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April 2005

| Apr 18, 2005 | Daily Developments in EEO Law |

Daily Developments in EEO Law
by Paul Mollica (c) 2005

April 2005

Friday, April 29, 2005

The Tenth Circuit in Plotke v. White, No. 02-3289 (10th Cir. Apr. 28, 2005) reverses summary judgment in a case where the plaintiff (a civilian historian for the Army) was terminated during her probationary period, but was not replaced. The court reiterated, citing Texas Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 253 (1981), that the prima facie test must not be invoked thoughtlessly and ritualistically, and (in some cases) its use might even impede the mission of locating an inference of discrimination:

“While we have held that one way a plaintiff may establish a prima facie case is to include evidence that her job was not eliminated after her discharge, we have also noted that ‘[t]he elimination of the position . . . does not necessarily eviscerate a plaintiff’s claim that her discharge was . . . motivated [by discrimination].’ . . . .

“Requiring Dr. Plotke to present evidence that her position remained open subsequent to her discharge when her employer never even asserted she was terminated because her position was eliminated is especially problematic. Indeed, where an employer contends the actual reason for termination in a discriminatory firing case is not elimination of the employee’s position but, rather, unsatisfactory conduct, the status of the employee’s former position after his or her termination is irrelevant.”

The court observed that other evidence in the record raised the inference of discrimination, even absent proof that she was replaced:

“Among the many facts recited earlier in this opinion, Dr. Plotke was the first and only female historian hired at Fort Leavenworth and Dr. Lackey informed her she was hired largely because of administrative pressures to employ a woman at the facility. Likewise, in contrast to her male counterpart, Dr. Bernstein, Dr. Plotke’s job duties were generally limited to clerical and manual tasks, and she was prohibited from engaging in higher-level functions within the CTC-WIN due to the unexplained delay in delivering her security clearance. Many of her male colleagues, at least one of whom had not achieved the same level of education as she had, referred to her as Jane while referring to other male staff members with their academic titles of ‘Dr.’ Finally, despite her highly praised work and general personal satisfaction while assigned on the Haiti project, Dr. Plotke was removed from that project prior to its completion and reassigned to the CTC-WIN due to the purported urgencies and importance of that project, although the project was never completed. Dr. Plotke’s reassignment to CTC-WIN assured that she was under the supervision of Dr. Morris and therefore sub to his review regarding whether to extend her employment beyond the one-year probationary period.”

Thursday, April 28, 2005

There appears to be a split in the circuits about whether an ADA plaintiff can use evidence of pretext to bolster an otherwise deficient prima facie case of “regarded as” disability discrimination. The Sixth Circuit apparently says yes (Ross v. Campbell Soup Co., 237 F.3d 701, 708 (6th Cir. 2001)), but the Seventh Circuit yesterday in Nese v. Julian Nordic Construction Co., No. 04-2576 (7th Cir. Apr. 27, 2005) joined the Tenth Circuit in holding otherwise:

“An employer is not guilty of discrimination every time it takes an employment action for one reason, but provides a different explanation to the employee. For example, perhaps the employer terminates an employee simply because her supervisor does not get along with her. That might not be a reason the employer wants to admit openly, so, instead, work deficiencies-real or imagined-are cited as the basis for the action. Even though we could wish such shenanigans never happened, we suspect they do, and they do not violate the employment laws unless, for instance, the real reason the supervisor dislikes the employee is based on some protected characteristic. That is why the employee must first establish that she falls into a protected group before we look at either real reasons or pretextual ones for the employment action. In other words, to say the employer was less than perfectly frank does not prove that the employer acted as it did for discriminatory reasons.”

Because the record presented no evidence that the employer regarded the employee as substantially limited in the major life activity of working, the plaintiff flamed out on summary judgment at the prima facie stage.

Wednesday, April 27, 2005

In Saroli v. Automation & Modular Components, Inc., No. 03-2395 (6th Cir. Apr. 26, 2005), the court reserved summary judgment in a Michigan Elliott-Larsen Civil Rights Act case, which substantially tracks Title VII. The district court found that the employee suffered no adverse employment action as a matter of law, despite (1) learning that her job was eliminated during her maternity leave; and (2) being confronted by her manager, Richard Shore, with a choice of either severance, demotion or an interval to look for other work.

The court of appeals found that the Threatened demotion, combined with additional facts, presented a genuine issue of material fact about constructive discharge:

“Of primary importance is the fact that Shore’s words and actions made clear to Saroli that she ought to consider resigning because if she chose to remain at the company she would ‘probably’ be demoted. It is reasonable to infer that such a demotion would likely have resulted in a reduction in job responsibilities for Saroli and perhaps a reduction in salary.”

The same manager, among other things, (1) “refused numerous attempts by Saroli to ascertain the maternity leave which would be offered to her”; (2) made numerous disparaging remarks about plaintiff taking maternity leave; (3) placed his own son personally in charge of the employee; (4) “failed to inform Saroli until the day she returned to work that she would need a doctor’s note in order to be cleared to resume work.” Which demonstrates that egregious evidence of discriminatory intent can go a long way to establishing an adverse employment action.

Tuesday, April 26, 2005

On Monday, the Supreme Court accepted certiorari in a section 1981 case, Domino’s Pizza, Inc. v. McDonald, No. 04-593. The question presented is whether “[i]n the absence of a contractual relationship with the defendant, . . . . allegations of personal injuries alone sufficient to confer standing on a plaintiff pursuant to 42 U.S.C. § 1981?”

Plaintiff McDonald is an African-American president and sole shareholder of a construction company, JWM Investments, Inc. (“JWM”), who claims he was injured by the termination of JWM’s contract to build four restaurants in Las Vegas. Allegedly Debbie Pear, Domino’s real estate negotiator, in expressing frustration at JWM’s delays, commented to McDonald that she did not like dealing with “you people.” McDonald sued Domino’s and petitioner Debbie Pear on his own behalf, under section 1981, alleging that he suffered financial loss, emotional distress, mental anguish, and humiliation because of Domino’s termination of its contracts with JWM. (I abstracted these details from the petitioner’s brief, which I read on Westlaw.)

While the case was dismissed in the district court, the Ninth Circuit revived it on appeal. The per curiam panel decision stated, in relevant part:

“While a shareholder cannot maintain a civil rights action for injury suffered only by the corporation, see Erlich v. Glasner, 418 F.2d 226, 228 (9th Cir.1969), we have acknowledged that ‘[t]he same discriminatory conduct can result in both corporate and individual injuries.’ Gomez v. Alexian Bros. Hosp., 698 F.2d 1019, 1021 (9th Cir.1983). In Gomez, we held that a physician of Hispanic origin who practiced medicine as an employee of a professional corporation had standing to sue under 42 U.S.C. § 1981 when the defendant hospital rejected, for allegedly racial reasons, the corporation’s contract proposal to operate the hospital’s emergency room. Id. at 1021- 22. The physician had alleged injuries distinct from that of the corporation, including loss of employment as director of the defendant’s emergency room, as well as ‘humiliation and embarrassment.’ Id. at 1021.”

One can picture this question coming up in other employment situations, such as crews or teams hired through a private contractors (a common practice in agriculture), or temporary workers hired through an agency. So the question might turn out to be significant for a wide swath of employees.

Apparently, the Ninth Circuit stands alone on this issue, with other circuits rejecting standing for third parties. But then, the Ninth Circuit also stood alone in Desert Palace v. Costa, so it remains up in the air.

Monday, April 25, 2005

Last week, the Supreme Court invited the Acting Solicitor General to file the government’s position to the petition for writ of certiorari from Carpenters Health And Welfare v. Vonderharr (9th Cir. Sept. 25, 2004) — a harbinger of an eventual grant of cert. The case implicates an issue raging powerfully in the ERISA field — whether the Supreme Court’s 5-4 decision in Great-West Life & Ann. Ins. Co. v. Knudson, 534 U.S. 204 (2002), entirely wipes out all forms of monetary relief under ERISA § 502(a)(3), which provides only for “appropriate equitable relief.”

While it is employees/participants that usually (and unsuccessfully) seek to recast their claims as equitable to fit into the strictures of this section, here it was the fund seeking to recoup settlement funds paid to a claimant; the plan imposed a duty to reimburse personal injury awards back to the Fund. (The case thus mirrored Great-West Life.) The employer sought a TRO to prevent distribution of the settlement proceeds to the plaintiff. The district court, and then the Ninth Circuit, found (under the circuit’s reigning precedents) that the relief sought nothing more than a mechanism to enforce a legal (i.e. contractual) remedy. The panel found that Great-West bolstered that conclusion:

“Great-West Life buttressed rather than overruled our holdings. Indeed, Great-West Life affirmed our unpublished opinion which the Supreme Court characterized as holding ‘that judicially decreed reimbursement for payments made to a beneficiary of an insurance plan by a third party is not equitable relief and is therefore not authorized by § 502(a)(3).’ 534 U.S. at 208.

“As in this appeal, the plan at issue in Great-West Life included a reimbursement provision, which specifically provided for the plan’s right to recovery of benefits paid from a third party and also provided for a lien on proceeds from tort recoveries. The plan in Great-West Life filed an action seeking injunctive and declaratory relief under § 502(a)(3) to enforce the reimbursement provision of the plan by requiring the payment of proceeds recovered from third parties. Id. Consistent with its prior authority and with our precedent, the Supreme Court held that this type of action was not permissible under ERISA. Id.”

The government’s position on this issue ought to be enlightening.

Friday, April 22, 2005

Nice to see a defense-bar shibboleth exploded, in West v. Ortho-McNeil Pharmaceutical Corp., No. 03-3595 (7th Cir. Apr. 21, 2005). The defense at trial successfully excluded racial epithets allegedly uttered by the plaintiff’s manager in a Title VII termination case, on the ground that they occurred more than 300 days prior to the filing of the charge. The Seventh Circuit found that the trial judge misread National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002):

“Morgan, however, is not limited to hostile work environment claims. On claims other than hostile work environment claims, acts outside the statutory time period cannot be the basis for liability, but the statute does not ‘bar an employee from using the prior acts as background evidence in support of a timely claim.’ At 113. We have interpreted this language as allowing time-barred acts as support for a timely claim. In Davis v. Con-Way Transportation Central Express, Inc., 368 F.3d 776, 786 n.4 (7th Cir. 2004), we said that Morgan made clear that ‘where, as here, the plaintiff timely alleged a discrete discriminatory act (i.e., his termination based on his race and in retaliation for filing prior charges), acts outside of the statutory time frame may be used to support that claim.’ This is one of those rare occasions on which we find the exclusion to be an abuse of discretion.”

Finding that the error was an abuse of discretion and could have affected the outcome of the trial, the court vacated judgment and remanded for a new trial. All the more remarkable, the plaintiff represented himself at trial and bested many lawyers by successfully preserving the argument for appeal (where he was ably represented by Robin Potter).

Thursday, April 21, 2005

Sometimes you know that the judge is gunning for you. Take a look at the opinion in McMillan v. Castro, No. 03-4444 (6th Cir. Apr. 19, 2005) , affirming a jury verdict against the plaintiff:

McMillan points to several pages in the transcript where the district court extensively questioned her regarding the facts of her claims, and specific instances where the district court appeared less-than-cordial. For example, the district court cut McMillan’s answers short on occasion, asserting that it was merely asking ‘a simple question.’ The district court also questioned whether it and McMillan were ‘speaking the same language,’ ended a line of questioning with ‘[t]hat’s it? That’s your case?,’ and once suggested that McMillan’s attorney had ‘keyed’ her in on an answer. The morning following McMillan’s testimony, her counsel moved for a mistrial based on the district court’s ‘onerous interrogatories.’ McMillan asserted that the district court ‘move[d] into the role of an advocate rather than the Judge.’ The district court responded that ‘[s]he couldn’t answer my question,’ told counsel that ‘[i]t’s a matter of interpretation, isn’t it?’ and overruled McMillan’s motion.

Despite finding this behavior from the bench “troubling” and “dangerously close to tainting the fairness of McMillan’s trial,” the Sixth Circuit found that the behavior was just shy of hostility or bias and not abuse of discretion.

Wednesday, April 20, 2005

The Supreme Court ruled unanimously in a securities case, Dura Pharmaceuticals, Inc. v. Broudo, No. 03-923 (U.S. S. Ct. Apr. 19, 2005), that the plaintiffs failed to state a claim in a fraud-on-the-market case because the complaint alleged no injury beyond the allegedly inflated value of their shares. While this may have only the remotest connection with employment law, it bears on an important rule of civil procedure, Fed. R. Civ. P. 8. There terms ago, in Swierkiewicz v. Sorema N. A., 534 U.S. 506, 513-515 (2002), the Supreme Court rejected the Second Circuit’s rule that a plaintiff alleging discrimination must plead (under Rule 8) the prima facie elements of the claim under McDonnell Douglas. In Tuesday’s decision, the Court conditioned its pronouncement in Sorema: at least in the securities arena, “it should not prove burdensome for a plaintiff who has suffered an economic loss to provide a defendant with some indication of the loss and the causal connection that the plaintiff has in mind.”

Defendants may argue, therefore, that plaintiffs seeking relief under the anti-discrimination statutes must also allege loss and causation. This bit of casuistry would be easily rebutted: in contrast to Securities Act cases, plaintiffs in most cases enjoy claims for compensatory damages (though not under the ADEA or Equal Pay Act), and back pay is a presumptive remedy in all cases where liability is established. Still, it always pays to consider these issues during the intake stage of a case, which are every bit as important as liability (but too often overlooked in haste).

Tuesday, April 19, 2005

There are ways to read, and misread, Ronda-Perez v. Banco Bilbao Vizcayargentaria, No. 04-2087 (1st Cir. Apr. 13, 2005). The facts, in a nutshell, is that plaintiff — a 54-year-old bank manager — was fired after an investigation revealed him to be a sex harasser. The prima facie case was conceded (he was replaced by a 42 year old). The plaintiff pointed to a number of alleged deficiencies in the investigation as evidence of pretext. There was no explicit reference to the plaintiff’s age.

The obvious misreading — unfortunately invited by the panel opinion’s extended obiter dictum concerning Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000) — is that the First Circuit continues to insist on “additional evidence” of bias to bolster the pretext method of proof, despite that Reeves explicitly overruled the First Circuit’s pre-Reeves standard: “Under these circumstances – ‘a prima facie case of discrimination . . . , enough evidence for the jury to reject respondent’s explanation, and . . . additional evidence of age-based animus,’ [Reeves] at 153 – the Court held that a jury could find intentional discrimination.” That interpretation would be difficult to square with the Reeves admonition “that, because a prima facie case and sufficient evidence to reject the employer’s explanation may permit a finding of liability, the Court of Appeals erred in proceeding from the premise that a plaintiff must always introduce additional, independent evidence of discrimination.”

The wiser reading, bolstered by the record evidence as a whole, is that the proffered reason for termination withstood attack, despite that the employer’s investigation was flawed, because the allegedly “fishy” characteristics of investigation did not suggest a preordained outcome that would have been more akin to “pretext.” The evidence presented no genuine issue of material fact about pretext at all — a departure from the discredited “pretext-plus” authority, which allowed entry of summary judgment even in the teeth of an obviously false excuse for an adverse employment action.

Monday, April 18, 2005

Public employees excluded from Title VII under the policy making exemption (42 U.S.C. § 2000e(f)) may petition the EEOC for an administrative remedy under the terms of the Government Employee Rights Act of 1991 (“GERA”), 42 U.S.C. §§ 2000e-16a, 2000e-16b, and 2000e-16c. A drafting glitch left open the question of whether the GERA covered claims of retaliation as well as discrimination. The Tenth Circuit in Board of County Commissioners, Fremont County, Colorado v. EEOC, No. 03-9566 (10th Cir. Apr. 15, 2005) filled the gap and held that retaliation is covered. The respondent county maintained that (1) the plain language of GERA omitted such a remedy; and (2) no Chevron deference was due the EEOC’s interpretation of the statute, because the Tenth Amendment erected a presumption against governmental liability. But the court, reviewing (and affirming) an administrative ruling in favor of the employee (intervenor Jay Janssen), rejected the county’s narrowing construction. “Because GERA is modeled after the language of Title VII, interpretation of § 2000e-16(b)(a)(1) to include prohibitions against retaliatory discrimination is consistent with judicial interpretations of Title VII, and supports the reasonableness of the EEOC’s interpretation.” The court also cited the Supreme Court’s recent decision in Jackson v. Birmingham Bd. of Educ., 544 U.S. ___, 2005 WL 701076, at 4, 9 (Mar. 29, 2005), that implied a retaliation remedy under Title IX.

Friday, April 15, 2005

The circuits have split over what kinds of employer behavior constitutes actionable Title VII retaliation. The Fifth Circuit single-mindedly adheres to the rule that an employee must establish an “ultimate employment action,” Mattern v. Eastman Kodak Co., 104 F.3d 702, 708 (5th Cir. 1997), such as termination or demotion. So, in Hockman vs. Westward Comm LLC, No. 03-41620 (5th Cir. Apr. 13, 2005), the employer responded to an EEOC charge of sex harassment by immediately separating the charging party (Hockman) from the alleged harasser. That is, the employer involuntarily transferred the charge-filer to a more remote facility, filled with “numerous spiders and webs, hundreds of cricket corpses, dead rats, maggots, old newspapers, thick dust, bodily fluids on the desk and wall and feces and urination.” Retaliation? Not in the Fifth Circuit, “because it was a purely lateral move.” She “retrained the same pay, duties, and benefits; was reimbursed for her mileage from Grand Saline to Edgewood; and although the Edgewood facility was temporarily filthy, any filth was cleaned up within a week or two of Hockman’s arrival.”

Presumably, it would have made no difference even if the employee’s boss had admitted a retaliatory intent behind the transfer (e.g., “This’ll show you what happens to people who file complaints with the EEOC”). Which is what makes the Fifth Circuit’s rule so maddening: because it leaves managers with myriad options for mischief on the legal side of the line.

Thursday, April 14, 2005

Reverting to form, the famously conservative Fifth Circuit declined to extend its groundbreaking decision in Rachid v. Jack In The Box, Inc., 375 F.3d 305 (5th Cir. 2004), to a Title VII national origin case in Keelan v. Majesco Software, Inc., No. 04-10317 (5th Cir. Apr. 12, 2005). Rachid stood out as the only U.S. Court of Appeals decision to date extending the holding of Desert Palace v. Costa, 539 U.S. 90 (2003), to the summary judgment stage and modifying the pretext method of proof to incorporate a motivating-factor analysis. This case retrenches a bit, holding that the two employees here failed to preserve their theory and were required to present a traditional prima facie case.

The employer — a Texas-based, wholly-owned subsidiary of an Indian corporation — allegedly terminated one British employee and constructively discharged another on the basis of national origin. There was some evidence of national chauvinism by management:

“Keelan and Sullivan also complained to P.N. Prasad (‘Prasad’), an Indian Majesco executive, about what they perceived to be discrimination against non-Indians. Keelan said Prasad also stated that ‘Americans have never worked out’ at the company. Sullivan spoke to Ketan Mehta (‘Mehta’), Majesco’s CEO and an Indian, about the apparent discrimination; Mehta’s response was, ‘I can see how you would feel that way.'”

On summary judgment, the employees supposedly failed to identify similarly-situated individuals outside of the protected class. Keelan and Sullivan protested in the district court and on appeal that Desert Palace upended the McDonnell Douglas test. But the panel found that they did not preserve their argument sufficiently on summary judgment to preserve an appeal:

“However, based upon our careful review of the record, we agree with Majesco that Appellants did not properly raise in the district court the argument that showing similarly situated employees were more favorably treated to meet the fourth element of McDonnell Douglas is not required to prove up a prima facie case of discrimination. While Appellants objected that their case should be treated under a mixed-motive theory perDesert Palace, they did not object to the similarly situated disparate treatment formulation of the fourth element of the prima facie case. Because Appellants did not sufficiently object below, the district court did not have any opportunity to rule on their argument; appellants’ legal argument on formulation is thus waived.”

Moreover, the panel held that Desert Palace would not avail the employees at any rate, because the traditional prima facie elements remained unaltered:

“Appellants desire that their case be analyzed underDesert Palace, which is a mixed-motive case, but they also erroneously argue thatDesert Palace changedMcDonnell Douglas, which governs disparate treatment cases premised on pretext. The district court acknowledged Appellants’ request. However, the court denied such mixed-motive treatment primarily because it found “no evidence that Majesco had legitimate and illegitimate reasons for discharging Keelan.”

Finally the panel, in unremarkable terms, affirmed dismissal of both employees’ claims at the prima facie stage. So employees and their counsel seeking to avoid this result should heed the Fifth Circuit’s directive and specifically invoke the mixed-motive analysis precisely.

Wednesday, April 13, 2005

The “Class Action Fairness Act of 2005” provides that “The amendments made by this Act shall apply to any civil action commenced on or after the date of enactment of this Act.” The language seems plain enough, e.g., that the provisions of the act do not apply retroactively to pending actions. But to a defendant seeking to avoid a state court trial just two weeks away (in class wage-and-hour case), the word “commenced” appeared sufficiently ambiguous to look like a lifeline. So it removed the case to federal district court under the Act, claiming that a removed case “commences” when the removal petition is filed. If given that reading, of course, the effective date would be a nullity. Any pending case could be removed (within 30 days of the passage of the Act, anyway) and squeak past this provision.

The Tenth Circuit in Pritchett v. Office Depot Inc., No. 05-0501 (10th Cir. Apr. 11, 2005) called a halt to the charade, affirming a remand order. Ticking through all of the usual sources of statutory construction — statutory language, presumptions against federal jurisdiction, legislative history, analogous case law, public policy — the court found no support for the defendant’s position. “Commenced” clearly enough means filed, whether in state or federal court. As the opinion closed, “we find it ironic that Defendant seeks countenance for its position from a statute that was designed, in the first place, to curtail jurisdictional gaming and forum-shopping.” And who doesn’t relish a little irony now and then. Especially when Office Depot lands right back in front of the same state court judge for its now-delayed trial on the merits.

Tuesday, April 12, 2005

After a slow stretch last week, the EEO beat is picking up. Today, the Sixth Circuit issued its decision in Isabel v. City of Memphis, No. 03-5912 (6th Cir. Apr. 11, 2005) , affirming (2-1) a finding of Title VII disparate impact liability against a police promotion written test that passed the four-fifths rule, but flunked other benchmarks of statistical significance.

The “four-fifths” or “eighty percent” rule of the Uniform Guidelines on Employee Selection Procedures, adopted by the EEOC, provides that a selection rate for “any race, sex, or ethnic group which is less than four-fifths (or eighty percent) of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies as evidence of adverse impact, while a greater than four-fifths rate will generally not be regarded by Federal enforcement agencies as evidence of adverse impact.” 29 CFR § 1607.4(d). Here, 51 out of 57 (89.5%) whites and 47 out of 63 (74.6%) African-Americans passed, thus squeaking through the 4/5ths rule.

Here, though, the test screened out African-Americans as detected by two alternative statistical analyses: the T-test (differences in mean scores between minority and non-minority candidates) and the Z-test (statistical pass rates across ethnic/racial groups). Judge Martin’s majority opinion affirmed that the plaintiffs met the prima facie burden under those tests. The panel majority held that prior circuit authority that apparently limited the prima facie analysis to the Commission’s four-fifths rule (Black v. City of Akron, 831 F.2d 131 (6th Cir. 1987)) was distinguishable and in any event superceded by Wards Cove and subsequent cases. The dissent (Judge Batchelder) disagreed on this ground, finding that the disparities too small to raise an inference of adverse impact.

Monday, April 11, 2005

In Lutz v. Glendale Union High, No. 03-15745 (9th Cir. April 8, 2005), the Ninth Circuit took a backwards glance at whether a back pay claim under the ADA, Rehabilitation Act and Arizona Civil Rights Act triggers a right to a jury trial. The court holds “no.” Accordingly, a verdict in favor of the employee was tossed.

The question arose in a case removed from state court, where the plaintiff only imperfectly preserved a demand for a jury trial. Under Fed. R. Civ. P. 38(b), a plaintiff must serve a jury demand no later than ten days after service of an answer, on pain of waiver. Rule 81(c), applying to removed cases, provides that a jury right may be preserved if the plaintiff (1) made a timely demand under state law, or else (2) included a suitable demand in her state-court complaint. Here, the court held that the plaintiff preserved her jury right in her complaint (specifically, her prayer for relief) — but only as to damages, not liability. The jury trial on liability issues was therefore held erroneous. The case was remanded for liability findings by the judge. (The judge was permitted either to make findings from the trial record, or to convene a further evidentiary hearing.)

As to damages, if the judge found liability for the plaintiff, he was instructed to enter the compensatory award already made by the jury. But the panel held that the district court committed further error by allowing a jury trial on back pay. Back pay is an equitable rather than legal remedy under the Title VII enforcement regimes (incorporated by the other statutes), and thus is not referred to a jury . “[We hold that there is no right to have a jury determine the appropriate amount of back pay under Title VII, and thus the ADA, even after the Civil Rights Act of 1991. Instead, back pay remains an equitable remedy to be awarded by the district court in its discretion.”

The panel recited the decades’ past precedent in the U.S. Courts of Appeals rejecting Seventh Amendment claims under Title VII. It found that the jury right conferred by 42 U.S.C. § 1981a(b)(2) extended only to compensatory and punitive damages, which expressly excluded back pay. As yet, the U.S. Supreme Court has never ruled on the Seventh Amendment issue as to whether back pay is a legal remedy under Title VII, or an equitable one.

Friday, April 1, 2005

Allowing a day to warm up to the topic, let us consider the potential significance of Smith v. City of Jackson, No. 03-1160 (U.S. S. Ct. Mar 30, 2005) . A four-justice plurality of the Supreme Court agreed that the ADEA — of its own force — provides a cause of action for disparate impact. The plurality (Justices Stevens, Souter, Ginsburg and Breyer) was joined by Justice Scalia, who joined the result but not the reasoning; he located disparate impact not in the statute itself, but in the EEOC regulations (29 C.F.R. § 1625.7), to which Justice Scala accorded Chevron deference.

The employees below challenged a plan to raise salaries, with a higher percentage for less experienced officers:

“[A] revision of the plan, which was motivated, at least in part, by the City’s desire to bring the starting salaries of police officers up to the regional average, granted raises to all police officers and police dispatchers. Those who had less than five years of tenure received proportionately greater raises when compared to their former pay than those with more seniority. Although some officers over the age of 40 had less than five years of service, most of the older officers had more.”

The Fifth Circuit affirmed summary judgment, finding that ADEA did not support a disparate impact theory. The Supreme Court rejected this reasoning, but affirmed the bottom-line result. The pith of the opinion came in the closing pages, where the plurality, joined by Justice Scalia, set out the standard for ADEA disparate impact cases:

“Two textual differences between the ADE and Title VII make it clear that even though both statutes authorize recovery on a disparate-impact theory, the scope of disparate-impact liability under ADEA is narrower than under Title VII. The first is the RFOA [reasonable factors other than age] provision, which we have already identified. The second is the amendment to Title VII constrained in the Civil Rights Act of 1991, 105 Stat. 1071. One of the purposes of that amendment was to modify the Court’s holding in Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989), a case in which we narrowly construed the employer’s exposure to liability on a disparate-impact theory. See Civil Rights Act of 1991, § 2, 105 Stat. 1071. While the relevant 1991 amendments expanded the coverage of Title VII, they did not amend the ADEA or speak to the subject of age discrimination. Hence, Wards Cove’s pre-1991 interpretation of Title VII’s identical language remains applicable to the ADEA.”

The five justices concurred that the age 40+ police officers in this case did not state a claim for disparate impact under Wards Cove — initially because they had “not identified any specific test, requirement, or practice within the pay plan that has an adverse impact on older workers,” and, in any event, because “the City’s plan was based on reasonable factors other than age.” On the latter point,

“Reliance on seniority and rank is unquestionably reasonable given the City’s goal of raising employees’ salaries to match those in surrounding communities. In sum, we hold that the City’s decision to grant a larger raise to lower echelon employees for the purpose of bringing salaries in line with that of surrounding police forces was a decision based on a ‘reasonable factor other than age’ that responded to the City’s legitimate goal of retaining police officers.”

Several developments flow from this decision.

First, as with last term’s Jones v. R.R. Donnelley & Sons Co. , 541 U.S. 369 (2004), we must return long-abandoned pre-1991 CRA case law for guidance. Jones requires that we consult post-Patterson case law to determine whether a section 1981 claim is pre- or post-formation, for purposes of applying the four-year catch-all limitations period. And so, with City of Jackson, we must return to the line of cases launched by Wards Cove, which (as the plurality opinion notes) “narrowly construed the employer’s exposure to liability on a disparate-impact theory.” But “narrow” does not mean “impossible”; even under the stringent Wards Cove standards, plaintiffs did not invariably lose. See Fisher v. Transco Services-Milwaukee, Inc., 979 F.2d 1239 (7th Cir.1992) (reversing summary judgment in ADEA disparate impact case); Waisome v. Port Authority of New York and New Jersey, 948 F.2d 1370 (2d Cir. 1991) (challenging racial impact of written test for promotion; reversing summary judgment); Bradley v. Pizzaco of Nebraska, Inc., 926 F.2d 714 (8th Cir. 1991) (challenging to grooming standards that had impact on black men; remanding for further proceedings).

Second, until this decision, litigants and courts had little occasion to consider the separate significance of the “reasonable factors other than age” defense. With the advent of disparate impact in age cases, we will see more activity in this front. Again, this means dredging through the old case law. See, e.g., Baker v. Deltair Lines, Inc., 6 F.3d 632 (9th Cir. 1993) (RFOA defense raised to downbidding policy affecting older pilots); Maresco v. Evans Chemetics, 964 F.2d 106 (2d Cir. 1992) (RFOA defense to decision to consolidate offices and terminate some workers); EEOC v. Westinghouse Elec. Corp., 725 F.2d 211 (3d Cir.) (pension and separation pay plans, which denied severance pay to laid-off employees who were eligible for early retirement, was not based on reasonable factors other than age), cert. denied, 469 U.S. 820 (1984).

A third development (of note mostly to Court watchers) is that between this decision and last term’s General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 581 (2004) (rejecting a “reverse age discrimination” theory under the ADEA), only Justice Scalia relied entirely on deference to EEOC rulemaking authority in both cases. Justice Scalialso joined Justice O’Connor’s concurring opinion in Edelman v. Lynchburg College, 535 U.S. 106 (2002) (allowing an amendment to a charge to permit an otherwise timely filer to verify a discrimination charge after the time for filing has expired), which rested entirely on deference to an EEOC procedural rule adopted under Title VII.

 

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