbursement by the United States to the State or public agencies, of the amount of money they currently pay to the United States for their participation” in the Social Security Program. 613 F. Supp., at 575. Since amended § 418(g) was enacted to solve the Social Security “financial crisis,” however, the District Court concluded that an order awarding this measure of damages would be “simply and clearly contrary to the will of Congress.” . Ibid. Accordingly, the District Court simply declared § 418(g) unconstitutional. Ibid. We noted probable jurisdiction, 474 U. S. 1004 (1985), and now reverse.

II

A

Congress’ decision that American workers need- a federal program of social insurance protecting them in old age and disability “has of necessity called forth a highly complicated and interrelated statutory structure.” Flemming v. Nestor, 363 U. S. 603, 610 (1960). Since the Act was designed to protect future, as well as present, generations of workers, it was inevitable that amendment of its provisions would be necessary in response to evolving social and economic conditions unforeseeable in 1935. Ibid. Congress anticipated that it would be necessary to respond to “ever-changing conditions” with “flexibility and boldness,” ibid., and therefore included in the Act “a clause expressly reserving to it ‘[t]he right to alter, amend, or repeal any provision’ of the Act. § 1104, 49 Stat. 648, 42 U. S. C. § 1304. That provision makes express what is implicit in the institutional needs of the program.” Id., at 611. As appellees must concede, the Act itself, including the original version of § 418(g), created no contractual rights. Cf. Flemming v. Nestor, supra, at 608-611; see also National Railroad Passenger Corporation v. Atchison, T & S. F. R. Co., 470 U. S. 451, 465-470 (1985). Therefore, there is no doubt that Congress had the power to amend the section.

In view of the purpose and structure of the Act, and of Congress’ express reservation of authority to alter its provisions, courts should be extremely reluctant to construe § 418 Agreements in a manner that forecloses Congress’ exercise of that authority. While the Federal Government, as sovereign, has the power to enter contracts that confer vested rights, and the concomitant duty to honor those rights, see Perry v. United States, 294 U. S. 330, 350-354 (1935); Lynch v. United States, 292 U. S. 571 (1934), we have declined in the context of commercial contracts to find that a “sovereign forever waives the right to exercise one of its sovereign powers unless it expressly reserves the right to exercise that power in” the contract. Merrion v. Jicarilla Apache Tribe, 455 U. S. 130, 148 (1982). Rather, we have emphasized that “[without regard to its source, sovereign power, even when unexercised, is an enduring presence that governs all contracts subject to the sovereign’s jurisdiction, and will remain intact unless surrendered in unmistakable terms.” Ibid. Therefore, contractual arrangements, including those to which a sovereign itself is party, “remain subject to subsequent legislation” by the sovereign. Id., at 147.

These principles form the backdrop against which we must consider the District Court’s decision effectively to forbid Congress to amend a provision of the Social Security Act. That decision heeded none of this Court’s often-repeated admonitions that contracts should be construed, if possible, to avoid foreclosing exercise of sovereign authority. Those admonitions take on added force when the arrangement pursuant to which the Government is claimed to have surrendered a sovereign power is one that serves to implement a comprehensive social welfare program affecting millions of individuals throughout our Nation.

B

Venerable precedent supports our conclusion that Congress reserved the authority to amend not only § 418 but also Agreements entered into “in conformity with” that section. Just last Term, we considered a statute in which Congress had “ ‘expressly reserved’ its right to ‘repeal, alter, or amend’ the Act at any time,” National Railroad Passenger Corporation, supra, at 456, and we noted that the “effect of these few simple words” has been settled since the Sinking-Fund Cases, 99 U. S. 700 (1879). 470 U. S., at 467-468, n. 22. The Sinking-Fund Cases involved federal statutes that governed railroads’ obligations to the United States on subsidy bonds. The statutes in question expressly reserved Congress’ authority to repeal, alter, or amend them, and Congress exercised that power by requiring the railroads to set aside part of their current income as a sinking fund to meet their debts to the Government as those debts came due. The railroads claimed that this amendment deprived them of property without due process and improperly interfered with their vested rights. 99 U. S., at 719. In rejecting those arguments, the Court explained that through the language of reservation, “Congress not only retains, but has given special notice of its intention to retain, full and complete power to make such alterations and amendments as come within the just scope of legislative power.” Id., at 720. The effect of the Court’s construction of the reservation was to authorize Congress not only to amend the statute granting the railroads’ corporate charter but also to change the stipulations of a contract made under that charter subsequently to and independently of the original statute. Whatever the limits of the reserved power, it was “safe to say” that Congress had the authority to provide by amendment whatever rules it might “have prescribed in the original charter” and terms governing the “performance of contracts already entered into.” Id., at 721.

This reasoning disposes of appellees’ contention that Congress lacked authority to amend California’s §418 Agreement. The State accepted the Agreement under an Act that contained the language of reservation. That language expressly notified the State that Congress retained the power to amend the law under which the Agreement was executed and by amending that law to alter the Agreement itself. We have no doubt that in 1950 Congress could have provided that States electing to enter the Social Security System would not have authority to terminate their participation. Therefore, amended § 418(g) falls well within the limits of Congress’ reserved power to alter the law governing performance of § 418 Agreements.

C

The § 418 Agreement provided that its terms were “in conformity with” §418. Therefore, the Agreement expressly incorporated §418, which of course was fully subject to Congress’ reserved power of amendment. Appellees nonetheless insist that the termination provision embodied in the Agreement constituted a valuable property right that was “taken” when Congress enacted amended § 418(g). In the Sinking-Fund Cases, the Court did observe that Congress’ exercise of the reserved power “has a limit” in that Congress could not rely on that power to “take away property already acquired under the operation of the charter, or to deprive the corporation of the fruits actually reduced to possession of contracts lawfully made.” 99 U. S., at 720. Similarly, other decisions have held that Congress does not have the power to repudiate its own debts, which constitute “property” to the lender, simply in order to save money. Perry v. United States, 294 U. S., at 350-351; see Lynch v. United States, 292 U. S., at 576-577.

But the “contractual right” at issue in this case bears little, if any, resemblance to rights held to constitute “property” within the meaning of the Fifth Amendment. The termination provision in the Agreement exactly tracked the language of the statute, conferring no right on the State beyond that contained in § 418 itself. The provision constituted neither a debt of the United States, see Perry v. United States, supra, nor an obligation of the United States to provide benefits under a contract for which the obligee paid a monetary premium, see Lynch v. United States, supra. The termination clause was not unique to this Agreement; nor was it a term over which the State had any bargaining power or for which the State provided independent consideration. Rather, the provision simply was part of a regulatory program over which Congress retained authority to amend in the exercise of its power to provide for the general welfare. Under these circumstances, we conclude that the termination provision in California’s §418 Agreement did not rise to the level of “property.” The provision simply cannot be viewed as conferring any sort of “vested right” in the face of precedent concerning the effect of Congress’ reserved power on agreements entered into under a statute containing the language of reservation. Since appellees had no property right in the termination clause, amended § 418 did not effect a taking within the meaning of the Fifth Amendment.

I — I I — I I — I

The judgment of the District Court is reversed, and the case is remanded for further proceedings consistent with this decision.

It is so ordered.

       According to the Senate Special Committee on Aging, the Social Security System is “much more” than a “retirement program for older workers. . . . Social security is also family security, protecting workers and their families from loss of earnings because of death, retirement, or disability.” Senate Special Committee on Aging, Termination of Social Security Coverage: The Impact on State and Local Government Employees, 94th Cong., 2d Sess., 9 (Comm. Print 1976) (hereinafter Senate Report on Aging).

       Congress included this provision in the original Act, and has retained it ever since. See Flemming v. Nestor, 363 U. S. 603, 610-611 (1960).

       “The ten percent of workers not . . . covered by social security [in 1983] include[d] most Federal civilian workers (2.4 out of 2.7 million), about 30 percent of State and local employees (approximately 3 million), and 10-15 percent of employees of nonprofit organizations (up to 1 million).” H. R. Rep. No. 98-25, at 13.

      As Congress explained when it was studying the reasons underlying States’ decisions to withdraw employees from the System, “[t]he Social Security Act of 1935 excluded from coverage all employment for States and localities, primarily because of the question of the constitutionality of any general levy of the employer tax on States and localities.” Subcommittee on Social Security of House Committee on Ways and Means, Termination of Social Security Coverage for Employees of State and Local Governments and Nonprofit Groups, 97th Cong., 2d Sess., Ser. No. WMCP: 97-34, p. 20 (Comm. Print 1982) (hereinafter H. R. Comm. Print 97-34).

       At the time Congress enacted the amendment challenged in this case, it explained that provision for voluntary participation by employees of state and local governments was “the result of congressional desire to extend coverage as quickly and with as little difficulty as possible to those employees who needed it most.” H. R. Rep. No. 98-25, at 19.

       Under the Act, therefore, States decide which groups of employees will receive Social Security coverage. Section 418(d)(3) creates an exception to this rule. Where state employees already are members of a retirement program, that section requires that a majority of such employees agree to participate in the Social Security System. 42 U. S. C. § 418(d)(3) (1982 ed. and Supp. II).

       For purposes of conciseness, we use the term “Secretary” to refer to the federal official responsible for administration of the System both under the current and prior versions of the Social Security Act.

       As of 1988, the employees of Alaska, “the only State to withdraw from the system, and of Maine, Massachusetts, Nevada, and Ohio, which never chose to participate in the system,” were not covered by Social Security. H. R. Rep. No. 98-25, at 17. Each of those States, however, was party to a § 418 Agreement that provided coverage to local government employees.

       During these years, “many terminations were caused by consolidation of local jurisdictions, rather than by withdrawal from the social security system.” Id., at 18.

       The Senate Special Committee on Aging found that States offered the following reasons for terminating their §418 Agreements: employees wanted more take-home pay through a reduction in payroll deductions; state and local governments sought to cut costs by dropping Social Security coverage; news reports concerning “the projected exhaustion of social security trust funds in the 1980’s” led employees to believe that benefits would cease; state and local governments believed that Social Security taxes would continue to rise, and thus viewed termination as a means “to achieve more static and budgetable expenditures”; some employees favored termination because they perceived that they would receive Social Security benefits even if they were no longer required to pay into the System; and alternative retirement plans were believed to pay higher levels of benefits. Senate Report on Aging 6-8; see also H. R. Comm. Print 97-34, at 6-7. The Committee also found that “many” decisions to withdraw from the System were made in the absence of “[information necessary for informed judgments.” Senate Report on Aging 8.

       Congress regarded voluntary participation by some employees, such as those of state and local governments, as an anomaly in an otherwise mandatory program. “The fundamental principle underlying compulsory coverage for most workers is that responsibility for paying for insurance against such risks should be borne by the society as a whole to the extent possible.” H. R. Comm. Print 97-34, at 4. Mandatory participation is necessary to sustain the “ ‘pay-as-you-go’ financing structure,” particularly since workers retain coverage “regardless of how many times they change their jobs in a lifetime.” Ibid. Mandatory participation ensures workers that they will obtain a minimum level of benefits in the event of a catastrophe that the worker did not foresee or plan for. Ibid. In the context of a mandatory system, voluntary participation for some employees was, in Congress’ view, “inconsistent with the principle of equal treatment of all citizens.” Id., at 5.

       The amendment, set out in Pub. L. 98-21, §103, 97 Stat. 71-72 provides:
      “(a) [42 U. S. C. § 418(g)] is amended to read as follows:
      “ ‘Duration of Agreement
      “(g) No agreement under this section may be terminated, either in its entirety or with respect to any coverage group, on or after the date of the enactment of the Social Security Amendments of 1983.’
      “(b) The amendment made by subsection (a) shall apply to any agreement in effect under [§ 418] on the date of the enactment of this Act, without regard to whether a notice of termination is in effect on such date, and to any agreement or modification thereof which may become effective under such [§ 418] after that date.”

       The termination provision in California’s § 418 Agreement stated:
      “The State, upon giving at least two years’ advance notice in writing to the [Secretary], may terminate this agreement, either in its entirety or with respect to any coverage group, effective at the end of a calendar quarter specified in the notice, provided, however, that the agreement may be terminated in its entirety only if it has been in effect not less than five years prior to receipt of such notice, and provided further that the agreement may be terminated with respect to any coverage group only if it has been in effect with respect to such coverage group for not less than five years prior to receipt of such notice.” Reprinted, App. 31.

       If these employees were withdrawn from the System, “approximately $33.7 millio[n] would be lost to the social security trust funds in 1984.” Id., at 61.

       Plaintiffs in this lawsuit also alleged that the enactment denied them their contract rights without due process, that it constituted an attempt to regulate “ ‘essential state and local government functions,’ in violation of the Tenth Amendment,” and that they were entitled to specific performance for the Government’s breach of contract. Public Agencies Opposed to Social Security Entrapment v. Heckler, 613 F. Supp. 558, 565 (ED Cal. 1985).

       Though the State did not press any claim that amended § 418(g) effected a taking of its property without the compensation required by the Fifth Amendment, the District Court rested its decision on that ground, finding it unnecessary to reach any of the arguments raised by the State. Therefore, none of those arguments are before us.

       Before reaching the merits, the District Court determined that the plaintiffs in both suits, appellees here, had standing to challenge the validity of the enactment. With respect to the first lawsuit, brought by the public agencies and certain individuals, the court concluded that the agencies alleged an injury sufficient to confer standing because they claimed that amended § 418(g) deprived them of their contractual rights as third-party beneficiaries of the State’s § 418 Agreement. Id., at 567-570. The individual plaintiffs had standing because they claimed that the federal defendants had denied them equal protection. Id., at 571. With respect to the second suit, the court found that the State had standing because it alleged “a judicially cognizable interest in the preservation of its own sovereignty, and a diminishment of that sovereignty by the alleged interference in its employment relations with its public employees.” Id., at 567. While appellants suggest in this Court that none of the plaintiffs in the lawsuit brought by the public agencies were properly before the District Court, they concede, and we agree, that there is no question concerning the State’s standing to bring the action. Therefore, the District Court plainly had authority to resolve this controversy, as do we.

       Title 42 U. S. C. § 1304 provides: “The right to alter, amend, or repeal any provision of this chapter is hereby reserved to the Congress.”

       The language of § 418 and of California’s § 418 Agreement provides further support for this conclusion. Section 418(a)(1) requires that the provisions of § 418 Agreements be “not inconsistent with the provisions of this section,” 42 U. S. C. § 418(a)(1) (1982 ed., Supp. II), and the Agreement provided that it was “in conformity with” § 418. The State was thus on notice that the terms of its Agreement must mirror the provisions of the section, which could be amended under the reserved power. If Congress amended § 418 in such a manner as to render a provision of an Agreement “inconsistent” or no longer “in conformity” with the section, then the logical conclusion is that the inconsistent provision no longer was to be given legal effect.


source: Caselaw Access Project

author:
      Justice Rehnquist Justice Stevens,
      Justice Marshall,

license: Public Domain

text:
    MERITOR SAVINGS BANK, FSB v. VINSON et al.
    No. 84-1979.
    Argued March 25, 1986
    Decided June 19, 1986

      Rehnquist, J., delivered the opinion of the Court, in which Burger, C. J., and White, Powell, Stevens, and O’Connor, JJ., joined. Stevens, J., filed a concurring opinion, post, p. 73. Marshall, J., filed an opinion concurring in the judgment, in which Brennan, Blackmun, and Stevens, JJ., joined, post, p. 74.

      F. Robert Troll, Jr., argued the cause for petitioner. With him on the briefs were Charles H. Fleischer and Randall C. Smith.

      Patricia J. Barry argued the cause for respondent Vinson. With her on the brief was Catherine A. MacKinnon

      Briefs of amici curiae urging reversal were filed for the United States et al. by Solicitor General Fried, Assistant Attorneys General Reynolds
        and Willard, Deputy Solicitor General Kuhl, Albert G. Lauber, Jr., John F. Cordes, John F. Daly, and Johnny J. Butler; for the Equal Employment Advisory Council by Robert E. Williams, Douglas S. McDowell, and Garen E. Dodge; for the Chamber of Commerce of the United States by Dannie B. Fogleman and Stephen A. Bokat; and for the Trustees of Boston University by William Burnett Harvey and Michael B. Rosen.

      Briefs of amici curiae urging affirmance were filed for the State of New Jersey et al. by W. Cary Edwards, Attorney General of New Jersey, James J. Ciancia, Assistant Attorney General, Susan L. Reisner and Lynn B. Norcia, Deputy Attorneys General, John Van de Kamp, Attorney General of California, Joseph I. Lieberman, Attorney General of Connecticut, Neil F. Hartigan, Attorney General of Illinois, Hubert H. Humphrey III, Attorney General of Minnesota, Paul Bardacke, Attorney General of New Mexico, Robert Abrams, Attorney General of New York, Jeffrey L. Amestoy, Attorney General of Vermont, and Elisabeth S. Shu-ster; for the American Federation of Labor and the Congress of Industrial Organizations et al. by Marsha S. Berzon, Joy L. Koletsky, Laurence Gold, Winn Newman, and Sarah E. Bums; for the Women’s Bar Association of Massachusetts et al. by S. Beville May; for the Women’s Bar Association of the State of New York by Stephen N. Shulman and Lynda S. Mounts; for the Women’s Legal Defense Fund et al. by Linda R. Singer, Anne E. Simon, Nadine Taub, Judith Levin, and Barry H. Gottfried; for the Working Women’s Institute et al. by Laurie E. Foster; and for Senator Paul Simon et al. by Michael H. Salsbury.

   Justice Rehnquist

delivered the opinion of the Court.

This case presents important questions concerning claims of workplace “sexual harassment” brought under Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U. S. C. § 2000e et seq.

I

In 1974, respondent Mechelle Vinson met Sidney Taylor, a vice president of what is now petitioner Meritor Savings Bank (bank) and manager of one of its branch offices. When respondent asked whether she might obtain employment at the bank, Taylor gave her an application, which she completed and returned the next day; later that same day Taylor called her to say that she had been hired. With Taylor as her supervisor, respondent started as a teller-trainee, and thereafter was promoted to teller, head teller, and assistant branch manager. She worked at the same branch for four years, and it is undisputed that her advancement there was based on merit alone. In September 1978, respondent notified Taylor that she was taking sick leave for an indefinite period. On November 1, 1978, the bank discharged her for excessive use of that leave.

Respondent brought this action against Taylor and the bank, claiming that during her four years at the bank she had “constantly been subjected to sexual harassment” by Taylor in violation of Title VII. She sought injunctive relief, compensatory and punitive damages against Taylor and the bank, and attorney’s fees.

At the 11-day bench trial, the parties presented conflicting testimony about Taylor’s behavior during respondent’s employment. Respondent testified that during her probationary period as a teller-trainee, Taylor treated her in a fatherly way and made no sexual advances. Shortly thereafter, however, he invited her out to dinner and, during the course of the meal, suggested that they go to a motel to have sexual relations. At first she refused, but out of what she described as fear of losing her job she eventually agreed. According to respondent, Taylor thereafter made repeated demands upon her for sexual favors, usually at the branch, both during and after business hours; she estimated that over the next several years she had intercourse with him some 40 or 50 times. In addition, respondent testified that Taylor fondled her in front of other employees, followed her into the women’s restroom when she went there alone, exposed himself to her, and even forcibly raped her on several occasions. These activities ceased after 1977, respondent stated, when she started going with a steady boyfriend.

Respondent also testified that Taylor touched and fondled other women employees of the bank, and she attempted to call witnesses to support this charge. But while some supporting testimony apparently was admitted without objection, the District Court did not allow her “to present wholesale evidence of a pattern and practice relating to sexual advances to other female employees in her case in chief, but advised her that she might well be able to present such evidence in rebuttal to the defendants’ cases.” Vinson v. Taylor, 22 EPD ¶ 30,708, p. 14,693, n. 1, 23 FEP Cases 37, 38-39, n. 1 (DC 1980). Respondent did not offer such evidence in rebuttal. Finally, respondent testified that because she was afraid of Taylor she never reported his harassment to any of his supervisors and never attempted to use the bank’s complaint procedure.

Taylor denied respondent’s allegations of sexual activity, testifying that he never fondled her, never made suggestive remarks to her, never engaged in sexual intercourse with her, and never asked her to do so. He contended instead that respondent made her accusations in response to a business-related dispute. The bank also denied respondent’s allegations and asserted that any sexual harassment by Taylor was unknown to the bank and engaged in without its consent or approval.

The District Court denied relief, but did not resolve the conflicting testimony about the existence of a sexual relationship between respondent and Taylor. It found instead that

“[i]f [respondent] and Taylor did engage in an intimate or sexual relationship during the time of [respondent’s] employment with [the bank], that relationship was a voluntary one having nothing to do with her continued employment at [the bank] or her advancement or promotions at that institution.” Id., at 14,692, 23 FEP Cases, at 42 (footnote omitted).

The court ultimately found that respondent “was not the victim of sexual harassment and was not the victim of sexual discrimination” while employed at the bank. Ibid., 23 FEP Cases, at 43.

Although it concluded that respondent had not proved a violation of Title VII, the District Court nevertheless went on to address the bank’s liability. After noting the bank’s express policy against discrimination, and finding that neither respondent nor any other employee had ever lodged a complaint about sexual harassment by Taylor, the court ultimately concluded that “the bank was without notice and cannot be held liable for the alleged actions of Taylor.” Id., at 14,691, 23 FEP Cases, at 42.

The Court of Appeals for the District of Columbia Circuit reversed. 243 U. S. App. D. C. 323, 753 F. 2d 141 (1985). Relying on its earlier holding in Bundy v. Jackson, 205 U. S. App. D. C. 444, 641 F. 2d 934 (1981), decided after the trial in this case, the court stated that a violation of Title VII may be predicated on either of two types of sexual harassment: harassment that involves the conditioning of concrete employment benefits on sexual favors, and harassment that, while not affecting economic benefits, creates a hostile or offensive working environment. The court drew additional support for this position from the Equal Employment Opportunity Commission’s Guidelines on Discrimination Because of Sex, 29 CFR § 1604.11(a) (1985), which set out these two types of sexual harassment claims. Believing that “Vinson’s grievance was clearly of the [hostile environment] type,” 243 U. S. App. D. C., at 327, 753 F. 2d, at 145, and that the District Court had not considered whether a violation of this type had occurred, the court concluded that a remand was necessary.

The court further concluded that the District Court’s finding that any sexual relationship between respondent and Taylor “was a voluntary one” did not obviate the need for a remand. “[U]ncertain as to precisely what the [district] court meant” by this finding, the Court of Appeals held that if the evidence otherwise showed that “Taylor made Vinson’s toleration of sexual harassment a condition of her employment,” her voluntariness “had no materiality whatsoever.” Id., at 328, 753 F. 2d, at 146. The court then surmised that the District Court’s finding of voluntariness might have been based on “the voluminous testimony regarding respondent’s dress and personal fantasies,” testimony that the Court of Appeals believed “had no place in this litigation.” Id., at 328, n. 36, 753 F. 2d, at 146, n. 36.

As to the bank’s liability, the Court of Appeals held that an employer is absolutely liable for sexual harassment practiced by supervisory personnel, whether or not the employer knew or should have known about the misconduct. The court relied chiefly on Title VII’s definition of “employer” to include “any agent of such a person,” 42 U. S. C. §2000e(b), as well as on the EEOC Guidelines. The court held that a supervisor is an “agent” of his employer for Title VII purposes, even if he lacks authority to hire, fire, or promote, since “the mere existence — or even the appearance — of a significant degree of influence in vital job decisions gives any supervisor the opportunity to impose on employees.” 243 U. S. App. D. C., at 332, 753 F. 2d, at 150.

In accordance with the foregoing, the Court of Appeals reversed the judgment of the District Court and remanded the case for further proceedings. A subsequent suggestion for rehearing en banc was denied, with three judges dissenting. 245 U. S. App. D. C. 306, 760 F. 2d 1330 (1985). We granted certiorari, 474 U. S. 1047 (1985), and now affirm but for different reasons.

II

Title VII of the Civil Rights Act of 1964 makes it “an unlawful employment practice for an employer ... to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” 42 U. S. C. § 200Óe-2(a)(l). The prohibition against discrimination based on sex was added to Title VII at the last minute on the floor of the House of Representatives. 110 Cong. Rec. 2577-2584 (1964). The principal argument in opposition to the amendment was that “sex discrimination” was sufficiently different from other types of discrimination that it ought to receive separate legislative treatment. See id., at 2577 (statement of Rep. Celler quoting letter from United States Department of Labor); id., at 2584 (statement of Rep. Green). This argument was defeated, the bill quickly passed as amended, and we are left with little legislative history to guide us in interpreting the Act’s prohibition against discrimination based on “sex.”

Respondent argues, and the Court of Appeals held, that unwelcome sexual advances that create an offensive or hostile working environment violate Title VII. Without question, when a supervisor sexually harasses a subordinate because of the subordinate’s sex, that supervisor “discriminate[s]” on the basis of sex. Petitioner apparently does not challenge this proposition. It contends instead that in prohibiting discrimination with respect to “compensation, terms, conditions, or privileges” of employment, Congress was concerned with what petitioner describes as “tangible loss” of “an economic character,” not “purely psychological aspects of the workplace environment.” Brief for Petitioner 30-31, 34. In support of this claim petitioner observes that in both the legislative history of Title VII and this Court’s Title VII decisions, the focus has been on tangible, economic barriers erected by discrimination.

We reject petitioner’s view. First, the language of Title VII is not limited to “economic” or “tangible” discrimination. The phrase “terms, conditions, or privileges of employment” evinces a congressional intent “ ‘to strike at the entire spectrum of disparate treatment of men and women’ ” in employment. Los Angeles Dept. of Water and Power v. Manhart, 435 U. S. 702, 707, n. 13 (1978), quoting Sprogis v. United Air Lines, Inc., 444 F. 2d 1194, 1198 (CA7 1971). Petitioner has pointed to nothing in the Act to suggest that Congress contemplated the limitation urged here.

Second, in 1980 the EEOC issued Guidelines specifying that “sexual harassment,” as there defined, is a form of sex discrimination prohibited by Title VII. As an “administrative interpretation of the Act by the enforcing agency,” Griggs v. Duke Power Co., 401 U. S. 424, 433-434 (1971), these Guidelines, “ ‘while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance,’” General Electric Co. v. Gilbert, 429 U. S. 125, 141-142 (1976), quoting Skidmore v. Swift & Co., 323 U. S. 134, 140 (1944). The EEOC Guidelines fully support the view that harassment leading to noneconomic injury can violate Title VII.

In defining “sexual harassment,” the Guidelines first describe the kinds of workplace conduct that may be actionable under Title VII. These include “[ujnwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature.” 29 CFR § 1604.11(a) (1985). Relevant to the charges at issue in this case, the Guidelines provide that such sexual misconduct constitutes prohibited “sexual harassment,” whether or not it is directly linked to the grant or denial of an economic quid pro quo, where “such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment.” § 1604.11(a)(3).

In concluding that so-called “hostile environment” (i. e., non quid pro quo) harassment violates Title VII, the EEOC drew upon a substantial body of judicial decisions and EEOC precedent holding that Title VII affords employees the right to work in an environment free from discriminatory intimidation, ridicule, and insult. See generally 45 Fed. Reg. 74676 (1980). Rogers v. EEOC, 454 F. 2d 234 (CA5 1971), cert. denied, 406 U. S. 957 (1972), was apparently the first case to recognize a cause of action based upon a discriminatory work environment. In Rogers, the Court of Appeals for the Fifth Circuit held that a Hispanic complainant could establish a Title VII violation by demonstrating that her employer created an offensive work environment for employees by giving discriminatory service to its Hispanic clientele. The court explained that an employee’s protections under Title VII extend beyond the economic aspects of employment:

“[T]he phrase ‘terms, conditions or privileges of employment’ in [Title VII] is an expansive concept which sweeps within its protective ambit the practice of creating a working environment heavily charged with ethnic or racial discrimination. . . . One can readily envision working environments so heavily polluted with discrimination as to destroy completely the emotional and psychological stability of minority group workers . . . .” 454 F. 2d, at 238.

Courts applied this principle to harassment based on race, e. g., Firefighters Institute for Racial Equality v. St. Louis, 549 F. 2d 506, 514-515 (CA8), cert. denied sub nom. Banta v. United States, 434 U. S. 819 (1977); Gray v. Greyhound Lines, East, 178 U. S. App. D. C. 91, 98, 545 F. 2d 169, 176 (1976), religion, e. g., Compston v. Borden, Inc., 424 F. Supp. 157 (SD Ohio 1976), and national origin, e. g., Cariddi v. Kansas City Chiefs Football Club, 568 F. 2d 87, 88 (CA8 1977). Nothing in Title VII suggests that a hostile environment based on discriminatory sexual harassment should not be likewise prohibited. The Guidelines thus appropriately drew from, and were fully consistent with, the existing case law.

Since the Guidelines were issued, courts have uniformly held, and we agree, that a plaintiff may establish a violation of Title VII by proving that discrimination based on sex has created a hostile or abusive work environment. As the Court of Appeals for the Eleventh Circuit wrote in Henson v. Dundee, 682 F. 2d 897, 902 (1982):

“Sexual harassment which creates a hostile or offensive environment for members of one sex is every bit the arbitrary barrier to sexual equality at the workplace that racial harassment is to racial equality. Surely, a requirement that a man or woman run a gauntlet of sexual abuse in return for the privilege of being allowed to work and make a living can be as demeaning and disconcerting as the harshest of racial epithets.”

Accord, Katz v. Dole, 709 F. 2d 251, 254-255 (CA4 1983); Bundy v. Jackson, 205 U. S. App. D. C., at 444-454, 641 F. 2d, at 934-944; Zabkowicz v. West Bend Co., 589 F. Supp. 780 (ED Wis. 1984).

Of course, as the courts in both Rogers and Henson recognized, not all workplace conduct that may be described as “harassment” affects a “term, condition, or privilege” of employment within the meaning of Title VII. See Rogers v. EEOC, supra, at 238 (“mere utterance of an ethnic or racial epithet which engenders offensive feelings in an employee” would not affect the conditions of employment to sufficiently significant degree to violate Title VII); Henson, 682 F. 2d, at 904 (quoting same). For sexual harassment to be actionable, it must be sufficiently severe or pervasive “to alter the conditions of [the victim’s] employment and create an abusive working environment.” Ibid. Respondent’s allegations in this case — which include not only pervasive harassment but also criminal conduct of the most serious nature — are plainly sufficient to state a claim for “hostile environment” sexual harassment.

The question remains, however, whether the District Court’s ultimate finding that respondent “was not the victim of sexual harassment,” 22 EPD ¶30,708, at 14,692-14,693, 23 FEP Cases, at 43, effectively disposed of respondent’s claim. The Court of Appeals recognized, we think correctly, that this ultimate finding was likely based on one or both of two erroneous views of the law. First, the District Court apparently believed that a claim for sexual harassment will not lie absent an economic effect on the complainant’s employment. See ibid. (“It is without question that sexual harassment of female employees in which they are asked or required to submit to sexual demands as a condition to obtain employment or to maintain employment or to obtain promotions falls within protection of Title VII”) (emphasis added). Since it ■ appears that the District Court made its findings without ever considering the “hostile environment” theory of sexual harassment, the Court of Appeals’ decision to remand was correct.

Second, the District Court’s conclusion that no actionable harassment occurred might have rested on its earlier “finding” that “[i]f [respondent] and Taylor did engage in an intimate or sexual relationship . . . , that relationship was a voluntary one.” Id., at 14,692, 23 FEP Cases, at 42. But the fact that sex-related conduct was “voluntary,” in the sense that the complainant was not forced to participate against her will, is not a defense to a sexual harassment suit brought under Title VII. The gravamen of any sexual harassment claim is that the alleged sexual advances were “unwelcome.” 29 CFR § 1604.11(a) (1985). While the question whether particular conduct was indeed unwelcome presents difficult problems of proof and turns largely on credibility determinations committed to the trier of fact, the District Court in this case erroneously focused on the “voluntariness” of respondent’s participation in the claimed sexual episodes. The correct inquiry is whether respondent by her conduct indicated that the alleged sexual advances were unwelcome, not whether her actual participation in sexual intercourse was voluntary.

Petitioner contends that even if this case must be remanded to the District Court, the Court of Appeals erred in one of the terms of its remand. Specifically, the Court of Appeals stated that testimony about respondent’s “dress and personal fantasies,” 243 U. S. App. D. C., at 328, n. 36, 753 F. 2d, at 146, n. 36, which the District Court apparently admitted into evidence, “had no place in this litigation.” Ibid. The apparent ground for this conclusion was that respondent’s voluntariness vel non in submitting to Taylor’s advances was immaterial to her sexual harassment claim. While “vol-untariness” in the sense of consent is not a defense to such a claim, it does not follow that a complainant’s sexually provocative speech or dress is irrelevant as a matter of law in determining whether he or she found particular sexual advances unwelcome. To the contrary, such evidence is obviously relevant. The EEOC Guidelines emphasize that the trier of fact must determine the existence of sexual harassment in light of “the record as a whole” and “the totality of circumstances, such as the nature of the sexual advances and the context in which the alleged incidents occurred.” 29 CFR § 1604.11(b) (1985). Respondent’s claim that any marginal relevance of the evidence in question was outweighed by the potential for unfair prejudice is the sort of argument properly addressed to the District Court. In this case the District Court concluded that the evidence should be admitted, and the Court of Appeals’ contrary conclusion was based upon the erroneous, categorical view that testimony about provocative dress and publicly expressed sexual fantasies “had no place in this litigation.” 243 U. S. App. D. C., at 328, n. 36, 753 F. 2d, at 146, n. 36. While the District Court must carefully weigh the applicable considerations in deciding whether to admit evidence of this kind, there is no per se rule against its admissibility.

Ill

Although the District Court concluded that respondent had not proved a violation of Title VII, it nevertheless went on to consider the question of the bank’s liability. Finding that “the bank was without notice” of Taylor’s alleged conduct, and that notice to Taylor was not the equivalent of notice to the bank, the court concluded that the bank therefore could not be held hable for Taylor’s alleged actions. The Court of Appeals took the opposite view, holding that an employer is strictly liable for a hostile environment created by a supervisor’s sexual advances, even though the employer neither knew nor reasonably could have known of the alleged misconduct. The court held that a supervisor, whether or not he possesses the authority to hire, fire, or promote, is necessarily an “agent” of his employer for all Title VII purposes, since “even the appearance” of such authority may enable him to impose himself on his subordinates.

The parties and amici suggest several different standards for employer liability. Respondent, not surprisingly, defends the position of the Court of Appeals. Noting that Title VII’s definition of “employer” includes any “agent” of the employer, she also argues that “so long as the circumstance is work-related, the supervisor is the employer and the employer is the supervisor.” Brief for Respondent 27. Notice to Taylor that the advances were unwelcome, therefore, was notice to the bank.

Petitioner argues that respondent’s failure to use its established grievance procedure, or to otherwise put it on notice of the alleged misconduct, insulates petitioner from liability for Taylor’s wrongdoing. A contrary rule would be unfair, petitioner argues, since in a hostile environment harassment case the employer often will have no reason to know about, or opportunity to cure, the alleged wrongdoing.

The EEOC, in its brief as’ amicus curiae, contends that courts formulating employer liability rules should draw from traditional agency principles. Examination of those principles has led the EEOC to the view that where a supervisor exercises the authority actually delegated to him by his employer, by making or threatening to make decisions affecting the employment status of his subordinates, such actions are properly imputed to the employer whose delegation of authority empowered the supervisor to undertake them. Brief for United States and EEOC as Amici Curiae 22. Thus, the courts have consistently held employers liable for the discriminatory discharges of employees by supervisory personnel, whether or not the employer knew, should have known, or approved of the supervisor’s actions. E. g., Anderson v. Methodist Evangelical Hospital, Inc., 464 F. 2d 723, 725 (CA6 1972).

The EEOC suggests that when a sexual harassment claim rests exclusively on a “hostile environment” theory, however, the usual basis for a finding of agency will often disappear. In that case, the EEOC believes, agency principles lead to

“a rule that asks whether a victim of sexual harassment had reasonably available an avenue of complaint regarding such harassment, and, if available and utilized, whether that procedure was reasonably responsive to the employee’s complaint. If the employer has an expressed policy against sexual harassment and has implemented a procedure specifically designed to resolve sexual harassment claims, and if the victim does not take advantage of that procedure, the employer should be shielded from liability absent actual knowledge of the sexually hostile environment (obtained, e. g., by the filing of a charge with the EEOC or a comparable state agency). In all other cases, the employer will be liable if it has actual knowledge of the harassment or if, considering all the facts of the case, the victim in question had no reasonably available avenue for making his or her complaint known to appropriate management officials.” Brief for United States and EEOC as Amici Curiae 26.

As respondent points out, this suggested rule is in some tension with the EEOC Guidelines, which hold an employer liable for the acts of its agents without regard to notice. 29 CFR § 1604.11(c) (1985). The Guidelines do require, however, an “examin[ation of] the circumstances of the particular employment relationship and the job [f Junctions performed by the individual in determining whether an individual acts in either a supervisory or agency capacity.” Ibid.

This debate over the appropriate standard for employer liability has a rather abstract quality about it given the state of the record in this case. We do not know at this stage whether Taylor made any sexual advances toward respondent at all, let alone whether those advances were unwelcome, whether they were sufficiently pervasive to constitute a condition of employment, or whether they were “so pervasive and so long continuing . . . that the employer must have become conscious of [them],” Taylor v. Jones, 653 F. 2d 1193, 1197-1199 (CA8 1981) (holding employer liable for racially hostile working environment based on constructive knowledge).

We therefore decline the parties’ invitation to issue a definitive rule on employer liability, but we do agree with the EEOC that Congress wanted courts to look to agency principles for guidance in this area. While such common-law principles may not be transferable in all their particulars to Title VII, Congress’ decision to define “employer” to include any “agent” of an employer, 42 U. S. C. §2000e(b), surely evinces an intent to place some limits on the acts of employees for which employers under Title VII are to be held responsible. For this reason, we hold that the Court of Appeals erred in concluding that employers are always automatically liable for sexual harassment by their supervisors. See generally Restatement (Second) of Agency §§219-237 (1958). For the same reason, absence of notice to an employer does not necessarily insulate that employer from liability. Ibid.

Finally, we reject petitioner’s view that the mere existence of a grievance procedure and a policy against discrimination, coupled with respondent’s failure to invoke that procedure, must insulate petitioner from liability. While those facts are plainly relevant, the situation before us demonstrates why they are not necessarily dispositive. Petitioner’s general nondiscrimination policy did not address sexual harassment in particular, and thus did not alert employees to their employer’s interest in correcting that form of discrimination. App. 25. Moreover, the bank’s grievance procedure apparently required an employee to complain first to her supervisor, in this case Taylor. Since Taylor was the alleged perpetrator, it is not altogether surprising that respondent failed to invoke the procedure and report her grievance to him. Petitioner’s contention that respondent’s failure should insulate it from liability might be substantially stronger if its procedures were better calculated to encourage victims of harassment to come forward.

IV

In sum, we hold that a claim of “hostile environment” sex discrimination is actionable under Title VII, that the District Court’s findings were insufficient to dispose of respondent’s hostile environment claim, and that the District Court did not err in admitting testimony about respondent’s sexually provocative speech and dress. As to employer liability, we conclude that the Court of Appeals was wrong to entirely disregard agency principles and impose absolute liability on employers for the acts of their supervisors, regardless of the circumstances of a particular case.

Accordingly, the judgment of the Court of Appeals reversing the judgment of the District Court is affirmed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

Justice Stevens,

concurring.

Because I do not see any inconsistency between the two opinions, and because I believe the question of statutory construction that Justice Marshall has answered is fairly presented by the record, I join both the Court’s opinion and Justice Marshall’s opinion.

Justice Marshall,

with whom Justice Brennan, Justice Blackmun, and Justice Stevens join, concurring in the judgment.

I fully agree with the Court’s conclusion that workplace sexual harassment is illegal, and violates Title VII. Part III of the Court’s opinion, however, leaves open the circumstances in which an employer is responsible under Title VII for such conduct. Because I believe that question to be properly before us, I write separately.

The issue the Court declines to resolve is addressed in the EEOC Guidelines on Discrimination Because of Sex, which are entitled to great deference. See Griggs v. Duke Power Co., 401 U. S. 424, 433-434 (1971) (EEOC Guidelines on Employment Testing Procedures of 1966); see also ante, at 65. The Guidelines explain:

“Applying general Title VII principles, an employer ... is responsible for its acts and those of its agents and supervisory employees with respect to sexual harassment regardless of whether the specific acts complained of were authorized or even forbidden by the employer and regardless of whether the employer knew or should have known of their occurrence. The Commission will examine the circumstances of the particular employment relationship and the job [f junctions performed by the individual in determining whether an individual acts in either a supervisory or agency capacity.
“With respect to conduct between fellow employees, an employer is responsible for acts of sexual harassment in the workplace where the employer (or its agents or supervisory employees) knows or should have known of the conduct, unless it can show that it took immediate and appropriate corrective action.” 29 CFR §§1604.11(c),(d) (1985).

The Commission, in issuing the Guidelines, explained that its rule was “in keeping with the general standard of employer liability with respect to agents and supervisory employees. . . . [T]he Commission and the courts have held for years that an employer is liable if a supervisor or an agent violates the Title VII, regardless of knowledge or any other mitigating factor.” 45 Fed. Reg. 74676 (1980). I would adopt the standard set out by the Commission.

An employer can act only through individual supervisors and employees; discrimination is rarely carried out pursuant to a formal vote of a corporation’s board of directors. Although an employer may sometimes adopt companywide discriminatory policies violative of Title VII, acts that may constitute Title VII violations are generally effected through the actions of individuals, and often an individual may take such a step even in defiance of company policy. Nonetheless, Title VII remedies, such as reinstatement and backpay, generally run against the employer as an entity. The question thus arises as to the circumstances under which an employer will be held liable under Title VII for the acts of its employees.

The answer supplied by general Title VII law, like that supplied by federal labor law, is that the act of a supervisory employee or agent is imputed to the employer. Thus, for example, when a supervisor discriminatorily fires or refuses to promote a black employee, that act is, without more, considered the act of the employer. The courts do not stop to consider whether the employer otherwise had “notice” of the action, or even whether the supervisor had actual authority to act as he did. E. g., Flowers v. Crouch-Walker Corp., 552 F. 2d 1277, 1282 (CA7 1977); Young v. Southwestern Savings and Loan Assn., 509 F. 2d 140 (CA5 1975); Anderson v. Methodist Evangelical Hospital, Inc., 464 F. 2d 723 (CA6 1972). Following that approach, every Court of Appeals that has considered the issue has held that sexual harassment by supervisory personnel is automatically imputed to the employer when the harassment results in tangible job detriment to the subordinate employee. See Horn v. Duke Homes, Inc., Div. of Windsor Mobile Homes, 755 F. 2d 599, 604-606 (CA7 1985); Craig v.Y & Y Snacks, Inc., 721 F. 2d 77, 80-81 (CA3 1983); Katz v. Dole, 709 F. 2d 251, 255, n. 6 (CA4 1983); Henson v. Dundee, 682 F. 2d 897, 910 (CA11 1982); Miller v. Bank of America, 600 F. 2d 211, 213 (CA9 1979).

The brief filed by the Solicitor General on behalf of the United States and the EEOC in this case suggests that a different rule should apply when a supervisor’s harassment “merely” results in a discriminatory work environment. The Solicitor General concedes that sexual harassment that affects tangible job benefits is an exercise of authority delegated to the supervisor by the employer, and thus gives rise to employer liability. But, departing from the EEOC Guidelines, he argues that the case of a supervisor merely creating a discriminatory work environment is different because the supervisor “is not exercising, or threatening to exercise, actual or apparent authority to make personnel decisions affecting the victim.” Brief for United States and EEOC as Amici Curiae 24. In the latter situation, he concludes, some further notice requirement should therefore be necessary.

The Solicitor General’s position is untenable. A supervisor’s responsibilities do not begin and end with the power to hire, fire, and discipline employees, or with the power to recommend such actions. Rather, a supervisor is charged with the day-to-day supervision of the work environment and with ensuring a safe, productive workplace. There is no reason why abuse of the latter authority should have different consequences than abuse of the former. In both cases it is the authority vested in the supervisor by the employer that enables him to commit the wrong: it is precisely because the supervisor is understood to be clothed with the employer’s authority that he is able to impose unwelcome sexual conduct on subordinates. There is therefore no justification for a special rule, to be applied only in “hostile environment” cases, that sexual harassment does not create employer liability until the employee suffering the discrimination notifies other supervisors. No such requirement appears in the statute, and no such requirement can coherently be drawn from the law of agency.

Agency principles and the goals of Title VII law make appropriate some limitation on the liability of employers for the acts of supervisors. Where, for example, a supervisor has no authority over an employee, because the two work in wholly different parts of the employer’s business, it may be improper to find strict employer liability. See 29 CFR § 1604.11(c) (1985). Those considerations, however, do not justify the creation of a special “notice” rule in hostile environment cases.

Further, nothing would be gained by crafting such a rule. In the “pure” hostile environment case, where an employee files an EEOC complaint alleging sexual harassment in the workplace, the employee seeks not money damages but in-junctive relief. See Bundy v. Jackson, 205 U. S. App. D. C. 444, 456, n. 12, 641 F. 2d 934, 946, n. 12 (1981). Under Title VII, the EEOC must notify an employer of charges made against it within 10 days after receipt of the complaint. 42 U. S. C. § 2000e-5(b). If the charges appear to be based on “reasonable cause,” the EEOC must attempt to eliminate the offending practice through “informal methods of conference, conciliation, and persuasion.” Ibid. An employer whose internal procedures assertedly would have redressed the discrimination can avoid injunctive relief by employing these procedures after receiving notice of the complaint or during the conciliation period. Cf. Brief for United States and EEOC as Amici Curiae 26. Where a complainant, on the other hand, seeks backpay on the theory that a hostile work environment effected a constructive termination, the existence of an internal complaint procedure may be a factor in determining not the employer’s liability but the remedies available against it. Where a complainant without good reason bypassed an internal complaint procedure she knew to be effective, a court may be reluctant to find constructive termination and thus to award reinstatement or backpay.

I therefore reject the Solicitor General’s position. I would apply in this case the same rules we apply in all other Title VII cases, and hold that sexual harassment by a supervisor of an employee under his supervision, leading to a discriminatory work environment, should be imputed to the employer for Title VII purposes regardless of whether the employee gave “notice” of the offense.

      Like the Court of Appeals, this Court was not provided a complete transcript of the trial. We therefore rely largely on the District Court’s opinion for the summary of the relevant testimony.

       The remedial provisions of Title VII were largely modeled on those of the National Labor Relations Act (NLRA). See Albemarle Paper Co. v. Moody, 422 U. S. 405, 419, and n. 11 (1975); see also Franks v. Bowman Transportation Co., 424 U. S. 747, 768-770 (1976).

       For NLRA cases, see, e. g., Graves Trucking, Inc. v. NLRB, 692 F. 2d 470 (CA7 1982); NLRB v. Kaiser Agricultural Chemical, Division of Kaiser Aluminum & Chemical Corp., 473 F. 2d 374, 384 (CA5 1973); Amalgamated Clothing Workers of America v. NLRB, 124 U. S. App. D. C. 365, 377, 365 F. 2d 898, 909 (1966).