National Employment Law Institute
Washington, D.C.
August 1, 2002

Recent Developments in Employment Discrimination: The Year in Review

By Richard T. Seymour*

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* Law Office of Richard T. Seymour, P.L.L.C., 1150 Connecticut Avenue N.W., Suite 900, Washington, D.C. 20036-4129. Telephone: 202-862-4320. Cell: 202-549-1454. Facsimile: 800-805-1065. E-mail: [email protected]. Some of the information in this paper is used with permission from an upcoming edition of Richard T. Seymour and John F. Aslin, Equal Employment Law Update (Bureau of National Affairs, Washington, D.C., 2006), copyright © American Bar Association, 2006. For copies, contact BNA at 1-800-960-1220; members of the Labor and Employment Law Section are entitled to a 25% discount as a benefit of Section membership. Mention priority code EQL in order to receive the discount.

Fuller versions of this paper will be updated at various times during the year, and updates can be downloaded from www.rickseymourlaw.com. Many of my other CLE papers are also downloadable from this site.

Table of Contents

Table of Cases

1. Decided Cases

Advest Inc. v. McCarthy,

914 F.2d 6 (1st Cir. 1990)

Alexander v. Riga,

208 F.3d 419 (3d Cir. 2000), cert. denied, 531 U.S. 1069 (2001)

Allison v. Citgo Petroleum Corp.,

151 F.3d 402 (5th Cir. 1998)

Arellano v. Household Finance Corp. III,

2002 WL 221604 (N.D. Ill. Feb. 13, 2002)

Atonio v. Wards Cove Packing Co., Inc.,

275 F.3d 797, 87 FEP Cases 1037 (9th Cir. 2001)

B.K.B. v. Maui Police Department,

276 F.3d 1091, 87 FEP Cases 1306 (9th Cir. 2002), modified in other respects,__ F.3d __, 2002 WL 237764 (9th Cir. Feb. 20, 2002)

Bailey v. Ameriquest Mortgage Co.,

2002 WL 100391 (D. Minn. Jan. 23, 2002)

Bazemore v. Friday,

478 U.S. 385 (1986)

Beard v. Flying J, Inc.,

266 F.3d 792, 87 FEP Cases 1836 (8th Cir. 2001)

In re Bemis Co., Inc.,

279 F.3d 419, 87 FEP Cases 1500 (7th Cir. 2002)

Bennington v. Caterpillar Inc.,

275 F.3d 654, 87 FEP Cases 1050 (7th Cir. 2001)

Bishop v. Gainer,

272 F.3d 1009, 87 FEP Cases 920 (7th Cir. 2001)

Brooks v. City of San Mateo,

229 F.3d 917 (9th Cir. 2000)

Brown v. Coleman Co., Inc.,

220 F.3d 1180, 16 IER Cases 966 (10th Cir. 2000),cert. denied, 531 U.S. 1192 (2001)

Bruso v. United Airlines, Inc.,

239 F.3d 848 (7th Cir. 2001)

Buckhannon Board and Care Home, Inc., v. West Virginia Department of
……….. Health and Human Resources,

530 U.S. 1304, 121 S. Ct. 1835, 11 AD Cases 1300 (2001)

Bull HN Information Systems, Inc. v. Hutson,

229 F.3d 321 (1st Cir. 2000)

Cardenas v. Massey,

269 F.3d 251, 87 FEP Cases 19 (3rd Cir. 2001)

Cassara v. DAC Services, Inc.,

276 F.3d 1210 (10th Cir. 2002)

Celestine v. Petroleos de Venezuella SA,

266 F.3d 343, 86 FEP Cases 1462, 81 E.P.D. ¶ 40,799 (5th Cir. 2001)

Circuit City Stores, Inc. v. Adams,

279 F.3d 889, 87 FEP Cases 1509 (9th Cir. 2002)

Circuit City Stores, Inc. v. Adams,

532 U.S. 105, 121 S. Ct. 1302, 149 L. Ed. 2d 234, 85 FEP Cases 266,17 IER Cases 545, 79 E.P.D. ¶ 40,401 (2001)

Chevron U.S.A. Inc. v. Echazabal,

__ U.S. __, 122 S. Ct. 2045, 13 AD Cases 97 (2002)

Cole v. Burns International Security Services,

105 F.3d 1465, 72 FEP Cases 1775 (D.C. Cir. 1997)

Collins v. NTN-Bower Corp.,

272 F.3d 1006, 7 WH Cases 2d 895, 81 E.P.D. ¶ 40,831 (7th Cir. 2001)

Conto v. Concord Hospital, Inc.,

265 F.3d 79 (1st Cir. 2001)

Cortez Byrd Chips, Inc. v. Harbert Construction Co.,

529 U.S. 193 (2000)

Costa v. Desert Palace, Inc.,

268 F.3d 882, 86 FEP Cases 1456, 81 E.P.D. ¶ 40,723 (9th Cir. 2001)

Craik v. Minn. State University Bd.,

731 F.2d 465 (8th Cir.1984)

Culver v. City of Milwaukee,

277 F.3d 908 (7th Cir. 2002)

Cush-Crawford v. Adchem Corp.,

271 F.3d 352, 87 FEP Cases 456, 81 E.P.D. ¶ 40,800 (2nd Cir. 2001)

Davis v. Coastal International Security, Inc.,

275 F.3d 1119, 87 FEP Cases 1263 (D.C. Cir. 2002)

Dawahare v. Spencer,

210 F.3d 666 (6th Cir.), cert. denied, 531 U.S. 878 (2000)

Dawavendewa v. Salt River Project Agricultural. Improvement and Power District,

276 F.3d 1150, 87 FEP Cases 1106 (9th Cir. 2002)

Dent v. Kaufman,

185 W.Va. 171, 406 S.E.2d 68 (1991)

Devlin v. Scardelletti,

__ U.S. __, 122 S. Ct. 2005 (2002)

DiRussa v. Dean Witter Reynolds Inc.,

121 F.3d 818, 74 FEP Cases 726 (2d Cir. 1997), cert. denied, 522 U.S. 1049 (1998)

Doll v. Brown,

75 F.3d 1200, 5 AD Cases 369 (7th Cir. 1996)

Duty v. Norton-Alcoa Proppants, __ F.3d __, 7 WH Cases 2d 1537,

2002 WL 1312197 (8th Cir. June 18, 2002)

Eastern Associated Coal Corp. v. United Mine Workers of America, District 17,

531 U.S. 57, 16 IER Cases (2000), arose

Edelman v. Lynchburg College,

__ U.S. __, 122 S. Ct. 1145, 88 FEP Cases 321 (2002)

EEOC v. Goodyear Aerospace Corp.,

813 F.2d 1539, 43 FEP Cases 875 (9th Cir. 1987)

EEOC v. Indiana Bell Telephone Co.,

256 F.3d 516, 86 FEP Cases 1, 80 E.P.D. ¶ 40,590 (7th Cir. 2001)

EEOC v. U. S. Steel Corp.,

921 F.2d 489 (CA3 1990)

EEOC v. University of Chicago Hospitals,

…….. 276 F.3d 326, 87 FEP Cases 1089 (7th Cir. 2002)

EEOC v. Waffle House,

193 F.3d 805 (4th Cir. 1999), rev’d, __ U.S. __, 122 S. Ct. 754, 12 AD Cases 1001 (2002)

EEOC v. Waffle House, Inc.,

__ U.S. __, 122 S. Ct. 754, 12 AD Cases 1001 (2002)

In re Exxon Valdez,

270 F.3d 1215 (9th Cir. 2001)

Farias v. Instructional Systems, Inc.,

259 F.3d 91 (2nd Cir. 2001)

Federated Department Stores, Inc. v. J.V.B. Industries, Inc.,

894 F.2d 862 (6th Cir. 1990)

Ferris v. Delta Air Lines, Inc.,

277 F.3d 128, 87 FEP Cases 899 (2nd Cir. 2001)

Fierros v. Texas Department of Health,

274 F.3d 187, 87 FEP Cases 503 (5th Cir. 2001)

First Options of Chicago, Inc., v. Kaplan,

514 U.S. 938 (1995)

Ford Motor Co. v. EEOC,

458 U.S. 219 (1982)

Frazier v. Fairhaven School Committee,

276 F.3d 52 (1st Cir. 2002)

Frazier v. Iowa Beef Processors, Inc.,

200 F.3d 1190 (8th Cir. 2000)

Friend v. Ancillia Systems, Inc.,

68 F. Supp. 2d 969 (N.D. Ill. 1999)

Gawley v. Indiana University,

276 F.3d 301, 87 FEP Cases 1116 (7th Cir. 2001)

Gianelli Money Purchase Plan and Trust v. ADM Investor Services, Inc.,

d 1309 (11th Cir.), cert. denied, 525 U.S. 1016 (1998)

Goodwin v. General Motors Corp.,

275 F.3d 1005, 87 FEP Cases 1651 (10th Cir. 2002)

__ U.S. __, 122 S. Ct. 2097, 13 AD Cases 193 (2002)

Great Western Mortgage Corporation v. Peacock,

110 F.3d 222, 73 FEP Cases 856 (3d Cir. 1997), cert. denied, 522 U.S. 915 (1997)

Green v. Ameritech Corp.,

200 F.3d 967, 81 FEP Cases 993 (6th Cir. 2000)

Greenberg v. Bear, Stearns & Co.,

220 F.3d 22 (2d Cir. 2000), cert. denied, 531 U.S. 1075 (2001)

Griffin v. Steeltek, Inc.,

261 F.3d 1026, 12 AD Cases 248 (10th Cir. 2001)

Hakim v. Payco-General American Credits, Inc.,

272 F.3d 932, 87 FEP Cases 555 (7th Cir. 2001)

Hall v. Bodine Electric Co.,

276 F.3d 345, 87 FEP Cases 1240 (7th Cir. 2002)

Halligan v. Piper Jaffray, Inc.,

148 F.3d 197, 77 FEP Cases 182 (2d Cir. 1998),cert. denied, 526 U.S. 1034 (1999)

Hart Surgical, Inc. v. Ultracision, Inc.,

244 F.3d 231 (1st Cir. 2001)

Hartman v. Lisle Park District

158 F. Supp. 2d 869 (N.D. Ill. 2001)

Health Services Management Corp. v. Hughes,

975 F.2d 1253 (7th Cir.1992)

Hertzberg v. SRAM Corp.,

261 F.3d 651 (7th Cir. 2001), cert. denied, 2002 WL 232975,70 USLW 3395, 70 USLW 3514 (U.S., Feb. 19, 2002)

Hibbs v. Department of Human Resources,

273 F.3d 844, 7 WH Cases 2d 865 (9th Cir. 2001)

Hoffman Plastics Compounds, Inc. v. N.L.R.B.,

__ U.S. __, 122 S. Ct. 1275,169 L.R.R.M. (BNA) 2769 (2002)

Hooters of America, Inc. v. Phillips,

173 F.3d 933, 79 FEP Cases 629, 75 E.P.D. ¶ 45,822 (4th Cir. 1999)

Hutton v. Elf Atochem North America, Inc.,

273 F.3d 884, 12 AD Cases 909 (9th Cir. 2001)

Jackson v. Arkansas Department of Education,

272 F.3d 1020, 87 FEP Cases 888 (8th Cir. 2001)

Johnson v. Cadillac Plastic Group, Inc.,

930 F. Supp. 1437 (D. Colo. 1996)

Johnson v. Federal Express Corp.,

147 F. Supp. 2d 1268 (M.D. Ala. 2001)

Johnson v. ITT Aerospace/Communications Division of ITT Industries, Inc.,

272 F.3d 498, 87 FEP Cases 553 (7th Cir. 2001)

Kazmier v. Widmann,

225 F.3d 519, 6 WH Cases 481 (5th Cir. 2000)

Kerr-Selgas v. America Airlines, Inc.,

69 F.3d 1205 (1st Cir. 1995)

Kiernan v. Piper Jaffray Companies,

137 F.3d 588, 7 AD Cases 1499 (8th Cir.1998)

Kimzey v. Wal-Mart Stores, Inc.,

107 F.3d 568, 73 FEP Cases 87, 69 E.P.D. ¶ 44,503 (8th Cir. 1997)

Kolstad v. American Dental Association,

527 U.S. 526, 79 FEP Cases 1697 (1999)

Lamb v. Household Services,

956 F. Supp. 1511 (N.D. Calif. 1997) 30, 31

Lapides v. Board of Regents of University System of Georgia,

__ U.S. __, 122 S. Ct. 1640, 18 IER Cases 961 (2002)

Legion Insurance Co. v. VCW, Inc.,

198 F.3d 718 (8th Cir. 1999)

Longstreet v. Illinois Department of Corrections,

276 F.3d 379, 87 FEP Cases 1375 (7th Cir. 2002)

Louisiana ACORN Fair Housing v. LeBlanc,

211 F.3d 298 (5th Cir. 2000), cert. denied, 532 U.S. 904 (2001)

Madison v. IBP, Inc.,

257 F.3d 780, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001),vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985)

Markel v. Board of Regents of University of Wisconsin System,

276 F.3d 906, 87 FEP Cases 1131 (7th Cir. 2002)

Martini v. Federal National Mortgage Association,

178 F.3d 1336 (D.C. Cir. 1999), cert. dismissed, 528 U.S. 1147 (2000)

Marzek v. Mori Milk & Ice Cream Co.,

2002 WL 226761 (N.D. Ill. Feb. 13, 2002)

Mathis v. Phillips Chevrolet, Inc.,

269 F.3d 771, 87 FEP Cases 219, 81 E.P.D. ¶ 40,807 (7th Cir. 2001)

McCowan v. All Star Maintenance, Inc.,

273 F.3d 917, 87 FEP Cases 596 (10th Cir. 2001)

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.,

273 F.3d 30, 87 FEP Cases 673 (1st Cir. 2001)

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker,

808 F.2d 930 (2d Cir. 1986)

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros,

70 F.3d 418 (6th Cir. 1995)

Messing, Rudavsky & Weliky, P.C. v. President and Fellows of Harvard College,

436 Mass. 347, 2002 WL 415540 (Mass. 2002)

Miller v. Kenworth of Dothan, Inc.,

277 F.3d 1269, 87 FEP Cases 1209 (11th Cir. 2002)

Montes v. Shearson Lehman Brothers, Inc.,

128 F.3d 1456, 4 WH Cases 2d 385 (11th Cir. 1997)

Mota v. University of Texas Houston Health Science Center,

261 F.3d 512, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001)

National R.R. Passenger Corp. v. Morgan,

536 U.S. __, 122 S. Ct. 2061, 88 FEP Cases 1601 (2002)

New England Health Care Employees Union, District 1199, SEIU,

……….. AFL-CIO v. Rhode Island Legal Services,
273 F.3d 425, 168 L.R.R.M. 2961 (1st Cir. 2001)

Newman v. Federal Express Corp.,

266 F.3d 401, 86 FEP Cases 1375 (6th Cir. 2001)

Niesig v. Team I,

76 N.Y.2d 363, 559 N.Y.S.2d 493, 558 N.E.2d 1030 (1990)

Occidental Life Ins. Co. of Cal. v. EEOC,

432 U.S. 355 (1977)

Parker v. Sony Pictures Entertainment, Inc.,

260 F.3d 100, 12 AD Cases 1 (2nd Cir. 2001) 12, 90

Passantino v. Johnson & Johnson Consumer Products, Inc.,

212 F.3d 493 (9th Cir. 2000)

Patt v. Family Health Systems, Inc.,

280 F.3d 749 (7th Cir. 2002)

Patton v. Indianapolis Public School Board,

276 F.3d 334, 87 FEP Cases 1433 (7th Cir. 2002)

People Helpers Foundation, Inc. v. City of Richmond,

12 F.3d 1321 (4th Cir. 1993)

Pike v. Freeman,

266 F.3d 78 (2d Cir. 2001)

Pipkins v. City of Temple Terrace,

267 F.3d 1197, 86 FEP Cases 1413, 81 E.P.D. ¶ 40,820 (11th Cir. 2001)

Price Waterhouse v. Hopkins,

490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268 (1989)

Providence Journal Co. v. Providence Newspaper Guild,

271 F.3d 16, 168 L.R.R.M. 2804 (1st Cir. 2001)

Quick v. Donaldson Co.,

90 F.3d 1372 (8th Cir.1996)

Ragsdale v. Wolverine World Wide, Inc.,

535 U.S. __, 122 S. Ct. 1155, 7 Wage & Hour Cas.2d (BNA) 1153 (2002)

Raygor v. Regents of the University of Minnesota,

__ U.S. __122 S. Ct. 999, 88 FEP Cases 6 (2002)

Reeves v. Sanderson Plumbing Products, Inc.,

530 U.S. 133, 82 FEP Cases 1748, 78 E.P.D. ¶ 40,045 (2000)

Robinson v. Metro-North Commuter R.R. Co.,

267 F.3d 147, 86 FEP Cases 1580 (2d Cir. 2001),cert. denied122 S. Ct. 1349, 152 L. Ed. 2d 251 (2002)

Schoffstall v. Henderson,

223 F.3d 818, 84 FEP Cases 1411, 79 E.P.D. ¶ 40,335 (8th Cir. 2000)

Sheldon v. Vermonty,

269 F.3d 1202 (10th Cir. 2001)

Sledge v. Goodyear Dunlop Tires North America, Ltd.,

75 F.3d 1014, 87 FEP Cases 823, 81 E.P.D. ¶ 40,828 (11th Cir. 2001)

Smith v. Texaco, Inc.,

263 F.3d 394, 86 FEP Cases 1619, 81 E.P.D. ¶ 40,718 (5th Cir. 2001),

vacated, Smith v. Texaco, Inc.,

281 F.3d 477, 88 FEP Cases 51(5th Cir. 2002)

Stewart v. Evans,

275 F.3d 1126, 87 FEP Cases 1298 (D.C. Cir. 2002)

Stone v. Indianapolis Public Utilities Division,

281 F.3d 640, 88 FEP Cases 162 (7th Cir. 2002)

Stout v. Potter,

276 F.3d 1118, 87 FEP Cases 1255 (9th Cir. 2002)

Succar v. Dade County School Board,

229 F.3d 1343 (11th Cir.2000)

Swenson v. Potter,

271 F.3d 1184, 87 FEP Cases 620, 81 E.P.D. ¶ 40,821 (9th Cir. 2001)

Swierkiewicz v. Sorema N.A.,

__ U.S. __, 122 S. Ct. 992, 88 FEP Cases 1 (2002)

Swinton v. Potomac Corp.,

270 F.3d 794, 87 FEP Cases 65 (9th Cir. 2001)

Teamsters Local 312 v. Matlack, Inc.,

118 F.3d 985, 155 L.R.R.M. 2738 (3d Cir. 1997)

Thiessen v. General Electric Capital Corp.,

267 F.3d 1095 (10th Cir. 2001), cert. denied,2002 WL 1306877, 70 USLW 3775 (U.S., June 17, 2002) (No. 01–881)

Timm v. Progressive Steel Treating, Inc.,

137 F.3d 1008, 76 FEP Cases 321, 72 E.P.D. ¶ 45,232 (7th Cir. 1998)

Ting v. AT&T,

182 F. Supp. 2d 902 (N.D. Calif. 2002)

Torres v. Pisano,

116 F.3d 625, 73 FEP Cases 1771 (2d Cir. 1997)

Toyota Motor Manufacturing, Kentucky, Inc. v. Williams,

534 U.S. 184, 122 S. Ct. 681, 151 L. Ed. 2d 615, 12 AD Cases 993 (2002)

United Paperworkers International Union v. Misco, Inc.,

484 U.S. 29, 126 LRRM 3113 (1987)

United States v. Arvizu,

__ U.S. __, 122 S. Ct. 744 (2002)

United Steelworkers v. Enterprise Wheel & Car Corp.,

363 U.S. 593 (1960)

U.S. Airways, Inc., v. Barnett,

__ U.S. __, 122 S. Ct. 1516, 12 AD Cases 1729 (2002)

W.R. Grace & Co. v. Rubber Workers,

461 U.S. 757, 26 FEP Cases 713, 107 LRRM 3251, 26 E.P.D. ¶ 32,024 (1983)

Waddell v. Valley Forge Dental Associates, Inc.,

276 F.3d 1275, 12 AD Cases 1029 (11th Cir. 2001)

Webner v. Titan Distribution, Inc.,

267 F.3d 828, 12 AD Cases 513 (8th Cir. 2001)

Weeks v. New York State (Division of Parole),

273 F.3d 76, 87 FEP Cases 161, 81 E.P.D. ¶ 40,822 (2nd Cir. 2001)

Westvaco Corp. v. United Paperworkers International Union,

171 F.3d 971, 79 FEP Cases 595 (4th Cir. 1999)

Williams v. Cigna Financial Advisors Inc.,

197 F.3d 752, 81 FEP Cases 747, 77 E.P.D. ¶ 46,359 ( 5th Cir. 1999),cert. denied, 529 U.S. 1099 (2000)

Williams v. Saint Luke’s-Shawnee Mission Health System, Inc.,

276 F.3d 1057, 87 FEP Cases 1473 (8th Cir. 2002)

Windham v. Time Warner, Inc.,

275 F.3d 179, 87 FEP Cases 843 (2nd Cir. 2001)

Woods v. Delta Beverage Group, Inc.,

274 F.3d 295, 87 FEP Cases 737, 81 E.P.D. ¶ 40,833 (5th Cir. 2001)

Worth v. Tyer,

276 F.3d 249, 87 FEP Cases 994 (7th Cir. 2001)

Wright v. Group Health Hospital,

103 Wash.2d 192, 196, 691 P.2d 564 (1984)

Zapata-Matos v. Reckitt & Colman, Inc.,

277 F.3d 40, 87 FEP Cases 1409 (1st Cir. 2002)

Zubi v. AT&T Corp.,

219 F.3d 220, 83 FEP Cases 417, 79 E.P.D. ¶ 40,260 (3d Cir. 2000)

2. Docketed Case

Adams v. Florida Power Corp.,

No. 01-584, cert. dismissed as improvidently granted (2002)

I. The Statistics

The number of new employment discrimination cases filed in Federal district courts in 2001 remained stable from the year before:

  • New EEO Cases Filed in 2000: 21,111
  • New EEO Cases Filed in 2001: 21,062

EEO cases remained a high proportion of civil filings, but the 18,309 Federal-question EEO cases were an even higher proportion of Federal-question filings:

  • EEO Cases in 2001, as % of All Civil Cases: 8.1%, or one out of every 12.3 civil cases Federal-question EEO cases in 2001, 12.2%, or one out of every 8.1 Federal-as % of all Federal-question civil cases: question civil cases

The number of EEO cases initially filed as class actions declined a little from 2000, but the striking factor is that the number of FLSA collective actions surpassed the number of EEO class actions:

  • New EEO Class Action Filings in 2000: 89
  • New EEO Class Action Filings in 2001: 77
  • New FLSA Collective-Action Filings in 2000: 71
  • New FLSA Collective-Action Filings in 2001: 79

804 Federal-question employment appeals were decided after oral argument. This is 21.5% of all Federal-question arguments, the cases most likely to result in published opinions. 842 were decided on the briefs, without oral argument. 1,246 cases were decided procedurally.

II. The Federal Fair-Employment Agencies: Ill Winds Are Blowing

A. The Labor Department

The Secretary of Labor spoke at the Section of Labor and Employment Law luncheon in Chicago in August 2001. In the course of the luncheon, she described her perception that the primary focus of the Labor Department’s work should be helping employers understand how to comply with the laws and regulations enforced by the Department. She has since announced an overall 20% reduction in enforcement actions.

The goal of helping employers understand how to comply is worthy, but there are still employers who have no interest in voluntary compliance. The job of the Department of Labor is to enforce their compliance. If it does that job well, more of these retrograde employers will be interested in avoiding enforcement actions through complying. When the government announces a goal of reducing enforcement across the board, its announcement will inevitably be read by retrograde employers as a safe harbor for noncompliance. Noncompliance will increase and, to the extent that compliance costs money, retrograde employers will have a cost advantage over the many employers that do try to comply with the laws enforced by the Labor Department.

B. The Justice Department

In a throwback to the Reagan Administration, the Justice Department has not been filing disparate-impact cases. In a meeting with civil rights groups, senior Civil Rights Division officials expressed a disinterest in such cases. Relatively few plaintiffs’ attorneys have the training and experience to handle such cases, and the virtual withdrawal of the Civil Rights Division from this field will leave an important void.

The Justice Department’s amicus brief in National R.R. Passenger Corp. v. Morgan, 536 U.S. __, 122 S. Ct. 2061, 88 FEP Cases 1601 (2002), argued that the two-years-before-the-charge limit on back pay in §706(g) of Title VII applies only to cases brought by the government, and that private plaintiffs are not entitled to assert continuing violations.

C. The EEOC

The EEOC’s position in the Waffle House case was quite strong, and quite successful. At the same time, there are other things that are not so good.

Over the past year, there were two unfortunate “firsts” for the agency. In past years, the EEOC has routinely filed excellent amicus briefs in the Supreme Court in defense of its regulations and its construction of the laws it enforces. However, it failed to give a strong recommendation to the Solicitor General that a brief be filed in support of the EEOC’s position that the ADEA covers disparate-impact claims, and Adams v. Florida Power Corp., No. 01–584, cert. dismissed as improvidently granted (2002), could have gone to decision without any contribution by the EEOC.

The EEOC also entered into a consent decree in Texas on behalf of a group of employees that included the waiver of claims under statutes the EEOC does not enforce.

Over the thirty years that I have been following the EEOC, the pendulum has shifted back and forth between tight control of local offices by headquarters stifling local initiative and allowing substantial room for local initiative with little control by headquarters. The last Bush Administration ended with their continuation of tight control, and the Clinton Administration placed heavy emphasis on local initiative. Somewhere in the middle might be right, but the national office badly needs to assert more control over the process.

Based on the calls and messages I’ve received from plaintiffs’ attorneys across the country over the last year, some investigators in local offices of the EEOC are refusing to accept charges of discrimination on a variety of grounds: that the charge involves credibility of witnesses, that the charging party is unable to provide a list of comparators, that the charging party cannot prove at the outset the falsity of the employer’s stated reasons for the employment action in question. More commonly, I have been hearing that investigators are increasingly refusing to allow charging parties to respond to the employer’s position statements with additional documents or witnesses showing that the employer’s explanation is false.

For twenty-five years, through both Democratic and Republican administrations, the EEOC has failed to set forth clear performance criteria for its employees, to train them to meet those criteria, and to return to the private sector those who cannot or will not meet performance criteria. This remains a pressing need, and it is every bit as important as increased funding.

III. Legislative and Regulatory Action, and Related Judicial Action

A. The Definition of “Applicant” for Purposes of the Uniform Guidelines
on Employee Selection Procedures, 29 C.F.R. §§ 1607.1 et seq.

The EEOC, Department of Labor, and Department of Justice are working on proposals for the definition of an “applicant” taking into account the ability of employers to receive and screen large numbers of résumés electronically. The resolution of the issue will affect employers’ legal obligation to maintain records of the identity of applicants and whether any of their selection standards have a disproportionately adverse effect on any of the groups protected by Title VII. Employers using Internet résumé data banks, or which receive large numbers of unsolicited applications by fax or e-mail, argue that the persons they screen should not be considered applicants. Plaintiffs and civil rights organizations argue that the failure to consider the persons being screened as applicants would result in the inability to challenge screening standards that could have a devastating exclusionary effect on blacks, Hispanics, Asians, women, or other protected groups. This issue arose during the Clinton Administration, which was unable to resolve it before leaving office.

B. The Fair Credit Reporting Act

The staff of the Federal Trade Commission have construed the FCRA, 15 U.S.C. §§ 1681 et seq., as barring unconsented outside investigations of employee misconduct by any person or entity that regularly performs such investigations, where the investigation can affect the continued employment of the person being investigated. The FTC staff considers reports of such investigations to be “investigative consumer reports” within the meaning of the FCRA. If the staff interpretation is correct, employers relying on qualified outside investigators—often the only investigative entities that will have credibility within the workforce—have to give any target of the investigation veto power over the investigation, and have to turn over the complete investigative file to the target, on pain of uncapped damages. 15 U.S.C. § 1681(d). Consumer credit reporting agencies, including investigative agencies if the FTC staff interpretation prevails, must have reasonable procedures to ensure the accuracy of reports and can be sued for damages if they lack such procedures and injure the plaintiff through an inaccurate report. Cassara v. DAC Services, Inc., 276 F.3d 1210 (10th Cir. 2002).

Legislative efforts to amend the FCRA to cure the problem have foundered between employers’ desire to be excluded from the investigative-consumer-report provisions altogether, and the desires of consumer and privacy groups, the AFL-CIO, and some civil rights organizations regulate such investigations so as to ensure some notice and fairness to the person being investigated. I spent a very painful year unsuccessfully trying to work out these conflicting interests.

There have been some judicial developments. Hartman v. Lisle Park District158 F. Supp. 2d 869, 876 (N.D. Ill. 2001), a First Amendment retaliation case in which a law firm performed an investigation on behalf of the employer, held that the FTC staff opinion letters “are entitled to respect but not deference.” The court continued:

After careful consideration of the arguments contained in the letters, we find them unpersuasive and we reject their construction of the statute. There is nothing in the FCRA or its history that indicates that Congress intended to abrogate the attorney-client or work-product privileges, as would be the effect of applying the FCRA’s requirements (which include disclosure of the report) to reports of the type at issue in this case. Moreover, we think that a report prepared by an attorney about an employee’s transactions or experiences with the attorney’s client (the employer) qualifies as a “report containing information solely as to transactions or experiences between the consumer and the person making the report” within the meaning of § 1681a(d)(2)(A)(i), even though the report is prepared by an entity other than the employer. Accord, Friend v. Ancillia Systems Inc., 68 F.Supp.2d 969, 974 (N.D. Ill. 1999). An attorney is the agent of his client . . . and the client is bound by the attorney’s acts and statements made within the scope of their relationship. . . . Thus an attorney is not a “third party” in the same way that a credit bureau or a detective agency would be in this context. Unlike those types of contract workers, the attorney has a relationship of trust, confidence, and confidentiality with his client and owes the client a duty of loyalty that among other things precludes the attorney from taking on engagements that would give rise to a conflict with the client’s interests. . . . Indeed, the attorney’s duty to the client survives, to some extent, the end of their relationship. . . . When an attorney conducts for an employer/client an investigation of an employee’s dealings with the employer, he is acting as the client, just as would be the case if the employer had one of its employees conduct the investigation. This is qualitatively different from the situation that exists when an employer contracts with an outside entity lacking a fiduciary and agency relationship like that of attorney and client.

Id. at 876–77 (citations omitted). A forensic document examiner who was hired to perform handwriting analyses of employees’ handwriting in order to determine which employee was threatening supervisors was held not to be covered by the FCRA because he relied on information provided by the employees and on his own knowledge, not on information provided by third parties. Johnson v. Federal Express Corp., 147 F. Supp. 2d 1268, 1274–75 (M.D. Ala. 2001), stated:

The FCRA’s legislative history makes clear that the “transactions or experiences” provision exempts any report based on the reporter’s first-hand experience of the subject, i.e., the handwriting. Indeed, the bill was targeted mainly at insuring the accuracy of information furnished by third parties to credit reporters. See 142 CONG. REC. S. 11868–01, 11869–70 (Sept. 30, 1996) (Sen. Ford). Thus, within the banking industry, for example, the Act’s coverage does not extend to first-hand “information about an individual with whom [the reporters] have had direct financial transactions.” 1970 U.S.C.C.A.N. at 4414.

In applying the 1681a(d)(2)(A)(i) exception, the Fifth Circuit has held that a worker’s urinalysis, authorized by the employer and performed by an outside chemist, fell within the exclusion because the test result derived from “first- hand experience in performing the tests on the urine sample, not on information gathered from outside sources.” . . . The Eleventh Circuit and other courts have reached similar conclusions. . . .

C. ABA Model Rule 4.2: With Which Employees Can a Plaintiff’s Lawyer Speak?

While many States have adopted ABA Model Rule 4.2, which governs communications by counsel with someone of adverse interest known to be represented by counsel, there is enormous variation in the construction of the rule. State and Federal trial courts in Massachusetts, for example, have construed Rule 4.2 as meaning that all employees, from the CEO right down to the janitor, are “represented” by defense counsel and are off limits to plaintiffs’ counsel absent the consent of defense counsel or a grant of permission by the court or administrative agency with jurisdiction over the dispute. Such consent was typically denied by defense counsel, unless they sat in on the interviews. The courts and the Massachusetts Commission Against Discrimination have denied permission. Plaintiffs’ attorneys could not investigate a case, as required by Rule 11 in Federal courts, without doing so in a fishbowl. Defense counsel were under no such constraint. The fiction that defense counsel represent all employees is even thinner than the fiction that law school graduates working for accounting firms are not practicing law as long as they do not draft documents. Such “representation,” for example, did not require defense counsel to obtain the consent of all employees before defending a claim by a present or former employee.

On March 20, 2002, the Supreme Judicial Court of Massachusetts rejected this extraordinary interpretation of Rule 4.2, and reversed a $ 94,418.14 sanction against plaintiff’s counsel. Messing, Rudavsky & Weliky, P.C. v. President and Fellows of Harvard College, 436 Mass. 347, 2002 WL 415540 (Mass. 2002). The court rejected a broad reading of the comment to Model Rule 4.2 barring contact with a represented person by an attorney for a person of adverse interest where the statements of the represented person may constitute an admission of the organization. It surveyed the varying approaches taken by numerous courts, and stated:

d. Our interpretation of rule 4.2. We adopt a test similar to that proposed in Niesig v. Team I, supra. Although the comment’s reference to persons “whose statement may constitute an admission on the part of the organization” was most likely intended as a reference to Fed. R. Evid. 801(d)(2)(D), this interpretation would effectively prohibit the questioning of all employees who can offer information helpful to the litigation. We reject the comment as overly protective of the organization and too restrictive of an opposing attorney’s ability to contact and interview employees of an adversary organization.

We instead interpret the rule to ban contact only with those employees who have the authority to “commit the organization to a position regarding the subject matter of representation.” See Johnson v. Cadillac Plastic Group, Inc., 930 F. Supp. 1437, 1442 (D. Colo.1996); Restatement (Third) of Law Governing Lawyerssupra at § 100 comment e. See also Ethics 2000 Commission Draft for Public Comment Model Rule 4.2 Reporter’s Explanation of Changes (Feb. 21, 2000) (recommending deletion of the third category of the comment). The employees with whom contact is prohibited are those with “speaking authority” for the corporation who “have managing authority sufficient to give them the right to speak for, and bind, the corporation.” . . . Employees who can commit the organization are those with authority to make decisions about the course of the litigation, such as when to initiate suit, and when to settle a pending case. See Restatement (Third) of the Law Governing Lawyers supra at § 100 comment e, at 93 (employees who have the power to make binding evidentiary admissions are “analogous to … person[s] who possess[ ] power to settle a dispute on behalf of the organization”). We recognize that this test is a retrenchment from the broad prohibition on employee contact endorsed by the comment.

This interpretation, when read in conjunction with the other two categories of the comment, would prohibit ex parte contact only with those employees who exercise managerial responsibility in the matter, who are alleged to have committed the wrongful acts at issue in the litigation, or who have authority on behalf of the corporation to make decisions about the course of the litigation. This result is substantially the same as the Niesig test because it “prohibit[s] direct communication … ‘with those officials … who have the legal power to bind the corporation in the matter or who are responsible for implementing the advice of the corporation’s lawyer … or whose own interests are directly at stake in a representation.” Niesig v. Team I, supra at 374, 559 N.Y.S.2d 493, 558 N.E.2d 1030, quoting C. Wolfram, Modern Legal Ethics § 11.6, at 613 (1986).

Our test is consistent with the purposes of the rule, which are not to “protect a corporate party from the revelation of prejudicial facts,” Dent v. Kaufman, supra at 175, 406 S.E.2d 68, quoting Wright v. Group Health Hosp., supra at 200, 691 P.2d 564, but to protect the attorney-client relationship and prevent clients from making ill-advised statements without the counsel of their attorney. Prohibiting contact with all employees of a represented organization restricts informal contacts far more than is necessary to achieve these purposes. See Niesig v. Team I, supra at 372-373, 559 N.Y.S.2d 493, 558 N.E.2d 1030. The purposes of the rule are best served when it prohibits communication with those employees closely identified with the organization in the dispute. The interests of the organization are adequately protected by preventing contact with those employees empowered to make litigation decisions, and those employees whose actions or omissions are at issue in the case. We reject the “control group” test, which includes only the most senior management, as insufficient to protect the “principles motivating [Rule 4.2].” See id. at 373, 559 N.Y.S.2d 493, 558 N.E.2d 1030. The test we adopt protects an organizational party against improper advances and influence by an attorney, while still promoting access to relevant facts. See id. at 373-374, 559 N.Y.S.2d 493, 558 N.E.2d 1030. The Superior Court’s interpretation of the rule would grant an advantage to corporate litigants over nonorganizational parties. It grants an unwarranted benefit to organizations to require that a party always seek prior judicial approval to conduct informal interviews with witnesses to an event when the opposing party happens to be an organization and the events at issue occurred at the workplace.

While our interpretation of the rule may reduce the protection available to organizations provided by the attorney-client privilege, it allows a litigant to obtain more meaningful disclosure of the truth by conducting informal interviews with certain employees of an opposing organization. Our interpretation does not jeopardize legitimate organizational interests because it continues to disallow contacts with those members of the organization who are so closely tied with the organization or the events at issue that it would be unfair to interview them without the presence of the organization’s counsel. Fairness to the organization does not require the presence of an attorney every time an employee may make a statement admissible in evidence against his or her employer. The public policy of promoting efficient discovery is better advanced by adopting a rule which favors the revelation of the truth by making it more difficult for an organization to prevent the disclosure of relevant evidence.

Harvard argues that adopting the Superior Court’s interpretation of rule 4.2 will not prevent parties from conducting informal interviews with an organization’s employees, but will instead simply force them to seek prior judicial approval. However, if we adopt such a rule, too often in cases involving a corporate party the court will be asked to decide the extent of informal interviews permitted. This will result in extensive litigation before the underlying case even begins, and would clearly favor the better-financed party. . . .

Our decision may initially result in some increased litigation to define exactly which employees fall within the bounds of the rule. Although “a bright- line rule” in the form of a “control group” test or a blanket ban on all employee interviews would be easier to apply, the rule we adopt is, as discussed above, fair, and will allow for ex parte interviews without prior counsel’s permission when an employee clearly falls outside of the rule’s scope.
(Citations and footnote omitted).

At its February 2002 meeting, the ABA House of Delegates voted to amend the comment to Model Rule 4.2 dealing with represented organizations by, inter alia, deleting the reference to admissions. The redline version of this comment is as follows:

[4] [7] In the case of an a represented organization, this Rule prohibits communications with a constituent of the organization, who supervises, directs or regularly consults with the organization’s lawyer concerning the matter or has authority to obligate the organization with respect to the matter or whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability or Consent of the organization’s lawyer is not required for communication with a former constituent. If a constituent of the organization is represented in the matter by his or her own counsel, the consent by that counsel to a communication will be sufficient for purposes of this Rule. Compare Rule 3.4(f). In communicating with a current or former constituent of an organization, a lawyer must not use methods of obtaining evidence that violate the legal rights of the organization. See Rule 4.4, Comment [2].

IV. The Constitution and Statutes

A. 42 U.S.C. § 1981

Swinton v. Potomac Corp., 270 F.3d 794, 806, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The court held that the trial court did not err in denying the defendant’s proposed jury instruction stating that the plaintiff was required to prove both intentional discrimination and that white employees were not subject to the same sort of conduct. The court relied on Kolstad v. American Dental Ass’n, 527 U.S. 526, 534, 79 FEP Cases 1697 (1999), for the proposition that intentional-discrimination cases are simply those that do not rely on the disparate-impact theory. The court continued:

Nor was Swinton required to prove that white employees were not subject to similar harassment. To suggest, as Potomac does, that it might escape liability because it equally harassed whites and blacks would give new meaning to equal opportunity. Potomac’s status as a purported “equal opportunity harasser” provides no escape hatch for liability. The fact that Fosdick may have told jokes about racial or ethnic groups other than African-Americans does not excuse the fact that he racially harassed Swinton.

Id. at 807.

B. Title VII of the Civil Rights Act of 1964

1. Separate Entities

Worth v. Tyer276 F.3d 249, 259–60, 87 FEP Cases 994 (7th Cir. 2001), affirmed in part, and reversed in part, the verdict for the Title VII plaintiff. The court held that the affiliated corporate defendants could only be proper Title VII defendants if they (1) possibly maintained an employment relationship with the plaintiff; (2) if they forfeited their limited liability by taking actions that pierce the corporate veil; or (3) by taking actions for the express purpose of avoiding liability or by directing the discriminatory action. To show that the corporate veil has been pierced, the plaintiff must show such unity of interest and ownership that the separate corporations no longer exist, and “‘circumstances must be such that adherence to the fiction of separate corporate existence would sanction a fraud or promote injustice.’” Id. at 260 (citation omitted). The court followed prior case law rejecting the “integrated enterprise” test. Here, one company met the requirements as a successor employer because it knew about the existence and extent of the predecessor’s liability to the plaintiff, the predecessor ceased operating, and the successor acquired the predecessor’s assets. Id. at 260–61. The other corporate defendants were not liable to the plaintiff.

2. Factors Other Than Prohibited Ones

Costa v. Desert Palace, Inc.268 F.3d 882, 888, 86 FEP Cases 1456, 81 E.P.D. ¶ 40,723 (9th Cir. 2001), reversed and vacated the judgment on a jury verdict for the plaintiff, holding that giving more overtime work to a male employee with a family than to a female employee without a family was not prohibited by Title VII. “Comments motivated by consideration of parental or marital status do not establish gender bias, and neither status is protected under Title VII.”

C. Age Discrimination in Employment Act

Bennington v. Caterpillar Inc., 275 F.3d 654, 659, 87 FEP Cases 1050 (7th Cir. 2001), affirmed the grant of summary judgment to the ADEA defendant. The court held that the five-year difference in ages between the plaintiff and his comparator “is not substantial enough (in and of itself) to set forth a prima facie age discrimination case.”

D. Americans with Disabilities Act, Title I

1. Definition of Disability

Toyota Motor Mfg., Kentucky, Inc. v. Williams, 534 U.S. 184, 122 S. Ct. 681, 151 L. Ed. 2d 615, 12 AD Cases 993 (2002), unanimously held that the plaintiff’s carpal tunnel syndrome and related impairments did not automatically make the plaintiff disabled within the meaning of the ADA, and that her inability to perform a range of manual tasks did not make her disabled. “We conclude that the Court of Appeals did not apply the proper standard in making this determination because it analyzed only a limited class of manual tasks and failed to ask whether respondent’s impairments prevented or restricted her from performing tasks that are of central importance to most people’s daily lives.” 122 S. Ct. at 686. The Court held that the medical diagnosis is not enough; an individualized assessment is normally needed. “An individualized assessment of the effect of an impairment is particularly necessary when the impairment is one whose symptoms vary widely from person to person. Carpal tunnel syndrome, one of respondent’s impairments, is just such a condition. While cases of severe carpal tunnel syndrome are characterized by muscle atrophy and extreme sensory deficits, mild cases generally do not have either of these effects and create only intermittent symptoms of numbness and tingling” Id. at 692. The Court again refused to decide whether working is a major life activity. Id. The Court held that the lower court had taken the wrong approach:

Even more critically, the manual tasks unique to any particular job are not necessarily important parts of most people’s lives. As a result, occupation-specific tasks may have only limited relevance to the manual task inquiry. In this case, “repetitive work with hands and arms extended at or above shoulder levels for extended periods of time,” . . . the manual task on which the Court of Appeals relied, is not an important part of most people’s daily lives. The court, therefore, should not have considered respondent’s inability to do such manual work in her specialized assembly line job as sufficient proof that she was substantially limited in performing manual tasks.

At the same time, the Court of Appeals appears to have disregarded the very type of evidence that it should have focused upon. It treated as irrelevant “[t]he fact that [respondent] can … ten[d] to her personal hygiene [and] carr[y] out personal or household chores.” Ibid. Yet household chores, bathing, and brushing one’s teeth are among the types of manual tasks of central importance to people’s daily lives, and should have been part of the assessment of whether respondent was substantially limited in performing manual tasks.

Id. at 693.

2. “Direct Threat”

Chevron U.S.A. Inc. v. Echazabal, __ U.S. __, 122 S. Ct. 2045, 13 AD Cases 97 (2002), unanimously upheld the EEOC regulation, 29 C.F.R. § 1630.15(b)(2), “permitting the defense that a worker’s disability on the job would pose a ‘direct threat’ to his health.” Id. at 2048. The plaintiff had worked for an independent contractor at the defendant’s oil refinery, and twice applied and was rejected for hire by the defendant. His medical examinations showed liver abnormality or damage, apparently caused by Hepatitis C, “which Chevron’s doctors said would be aggravated by continued exposure to toxins at Chevron’s refinery.” Id. Each time, the company withdrew its offer of employment. The second time, Chevron asked the contractor to reassign him to a job where he would not be exposed to harmful chemicals or to remove him from the refinery. He was then laid off. The court recognized that the ADA explicitly provided only that the employer may use a qualification standard that includes “‘a requirement that an individual shall not pose a direct threat to the health or safety of other individuals in the workplace,’ § 12113(b), if the individual cannot perform the job safely with reasonable accommodation, § 12113(a).” Id. at 2049. The Court used a “three strikes” metaphor in rejecting the argument that Congress specified direct threats to others in the workplace, and so must have intended to exclude direct threats to oneself. The Court described the first strike as being in the text of the Act, allowing employers broad authority to establish qualification standards. “Far from supporting Echazabal’s position, the expansive phrasing of ‘may include’ points directly away from the sort of exclusive specification he claims.” Id. at 2050 (citations omitted.) The court also held that the expression unius exclusio alterius maxim has an “essential extrastatutory ingredient” missing from the ADA: “The canon depends on identifying a series of two or more terms or things that should be understood to go hand in hand, which are abridged in circumstances supporting a sensible inference that the term left out must have been meant to be excluded.” Id. The Court then went on: “Strike two in this case is the failure to identify any such established series, including both threats to others and threats to self, from which Congress appears to have made a deliberate choice to omit the latter item as a signal of the affirmative defense’s scope.” Id. It held that no inference could be drawn from Congress’s repetition of the “direct threat” statutory language in the Rehabilitation Act, without the gloss of the EEOC’s Rehabilitation Act regulation including threats to self. Three other agencies had not included threat-to-self provisions in their regulations. The Court held that the Congressional language in light of the regulation was “equivocal.” Id. at 2051. It continued:

Instead of making the ADA different from the Rehabilitation Act on the point at issue, Congress used identical language, knowing full well what the EEOC had made of that language under the earlier statute. Did Congress mean to imply that the agency had been wrong in reading the earlier language to allow it to recognize threats to self, or did Congress just assume that the agency was free to do under the ADA what it had already done under the earlier Act’s identical language? There is no way to tell.

Id. The Court then wrapped up its holding against application of the maxim:

There is even a third strike against applying the expression-exclusion rule here. It is simply that there is no apparent stopping point to the argument that by specifying a threat-to-others defense Congress intended a negative implication about those whose safety could be considered. When Congress specified threats to others in the workplace, for example, could it possibly have meant that an employer could not defend a refusal to hire when a worker’s disability would threaten others outside the workplace? If Typhoid Mary had come under the ADA, would a meat packer have been defenseless if Mary had sued after being turned away? See 42 U.S.C. § 12113(d). Expressio unius just fails to work here.

Id. The Court held that the EEOC’s regulation is entitled to Chevron deference. It rejected the argument that the EEOC’s regulation “allowed the kind of workplace paternalism the ADA was meant to outlaw,” because the employer here was acting on the basis of specific and documented medical risks to the worker. Id. at 2052–53.

Hutton v. Elf Atochem North America, Inc.273 F.3d 884, 892–95, 12 AD Cases 909 (9th Cir. 2001), affirmed the grant of summary judgment to the ADA and Oregon disability discrimination defendant because the plaintiff posed a direct threat to the safety of others. The plaintiff worked in the manufacture and loading of chlorine, and had had a number of diabetic seizures while at work. “Even if we were to agree with Hutton . . . that the likelihood of an accident is small, we conclude that the severity and scale of the potential harm to others presented by Hutton’s employment nevertheless pose a significant risk under the direct-threat analysis.” Id. at 894 (citation omitted).

Waddell v. Valley Forge Dental Associates, Inc., 276 F.3d 1275, 12 AD Cases 1029 (11th Cir. 2001), affirmed the grant of summary judgment to the ADA defendant. The plaintiff was a dental hygienist who learned while employed that he was HIV-positive, and who was fired after he refused to accept a demotion to clerical duties at half his former pay. The court declined to address the questions whether HIV-positive status is a disability per se, or whether the plaintiff was substantially limited in a major life activity, but stated in dicta that the Supreme Court favors an individualized approach. Id. at 1279–80 n.4. The court held that the plaintiff “carries the burden of establishing” that he was not a direct threat to others, or that reasonable accommodations were available. Id. at 1280. It stated that an employer in the medical field has a duty to consult available objective scientific information, and may not just rely on good faith. Id. The court held that an employer may rely on a “significant risk,” that the likelihood of harm can be low if the risk is of transmitting a fatal infection, and that it is not necessary to show that someone has actually been harmed. Id.at 1280–81. The court held that the procedures used by a dental hygienist were “exposure prone” within the definition of that term by the Centers for Disease Control, because the procedures used to clean teeth can result in commingling of blood. Id. at 1281–83. The court relied on the plaintiff’s medical evidence that the hygienist’s fingers are rarely in the patient’s mouth at the same time as a sharp instrument, as establishing that there were in fact times when this occurred. Id. at 1282–83. Thus, the plaintiff was a direct threat to others while performing the normal functions of his job. Id. at 1284.

3. Reasonable Accommodation and Seniority Systems: U.S. Airways, Inc. v. Barnett

On April 29, 2002, the U.S. Supreme Court decided U.S. Airways, Inc., v. Barnett, __ U.S. __, 122 S. Ct. 1516, 12 AD Cases 1729 (2002). The Court held that an otherwise reasonable ADA accommodation is ordinarily unreasonable if it conflicts with the rights of other employees under a seniority system, whether collectively bargained or unilaterally imposed, unless the plaintiff shows special circumstances that would make an exception to the seniority system reasonable in the case at hand:

The plaintiff might show, for example, that the employer, having retained the right to change the seniority system unilaterally, exercises that right fairly frequently, reducing employee expectations that the system will be followed—to the point where one more departure, needed to accommodate an individual with a disability, will not likely make a difference. The plaintiff might show that the system already contains exceptions such that, in the circumstances, one further exception is unlikely to matter. We do not mean these examples to exhaust the kinds of showings that a plaintiff might make. But we do mean to say that the plaintiff must bear the burden of showing special circumstances that make an exception from the seniority system reasonable in the particular case. And to do so, the plaintiff must explain why, in the particular case, an exception to the employer’s seniority policy can constitute a “reasonable accommodation” even though in the ordinary case it cannot.

Id. at 1525. This is not what employers wanted. The Court also rejected U.S. Airways’ argument that the ADA does not provide for affirmative action, and that any accommodation that would dispense with a rule generally applicable to all employees would constitute affirmative action unwarranted by the statute:

In sum, the nature of the “reasonable accommodation” requirement, the statutory examples, and the Act’s silence about the exempting effect of neutral rules together convince us that the Act does not create any such automatic exemption. The simple fact that an accommodation would provide a “preference”—in the sense that it would permit the worker with a disability to violate a rule that others must obey—cannot, in and of itself, automatically show that the accommodation is not “reasonable.” As a result, we reject the position taken by U.S. Airways and Justice SCALIA to the contrary.

Id. at 1521. The Court’s discussion about the importance of seniority systems in assuring uniform and fair treatment of employees, rewarding their expectations and encouraging them to invest themselves in the company, can provide very persuasive reasons in support of claims for constructive seniority in a hiring or reinstatement case, and it seems to me that the thwarting of these expectations can be used to good effect in presenting a claim for compensatory damages.

The line-up on this decision was extremely interesting:

BREYER, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and STEVENS, O’CONNOR, and KENNEDY, JJ., joined. STEVENS, J., and O’CONNOR, J., filed concurring opinions. SCALIA, J., filed a dissenting opinion, in which THOMAS, J., joined. SOUTER, J., filed a dissenting opinion, in which GINSBURG, J., joined.

4. Reasonable Accommodation — Other

Parker v. Sony Pictures Entertainment, Inc.260 F.3d 100, 106–08, 12 AD Cases 1 (2nd Cir. 2001), affirmed the grant of judgment as a matter of law to the ADA defendant but reversed the award of attorneys’ fees to the defendant. The court stated that an employer is not immunized from ADA liability by a mistaken belief that the plaintiff could not perform the essential duties of the job even with a reasonable accommodation, but held that the plaintiff’s failure to communicate clearly with the defendant was responsible for its mistake and for the breakdown of the interactive process. Id. at 106. The court held that the plaintiff is required to show a causal relationship between the protected characteristic and the injury of which the plaintiff complains. It stated that the requirement of a causal relationship is often left unstated because it is often not an issue in ADA litigation, but it is nonetheless a requirement. Id. at 107–08.

Thus, if an employer failed to provide an accommodation to an employee who needed that accommodation to return to work, but, for whatever reason, the employee did not return to work for reasons entirely unrelated to the refusal of the accommodation, then the ADA’s prohibition on taking adverse employment actions “because of disability” would not be violated. The same would be true when an employer terminated an employee who–because of the absence of an accommodation–could not return to work, if the employer terminated the employee for reasons entirely unrelated to his failure to return to work.

Id. at 108. The court cautioned that the plaintiff is not required to show that the protected characteristic is the sole cause of the injury, just that it is a contributing cause. “Nonetheless, it remains essential to a finding of discrimination that plaintiff’s disability, or the lack of accommodation to that disability, played a ‘substantial’ role that ‘made a difference’ to his employer’s actions.” Id. (citation omitted).

5. Remedies for Technical Violations

Griffin v. Steeltek, Inc., 261 F.3d 1026, 12 AD Cases 248 (10th Cir. 2001), affirmed the judgment for the ADA defendant, holding that a plaintiff who proves only a technical violation of the ADA, such as the employer’s asking questions prior to a conditional job offer, but does not show personal injury, is not entitled to an award of compensatory or punitive damages or an award of attorneys’ fees. The opinion surveys the decisions of other Circuits.

E. Americans with Disabilities Act, Title II, and § 504 of the Rehabilitation Act

Gorman v. Barnes, __ U.S. __, 122 S. Ct. 2097, 13 AD Cases 193 (2002), involved the mishandling of a catheterized paraplegic arrestee, resulting in serious physical injuries and incapacity to work. He sued under Title II of the ADA and § 504 of the Rehabilitation Act of 1973. The Court held that both statutes were enacted pursuant to the power of Congress under the Spending Clause, and that remedies under these statutes should be analogized to contract actions, both as to implying the cause of action and implying the scope of a damages remedy. “But punitive damages, unlike compensatory damages and injunction, are generally not available for breach of contract, see 3 E. Farnsworth, Contracts § 12.8, 192-201 (2d ed.1998); Restatement (Second) of Contracts § 355 ; 1 T. Sedgwick, Measure of Damages § 370 (8th ed. 1891).” Id. at 2102.

F. Title IX of the Education Amendments of 1972

Frazier v. Fairhaven School Committee276 F.3d 52, 65 (1st Cir. 2002), affirmed the dismissal of the plaintiff’s Title IX claims against the discipline matron of her school and other individual defendants because the implied private right of action under Title IX applies only to educational institutions, and does not extend to individuals. The court held that Title IX bars same-sex harassment. Id. at 65–66.

G. The Family and Medical Leave Act

1. Ragsdale and the DOL Regulation Requiring Employers to Notify Employee that Leave is Being Considered FMLA Leave

Ragsdale v. Wolverine World Wide, Inc., 535 U.S. __, 122 S. Ct.1155, 7 Wage & Hour Cas.2d (BNA) 1153 (2002), struck down, as inconsistent with the FMLA, 29 C.F.R. § 825.700(a). This Labor Department regulation requires employers to notify employees in writing when employees’ medical leave is counted against the statutorily required 12 weeks of leave, on pain of not being able to treat the medical leave as FMLA leave. The Court observed that the policy of the FMLA is to require only 12 weeks of qualifying leave per twelve-month period, but to encourage employers to adopt more generous policies on a voluntary basis. The defendant granted plaintiff 30 weeks of leave in 1996 without notifying the plaintiff that it considered 12 weeks of this leave as FMLA leave, refused to grant additional leave, and fired the plaintiff when she did not return to work. The plaintiff sued, contending that the employer’s failure to abide by the regulation entitled her to 12 additional weeks of leave. The Court held the regulation invalid because the penalty is not connected to any prejudice suffered by the person taking leave. It observed that the plaintiff here would have taken the 30 weeks’ leave even if she had received the written notice. Justice O’Connor dissented, joined by Justices Souter, Ginsburg, and Breyer.

2. Unscheduled, Unpredictable, Cumulatively Substantial Absences

Collins v. NTN-Bower Corp.272 F.3d 1006, 7 WH Cases 2d 895, 81 E.P.D. ¶ 40,831 (7th Cir. 2001), affirmed the grant of summary judgment to the FMLA defendant, which fired the plaintiff after she called in “sick” on too many occasions, without informing her employer that she suffered from depression, a serious health condition. Because her condition had developed over years, the court held that the plaintiff was not entitled to the exception in which advance notice is not possible. The court held that adequate FMLA notice also requires telling the employer when the employee will return to work. The court described the testimony of the plaintiff’s expert, who stated that she was incapacitated 10% to 20% of the time, and that the episodes occurred without warning. It continued:

If this is so then it is doubtful that the Act has much to offer Collins. Courts have been reluctant to read the FMLA as allowing unscheduled and unpredictable, but cumulatively substantial, absences, when the Americans with Disabilities Act protects only persons who over the long run are capable of working full time. . . . Collins is not suffering from an acute condition that will improve with time off; instead she asserts a right to take unscheduled leave at a moment’s notice for the rest of her life. This implies that she is not qualified for a position where reliable attendance is a bona fide requirement, and a person not protected by the ADA may be discharged.

Id. at 1007–08.

3. Availability of Emotional-Distress Damages Under the FMLA

Most courts to address the issue have held that the FMLA does not allow recoveries for the emotional distress of employees denied FMLA leave. The Eighth Circuit follows a different rule. Duty v. Norton-Alcoa Proppants, __ F.3d __, 7 WH Cases 2d 1537, 2002 WL 1312197 (8th Cir. June 18, 2002), stated:

NAP claims that Duty was not entitled to compensatory damages because he failed to demonstrate genuine injury as a result of his termination by failing to present any evidence of (1) out-of-pocket expenses incurred as a result of NAP’s conduct, or (2) physical symptoms related to severe emotional distress.

Under the FMLA, an employer is liable for “any wages, salary, employment benefits, or other compensation denied or lost to such employee by reason of the violation.” 29 U.S.C. § 2617(a)(1)(A)(i)(I). The district court properly instructed the jury to assess damages actually sustained by Duty, including lost wages and fringe benefits as well as compensation for “mental anguish, loss of dignity, and other intangible injuries.” . . . Sufficient evidence supported the jury’s compensatory damages award, including Duty’s and his wife’s testimony that Duty suffered emotionally after losing his job. See Frazier v. Iowa Beef Processors, Inc., 200 F.3d 1190 (8th Cir. 2000) (testimony from plaintiff and spouse regarding plaintiff’s loss of dignity and self-esteem, along with feeling of emptiness, deemed sufficient to sustain compensatory damages award for emotional distress under FMLA). The jury reasonably could have relied on this testimony to assess compensatory damages.

V. Theories and Proof

A. Intentional Discrimination

Atonio v. Wards Cove Packing Co., Inc.275 F.3d 797, 802, 87 FEP Cases 1037 (9th Cir. 2001), affirmed the judgment for the defendant, holding that the racial labeling of crews and facilities, as in “the Filipino bunkhouse,” did not violate Title VII because it was not used to stigmatize any employees, did not result in any stigmatizing or social separation of employees during their free time, and was used by the employees of the nationality in question, and because no employee testified that it had any adverse effect on him.

B. The Inferential Model

United States v. Arvizu, __ U.S. __, 122 S. Ct. 744 (2002), a Fourth Amendment case, follows Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 82 FEP Cases 1748, 78 E.P.D. ¶ 40,045 (2000). In both cases, the Court rejected the approach of some lower courts in segmenting evidence when a determination is supposed to be made in light of all the evidence. In Arvizu, the Ninth Circuit considered in isolation each circumstance that led to the stop, and rejected it if the court could conceive of a possible innocent explanation. The same often occurs in appellate review of employment discrimination summary judgments. In Arvizuthe Court stated:

We think that the approach taken by the Court of Appeals here departs sharply from the teachings of these cases. The court’s evaluation and rejection of seven of the listed factors in isolation from each other does not take into account the “totality of the circumstances,” as our cases have understood that phrase. The court appeared to believe that each observation by Stoddard that was by itself readily susceptible to an innocent explanation was entitled to “no weight.” . . . Terry, however, precludes this sort of divide-and-conquer analysis. The officer in Terry observed the petitioner and his companions repeatedly walk back and forth, look into a store window, and confer with one another. Although each of the series of acts was “perhaps innocent in itself,” we held that, taken together, they “warranted further investigation.”

Id. at 751 (citations omitted.) The Court recognized that the Ninth Circuit was attempting to provide more uniform guidance, but held that it went too far:

But the Court of Appeals’ approach would go considerably beyond the reasoning of Ornelas and seriously undercut the “totality of the circumstances” principle which governs the existence vel non of “reasonable suspicion.” Take, for example, the court’s positions that respondent’s deceleration could not be considered because “slowing down after spotting a law enforcement vehicle is an entirely normal response that is in no way indicative of criminal activity” and that his failure to acknowledge Stoddard’s presence provided no support because there were “no ‘special circumstances’ rendering ‘innocent avoidance . . . improbable.’ ” . . . We think it quite reasonable that a driver’s slowing down, stiffening of posture, and failure to acknowledge a sighted law enforcement officer might well be unremarkable in one instance (such as a busy San Francisco highway) while quite unusual in another (such as a remote portion of rural southeastern Arizona). Stoddard was entitled to make an assessment of the situation in light of his specialized training and familiarity with the customs of the area’s inhabitants. . . . To the extent that a totality of the circumstances approach may render appellate review less circumscribed by precedent than otherwise, it is the nature of the totality rule.

Id. at 752 (emphasis supplied). Bright-line tests of isolated factors, such as the “same actor” inference in some Circuits, the ten-year minimum age rule in the Seventh Circuit, the universal-and-exclusive approach to retaliation cases in the Seventh Circuit, and the like, have no place under Arvizu.

Zapata-Matos v. Reckitt & Colman, Inc.277 F.3d 40, 47, 87 FEP Cases 1409 (1st Cir. 2002), affirmed the grant of summary judgment for the Title VII defendant. The court held that the “slight suggestion of pretext present here, absent other evidence from which discrimination can be inferred,” cannot meet the plaintiff’s burden. The court held—correctly, in my view—that the plaintiff’s case was extremely weak and the defendant’s evidence of nondiscrimination was very strong. It reasoned from this that summary judgment was appropriate under Reeves.

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.273 F.3d 30, 34, 87 FEP Cases 673 (1st Cir. 2001), vacated the grant of summary judgment to the ADEA defendant. The court held that some undocumented criticisms of the demoted plaintiff’s work performance were too general to be useful, such as “poor communications with the management.”

Celestine v. Petroleos de Venezuella SA, 266 F.3d 343, 355– 56, 86 FEP Cases 1462, 81 E.P.D. ¶ 40,799 (5th Cir. 2001), affirmed the grant of summary judgment to the defendant on the plaintiffs’ claims of denial of promotion and training. Although there were 206 individual plaintiffs, the court held that, in light of the earlier denial of class certification, the lower court did not abuse its discretion in barring the plaintiffs from proceeding with their claims on a pattern-and-practice basis and requiring them to proceed on an individual basis under the McDonnell Douglas model.

C. Mixed Motives

Costa v. Desert Palace, Inc.268 F.3d 882, 86 FEP Cases 1456, 81 E.P.D. ¶ 40,723 (9th Cir. 2001), reversed and vacated the judgment on a jury verdict for the plaintiff, holding that the lower court erred in giving a mixed-motives instruction. The court stated: “The use of terms such as ‘direct’ evidence should not be read as limiting the type of evidence a plaintiff such as Costa must present in order to receive a mixed-motive instruction. Rather, it is directed at the greater quantum of evidence required to establish a mixed-motive case.” Id. at 888 n.3. Surveying the law of the Circuits, the court held that a plaintiff cannot meet the standard for mixed-motives treatment by drawing an inference from disparate treatment. Id. at 886–88. The plaintiff relied on the fact that she received less overtime work than a man performing the same work, and was told that it was because he had a family to support, and she did not. The court held that this was not even actionable under Title VII: “Comments motivated by consideration of parental or marital status do not establish gender bias, and neither status is protected under Title VII.” Id. at 888. The plaintiff also relied on the fact that a female supervisor had called her a “bitch,” but the court held that this was evidence only of personal dislike, not evidence of gender discrimination, where the plaintiff had been a union steward during a time of contentious labor-management relations, and where the female supervisor had an aggressive management style that had led both men and women to complain. Finally, the court rejected plaintiffs’ reliance on a series of allegedly disparate treatments, observing that these may be enough to show discrimination but were not enough to show that plaintiff’s gender was a motivating factor in her termination. Id. at 888–90.

D. Actionable Discrimination

Weeks v. New York State (Division of Parole), 273 F.3d 76, 85–87, 87 FEP Cases 161, 81 E.P.D. ¶ 40,822 (2nd Cir. 2001), affirmed the dismissal of certain Title VII claims as not involving adverse employment actions. The court stated:

To be “‘materially adverse,’ a change in working conditions must be more disruptive than a mere inconvenience or an alteration of job responsibilities.” . . . Such a change “might be indicated by a termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices . . . unique to a particular situation.”

Id. at 85. The court described her allegations at length, noting that in many instances the plaintiff had not shown that the challenged actions had harmed her in any way. Id. at 85–87.

Fierros v. Texas Department of Health274 F.3d 187, 192–94, 87 FEP Cases 503 (5th Cir. 2001), reversed the grant of summary judgment to the Title VII retaliation defendant, and holding that the denial of a pay increase was an actionable employment decision. The court held that the denial of some pay increases is significant enough to be actionable, and rejected the defendant’s argument that only cuts in pay are actionable: “As Fierros points out, in light of her annual salary of $20,924.97, the $57-per-month pay increase is not, as TDH claims, ‘de minimis.’ It is illogical to construe Title VII as prohibiting discriminatory decreases in pay, but permitting discriminatory denials of pay increases.” Id. at 194. The court held that the denial of the pay increase was an ultimate employment decision because “Fierros seeks Title VII relief from the denial of the pay increase itself, and not from any employment action that the pay increase denial might lead to.” Id. The district court had dismissed plaintiff’s affidavit attesting to the decisionmaker’s statement, that she was denied the increase because of her complaint, as her mere “subjective belief” as to a linkage between the two. The court of appeals pointed out that the affidavit did not speak to the plaintiff’s beliefs, and held that the statement in question was, if believed, direct evidence of discrimination. Id. at 195.

Patt v. Family Health Systems, Inc., 280 F.3d 749 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant on the plaintiff surgeon’s claim of denial of career opportunities after she complained of pay discrimination. The court stated that such a claim may be actionable, but the plaintiff did not present evidence showing such a denial. While she claimed that she was given the easier surgical assignments making it difficult for her to advance professionally, the undisputed evidence was that the assignments were made in rotation, and the plaintiff was responsible for making assignments three months of the year.“ Because Patt has not presented more specific evidence showing how Family Health limited her career opportunities, we cannot conclude that she suffered an adverse employment action.”

Markel v. Board of Regents of University of Wisconsin System276 F.3d 906, 911–12, 87 FEP Cases 1131 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant, holding that the plaintiff’s complaints of denial of better equipment, the ability to travel and make presentations, and removal from some accounts that caused her to lose bonuses, were not independently actionable. “When combined with other actions, differences in office aesthetics between employees might aid the plaintiff in showing discriminatory treatment, however, standing alone they are not readily quantifiable losses Title VII was meant to redress.” Id. at 912 (citations omitted).

E. Retaliation

Cardenas v. Massey, 269 F.3d 251, 264, 87 FEP Cases 19 (3rd Cir. 2001), affirmed the grant of summary judgment to the defendants on the plaintiff’s Title VII and New Jersey Law Against Discrimination retaliation claims because the plaintiff failed to show a causal link between the incidents he alleged to have resulted in his constructive discharge—which were the same as the incidents underlying his racial harassment claim—and his protected activity. The court held that timing alone was not sufficient, because the protected activities took place throughout the incidents in question, and the acceptance of timing as the sole factor would mean an acceptance of a causal relationship as to each incident. While the harassment incidents were linked by the animus of the plaintiff’s chief harasser, the court held that no such thread exists with respect to the retaliation claims. However, his constructive-discharge claim survived as part of his harassment claim.

Mota v. University of Texas Houston Health Science Center, 261 F.3d 512, 520–21, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), affirmed the judgment for the plaintiff on his retaliation claims. The court held that the discontinuation of the plaintiff’s $2,500 stipend, the denial of the plaintiff’s request for paid leave, the denial of the plaintiff’s request for an extension of his unpaid leave, were all adverse employment actions, while ostracism by fellow employees was not.

Stone v. Indianapolis Public Utilities Division, 281 F.3d 640, 644, 88 FEP Cases 162 (7th Cir. 2002) (Posner, J.), announced a new rule governing retaliation plaintiffs’ ability to survive summary judgment in situations in which the plaintiff does not have direct evidence of retaliation:

The second route to summary judgment, the adaptation of McDonnell Douglas to the retaliation context, requires the plaintiff to show that after filing the charge only he, and not any similarly situated employee who did not file a charge, was subjected to an adverse employment action even though he was performing his job in a satisfactory manner. If the defendant presents no evidence in response, the plaintiff is entitled to summary judgment. If the defendant presents unrebutted evidence of a noninvidious reason for the adverse action, he is entitled to summary judgment. Otherwise there must be a trial.

This is unworkable. No court has previously held that all the employer has to do to thwart retaliation claims is to sacrifice another employee who did not engage in protected activity, or to leave one charging party or witness unpunished. This panel would undoubtedly pull back from such a result. So why invite such actions?

Similarly, Stone rejected any burden on a plaintiff to prove even an attenuated causal relationship between the protected activity and the adverse employment action:

Evidence, though not conclusive, that the cause was retaliation should be enough to entitle the plaintiff to a jury trial unless the defendant can produce uncontradicted evidence that he would have fired the plaintiff anyway, in which event the defendant’s retaliatory motive, even if unchallenged, was not a but-for cause of the plaintiff’s harm.

(Citations omitted.) The same concept then comes in again by the back door, but without the same name:

The question of how much evidence the plaintiff must present to establish a triable issue that the adverse employment action of which he complains was retaliatory is not susceptible of a general answer. But we remind that mere temporal proximity between the filing of the charge of discrimination and the action alleged to have been taken in retaliation for that filing will rarely be sufficient in and of itself to create a triable issue.

(Citations omitted.) The court’s formulation is far too broad and vastly outstrips its citations. The question in the Seventh and all other Circuits has always been the length of time between the protected activity and the adverse employment action, in the context of the case. A firing a very short time after the employer learns of the charge or adverse testimony has generally been taken in all Circuits as sufficient evidence of causation, while a long delay has generally been taken in all Circuits as inadequate. To the extent that Stone seeks to lay down ironclad rules, it is inconsistent with Reeves.

Johnson v. ITT Aerospace/Communications Div. of ITT Industries, Inc.272 F.3d 498, 500, 87 FEP Cases 553 (7th Cir. 2001), affirmed the grant of summary judgment to the defendant, holding that an employer did not violate Title VII by refusing to authorize absences for the purpose of prosecuting cases while authorizing the absences of nonparty witnesses pursuant to a court order. The court also held that an employer does not violate Title VII by denying leave to an employee pursuing frivolous claims against the employer. Id. at 501.

Longstreet v. Illinois Department of Corrections, 276 F.3d 379, 383–84, 87 FEP Cases 1375 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII retaliation defendant. The court held that there was no evidence that the plaintiff’s reassignment to Tower 5 was a materially adverse employment action because the plaintiff presented only her own description of increased difficulties working there, and she did manage to work there for almost two years before being reassigned back to her former position. The court also held that no inference of causation could be drawn from the four-month lapse between her sexual harassment complaints and her reassignment.

Pipkins v. City of Temple Terrace, 267 F.3d 1197, 1201, 86 FEP Cases 1413, 81 E.P.D. ¶ 40,820 (11th Cir. 2001), affirmed the grant of summary judgment to the Title VII retaliation defendant. The court held that the plaintiff could not show a causal link between her poor performance evaluations and her complaints of harassment because the earlier poor evaluations preceded any protected activity, and her later poor evaluations were accompanied by “well-documented job performance deficiencies.” (Footnote omitted.)

F. Comparators

Zapata-Matos v. Reckitt & Colman, Inc.277 F.3d 40, 46–47, 87 FEP Cases 1409 (1st Cir. 2002), affirmed the grant of summary judgment for the Title VII defendant. The court rejected the discharged Puerto Rican plaintiff’s comparison of himself to an interim Anglo replacement who was given the Regional Director title the plaintiff had been denied, because the plaintiff had effectively driven out the entire top management structure below him, the interim replacement was called in to fill the void, and the interim replacement was already a Vice-President of the company. The court accepted the defendant’s comparator, the Puerto Rican who was brought into the company as a permanent replacement.

Patt v. Family Health Systems, Inc., 280 F.3d 749 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant on the plaintiff surgeon’s compensation claim. The court rejected her comparator: “ Although Rosner was paid a higher salary, the record shows that Rosner worked at Family Health at least a year longer than Patt, and that Rosner had completed four years of post-residency work to Patt’s two years at the time she was hired. Patt asserts that Rosner’s prior post-residency work had ‘no bearing on nor relationship to surgery,’ but Rosner’s curriculum vitae states that he previously served as ‘Director of Surgical Critical Care’ at a medical facility in New York. Years of service and prior experience are legitimate, non-discriminatory reasons for a wage disparity.”

Markel v. Board of Regents of University of Wisconsin System276 F.3d 906, 913, 87 FEP Cases 1131 (7th Cir. 2002), affirmed the grant of summary judgment to the Equal Pay Act defendant, holding that a plaintiff with a nine-month contract was not comparable to a permanent employee with seniority.

Williams v. Saint Luke’s-Shawnee Mission Health System, Inc.276 F.3d 1057, 87 FEP Cases 1473 (8th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant. The black plaintiff worked as a Behavioral Health Technician at a facility for troubled adolescent girls, most of whom had been either promiscuous or sexually abused. He was fired for assertedly engaging in horseplay with the patients, getting manicures and head rubs from them, and giving his phone number to a patient’s mother and insinuating that he would like to have a relationship with her. The court rejected his comparison to a white co-worker who had been accused of being in a patient’s room with the door closed, because the co-worker explained that the door had closed by itself, and an investigation had exonerated him. The court also rejected his comparison to a white co-worker who was counseled but not disciplined after female co-workers had complained that he was sexually harassing them. “Neither employee was found to have had improper physical contact with minor patients or inappropriate conversations with any patients, nor did either give his telephone number to a patient or family member.” Id. at 1060. The court stated that comparators, for purposes of proof of disparate treatment, must be similarly situated in all relevant respects, including the commission of offenses that were the same or were of comparable seriousness. Id.

G. Discriminatory Statements

Zapata-Matos v. Reckitt & Colman, Inc.277 F.3d 40, 87 FEP Cases 1409 (1st Cir. 2002), affirmed the grant of summary judgment for the Title VII defendant. Michael Gallagher had been involved in the hiring and promotion of the plaintiff, the increase of his responsibilities, and his raise the year before his discharge. The plaintiff was responsible for Puerto Rican, Mexican, and Caribbean markets, and was directed to increase the prices for his company’s goods to mainland levels because the 30% discount was causing mainland buyers to obtain their goods in Puerto Rico and resell them for less than the mainland price. The resellers were reaping what should have been the company’s profits. When the plaintiff objected that that large a price increase would cause a loss of sales in Puerto Rico, Gallagher said “Fuck Puerto Rico . . . . We’ve got to change and we’ve got to fix this situation, because we don’t want this happening.” Id. at 43. The court held that no rational factfinder would regard this statement as evidence of national-origin discrimination against Puerto Ricans. Id. at 46.

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.273 F.3d 30, 33–34, 87 FEP Cases 673 (1st Cir. 2001), vacated the grant of summary judgment to the ADEA defendant, holding that a two-year series of age-biased statements by the plaintiff’s direct supervisor, Larry Cancel, coupled with the lack of contemporaneous documentary support for his criticisms of her work performance and mutually conflicting accusations of poor performance by different supervisors created a jury issue. The plaintiff and others “quoted him as saying, among other things, that the ages of his accounting employees added up to more than a thousand years; that his employees were as old as Methuseleh [sic]; that they were ‘old women,’ ‘a bunch of incapacitated people,’ and ‘useless old women’ and that ‘what I have here is Social Security.’ Melendez also said that Cancel told her that she was an old hag, an old lady and that ‘her age didn’t allow her to think.’” Id.

Markel v. Board of Regents of University of Wisconsin System276 F.3d 906, 910–11, 87 FEP Cases 1131 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant, holding that assertedly discriminatory statements cannot be considered direct evidence of discrimination unless they are clearly discriminatory, without resort to any inference or presumption, and unless they are made contemporaneously with the challenged action.

EEOC v. University of Chicago Hospitals276 F.3d 326, 333, 87 FEP Cases 1089 (7th Cir. 2002), reversed the grant of summary judgment to the Title VII religious-discrimination constructive-discharge defendant. The court rejected the defendant’s assertions that the incidents surrounding the constructive discharge themselves did not show religious discrimination. It held that the decisionmaker’s references within the prior two months to the charging party as a religious fanatic, and to the problems the decisionmaker had with the charging party’s religious beliefs and to her bringing religion into the workplace, her instruction to a manager that he fire the charging party, the manager’s belief that the instruction was based on religious animosity, and her firing the manager when he refused to fire the charging party, were evidence of a religious bias which, in combination with other evidence, was sufficient to defeat summary judgment.

Costa v. Desert Palace, Inc.268 F.3d 882, 888, 86 FEP Cases 1456, 81 E.P.D. ¶ 40,723 (9th Cir. 2001), reversed and vacated the judgment on a jury verdict for the plaintiff, holding that the lower court erred in giving a mixed-motives instruction. The court rejected plaintiff’s argument that being called a “bitch” by a female supervisor was evidence of gender discrimination. The court held that this was evidence only of personal dislike, where the plaintiff had been a union steward during a time of contentious labor-management relations, and where the female supervisor had an aggressive management style that had led both men and women to complain.

McCowan v. All Star Maintenance, Inc.273 F.3d 917, 926, 87 FEP Cases 596 (10th Cir. 2001), reversed the grant of summary judgment to the Title VII and § 1981 defendant on both their hostile-environment claim and their discriminatory-discharge claim. The facts of the hostile environment claim are described below. The court held that the “totality of the circumstances” test applies to the discharge claim as well as the harassment claim, and that plaintiffs did not need to establish a nexus between the harassing remarks and their termination unless they were claiming that the remarks were direct evidence of discrimination in their discharges.

H. Disparate Impact

Stout v. Potter276 F.3d 1118, 1122–24, 87 FEP Cases 1255 (9th Cir. 2002), affirmed the grant of summary judgment to the Title VII gender discrimination defendant. The court rejected the Postal Service’s argument that there was no disparate impact because one out of six female candidates was promoted, compared to about one out of ten male applicants, because plaintiffs’ disparate impact challenge was directed at selection for interview, an intermediate pass-or-fail hurdle. The court also rejected plaintiffs’ argument that the first and second interviews should be analyzed separately. Ten males and no women had been selected for the first round, which had originally been intended to be the only round of interviews. When the selection process was re-opened for further interviews, women were two of the five new interviewees. The court held that there was a functional reason to separate the interview selection stage from the final selections, because it operated as a pass-or-fail barrier, but that there was no such barrier between the first and second rounds. Id. at 1122. Because intent plays no role in a disparate-impact case, the court held it irrelevant that the first round had originally been intended to be the only round. Id. at 1123. The court held that the relevant population for purposes of disparate-impact analysis was the composition of the persons seeking promotion. It held that the difference between the percentage of applicants who were female (15.8%) and the percentage of interviewees who were female (13.3%) was too small to support a claim of disparate impact. Id. It pointed out that the selection of one more female applicant for an interview would have resulted in a higher percentage of interviewees who were female than the percentage of applicants who were male. “This potential reversal of fortunes underscores the problem in working with a small sample size.” Id. at 1123 n.2 (citation omitted). The court applied the four-fifths rule, and found that the selection rate for women was 81% of the selection rate for men. Id. at 1124. Finally, the court stated in dicta or alternative holding that the selection of interviewees was a process that had several elements, the plaintiffs did not argue that the elements could not be isolated for analysis, and the plaintiffs did not isolate any element and show a causal relationship linking disparate impact to that factor. Id. at 1124–25.

Sledge v. Goodyear Dunlop Tires North America, Ltd., 275 F.3d 1014, 87 FEP Cases 823, 81 E.P.D. ¶ 40,828 (11th Cir. 2001) (per curiam), reversed the grant of summary judgment to the Title VII and § 1981 racial discrimination defendant and held that a reasonable jury could find that the black plaintiff was qualified to be a maintenance mechanic and that the company’s examinations for mechanic “were nothing more than a pretext for racial discrimination.” Id. at 1019. The plaintiff applied for vacant mechanic positions and was not interviewed. At his request, his supervisors signed a letter to Human Resources stating that he was qualified. The Plant Engineer then devised a test. The plaintiff applied for the next two openings, and was not allowed to take the test. Two whites who had not taken the test were promoted. He protested, but applied for another vacancy, and was not allowed to take the test. The white promotee had failed the test. The Plant Engineer then rewrote the test to include drawing and verbal problems. A white applicant was told to disregard the word problems and passed. The company finally allowed the plaintiff to take the test, but insisted he take it at the end of a twelve-hour shift. He passed the practical but failed the word problems. The union pursued a grievance on behalf of a white employee, and an arbitrator ruled that the white employee could take the test again. The plaintiff was also given the opportunity to take the test again. A new test was devised, neither man passed, and the white employee received the promotion. Id. at 1016–18. The court noted that, at the time the plaintiff filed suit, there was only one black Mechanic in the Maintenance Department, out of 107. Id. at 1019. It described the evidence of discrimination as “compelling.” Id. at 1020.

I. Constructive Discharge

EEOC v. University of Chicago Hospitals276 F.3d 326, 332, 87 FEP Cases 1089 (7th Cir. 2002), reversed the grant of summary judgment to the Title VII constructive-discharge defendant. The court held that a plaintiff can show constructive discharge not only by showing an intolerable working environment, but also by showing that the employer has acted “in a manner so as to have communicated to a reasonable employee that she will be terminated,” and that the employee has then resigned. The lower court had held that the conditions at the time the plaintiff submitted her resignation letter—such as the fact that she had been told by her supervisor while she was on vacation that an asserted mistake was the “‘last straw’” and, when she returned, she found that her belongings were packed and her office was being used for storage space—were irrelevant, because she had prepared the resignation letter ahead of time. Reversing, the court of appeals stated that even though the letter had been prepared ahead of time, “her decision to submit that letter could have surely been based on” those conditions, (Emphasis in original.)

Jackson v. Arkansas Department of Education272 F.3d 1020, 1026–27, 87 FEP Cases 888 (8th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant, rejecting the plaintiff’s constructive-discharge claim and upholding the affirmative defense to the plaintiff’s claim of sexual harassment by her supervisor, Robert Gwatney. The court observed in dictum that, if the plaintiff were found to have been constructively discharged, that would have been a tangible employment action and the defendant would have been deprived of the affirmative defense. Id. at 1026. The court rejected the plaintiff’s constructive-discharge claim because “the Department’s expectation that Jackson would return to work, especially after Gwatney had been terminated, does not rise to the level of an objectively intolerable working condition.” Id. at 1027. The court also relied on the facts that the plaintiff did not cooperate with the defendant’s investigation and efforts to correct the problem, and that the problem was in fact corrected “by changing Gwatney’s schedule, reimbursing her sick leave time, checking on her continued state of mind, and ultimately firing Gwatney.” Id.

Pipkins v. City of Temple Terrace, 267 F.3d 1197, 1201, 86 FEP Cases 1413, 81 E.P.D. ¶ 40,820 (11th Cir. 2001), affirmed the grant of summary judgment to the Title VII retaliation defendant. The court held that the plaintiff had not shown working conditions so bad that a reasonable person would have felt compelled to resign. “Repeatedly receiving poor evaluations would be unpleasant for anyone, but it does not rise to the level of such intolerable conditions that no reasonable person would remain on the job.” Moreover, the Assistant City Manager, with whom the plaintiff had formerly had a consensual affair, was effectively discharged as soon as the affair came to light.

J. Reductions in Force

Windham v. Time Warner, Inc.275 F.3d 179, 190, 87 FEP Cases 843 (2nd Cir. 2001), vacated the grant of summary judgment to the Title VII racial-discrimination RIF defendant because the lower court failed to understand the plaintiffs’ argument. Plaintiffs did not argue that the defendant made a bad decision by choosing to terminate three black employees in a RIF, but argued that the decisionmaker did not consider white employees for the RIF. “From the admitted facts and the inferences raised by the record, a reasonable jury could find Harvey gave McLoughlin and Sherman additional responsibilities to make their jobs indispensable after she knew the department was overstaffed.” In addition, the court found that all employees had engaged in the types of negative conduct that the decisionmaker had relied on to justify the termination of the plaintiffs.

K. Compensation

Goodwin v. General Motors Corp.275 F.3d 1005, 1013, 87 FEP Cases 1651 (10th Cir. 2002), reversed the grant of summary judgment to the Title VII gender discrimination defendant, holding that the district court erred in considering only the amounts of percentage increases in pay rather than the absolute amounts of pay raises, where the plaintiff alleged that she had been paid less from the beginning of her employment.

L. Harassment

1. What is Actionable Conduct?

a. Not a Single Episode of Profane Language

Stewart v. Evans, 275 F.3d 1126, 87 FEP Cases 1298 (D.C. Cir. 2002), affirmed the grant of judgment on the pleadings to the Title VII sexual harassment defendant, based on the annexed opinion of the district court. The claim rested solely on a single telephone call in which the Inspector General of the U.S. Department of Commerce berated her and repeatedly used profane language. The district court opinion stated: “During the call, Ms. Stewart alleges that Mr. DeGeorge used offensive profanities, including the following: ‘…you’re a fucking idiot…;’ ‘…you are full of shit…;’ ‘…can’t you fucking read…;’ ‘…fuck the goddamn memo…;’ ‘…just between us girls…;’ ‘…I want to know where your fucking head was at…;’ and ‘…I don’t have to listen to your fucking bullshit.’ Mr. DeGeorge also allegedly said that Ms. Stewart would ‘rue the day [she] ever did this to [him]’ and that ‘somebody’s going to pay for this.’ Complaint, ¶ 14.” Id. at 1131. The lower court held that the conduct in question had nothing to do with sexual discrimination, and was motivated by DeGeorge’s rage at her handling of a workplace matter.

b. Not if the Conduct is Alleged to be Mere Rudeness

Patton v. Indianapolis Public School Board276 F.3d 334, 339, 87 FEP Cases 1433 (7th Cir. 2002), affirmed the grant of summary judgment for the defendants. The plaintiffs were African-American officials who had been in charge of student transportation for the Indianapolis Public Schools at the time of a disastrous planning failure that left thousands of children stranded at their bus stops or delivered to the wrong schools. Superintendent Gilbert and Donald Coleman, an official asked by Gilbert to help rectify the situation, were both African-American. Plaintiff Patton accused them of creating a hostile working environment by treating her in a rude and abrupt manner, ignoring her suggestions, failing to keep her informed of changes at work, and criticizing her for taking three days of sick leave in the middle of the crisis. The court held that this was not enough to constitute an actionable hostile environment and that, in any event, the plaintiff’s contention that the treatment was “purely personal,” doomed her claim.

Bennington v. Caterpillar Inc., 275 F.3d 654, 660, 87 FEP Cases 1050 (7th Cir. 2001), affirmed the grant of summary judgment to the ADEA defendant. The court held that, even assuming a hostile-environment claim could be brought under the ADEA, rudeness or unfairness did not rise to the level of actionable conduct.

c. Not if Sexual in Form, But Motivated by a Nonsexual Grudge.

Davis v. Coastal International Security, Inc.275 F.3d 1119, 87 FEP Cases 1263 (D.C. Cir. 2002), affirmed the grant of summary judgment to the defendants. The court held that the harassment of one man by other men is not sexual harassment violating Title VII if it is motivated by a workplace grudge unrelated to sexual discrimination, even if it takes the form of sexual innuendos and unmeant propositions.

Patton v. Indianapolis Public School Board276 F.3d 334, 339, 87 FEP Cases 1433 (7th Cir. 2002), affirmed the grant of summary judgment for the defendants. The court held in the alternative that the plaintiff’s contention that the treatment was “purely personal” doomed her claim.

d. Not in the Common Aftermath of Consensual Relationships

Pipkins v. City of Temple Terrace, 267 F.3d 1197, 1199–1201, 86 FEP Cases 1413, 81 E.P.D. ¶ 40,820 (11th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court summarized the context of its decision: “From approximately June 1993 until May 1994, Houldsworth maintained an on-again, off-again personal relationship with Daniel Klein, City Finance Director and Assistant City Manager. Although Klein held a supervisory position within Houldsworth’s department, Houldsworth’s immediate overseer was Florence Lewis-Begin, Assistant Finance Director. After May 1994, Houldsworth and Klein ceased to have a sexual relationship. Houldsworth asserts, however, that Klein continued to pursue her romantically even subsequent to this date.” Id. at 1199. She alleged that, after their relationship came to light, her evaluations declined, affecting her pay. Id. The court stated: “Applying Oncale, this court has distinguished between actions based on discriminatory animus and those based on personal animosity resulting from failed consensual relationships. See Succar v. Dade County Sch. Bd., 229 F.3d 1343, 1345 (11th Cir.2000).” Id. at 1200. Succar involved a hostile work environment claim, but the plaintiff relied on a quid pro quo theory for her claim. The court extended the Succar rule “to claims arising out of consensual relationships in the quid pro quo context.” It held that any harassment committed by the plaintiff’s immediate supervisor in order to please her friend, Klein’s wife, would have been motivated by personal animosity rather than gender, and that the same applied to any harassing actions committed by Klein in light of the plaintiff’s characterization of them as reflecting his disappointment at the end of their relationship. The court cautioned that its ruling was limited: “This court does not today decide that once a consensual relationship between a supervisor and a subordinate is established, the subordinate could never then become victim to quid pro quo sexual harassment by that supervisor subsequent to the termination of the relationship. We hold only that the facts and circumstances of this case operate to take the motivation for any harassment that might have occurred out of the scope of Title VII.” Id. at 1201.

e. Not if the Plaintiff Was Not Bothered by the Incidents

Newman v. Federal Express Corp.266 F.3d 401, 86 FEP Cases 1375 (6th Cir. 2001), affirmed the grant of summary judgment on the plaintiff’s racial harassment claims, because he did not consider the anonymous racially-charged letter “a big deal,” and thought the anonymous voice-mail communication was just “silly.”

f. Yes, if Neutral in Form but Motivated by a Prohibited Motive

Cardenas v. Massey, 269 F.3d 251, 261–62, 87 FEP Cases 19 (3rd Cir. 2001), reversed the grant of summary judgment to the defendants on the plaintiff’s Title VII and New Jersey Law Against Discrimination racial harassment claim against certain defendants. The alleged harassment included performance evaluations with a practice of rounding up the evaluations of non-Hispanic employees and rounding down the evaluations of Hispanic employees, id. at 259, and the practice of assigning all minority employees to the one unit headed by a minority manager. The court held that the record must be considered as a whole in determining whether the challenged conduct is actionable. Id. at 260–61. In holding that there was sufficient evidence that the harassment affected the plaintiff’s work performance, the court relied on evidence that plaintiff’s chief harassers may have “set him up to fail,” with one of them asking the plaintiff to curtail a presentation requested by the other, and with the result that the second publicly berated the plaintiff. Another example was the assignment of too many complex matters to his unit, which had a high proportion of trainees Id. at 262. The court held that the plaintiff’s constructive-discharge claim survived as part of his harassment claim, and assumed without deciding that such a discharge is a tangible employment action. Id. at 266 n.10.

g. Yes, if One Gender is the Primary, But Not Exclusive, Target

Beard v. Flying J, Inc., 266 F.3d 792, 798, 87 FEP Cases 1836 (8th Cir. 2001), affirmed the judgment on a jury verdict for the Title VII sexual harassment plaintiff. The court rejected the defendant’s “equal opportunity harasser” defense, in which the breasts of males were sometimes twisted and sexual terms used in speaking with them, because women remained the primary target of the harassment:

Flying J next contends that the harassment was not based on sex because Mr. Krout harassed male employees by occasionally giving them so- called “titty-twisters” and speaking to them in sexual terms. Because of this, Flying J contends that women were not “exposed to disadvantageous terms or conditions of employment to which [males were] not exposed.” Schoffstall, 223 F.3d at 826. We observe, first of all, that this conduct is not the same as what occurred to Ms. Beard, partly because it is probably not sexual, and in any case it carries an entirely different cultural and contextual message. A plaintiff in this kind of case need not show, moreover, that only women were subjected to harassment, so long as she shows that women were the primary target of such harassment. See Quick v. Donaldson Co., 90 F.3d 1372, 1378 (8th Cir.1996). Viewing the evidence in the light most favorable to Ms. Beard, a jury could reasonably find that the vast majority of Mr. Krout’s activities of a harassing nature was directed toward female employees, and could thus conclude that the harassment of Ms. Beard was based on sex.

h. Hotel Rooms Can Sometimes Be Part of a Working Environment

Ferris v. Delta Air Lines, Inc.277 F.3d 128, 135, 87 FEP Cases 899 (2nd Cir. 2001), reversed the grant of summary judgment to the Title VII defendant. The plaintiff flight attendant alleged that she had been raped by a male flight attendant in his hotel room during a stopover in Rome. The court of appeals rejected the district court’s finding that the alleged assault had not occurred in a work environment because no Delta policy encouraged flight attendants to socialize in their rooms. “The circumstances that surround the lodging of an airline’s flight crew during a brief layover in a foreign country in a block of hotel rooms booked and paid for by the employer are very different from those that arise when stationary employees go home at the close of their normal workday.” The court held that a jury could properly find that the male flight attendant’s hotel room was a part of the plaintiff’s work environment for purposes of Title VII. The court held that a single instance of harassment can establish a hostile environment “when it is sufficiently egregious.” Id. at 136. The court reversed the lower court’s decision that no ongoing hostile environment could arise from the plaintiff’s “hypothetical and speculative” fear and trepidation at further direct encounters with the rapist, because the evidence showed that the plaintiff “suffered real emotional trauma from her fear of seeing Young again,” tried to keep informed about his work schedule so she could attempt to avoid working on those flights, sought psychiatric help, and took antidepressants. Id. at 137.

i. Improper Physical Contact

Worth v. Tyer276 F.3d 249, 268, 87 FEP Cases 994 (7th Cir. 2001), affirmed the Title VII sexual harassment verdict for the plaintiff. The court held that improper physical contact with the plaintiff over two days was actionable. It stated that even one act of harassment can be actionable if it is sufficiently egregious, and that touching increases the severity of the situation. Here, the harasser touched the plaintiff’s breast near the nipple and maintained the contact for several seconds.

j. Racial or Ethnic Slurs

Swinton v. Potomac Corp., 270 F.3d 794, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law plaintiff. The court held that frequently repeated racial slurs were actionable, id. at 804, although Fosdick, a company supervisor who was the chief racial harasser of the plaintiff, was also the uncle of the plaintiff’s fiancée and although the plaintiff socialized with Fosdick at work and outside of work “to maintain harmonious family relations.” Id. at 800.

McCowan v. All Star Maintenance, Inc.273 F.3d 917, 87 FEP Cases 596 (10th Cir. 2001), reversed the grant of summary judgment to the Title VII and § 1981 defendant. The court held that the plaintiffs had shown sufficient evidence of severe and pervasive racial and national-origin harassment for it to be actionable. The court rejected the defendants’ contention that the ethnic slurs and references directed at plaintiffs over the three weeks of their employment could not have been pervasive “because Plaintiffs spent only a few minutes at the beginning and end of the day in the office where some of the offensive language might have been voiced and otherwise worked alone in a house for the entire day over a period of only three weeks.” Id. at 920. Some of the language used was particularly vile, such as “stupid f—–g Mexican” and “burrito-eating m—–f——.” Id. at 924. Hispanics were not the only group singled out for contempt; indeed, one witness defended himself by denying that he had ever said “worthless n—–“while admitting that he might have said “n—–.” Id. The court disapproved of the lower court’s trivialization of these incidents: “In light of a record that spans only three weeks, the court’s characterizing the racial harassment as ‘isolated’ evincing more ‘casual comments, or accidental or sporadic conversation,’ and as statements of personal opinion not made by individuals responsible for their hiring or firing misses the mark.” Id. at 925. The court held that the totality of the circumstances must be examined, and stated that “we look at both specific hostility targeting Plaintiffs as well as the general work atmosphere.” Id. It added: “This, even if a comment about Plaintiffs’ baggy pants or low riders might not be explicitly racial, given the context of the statement, it could be reasonably inferred the remarks were related to Plaintiffs’ race and were part of an ongoing, pervasive environment of racial taunting.” Id. (footnote omitted). The court held that the lower court erred in disregarding racial and ethnic slurs directed at others; such evidence “must be weighed on the side of reasonable inferences.” Id. at 925 n.10. The court also rejected the lower court’s approach to the fact that plaintiffs were exposed for only a few minutes a day, and worked for only three weeks: “These circumstances, however, cut both ways. Alternatively, the shorter exposure time supports the equally plausible inference the abuse was so offensive as to taint the entire job site.” Id. at 926.

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 87 FEP Cases 1209 (11th Cir. 2002), affirmed the jury verdict for the plaintiff, holding that a reasonable jury could find that ethnic slurs, shouted angrily three or four times a day over a period of a month, often in the course of reprimanding the plaintiff, with lesser harassment over a period of three months, were sufficiently severe and pervasive to be actionable. The court held that the “totality of the circumstances” approach was to be followed in determining whether the harassment unreasonably interfered with his work performance, and the evidence was sufficient for the jury to draw that conclusion. Id. at 1276. The court explained:

Miller did not suffer from overhearing occasional off-color comments. Rather, as one of his coworkers testified, Galpin and other technicians in the Service Department used the derogatory names in an intimidating manner, shouting them at Miller during the course of berating him for his job performance, or when they were “arguing with him,” were “mad with him,” or were “taunting him.” This conduct rose above the level of off-handed comments in the course of casual conversation that the Supreme Court has refused to find actionable. . . . Third, the testimony makes it clear that these incidents were humiliating and degrading to Miller. The very nature of the coworkers’ utterances, coupled with the fact that they were directed at Miller and were sometimes used in the course of reprimanding him in front of others, establishes this factor. Finally, there was evidence that Galpin’s behavior prevented Miller from performing his job, on at least one occasion. Kenworth emphasizes testimony that Miller engaged in horse play at work, used his time to make personal phone calls, and was often seen loafing with other employees, and suggests these as alternative reasons for Miller’s poor job performance. Even if true, this would not prevent the jury from reasonably finding that Galpin’s conduct also interfered with Miller’s job performance. The Supreme Court has cautioned that harassment need not be shown to be so extreme that it produces tangible effects on job performance in order to be actionable. . . . Thus, having established the frequency, severity, and humiliating nature of the conduct, Miller’s failure to establish convincingly how Galpin’s conduct interfered with his duties is not fatal to his hostile environment claim, given the totality of the circumstances. We therefore cannot conclude that the jury unreasonably found Galpin’s conduct to be sufficiently severe and pervasive such that the terms or conditions of Miller’s employment were altered.

Id. at 1277 (citations omitted).

2. Who is a Supervisor?

a. For Purposes of Faragher and Ellerth

Hall v. Bodine Electric Co.276 F.3d 345, 355, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court applied prior case law holding that a supervisor within the meaning of Ellerth is someone possessing at least some of the authority to hire, fire, demote, promote, transfer, or discipline, an employee. The court held that the asserted authority of Samuel Lopez, plaintiff’s harasser, was not enough to make him her supervisor although he assertedly had authority to direct her work operations by telling her which machines to run, provide input into her performance evaluations, and train her. The court distinguished between overseeing aspects of the plaintiff’s work performance and having “the authority to directly affect the terms and conditions of a victim’s employment.” (Emphasis in original; citations omitted.) “The type of marginal discretion Lopez had over Hall’s work operations is not sufficient to impute Title VII vicarious liability to an employer.” (Citation omitted.) The court also found it relevant that the plaintiff always took her complaints to her “real supervisor” or to Human Resources, rather than to her harasser or someone at his level. Id. at 355–56.

Swinton v. Potomac Corp., 270 F.3d 794, 803, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law plaintiff. The court stated that Fosdick, a company supervisor who was the chief racial harasser of the plaintiff, was not a supervisor within the meaning of Faragher and Ellerth because he was not the plaintiff’s supervisor.

b. For Purposes of the Negligence Theory

Swinton v. Potomac Corp., 270 F.3d 794, 804–05, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law plaintiff. The court relied on Brooks v. City of San Mateo, 229 F.3d 917, 925 n.6 (9th Cir. 2000), and Lamb v. Household Services, 956 F. Supp. 1511, 1516–18 (N.D. Calif. 1997), in defining employees who qualify as members of management for purposes of imposing liability on the defendant in a negligence case:

The court in Lamb identified two categories of employees who qualify as management for these purposes. First, an employee is a member of management if a “supervisor[ ] possessing substantial authority and discretion to make decisions concerning the terms of the harasser’s or harassee’s employment,” such as “authority to counsel, investigate, suspend, or fire the accused harasser, or to change the conditions of the harassee’s employment.” Id. at 1517. Second, a supervisor who lacks such authority is nonetheless classified as “management” if he “has an official or strong de facto duty to act as a conduit to management for complaints about work conditions.” Id. ; see also Distasio , 157 F.3d at 64 (“An official’s knowledge will be imputed to an employer when: ‘ . . . (B) the official is charged with a duty to act on the knowledge [of harassment] and stop the harassment; or (C) the official is charged with a duty to inform the company of the harassment.’”) (quoting Torres v. Pisano , 116 F.3d 625, 636- 37 (2d Cir. 1997) (citations omitted)).

It is beyond dispute that Stewart fell into the second category of “management” employees identified by Lamb : employees with “an official or strong de facto duty to act as a conduit to management for complaints about work conditions.” 956 F.Supp. at 1517. The duty here was official and explicit, not left to chance. By the very terms of U.S. Mat’s employee manual, Stewart was charged with accepting reports of harassment; he was the one to whom Swinton was to report first if he experienced harassment. And it is also undisputed that Stewart personally witnessed the harassment; he admitted as much. It could even be said that he participated in it himself by laughing along with Fosdick’s jokes. Under these circumstances, we are confident in concluding that Swinton presented overwhelming and undisputed evidence justifying a verdict in his favor under a negligence theory, as outlined in Instruction 10.

Id. at 804–05 (footnote omitted).

3. Tangible Employment Actions

Cardenas v. Massey, 269 F.3d 251, 266–67, 87 FEP Cases 19 (3rd Cir. 2001), reversed the grant of summary judgment to the defendants on the plaintiff’s Title VII and New Jersey Law Against Discrimination racial harassment claim against certain defendants, including his constructive-discharge claim arising from the harassment. The court assumed without deciding that a constructive discharge is a tangible employment action. Id. at 266 n.10.

Mota v. University of Texas Houston Health Science Center , 261 F.3d 512, 520, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), affirmed the judgment for the plaintiff on his same-sex sexual harassment claim. The court held that a tangible employment action for purposes of a sexual harassment claim is not necessarily the same as an adverse employment action for purposes of a retaliation claim. “Retaliation occurs in response to protected activity, whereas a tangible employment action is the result of the harassment itself. A rational jury could have concluded both that no tangible employment action resulted from the harassment and that the University subsequently retaliated against Mota for filing a complaint.”

4. Harassment by Persons Other than Supervisors

Ferris v. Delta Air Lines, Inc.277 F.3d 128, 136–37, 87 FEP Cases 899 (2nd Cir. 2001), reversed the grant of summary judgment to the Title VII defendant. The plaintiff flight attendant alleged that she had been raped by a male flight attendant in his hotel room during a stopover in Rome. The court stated that a reasonable factfinder could conclude that the defendant was responsible for the rape because of its negligence in responding to past complaints by other flight attendants who had stated that the same flight attendant had raped them. The court stated:

Delta had notice of Young’s proclivity to rape co-workers. The fact that Young’s prior rapes were not of Ferris but of other co-workers is not preclusive. If an employer is on notice of a likelihood that a particular employee’s proclivities place other employees at unreasonable risk of rape, the employer does not escape responsibility to warn or protect likely future victims merely because the abusive employee has not previously abused those particular employees.

Id. at 136. The court rejected the lower court’s trivialization of the prior rapes:

Had the earlier non-work related incidents consisted of less grave conduct, such as off-duty flirtation, sexual innuendo, or crude talk, we might agree that such off-premises, off-duty conduct does not reasonably give notice of a likelihood that the person will represent a danger to co-employees or import his harassment into a work environment and therefore does not give rise to an employer’s duty to protect co-workers. But rape is obviously a far more serious matter. The more egregious the abuse and the more serious the threat of which the employer has notice, the more the employer will be required under a standard of reasonable care to take steps for the protection of likely future victims. The district court may have been correct that Delta’s ability to investigate was curtailed by the fact that the Feingold and Ballweg rapes occurred off-duty. It does not follow, however, that the off-duty nature of the rapes absolved Delta of all responsibility to take reasonable care to protect co-workers, much less justified a supervisor’s affirmative steps to prevent a victim from filing a written complaint and warning co-workers.

Id. at 137.

Hall v. Bodine Electric Co., 276 F.3d 345, 356, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court held that notice or knowledge is a prerequisite for employer liability for co-worker harassment. “Title VII neither requires nor expects the management of a company to be aware of every impropriety committed by every low-level employee.” (Citation omitted.)

Swenson v. Potter, 271 F.3d 1184, 1192, 87 FEP Cases 620, 81 E.P.D. ¶ 40,821 (9th Cir. 2001), reversed the judgment for plaintiff, holding that the defendant Postal Service could not be liable for harassment by a co-worker prior to its actual notice of the asserted harassing conduct.

Swinton v. Potomac Corp., 270 F.3d 794, 803–04, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law plaintiff. The court held that the company was liable for racial harassment by a person who was not in a direct chain of command over the plaintiff, and that the affirmative defense is not available under the negligence theory. The court rejected the defendant’s argument that such a result would leave an employer better off if the harasser is a supervisor over the plaintiff, because at least then the employee would be required to complain. “This reasoning rests on the faulty premise that an employer is ‘better off’ in the strict liability context than in the negligence context.” Id. at 803. The court explained that the actual difference came down to an allocation of the burden of persuasion:

While it is strictly true that it is not available as an affirmative defense, the principle embodied in the defense—that an employer can avoid liability in situations where it acts promptly to remedy harassment—is contained in the requirements for a prima facie case based on negligence. In the context of this case, it was Swinton’s burden, in accord with Jury Instruction 10, to prove that management knew or should have known of the harassment and “failed to take reasonably prompt, corrective action . . . .” And, as the Second Circuit has explained, a plaintiff alleging co-worker harassment must prove that the employer “either provided no reasonable avenue for complaint or knew of the harassment but did nothing about it.” . . . . This formulation is substantively similar to the Ellerth / Faragher defense; the chief difference is that in the negligence context, the plaintiff bears the burden of proving the employer’s failure to respond adequately to the harassment, while, in a vicarious liability regime, the defendant must establish the corrective action as an affirmative defense.

Id. at 803–04 (citations omitted). Although the lower court gave an erroneous instruction on vicarious liability, the court of appeals held that the error was harmless in light of the strength of the plaintiff’s case under the negligence theory.

5. Failure to Complain

Jackson v. Arkansas Department of Education272 F.3d 1020, 1025–26, 87 FEP Cases 888 (8th Cir. 2001), affirmed the grant of summary judgment to the defendant, upholding the affirmative defense. The plaintiff was subjected to harassing conduct by her supervisor for nine months before her fiancé complained on August 31, 1994, to one of her supervisors. On receipt of the complaint, the defendant immediately began an investigation, but the result was inconclusive. When the defendant later learned on June 23, 1995, from a co-worker that the alleged harasser had lied in the investigation, it immediately fired him. The court rejected the plaintiff’s argument that the lapse of time before the defendant found out that the co-worker had lied meant that its policy was ineffective and that the plaintiff was therefore excused from complaining.

6. Adequacy of a Complaint, and Reasons for Not Complaining Earlier

Cush-Crawford v. Adchem Corp.271 F.3d 352, 359, 87 FEP Cases 456, 81 E.P.D. ¶ 40,800 (2nd Cir. 2001), affirmed the judgment on a jury verdict for $100,000 in punitive damages for the Title VII hostile-environment plaintiff. The court held that a jury could reasonably conclude that the plaintiff’s complaints to company officials about her supervisor’s continual demands to go out with him, and about her fears that failure to comply would result in bad evaluations, were adequate complaints of sexual harassment notwithstanding her failure to use that phrase, and notwithstanding the defendant’s prompt action a year later when she did use the phrase. See the discussion of this case in the section on punitive damages.

Mota v. University of Texas Houston Health Science Center 261 F.3d 512, 525–26, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), affirmed the judgment for the plaintiff on his same-sex sexual harassment claims, holding that a jury could reasonably find that the plaintiff’s otherwise problematic delay of up to nine months in reporting the harassment was not unreasonable in light of the harasser’s threats of retaliation and assertions of ability to influence the outcome of any action the University might take. Moreover, the court held that a jury could find the plaintiff’s refusal to turn over his tape recordings to the internal investigative board was not unreasonable, given his testimony before the panel and his provision of an extensive written complaint. “He may have viewed the production of additional evidence, such as recordings of conversations, as futile, given his concerns over the effectiveness of the panel’s inquiry, the composition of the panel, and Caffesse’s influence. A jury could have concluded that Mota’s actions did not constitute an unreasonable failure to take advantage of preventive or corrective opportunities.” Id. at 526.

Hall v. Bodine Electric Co.276 F.3d 345, 356, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court stated that, if the employer designated a channel for making harassment complaints, complainants can normally be expected to use it. “If a point person has not been identified, or is not easily accessible, ‘an employer can receive notice of harassment from a ‘department head’ or someone that ‘the complainant reasonably believed” was authorized to receive and forward (or respond to a complaint of harassment.’” (Emphasis in original; citation omitted.) The court rejected the plaintiff’s argument that she did not complain about the earlier harassment because the defendant had failed to implement a published and widely distributed sexual harassment policy. “But we have never held that Title VII employers must institute formal sexual harassment policies. Instead, we have focused on whether an employer has a reasonable mechanism in place for ‘detecting and correcting harassment.’” (Citations omitted.) The court held that the defendant had an effective channel in place, because each time the plaintiff complained, she knew with whom to make her complaint. Id. at 356–57.

Gawley v. Indiana University, 276 F.3d 301, 311–12, 87 FEP Cases 1116 (7th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant because the university had a procedure in place because the harassment of the plaintiff ended shortly after she complained, and because the plaintiff let ongoing and repeated harassment continue for seven months before she complained. “Gawley’s neglect of the university’s formal procedures during seven months of escalating harassment, in combination with the insufficiency of her repeated informal efforts to stop Minger constitute an unreasonable failure to take advantage of the university’s corrective procedures.” Id. at 312.

7. How Many Times Must a Complainant Complain?

Woods v. Delta Beverage Group, Inc., 274 F.3d 295, 87 FEP Cases 737, 81 E.P.D. ¶ 40,833 (5th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant because the plaintiff failed to complain that her harasser had resumed his unwelcome conduct after he had been counseled. The plaintiff complained about the harassing actions of a co-worker, Gary Eddy. The company promptly investigated the complaint, counseled Eddy and warned him that he could be fired if he continued, and told the plaintiff to let it know immediately if any further improper conduct occurred. The harassment assertedly continued, but the plaintiff did not report it. The court held that her failure to report the resumption doomed her claim. Id. at 299–300. There was no evidence of any prior harassment of other women by Eddy, and the defendant was not liable simply because its first corrective action was unsuccessful. Id. at 300. When the plaintiff made her first complaint, “Delta Beverage was not legally obligated to fire Eddy or separate him from work interaction with Woods.” (Citation omitted.) The court stated that, if the plaintiff had complained and the defendant had merely given Eddy another verbal counseling, “Woods might have an objective basis for concluding that further reports of harassment would be futile.” Id.

8. Actual or Constructive Notice of the Harassment

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1278–79, 87 FEP Cases 1209 (11th Cir. 2002), affirmed the jury verdict for the plaintiff, holding that a reasonable jury could find that the defendant had constructive notice of co-workers’ repeated racial or ethnic slurs against the plaintiff. The court held that the plaintiff’s request to his supervisor, to the effect that the supervisor should tell Galpin, the chief harasser, to watch what he says, was not specific enough to constitute actual notice to the defendant. Id. at 1278. The court continued:

Unfortunately for Kenworth, this was not the only notice Brooks received. There is ample evidence in the record establishing that Brooks had constructive knowledge of Galpin’s abusive comments. We have held the following factors to be germane to the issue of constructive notice of harassment: “(1) the remoteness of the location of the harassment as compared to the location of management; (2) whether the harassment occurs intermittently over a long period of time; (3) whether the victims were employed on a part-time or full-time basis; and (4) whether there were only a few, discrete instances of harassment.” . . . Brooks’ office was located in the Service Department shop, where much of Miller’s abuse occurred. Viewed in the light most favorable to Miller, the evidence presented at trial established that Brooks was actually present at times when Galpin shouted the ethnic insults at Miller. The abuse occurred on a daily basis for the month that Galpin and Miller were both full-time employees of Kenworth. Finally, Galpin’s harassment of Miller occurred up to three to four times a day, and was often directed at Miller in the presence of others. Considering the relevant factors, we find that the evidence set forth in the record, viewed in the light most favorable to Miller, was sufficient to support a jury finding of constructive notice on the part of Kenworth.

Id. at 1278–79. The court rejected the defendant’s argument that Brooks was too far down the corporate ladder for notice to him to be notice to the corporation. Unlike isolated store managers in a giant corporation, Brooks had only one person between him and the President and owner of the defendant. Id. at 1279.

9. Adequacy of the Policy

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1279–80, 87 FEP Cases 1209 (11th Cir. 2002), affirmed the jury verdict for the plaintiff, holding that the defendant’s harassment policy did not provide it with a defense because it was simply a document new employees had to sign, managers were unfamiliar with it, and supervisors did not step in to stop harassment of which they were aware.

10. Adequacy of Corrective Action

Woods v. Delta Beverage Group, Inc., 274 F.3d 295, 300, 87 FEP Cases 737, 81 E.P.D. ¶ 40,833 (5th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant because the plaintiff failed to complain that her harasser had resumed his unwelcome conduct after he had been counseled. When the plaintiff made her first complaint, “Delta Beverage was not legally obligated to fire Eddy or separate him from work interaction with Woods.” (Citation omitted.) The court stated that, if the plaintiff had complained and the defendant had merely given Eddy another verbal counseling, “Woods might have an objective basis for concluding that further reports of harassment would be futile.”

Mota v. University of Texas Houston Health Science Center261 F.3d 512, 525, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), affirmed the judgment for the plaintiff on his same-sex sexual harassment claims, holding that a jury could reasonably find the defendant’s corrective actions inadequate because the investigating body did not make a finding of harassment, did not discipline the harasser, took no step more affirmative than directing that the plaintiff and his harasser work out an accommodation, and did not even issue a reprimand or warning. “Finally, the University’s retaliation against Mota undermines its claim that it was attempting to prevent future harassment.”

Longstreet v. Illinois Department of Corrections, 276 F. 3d 379, 382–83, 87 FEP Cases 1375 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The plaintiff was subjected to two incidents of harassment by two different perpretrators. In both instances, the defendant took adequate corrective action. The court rejected the plaintiff’s contention that, if it had taken adequate corrective action on earlier complaints against the harassers by earlier victims, she would never have been exposed to their harassment. Only one prior incident had been reported, resulting in the reassignment of one of the harassers after he told a female Sergeant, Tracey Terry, that he would pay her money to perform a sexual act on him. That victim was never bothered again. The court held that the defendant’s response to that incident “was not obviously unreasonable,” id. at 382, and continued:

It would push the role of deterrence too far to say that a response which seemed to be within the realm of reasonableness in one situation can, if ultimately it did not have the proper deterrent effect, be the sole basis for liability in another case even if the employer’s response in the second case was clearly sufficient. . . .

Although Longstreet’s argument has superficial appeal, we cannot conclude that an employer is subject to what amounts to strict liability for every second incident of harassment committed by an employee, especially when the first incident was far less serious than the second. Had Bester’s acts toward Terry been more severe—and as a result he had merely been reassigned to another duty station—we would be faced with a different situation. Or were there actual nonhearsay complaints that he harassed several other women, and that despite complaints he had not been disciplined, the situation would also be different. But what we have here is, in effect, one prior incident which may or may not rise to the level of actionable harassment and which was not ignored by the employer, followed by a second incident which resulted in the de facto discharge of the harasser. To say that the employer must be held liable in the second incident would be to impose strict liability on an employer any time an employee commits two acts of harassment. It would be a two-strikes-and-you’re-out rule. To be safe from liability, an employer would always have to discharge a person accused of any kind of harassment because no employer can predict with certainty, any more than any judge sentencing a criminal defendant can predict with certainty, that an offender will not offend again.

Id. at 383.

EEOC v. Indiana Bell Telephone Co.256 F.3d 516, 521–26, 86 FEP Cases 1, 80 E.P.D. ¶ 40,590 (7th Cir. 2001) (en banc), affirmed the judgment of liability for sexual harassment, holding that the employer’s asserted reason for not taking effective action against the alleged harasser—that he would file a grievance under the collective bargaining agreement and be reinstated—was irrelevant on liability.

Jackson v. Arkansas Department of Education272 F.3d 1020, 1025–26, 87 FEP Cases 888 (8th Cir. 2001), affirmed the grant of summary judgment to the defendant, upholding the affirmative defense. The plaintiff was subjected to harassing conduct by her supervisor for nine months before her fiancé complained to one of her supervisors. On receipt of the complaint, the defendant immediately began an investigation, took steps to ensure that there would be no repetition of the offensive conduct, asked the plaintiff to inform it if anything further happened, and checked regularly with the plaintiff. The defendant’s investigation was inconclusive, but it changed the plaintiff’s work hours to eliminate any opportunity for the alleged harasser to interact with her in the workplace and, when she desired to return to her former hours because of child-care problems, it changed the alleged harasser’s work hours to achieve the same effect. When the defendant later learned from a co-worker that the alleged harasser had lied in the investigation, it immediately fired him. The court held that this was adequate corrective action and demonstrated the existence of an adequate policy.

Beard v. Flying J, Inc., 266 F.3d 792, 799–800, 87 FEP Cases 1836 (8th Cir. 2001), affirmed the judgment on a jury verdict for the Title VII sexual harassment plaintiff, and rejected the company’s argument that it was entitled to the affirmative defense because it conducted an incomplete investigation, and took no corrective action even when it believed the allegations of harassment.

Swenson v. Potter, 271 F.3d 1184, 1192, 87 FEP Cases 620, 81 E.P.D. ¶ 40,821 (9th Cir. 2001), reversed the judgment for plaintiff, holding that the defendant Postal Service took adequate corrective action. The court held that there are two types of corrective action. “The first consists of the temporary steps the employer takes to deal with the situation while it determines whether the complaint is justified. The second consists of the permanent remedial steps the employer takes once it has completed its investigation.” (Citations omitted.) The court held that the defendant’s moving the harasser to minimize his contact with the plaintiff was adequate:

Separating Swenson and Feiner did not eliminate all contact between them, but the Postal Service was not required to provide Swenson a Feiner-free workplace merely because she complained about him. The degree of separation imposed, if any, must be a function of the severity of the alleged harassment and the evidence provided to the employer in support of the complaint. The more egregious the conduct alleged, and the more substantial the proof supporting the allegation, the harder the employer must try to minimize further contact between the two employees pending the outcome of the investigation.8
________

8 The employer is not required to separate the complainant and the accused employee pending the outcome of the investigation. Depending on the circumstances, which can include the employer’s legitimate interest in avoiding disruption to its business, the employer may reasonably decide that the employees must continue working together while awaiting the outcome of the investigation. At the very least, however, the employer must try to eliminate contact between the two employees that is not strictly business-related. If it reasonably concludes that the two employees must continue to have regular business contact during the course of the investigation, the employer must take reasonable steps to expedite the investigation.

Id. at 1192–93. The court went on to state that a prompt investigation is the “most significant immediate measure an employer can take.” Id. at 1193. “An investigation is a warning, not by words but by action.” Id. The court also held that the defendant’s permanent steps were adequate. Although it found that it could not sustain the claims, it gave the plaintiff a permanent job assignment that kept her free from daily contact with Steiner, without her having to go through the bidding process, and offered her customized hours to minimize contact with him. The court stated that not all transfers of complainants are inappropriate. “ If it decides to separate the two employees in the workplace, the employer may properly consider the relative ease of moving them and their respective importance to its business operations. The employer has wide discretion in choosing how to minimize contact between the two employees, so long as the accuser is not moved to an objectively less desirable position.” Id. at 1194. The court relied on the EEOC Compliance Manual § 615.4(a)(9)(iii) (2000) in defining such a position. The court held that the defendant’s inability to sustain the charge gave it a legitimate reason for not disciplining Steiner. Id. at 1196. The court explained:

As a matter of policy, it makes no sense to tell employers that they act at their legal peril if they fail to impose discipline even if they do not find what they consider to be sufficient evidence of harassment. . . . Employees are no better served by a wrongful determination that harassment occurred than by a wrongful determination that no harassment occurred. We should be wary of tempting employers to conduct investigations that are less than fully objective and fair. Title VII “in no way requires an employer to dispense with fair procedures for those accused or to discharge every alleged harasser.” . . .

The dissent makes much of supposed defects in The Postal Service’s investigation. While we believe that the investigation was competent, it ultimately doesn’t matter. In considering whether the employer’s response was appropriate, we consider the overall picture. Even assuming that the investigation was less than perfect, the Postal Service nevertheless took prompt action to remedy the situation. The harassment stopped. The only possible consequence of a better investigation could have been to make out a stronger case for disciplining Feiner. But the purpose of Title VII is remedial-avoiding and preventing discrimination-rather than punitive. Failure to punish the accused harasser only matters if it casts doubt on the employer’s commitment to maintaining a harassment-free workplace. Where an employee is not punished even though there is strong evidence that he is guilty of harassment, such failure can embolden him to continue the misconduct and encourage others to misbehave. But where the proof of harassment is weak and disputed, as it was in this case, the employer need not take formal disciplinary action simply to prove that it is serious about stopping sexual harassment in the workplace. Where, as here, the employer takes prompt steps to stop the harassment, liability cannot be premised on perceived inadequacies in the investigation.

Id. at 1196–98 (footnotes and citations omitted). Judge Fletcher dissented.

11. Direct Liability

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1280, 87 FEP Cases 1209 (11th Cir. 2002), affirmed the jury verdict for the plaintiff, holding that the jury could find the defendant directly liable for co-worker harassment “if it concluded that Kenworth failed to take immediate and appropriate corrective action. There is absolutely no evidence in the record to indicate that Kenworth took any action whatsoever against Galpin, let alone that which would rise to the level of appropriate and immediate.”

12. Failure to Mitigate

Ferris v. Delta Air Lines, Inc.277 F.3d 128, 137, 87 FEP Cases 899 (2nd Cir. 2001), reversed the grant of summary judgment to the Title VII defendant. The plaintiff flight attendant alleged that she had been raped by a male flight attendant in his hotel room during a stopover in Rome. The court reversed the lower court’s decision that no ongoing hostile environment could arise from the plaintiff’s “hypothetical and speculative” fear and trepidation at further direct encounters with the rapist, because the evidence showed that the plaintiff “suffered real emotional trauma from her fear of seeing Young again,” tried to keep informed about his work schedule so she could attempt to avoid working on those flights, sought psychiatric help, and took antidepressants. It stated:

Under the circumstances, we do not think that Ferris’s fear of encountering her rapist at her workplace is too hypothetical and speculative to sustain an award of damages. We do not rule out, however, that Ferris may be chargeable with partial, or even full, responsibility for this later injury or its duration by reason of her failure to mitigate her damages when she delayed reporting the event to Delta and naming her assailant.

VI. Litigation

A. Administrative Exhaustion

Edelman v. Lynchburg College, __ U.S. __, 122 S. Ct. 1145, 88 FEP Cases 321 (2002), upheld the EEOC regulation, 29 CFR §1601.12(b) (1997), allowing an unverified charge to be filed if it is later verified while the charge is before the agency, even if the verification is after the expiration of the charge-filing period, and providing that the verification relates back to the original filing of the charge. However, Part III of the opinion raised a new question. It stated that there was some factual support in the record for the proposition that Edelman’s unverified letter might not be a charge because it was not treated by Edelman or the EEOC as a charge, and that this question was open on remand. The decision in the Fourth Circuit quoted Edelman’s letter:

At the conclusion of his letter, Edelman wrote, “I hereby file a charge of employment discrimination against Lynchburg College (Dean Jacqueline Asbury, President Charles Warren and the Board of Trustees) and I call upon the EEOC to investigate this case [.]”

228 F.3d 503, 505–06, 83 FEP Cases 1708, 79 E.P.D. ¶ 40,264 (4th Cir. 2000). The Supreme Court cited a letter from plaintiff’s counsel sent eight days after the EEOC received Edelman’s letter:

On November 26, 1997, Edelman =s attorney sent another letter to the EEOC that stated:

Professor Edelman would like to have a personal interview with an EEOC investigator prior to the final charging documents being served on the college. It is my understanding that delay occasioned by the interview will not compromise the filing date, which will remain as November 14, 1997. Please advise if my understanding in this regard is not correct.

* * * * * *

Finally, please have the investigator contact this office to schedule the interview at a mutually convenient time.

Shortly thereafter, the EEOC sent a letter to Edelman advising him that it needed additional information in order to investigate his case. The EEOC =s letter urged Edelman to set up an interview Aas soon as possible because a charge of discrimination must be filed within the time limits imposed by law[.] @

Id. at 506. For its part, the EEOC did not serve the respondent with the statutorily required ten-day notice until after the verification was filed. I would suggest that this decision means that it is extremely risky for plaintiffs to file an unverified charge and/or to state that a future charge will be filed, particularly if the charging party asks the EEOC not to serve the charge until some later time.

Worth v. Tyer276 F.3d 249, 258–59, 87 FEP Cases 994 (7th Cir. 2001), affirmed in part, and reversed in part, the verdict for the Title VII plaintiff. The court rejected the defendant’s argument that the trial court lacked jurisdiction because the plaintiff had not received a Notice of Right to Sue when she filed suit. The court held that receipt of the letter was not a jurisdictional prerequisite, and lack of such receipt was only a defense the defendant could raise. In any event, receipt of the letter prior to dismissal cures any defect.

B.K.B. v. Maui Police Department276 F.3d 1091, 1099–1103, 87 FEP Cases 1306 (9th Cir. 2002), modified in other respects, __ F.3d __, 2002 WL 237764 (9th Cir. Feb. 20, 2002), reversed the grant of summary judgment to the defendant on plaintiff’s Title VII and Hawaii civil rights claims, for failure to exhaust administrative remedies. Plaintiff’s charge simply alleged race, sex, and national origin discrimination and race and retaliation harassment, including retaliatory harassment of a verbal nature. She checked boxes stating that she was complaining of racial, sexual and national origin discrimination and harassment. She did not mention the rapes to which she was allegedly subjected. Her pre-charge questionnaire gave examples showing that some of the harassment was combined racial and sexual harassment. The court stated that reliance on the questionnaire to interpret the scope of the charge impaired the notice function of the charge. Id. at 1101. “However, we do not take the respondent’s notice of the charge itself to be of paramount consideration where the failure of notification is due to agency negligence.” Id. at 1101–02 (citation omitted). The court continued:

If the charge itself is deficient in recording her theory of the case due to the negligence of an agency representative who completes the charge form, then the plaintiff may present her pre-complaint questionnaire as evidence that her claim for relief was properly exhausted.

Id. at 1102 (citations omitted). The court rejected what it regarded as the contrary conclusion of the Seventh Circuit. The plaintiff presented an affidavit of the official of the Hawaii Civil Rights Commission who had assisted her, stating that her Right to Sue letter “was intended by the agency to afford her the right to pursue claims of sexual as well as racial harassment.” Id. The court treated this statement as effectively admitting negligence. Based on all this, the court held that the “close question” should be resolved in favor of construing the word “harassment” in her charge broadly. Id. at 1103.

B. Timeliness

1. Existence of Continuing Violation s

National R.R. Passenger Corp. v. Morgan, 536 U.S. __, 122 S. Ct. 2061, 88 FEP Cases 1601 (2002), rejected the doctrine of continuing violations under Title VII for discrete actions, but upheld the doctrine for hostile-environment cases, subject to a laches defense of uncertain scope. “ A discrete retaliatory or discriminatory act ‘occurred’ on the day that it ‘happened.’ A party, therefore, must file a charge within either 180 or 300 days of the date of the act or lose the ability to recover for it.” Id. at 2070–71. The Court looked to the language of § 703(a) for examples of “numerous discrete acts,” which include hiring, firing, compensation, terms and conditions of employment, and the like. Id. at 2071. A discrete act or occurrence is a “practice” “even when it has a connection to other acts.” Id. It relied upon Evans, Ricks, and Robbins & Myers, Inc., holding that “discrete acts that fall within the statutory time period do not make timely acts that fall outside the time period.” Id. at 2071–72. The court summarized this part of its holding:

We derive several principles from these cases. First, discrete discriminatory acts are not actionable if time barred, even when they are related to acts alleged in timely filed charges. Each discrete discriminatory act starts a new clock for filing charges alleging that act. The charge, therefore, must be filed within the 180- or 300-day time period after the discrete discriminatory act occurred. The existence of past acts and the employee’s prior knowledge of their occurrence, however, does not bar employees from filing charges about related discrete acts so long as the acts are independently discriminatory and charges addressing those acts are themselves timely filed. Nor does the statute bar an employee from using the prior acts as background evidence in support of a timely claim.

As we have held, however, this time period for filing a charge is subject to equitable doctrines such as tolling or estoppel. . . . Courts may evaluate whether it would be proper to apply such doctrines, although they are to be applied sparingly.

Id. at 2072 (citations omitted.) The Court saw little practical difficulty in identifying discrete acts “such as termination, failure to promote, denial of transfer, or refusal to hire.” Id. at 2073. It stated: “Each incident of discrimination and each retaliatory adverse employment decision constitutes a separate actionable ‘unlawful employment practice.’” Id. The “discovery rule” was not presented by the case, but both the majority and dissenting opinions seemed to find a way of speaking of it with favor while not deciding whether it is proper. Justice Thomas wrote for the majority, at 2073 n. 7:

There may be circumstances where it will be difficult to determine when the time period should begin to run. One issue that may arise in such circumstances is whether the time begins to run when the injury occurs as opposed to when the injury reasonably should have been discovered. But this case presents no occasion to resolve that issue.

Justice O’Connor’s dissent agreed:

Like the Court, I see no need to resolve fully the application of the discovery rule to claims based on discrete discriminatory acts. . . . I believe, however, that some version of the discovery rule applies to discrete-act claims. . . . In my view, therefore, the charge-filing period precludes recovery based on discrete actions that occurred more than 180 or 300 days after the employee had, or should have had, notice of the discriminatory act.

Id. at 2078. Justice O’Connor’s dissent further emphasized the discovery rule. Discussing the two-year limit on back pay under § 706(g)(1) of Title VII, 42 U.S.C. § 2000e–5(g)(1), she stated:

Because of the potential adjustments to the charge-filing period based on equitable doctrines, two years of backpay will sometimes be available even under my view. For example, two years of backpay may be available where an employee failed to file a timely charge with the EEOC because his employer deceived him in order to conceal the existence of a discrimination claim.

Id. at 2079. The majority opinion signaled that there might be an exception to its rule for discrete acts. It stated at 2073 n.9:

We have no occasion here to consider the timely filing question with respect to “pattern-or-practice” claims brought by private litigants as none are at issue here.

The Court then turned to hostile-environment claims and held that they were “different in kind from discrete acts” because their nature involves repeated conduct and the cumulative effect of individual acts. Id. at 2073. It made clear that racial and sexual hostile environments are to be judged by the same standards, id. at 2074 n.10, and stated that Title VII’s prohibition of discrimination “is not limited to ‘economic’ or ‘tangible’ discrimination.” Id. at 2073 (citations omitted). The Court summarized its holding as to hostile environment claims:

A hostile work environment claim is comprised of a series of separate acts that collectively constitute one “unlawful employment practice.” 42 U.S.C. § 2000e-5(e)(1) . The timely filing provision only requires that a Title VII plaintiff file a charge within a certain number of days after the unlawful practice happened. It does not matter, for purposes of the statute, that some of the component acts of the hostile work environment fall outside the statutory time period. Provided that an act contributing to the claim occurs within the filing period, the entire time period of the hostile environment may be considered by a court for the purposes of determining liability. That act need not, however, be the last act. As long as the employer has engaged in enough activity to make out an actionable hostile environment claim, an unlawful employment practice has “occurred,” even if it is still occurring. Subsequent events, however, may still be part of the one hostile work environment claim and a charge may be filed at a later date and still encompass the whole.

Id. at 2074 (footnote omitted.) The Court provided guidance by comparing a 400-day pattern of harassment to one in which there was a 100-day period of harassment, a 300-day break in the hostile environment, and then a resumption on day 401. Id. at 2075. It stated:

In truth, all other things being equal, there is little difference between the two scenarios as a hostile environment constitutes one “unlawful employment practice” and it does not matter whether nothing occurred within the intervening 301 days so long as each act is part of the whole. Nor, if sufficient activity occurred by day 100 to make out a claim, does it matter that the employee knows on that day that an actionable claim happened; on day 401 all incidents are still part of the same claim. On the other hand, if an act on day 401 had no relation to the acts between days 1–100, or for some other reason, such as certain intervening action by the employer, was no longer part of the same hostile environment claim, then the employee can not recover for the previous acts, at least not by reference to the day 401 act.

Id. The Court made explicit that “the statute in no way bars a plaintiff from recovering damages for that portion of the hostile environment that falls outside the period for filing a timely charge.” Id. In the case at bar, the Court held, the claimed racially hostile environment outside the 300-day period was the same as that inside the 300-day period because harassing incidents were relatively frequent, perpetrated by the same managers, and involved similar types of conduct, in that “managers made racial jokes, performed racially derogatory acts, made negative comments regarding the capacity of blacks to be supervisors, and used various racial epithets.” Id. at 2076. The Court held that employers have means of protecting themselves from unreasonably long delays. Because the timely-filing requirement is not jurisdictional but is subject to equitable exceptions, the Court stated, equity allows courts to take into account the employer’s interest in prompt notice. Id. at 2076–77. It continued:

In addition to other equitable defenses, therefore, an employer may raise a laches defense, which bars a plaintiff from maintaining a suit if he unreasonably delays in filing a suit and as a result harms the defendant. This defense “‘requires proof of (1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting the defense.’” We do not address questions here such as “how—and how much—prejudice must be shown” or “what consequences follow if laches is established.” 2 Lindemann 1496–1500. We observe only that employers may raise various defenses in the face of unreasonable and prejudicial delay.

Id. at 2077 (footnote omitted.) The Court stated at 2077 n.14 that it was not addressing the question whether laches may be applied against the EEOC when it sues, but added:

We note, however, that in Occidental there seemed to be general agreement that courts can provide relief to defendants against inordinate delay by the EEOC. See Occidental Life Ins. Co. of Cal. v. EEOC, 432 U.S. 355, 373 (1977). Cf. id., at 383 (REHNQUIST, J., dissenting in part) (“Since here the suit is to recover backpay for an individual that could have brought her own suit, it is impossible to think that the EEOC was suing in the sovereign capacity of the United States”).

Now-Chief Justice Rehnquist’s quoted statement is presumably no longer valid in light of EEOC v. Waffle House, Inc., __ U.S. __, 122 S. Ct. 754, 12 AD Cases 1001 (2002).

2. Juries Are to Determine Disputed Facts on Limitations Questions

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.273 F.3d 30, 37–39, 87 FEP Cases 673 (1st Cir. 2001), vacated the grant of summary judgment to the ADEA defendant, holding that there were genuine issues of material fact as to whether the plaintiff’s severe depression—triggered by her demotion but reaching a state in which she could not dress herself or brush her teeth—equitably tolled her 300-day charge-filing period “Where questions of fact are presented, statute of limitations defenses are ordinarily submitted to the jury.” Id. at 38.

3. What is Needed to Invoke the Continuing-Violation Doctrine

Weeks v. New York State (Division of Parole), 273 F.3d 76, 82–83, 87 FEP Cases 161, 81 E.P.D. ¶ 40,822 (2nd Cir. 2001), affirmed the dismissal of certain Title VII claims as time-barred, rejecting the plaintiff’s contention that she could invoke the continuing-violation doctrine merely by alleging a general “custom and policy” of discrimination, without providing any specific information. The court stated that “what must be alleged to withstand dismissal on the pleadings, or supported by evidence to withstand summary judgment, is a discriminatory policy or practice, not the undertaking to come up with one.” Id. at 83. Moreover, the plaintiff’s complaints related to numerous isolated incidents, all of which were remedied if she had chosen to report them.

4. Special Rule for Claims of Pay Discrimination

Cardenas v. Massey, 269 F.3d 251, 87 FEP Cases 19 (3rd Cir. 2001), reversed the grant of summary judgment to the defendants on the plaintiff’s Title VII disparate-pay claim. The district court had dismissed the claim on the ground that the plaintiff’s current pay was a mere consequence of his initial pay classification. The court stated: “The Evans Ricks Lorance line of cases bars claims where the relevant aspect of the employment system (such as promotion, seniority, or termination) is facially neutral, and any discrete discriminatory conduct took place and ceased outside the period of limitations.” Id. at 256. Here, however, the plaintiff alleged that the decision to pay him less was made on an ongoing basis. Citing Bazemore v. Friday, 478 U.S. 385 (1986) the court held that discrimination in pay is a continuing violation, and the receipt of each check constitutes a new violation. Id. at 257–58.

5. Exceptions to the Continuing-Violation Doctrine

Celestine v. Petroleos de Venezuella SA, 266 F.3d 343, 350–52, 86 FEP Cases 1462, 81 E.P.D. ¶ 40,799 (5th Cir. 2001), affirmed the district court’s rejection of the plaintiffs’ continuing-violation theory with respect to both their promotional and training claims and their racial harassment claims. The court held that denials of promotion and training are one-time events not suited to continuing-violation treatment, id. at 352, and while “hostile work environment claims are potentially more compatible with the continuing violation doctrine,” the “doctrine does not automatically attach” because “the burden remains on the employee to demonstrate an organized scheme led to and included the present violation.” Id. In addition, the court held, the plaintiff has to show that the same type of conduct took place before and within the period of limitations, and a plaintiff cannot simply sit back once it is clear that the conduct is discriminatory. Id. at 353.

Hall v. Bodine Electric Co.276 F.3d 345, 353, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual discrimination defendant. The court re-affirmed its case law to the effect that the continuing-violations doctrine applies only to pre-limitations period conduct when it “‘would have been unreasonable to expect the plaintiff to sue before the statute ran out on that conduct,’” such as where the conduct could only have been recognized as discriminatory or as actionable harassment in the light of the events occurring within the period of limitations. (Citation omitted.) The court held that some discrimination must have taken place within the period of limitations.

Swenson v. Potter, 271 F.3d 1184, 1191, 87 FEP Cases 620, 81 E.P.D. ¶ 40,821 (9th Cir. 2001), reversed the judgment for plaintiff, but held that the plaintiff’s sexual harassment charge was timely because the charge-filing period is not measured from the date of the harassing incident, but from the date that the employer took final action on her internal complaint.

Goodwin v. General Motors Corp.275 F.3d 1005, 1009–11, 87 FEP Cases 1651 (10th Cir. 2002), reversed the grant of summary judgment to the Title VII gender discrimination defendant, holding that the district court erred in considering only the pay raise occurring within the charge-filing period. The court relied on Bazemore v. Friday, 478 U.S. 385 (1986), and held that each pay check constituted a separate violation. The court also held that the plaintiff’s back pay would cut off at two years before the filing of the charge.

6. 42 U.S.C. § 1981 and the Four-Year Limitations Period of 28
U.S.C. § 1658

To date, two courts of appeals have held that the four-year period of limitations in 28 U.S.C. § 1658 does not apply to the amendments to § 1981 in the Civil Rights Act of 1991 because § 1658 is limited to the enactment of new statutes, not the amendment of old statutes. Madison v. IBP, Inc.257 F.3d 780, 797–98, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001), vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985); Zubi v. AT&T Corp. , 219 F.3d 220, 225–26, 83 FEP Cases 417, 79 E.P.D. ¶ 40,260 (3d Cir. 2000). The issue is pending before the Seventh Circuit.

C. Pleading

Swierkiewicz v. Sorema N.A., __ U.S. __122 S. Ct. 992, 88 FEP Cases 1 (2002) (Thomas, J.), unanimously rejected the requirements of the Second and Sixth Circuits that employment-discrimination plaintiffs plead facts sufficient to constitute a prima facie case, on pain of dismissal. “The prima facie case under McDonnell Douglas . . . is an evidentiary standard, not a pleading requirement.” The Court pointed out that discovery may produce direct evidence of discrimination, enabling a plaintiff to escape the McDonnell Douglas approach entirely, and added: “Before discovery has unearthed relevant facts and evidence, it may be difficult to define the precise formulation of the required prima facie case in a particular case. Given that the prima facie case operates as a flexible evidentiary standard, it should not be transposed into a rigid pleading standard for discrimination cases.” The court also rejected the Second Circuit’s holding that the facts alleged in the Complaint were insufficient to make out a case on which the plaintiff could prevail.

D. Supplemental Jurisdiction

Raygor v. Regents of the University of Minnesota, __ U.S.__, 122 S. Ct. 999, 88 FEP Cases 6 (2002), held that the savings provision of 28 U.S.C. § 1367(d) does not apply to State-law claims brought against a State agency in Federal court under the court’s supplemental jurisdiction where the State agency is entitled to Eleventh Amendment immunity. The statute generally “purports to toll the period of limitations for supplemental claims while they are pending in federal court and for 30 days after they are dismissed.” The Court held that the provision does not apply to suits against nonconsenting States.

E. Indispensable Parties

Dawavendewa v. Salt River Project Agricultural. Improvement and Power District276 F.3d 1150, 1153, 87 FEP Cases 1106 (9th Cir. 2002), affirmed the dismissal without prejudice of the plaintiff’s Title VII challenge to the hiring preference for Navajos that the defendant was required to provide by the terms of its lease with the Navajo Nation. “As a signatory to the lease, we conclude the Nation is a necessary party that cannot be joined because it enjoys tribal sovereign immunity,” and that “tribal officials cannot be joined to replace the immune Nation.”

F. Arbitration

1. Circuit City Stores v. Adams

Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S. Ct. 1302, 149 L. Ed. 2d 234, 85 FEP Cases 266, 17 IER Cases 545, 79 E.P.D. ¶ 40,401 (2001), held that the exception for contracts of employment in § 1 of the Federal Arbitration Act, 9 U.S.C. § 1, is limited to persons who directly move goods in interstate or foreign commerce, i.e., that it is a “schlepper” provision.

Circuit City Stores, Inc. v. Adams, 279 F.3d 889, 87 FEP Cases 1509 (9th Cir. 2002), on remand from the Supreme Court, held that Circuit City’s arbitration provisions were unenforceable because procedurally and substantively unconscionable. Discussing the terms of the Dispute Resolution Agreement (“DRA”), the court described its provisions:

Incorporated into the DRA are a set of “Dispute Resolution Rules and Procedures” (“dispute resolution rules” or “rules”) that define the claims subject to arbitration, discovery rules, allocation of fees, and available remedies. Under these rules, the amount of damages is restricted: back pay is limited to one year, front pay to two years, and punitive damages to the greater of the amount of front and back pay awarded or $5000. In addition, the employee is required to split the costs of the arbitration, including the daily fees of the arbitrator, the cost of a reporter to transcribe the proceedings, and the expense of renting the room in which the arbitration is held, unless the employee prevails and the arbitrator decides to order Circuit City to pay the employee’s share of the costs. Notably, Circuit City is not required under the agreement to arbitrate any claims against the employee.
Id. at 891.

2. EEOC v. Waffle House : What Has the Supreme Court Wrought?

On January 15, 2002, the Supreme Court handed down EEOC v. Waffle House, Inc., __ U.S. __, 122 S. Ct. 754, 12 AD Cases 1001 (2002). The facts of the case are simple, but its implications are not.

a. The Facts

Before Eric Baker started to work for Waffle House, he was required to sign an arbitration “agreement” stating as follows:

The parties agree that any dispute or claim concerning Applicant’s employment with Waffle House, Inc., or any subsidiary or Franchisee of Waffle House, Inc., or the terms, conditions or benefits of such employment, including whether such dispute or claim is arbitrable, will be settled by binding arbitration. The arbitration proceedings shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association in effect at the time a demand for arbitration is made. A decision and award of the arbitrator made under the said rules shall be exclusive, final and binding on both parties, their heirs, executors, administrators, successors and assigns. The costs and expenses of the arbitration shall be borne evenly by the parties.
122 S. Ct. at 758 n.1. Sixteen days later, he had a seizure at work and was fired.

Baker filed an EEOC charge, alleging a violation of Title I of the Americans with Disabilities Act. Neither he nor his employer initiated arbitration. Baker never filed suit. When the EEEOC brought suit on his behalf, Baker had a statutory right to intervene, but did not exercise it. He relied exclusively on the EEOC to protect his interests.

For its part, the EEOC represented to the lower court that it was suing on behalf of Baker. “The complaint requested the court to grant injunctive relief to ‘eradicate the effects of [respondent’s] past and present unlawful employment practices,’ to order specific relief designed to make Baker whole, including backpay, reinstatement, and compensatory damages, and to award punitive damages for malicious and reckless conduct.” 122 S. Ct. at 759. The EEOC did not seek any individualized relief on behalf of any other applicants or employees who were disabled or regarded as disabled.

The defendant moved to stay the action and to compel arbitration under the “agreement.” The district court held that “agreement” was not part of the plaintiff’s contract of employment and was unenforceable. Waffle House appealed, and the U.S. Court of Appeals for the Fourth Circuit reversed. EEOC v. Waffle House, 193 F. 3d 805, 808 (4th Cir. 1999). The court of appeals held that the EEOC could seek a judicial award of general relief against discrimination, but “held that the EEOC was precluded from seeking victim-specific relief in court because the policy goals expressed in the FAA required giving some effect to Baker’s arbitration agreement.” Id.

The EEOC petitioned for certiorari, and it was granted.

b. The Narrow Holding

The Court held 6–3 that the EEOC could not be bound by a charging party’s arbitration agreement because the EEOC was not a party to it, that the EEOC exercised a power to sue in furtherance of the public interest that is independent of the charging party’s personal rights, and that the EEOC does not act as the attorney for the charging party when it sues on the charging party’s behalf. It therefore retains its full right to seek victim-specific relief—compensatory and punitive damages, back pay, and an order of reinstatement or instatement—just as if the charging party had never signed the “agreement.”

The Court found the Fourth Circuit’s distinction between general relief and victim-specific relief unworkable because relief running to the victim’s direct benefit, such as an award of punitive damages, may serve the broad deterrent purposes of the EEOC and thus help enforce the statute generally.

c. The Doors the Court Opened

The holding is interesting, but the questions the Court flagged without answering are even more interesting. Here is the discussion that is our springboard:

It is true, as respondent and its amici have argued, that Baker’s conduct may have the effect of limiting the relief that the EEOC may obtain in court. If, for example, he had failed to mitigate his damages, or had accepted a monetary settlement, any recovery by the EEOC would be limited accordingly. See, e.g., Ford Motor Co. v. EEOC, 458 U.S. 219, 231-32 (1982) (Title VII claimant “forfeits his right to backpay if he refuses a job substantially equivalent to the one he was denied”); EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1542 (CA9 1987) (employee’s settlement “rendered her personal claims moot”); EEOC v. U.S. Steel Corp., 921 F.2d 489, 495 (CA3 1990) (individuals who litigated their own claims were precluded by res judicata from obtaining individual relief in a subsequent EEOC action based on the same claims). As we have noted, it “goes without saying that the courts can and should preclude double recovery by an individual.” General Telephone, 446 U.S., at 333.

But no question concerning the validity of his claim or the character of the relief that could be appropriately awarded in either a judicial or an arbitral forum is presented by this record. Baker has not sought arbitration of his claim, nor is there any indication that he has entered into settlement negotiations with respondent. It is an open question whether a settlement or arbitration judgment would affect the validity of the EEOC’s claim or the character of relief the EEOC may seek. The only issue before this Court is whether the fact that Baker has signed a mandatory arbitration agreement limits the remedies available to the EEOC. The text of the relevant statutes provides a clear answer to that question. They do not authorize the courts to balance the competing policies of the ADA and the FAA or to second-guess the agency’s judgment concerning which of the remedies authorized by law that it shall seek in any given case.>

Id. at 765–66.

1. Limitation of Arbitration “Agreements” to Changes of Forum

The Court again stated what it has stated in many of its arbitration cases under the FAA: all that an enforceable arbitration agreement does is change the forum for determination of a dispute. “We have held that federal statutory claims may be the subject of arbitration agreements that are enforceable pursuant to the FAA because the agreement only determines the choice of forum.” Id. at 765 n.10. The court went on to quote some of its earlier language stating that the parties to an arbitration agreement do not agree to waive any of their substantive rights under the statutes. It then concluded:

To the extent the Court of Appeals construed an employee’s agreement to submit his claims to an arbitral forum as a waiver of the substantive statutory prerogative of the EEOC to enforce those claims for whatever relief and in whatever forum the EEOC sees fit, the court obscured this crucial distinction and ran afoul of our precedent.

Id.

What does this mean in practical terms? Having the government litigate one’s case on one’s behalf is a substantive right, even if there is not a dime’s worth of difference between the relief Baker could get and the relief the EEOC could get for Baker.

2. Practical Consequences

What else does it mean? It seems to me that the following consequences can flow:

  • If the arbitration “agreement” had contained a clause waiving the right to have the EEOC proceed on the charge and file suit, it would not have been enforceable.
  • What about arbitration “agreements” that specify an inconvenient venue? If the inconvenience is large enough, plaintiffs may be able to escape the “agreement.”
  • What about arbitration “agreements” that impose any kind of restrictions on relief? It seems to me that they are now all unenforceable.
  • It seems to me that the same applies to “agreements” that shorten the time for bringing claims.
  • What about arbitration “agreements” that restrict discovery? It seems to me that the question is one of degree. If the “agreement” restricts discovery to the extent that the plaintiff is denied a fair opportunity to litigate the merits of the claim, the plaintiff should be able to escape the “agreement.” If the “agreement” restricts discovery but allows enough discovery to make a fair contest possible, the “agreement” should not be affected. “Agreements” that allow the plaintiff to make a showing of need to the arbitrator, who has discretion to allow more discovery and in practice acts reasonably, will likely pass muster.
  • What about arbitration “agreements” that directly restrict the use of class actions or that have that effect? Congress actually addressed class actions in enacting the 1972 amendments to Title VII, rejecting a proposed change that would have required every class member to exhaust EEOC remedies. I think Waffle House sounds the death knell for these “agreements,” both from the standpoint of the complainant and the standpoint of other employees, who have a right to have their claims litigated as part of a class without their having to become parties. There are, of course, potential problems for both sides with the litigation of class claims in an arbitral context. The problems are magnified if the arbitrator is not law-trained.

d. What if the Charging Party Had Taken Enforcement Action?

Justice Thomas’s dissent presents an intriguing scenario:

Assuming that the Court means what it says, an arbitral judgment will not preclude the EEOC’s claim for victim-specific relief from going forward, and courts will have to adjust damages awards to avoid double recovery. See ante, at 766. If an employee, for instance, is able to recover $20,000 through arbitration and a court later concludes in an action brought by the EEOC that the employee is actually entitled to $100,000 in damages, one assumes that a court would only award the EEOC an additional $80,000 to give to the employee. Suppose, however, that the situation is reversed: An arbitrator awards an employee $100,000, but a court later determines that the employee is only entitled to $20,000 in damages. Will the court be required to order the employee to return $80,000 to his employer? I seriously doubt it.

The Court’s decision thus places those employers utilizing arbitration agreements at a serious disadvantage. Their employees will be allowed two bites at the apple—one in arbitration and one in litigation conducted by the EEOC—and will be able to benefit from the more favorable of the two rulings. This result, however, discourages the use of arbitration agreements and is thus completely inconsistent with the policies underlying the FAA.

Id. at 773.

The majority neither agreed nor disagreed, but stated: “It is an open question whether a settlement or arbitration judgment would affect the validity of the EEOC’s claim or the character of relief the EEOC may seek.” Id. at 766. The Court continued:

And, in this context, the statute specifically grants the EEOC exclusive authority over the choice of forum and the prayer for relief once a charge has been filed. The fact that ordinary principles of res judicata, mootness, or mitigation may apply to EEOC claims, does not contradict these decisions, nor does it render the EEOC a proxy for the employee.

Id. Stay tuned.

e. Settlements

The EEOC argued to the Court that it was not bound by any action the charging party takes on his or her charge of discrimination, even settlements with the respondent. For many years, the EEOC’s regulations have stated that it is not bound by a charging party’s request to withdrawn his or her charge. I have always thought that the principal reason for the regulation was twofold: (a) to provide protection against the retaliation that might occur if the EEOC were to accept automatically charging parties’ requests to withdraw charges; and (b) to preserve the right to seek broad systemic relief even if the individual accepted an individual settlement.

The Commission’s arguments in Waffle House suggest that the EEOC is seeking to obtain or preserve a general right to take enforcement action on its own, even as to individualized relief, notwithstanding an individual settlement.

We are all familiar with the supervised-release question in the Fair Labor Standards Act, and the enactment of the Older Workers Benefits Protection Act. What we are not familiar with is the notion that the EEOC might sue on behalf of persons who had already settled privately. Many attorneys on both sides of the fence would not be happy with such a prospect, or with having to share with the EEOC the details of a private individual settlement.

Fortunately, the EEOC’s regulations provide a default closing point for the EEOC’s taking of independent action. 28 C.F.R. § 1601.28(a)(3) states:

3) Issuance of a notice of right to sue shall terminate further proceeding of any charge not a Commissioner charge unless the District Director; Area Director; Local Director; Program Director, Office of Program Operations or upon delegation, the Director of Systemic Programs, Office of Program Operations or the Directors, Field Management Programs, Office of Program Operations; or the General Counsel, determines at that time or at a later time that it would effectuate the purpose of title VII or the ADA to further process the charge. Issuance of a notice of right to sue shall not terminate the processing of a Commissioner charge.

The EEOC would still retain the ability to intervene in a case brought by the charging party, but that is not our concern here.

f. The EEOC’s Future Litigation Priorities

The Court took clear comfort from the fact that the EEOC brings so few cases per year. Speaking of the Fourth Circuit’s decision, it stated:

The court also neglected to take into account that the EEOC files suit in a small fraction of the charges employees file. For example, in fiscal year 2000, the EEOC received 79,896 charges of employment discrimination. Although the EEOC found reasonable cause in 8,248 charges, it only filed 291 lawsuits and intervened in 111 others. Equal Employment Opportunity Commission, Enforcement Statistics and Litigation (as visited Nov. 18, 2001), http://www.eeoc.gov/stats/enforcement.html.

In contrast, 21,032 employment discrimination lawsuits were filed in 2000. See Administrative Office, Judicial Business of the United States Courts 2000, Table C-2A (Sept. 30, 2000). These numbers suggest that the EEOC files less than two percent of all antidiscrimination claims in federal court. Indeed, even among the cases where it finds reasonable cause, the EEOC files suit in less than five percent of those cases. Surely permitting the EEOC access to victim-specific relief in cases where the employee has agreed to binding arbitration, but has not yet brought a claim in arbitration, will have a negligible effect on the federal policy favoring arbitration.

Id. at 762 n.7.

Given the limited resources of the Commission, it is difficult to imagine any large increase in the number of cases it files.

What may be more likely is that the Commission will adjust its litigation priorities in light of this decision. It already needs to do so in light of the Court’s holdings in the last few years that private parties are barred by the Eleventh Amendment from suing State agencies for monetary relief for violations of the Age Discrimination in Employment Act or of the Americans with Disabilities Act.

If so, I expect that the Commission will do two things. First, it will continue to bring individual cases based on charges on which it has found reasonable cause, using its normal case-selection guidelines, and will pay no attention whatsoever to the existence of an arbitration “agreement.” Cases like Baker’s will arise in small numbers.

Second, however, I would not be surprised if the Commission were to decide in the future to target for litigation employers with arbitration “agreements” like that discussed at the 2001 Chicago Annual Meeting of the ADR Committee, which bear the hallmark of attorneys vying with each other to see who could come up with the most oppressive conditions to impose on captive employees. The worse off the employee under the terms of a particular employer’s arbitration “agreement,” the likelier a sensible EEOC litigation priority would target that employer for suit.

My experience in reading a lot of arbitration rules and cases is that many employers find it difficult to resist the temptation to stack the deck in their favor when they unilaterally develop arbitration “agreements” and rules, or when they choose to use an intimidating provider or one with business relationships with their companies or commercial rules rather than rules subject to the Due Process Protocol. Arbitration is like Christmas for them. Any countervailing pressure making them less likely to take unfair advantage would be in the public interest.

3. Arbitrability

a. Terms of Collective Bargaining Agreements

New England Health Care Employees Union, District 1199, SEIU, AFL-CIO v. Rhode Island Legal Services273 F.3d 425, 168 LRRM 2961 (1st Cir. 2001), affirmed the grant of summary judgment to the defendant. The union had sought to arbitrate the claim of a former employee who claimed that she had been fired because of a disability. After the union filed a grievance on her behalf, she filed charges of discrimination with the Rhode Island Commission on Human Rights and the EEOC. The court held that the arbitrator was correct that this rendered her dispute nonarbitrable in light of the language of the collective bargaining agreement stating that the employer “shall not be required to arbitrate any dispute which is pending before any administrative or judicial agency.”

b. Class Actions

The enforceability of arbitration clauses not allowing for class actions is currently one of the hottest issues in arbitration.

Enforcing Arbitration “Agreements” Barring Class Treatment: Arellano v. Household Finance Corp. III, 2002 WL 221604 (N.D. Ill. Feb. 13, 2002) (Guzman, J.) (enforcing arbitration “agreement” as to Truth in Lending Act claim although class claims were not arbitrable under the agreement, holding that the statutory reference to class actions did not convey a right to bring class claims); Marzek v. Mori Milk & Ice Cream Co., 2002 WL 226761 (N.D. Ill. Feb. 13, 2002) (Guzman, J.) (same as to FLSA collective action).

Refusing to Enforce Arbitration “Agreements” Barring Class Treatment:Ting v. AT&T, 182 F. Supp. 2d 902, 927 (N.D. Calif. 2002) (consumer case; “agreement” held unconscionable); Bailey v. Ameriquest Mortgage Co., 2002 WL 100391 (D. Minn. Jan. 23, 2002) (FLSA action) (“Applying that case by case principle to the facts of this case, the Court finds that the inability to proceed collectively, particularly when considered in connection with the venue and other provisions discussed above, has the effect of rendering plaintiff’s individual claims impractical to pursue. The right to proceed collectively is particularly critical to these plaintiffs, who, as previously mentioned, have relatively small individual claims.”).

4. Arbitration Services Providers

The following is from an October 14, 2001, editorial in the San Francisco Chronicle, following a three-part investigative series on the American Arbitration Association and cram-down arbitration “agreements”:

“ ‑‑ Conflicts of interest: The arbitration system allows conflicts that would not be permitted by the court system. The American Arbitration Association invests in major corporations whose legal disputes the firm’s arbitrators hear; companies are allowed to buy ‘memberships’ in the association, and their executives sit on its board of directors. Arbitration firms often court clients by touting their small awards and perfunctory procedures. Also, arbitrators face an inherent conflict to ‘please’ companies to keep them coming back for repeat business.”

5. The Rules Governing the Arbitration

The National Rules for the Resolution of Employment Disputes of the American Arbitration Association (AAA) have been held to authorize the grant of broad injunctive relief. Brown v. Coleman Co., Inc., 220 F.3d 1180, 1183–84, 16 IER Cases 966 (10th Cir. 2000), cert. denied, 531 U.S. 1192 (2001). “We now hold that Rule 34(d) of the AAA Employment Disputes Rules permits the crafting of broad equitable relief, and that the panel did not exceed its power by granting the equitable relief of extending the time in which stock options could be exercised.” Id. at 1184.

Plaintiffs’ counsel should get a copy; do not assume they will be like other rules you have seen. Cf.Hooters of America, Inc. v. Phillips, 173 F.3d 933, 79 FEP Cases 629, 75 E.P.D. ¶ 45,822 (4th Cir. 1999), stated: “Because Hooters set up a dispute resolution process utterly lacking in the rudiments of even-handedness, we hold that Hooters breached its agreement to arbitrate. Thus, we affirm the district court’s refusal to compel arbitration.”

Even if the unfairness of the rules has not saved the plaintiff from an arbitration requirement, it may still be possible to seek an arbitral decision striking the unfair provision. Great Western Mortgage Corporation v. Peacock, 110 F.3d 222, 231–32, 73 FEP Cases 856 (3d Cir. 1997), cert. denied, 522 U.S. 915 (1997), held that, once the dispute has been determined arbitrable, all other issues are for the arbitrator. Thus, the arbitrator had to determine the validity of the waiver of punitive damages in the arbitration agreement.

The parties can agree to waive some provisions and amend others. Discovery rights, for example, can be expanded by agreement. The parties to an arbitration agreement can contractually specify additional grounds for review, however, and it may be in the interest of both sides to exercise this option in advance of the arbitration. Employers and employees share a common interest in avoiding the consequences of “runaway arbitrators” issuing arbitrary awards, particularly where broad injunctive relief is claimed or awarded. Even if an agreement has been signed three times, as in Peacock, both sides can still agree to substantial changes where these seem mutually reasonable. In Peacock itself, for example, the employer represented to the Third Circuit that it would provide informal discovery during the arbitration and that attorneys’ fees could be awarded by the arbitrator. Id. at 231 nn. 37, 38. If a thrice-signed agreement can be amended by representations in court, the parties can certainly sit down and reach modifying or clarifying agreements on their own. Valid arbitration agreements are contracts on paper, not engravings on stone.

6. Bifurcating the Arbitration

Ordinarily, a party to an arbitration can move to confirm or vacate the award only after the entire arbitration has concluded. However, the parties can make a formal agreement to bifurcate an arbitration. For example, the parties can agree that there will be a final award on liability, and that the arbitration will then resume solely as to the remedy. The First Circuit has held that such an agreement allows a motion to confirm or vacate the award on liability even though the arbitration is proceeding on the other issues. Hart Surgical, Inc. v. Ultracision, Inc., 244 F.3d 231, 235 (1st Cir. 2001).

The First Circuit has held that the parties can achieve the same result by informally but consistently treating the arbitration as bifurcated, even without an explicit agreement. Providence Journal Co. v. Providence Newspaper Guild, 271 F.3d 16, 20, 168 LRRM 2804 (1st Cir. 2001). The court explained:

It is evident from the November arbitration hearing that the parties intended, though never formally stated, to bifurcate the proceedings. They divided the arbitration into separate phases and requested that the arbitrator retain jurisdiction over the remedy issue. In fact, had the parties not been stipulating to bifurcation, there would have been no need for the parties to specifically request that the arbitrator retain jurisdiction over the remedial phase. Clearly, then, both the parties and the arbitrator agreed to bifurcate the arbitral proceeding and understood the determination of liability to be a final award.

In Teamsters Local 312 v. Matlack, Inc., 118 F.3d 985, 155 LRRM 2738 (3d Cir. 1997), the Third Circuit affirmed the district court’s vacating of an arbitrator’s decision based on procedural irregularities. The arbitrator had verbally instructed the parties that his ruling would be on only one of two issues and that a later hearing would be held on the second if it was needed. However, the arbitrator issued a ruling that appeared to decide both issues without a second hearing. In a later letter the arbitrator clarified his ruling to have decided only the first issue. The union argued that the functus officio doctrine, a doctrine that deprives the arbitrator of power to decide a dispute after having made his ruling, prevented the second letter from having any effect. The court found that the second letter was merely a clarification of the procedural status of the case and did not alter any substantive decision of the arbitrator. The court relied on the exceptions to the functus officio doctrine, as well as similar language in the FAA, in its decision to affirm the vacation of one of the apparent rulings in the initial decision of the arbitrator.

Legion Insurance Co. v. VCW, Inc., 198 F.3d 718, 721 (8th Cir. 1999), held that, where an arbitral panel “by the language it uses makes clear that it intends its award to be indivisible, the district court must take the award as it finds it and either vacate the entire award under section 10 or modify the award using section 11.”

7. Dismissals Before Hearing

The NASD Manual and Code of Arbitration Procedure allows an arbitrator to dismiss a fatally defective claim with prejudice based on the pleadings alone, “so long as the dismissal does not deny a party fundamental fairness.” The opportunity to brief and argue the dismissal motion was adequate. Sheldon v. Vermonty, 269 F.3d 1202 (10th Cir. 2001).

8. Waiver

The Second Circuit has held that an indemnification claim subject to an arbitration clause that was not presented in the arbitration of other claims under the agreement, where there was an opportunity to do so, results in waiver of the claims not pursued. “Arbitration is not a trial run in which a party may sit quietly by without raising pertinent issues, wait to see if the result is in his favor and then seek judicial relief as an afterthought.” Pike v. Freeman, 266 F.3d 78, 89 (2d Cir. 2001) (citation omitted). The court remanded the counterclaim and cross-claims for indemnification to determine if they were subject to the arbitration agreement. Id. at 91–93.

A party submitting a disability discrimination claim to arbitration could not subsequently argue that the arbitration panel did not have the authority to decide the claim. In Kiernan v. Piper Jaffray Companies, 137 F.3d 588, 7 AD Cases 1499 (8th Cir. 1998), a plaintiff submitted his disability discrimination claim against his employer to an arbitration panel. After losing, he argued that his ADA claim was not arbitrable based on the NASD rules and the ADA’s history. The court held that the plaintiff’s submission of the claim defined the authority of the arbitration panel regardless of whether he had a prior legal obligation to arbitrate the claim.

9. The Basis for an Award

In arbitrations involving contract rights under collective bargaining agreements, the arbitrator can base the award not only on the language of the CBA, but also on the practice of the parties. E.g., Providence Journal Co. v. Providence Newspaper Guild, 271 F.3d 16, 21, 168 LRRM (BNA) 2804 (1st Cir. 2001).

10. Questions of Appealability

An order confirming, denying confirmation of, or vacating an arbitration award is appealable. 9 U.S.C. § 16(a).

An order compelling arbitration is not appealable. 9 U.S.C. § 16(b).

Cortez Byrd Chips, Inc. v. Harbert Construction Co., 529 U.S. 193 (2000), held that the venue provisions in §§ 9, 10(a), and 11 of the FAA are permissive rather than exclusive, and allow the filing of motions to confirm, vacate, or modify an arbitral award either in the district in which the award was made, or in any district proper under the general venue statute.

An order denying confirmation of an arbitration award and directing the submission of the dispute to a new arbitrator does not lose its appealability because of the additional element. Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 327-28 (1st Cir. 2000).

11. Jurisdiction

“Because the FAA itself does not create a basis for federal subject matter jurisdiction, there must be an independent basis for federal jurisdiction,” including jurisdictional amount. Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 328 (1st Cir. 2000).

Where there is no other basis for Federal-court jurisdiction:

“We conclude that: (1) the fact that the arbitration itself concerns issues of federal law does not, on its own, confer subject matter jurisdiction on a federal district court to review the award; but (2) federal jurisdiction may lie where the petitioner seeks to vacate the award primarily on the ground of manifest disregard of federal law.” Greenberg v. Bear, Stearns & Co., 220 F.3d 22, 25 (2d Cir. 2000), cert. denied, 531 U.S. 1075 (2001).

12. The Standard of Review

The Supreme Court seems to have accepted that there can be review of an arbitral award on certain limited grounds in addition to those specified in the FAA, particularly where the award is in “manifest disregard of the law.” First Options of Chicago, Inc., v. Kaplan, 514 U.S. 938, 942 (1995).

The findings in a district court order on review of an arbitration award are reviewed by a court of appeals for clear error, and the district court’s legal rulings are reviewed de novo. First Options of Chicago, Inc., v. Kaplan, 514 U.S. 938, 947 (1995).

The same standard should be followed whether a party is seeking to confirm or vacate the arbitral award. Gianelli Money Purchase Plan and Trust v. ADM Investor Services, Inc., 146 F.3d 1309, 1311 (11th Cir.), cert. denied, 525 U.S. 1016 (1998).

Arbitration of Grievances based on a CBA: United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 36, 126 LRRM 3113 (1987), stated: “Collective-bargaining agreements commonly provide grievance procedures to settle disputes between union and employer with respect to the interpretation and application of the agreement and require binding arbitration for unsettled grievances. In such cases, and this is such a case, the Court made clear almost 30 years ago that the courts play only a limited role when asked to review the decision of an arbitrator. The courts are not authorized to reconsider the merits of an award even though the parties may allege that the award rests on errors of fact or on misinterpretation of the contract. ‘The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards.’ Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596 . . . (1960). As long as the arbitrator’s award ‘draws its essence from the collective bargaining agreement,’ and is not merely ‘his own brand of industrial justice,’ the award is legitimate. Id., at 597.” The Court stated that “improvident, even silly, factfinding . . . is hardly a sufficient basis for disregarding what the agent appointed by the parties determined to be the historical facts.” Id. at 39. The Court continued:

Even in the very rare instances when an arbitrator’s procedural aberrations rise to the level of affirmative misconduct, as a rule the court must not foreclose further proceedings by settling the merits according to its own judgment of the appropriate result, since this step would improperly substitute a judicial determination for the arbitrator’s decision that the parties bargained for in the collective-bargaining agreement. Instead, the court should simply vacate the award, thus leaving open the possibility of further proceedings if they are permitted under the terms of the agreement. The court also has the authority to remand for further proceedings when this step seems appropriate.

Id. at 40 n.10.

D.C. Circuit:Cole v. Burns International Security Services, 105 F.3d 1465, 1469, 72 FEP Cases 1775 (D.C. Cir. 1997), held that the arbitrators’ decisions on legal issues must be subject to judicial review “sufficiently rigorous” to ensure that the arbitrators “have properly interpreted and applied statutory law.” The court explained:

The value and finality of an employer’s arbitration system will not be undermined by focused review of arbitral legal determinations. Most employment discrimination claims are entirely factual in nature and involve well-settled legal principles. See Alleyne, 13 HOFSTRA LAB. L.J. at 422 (most arbitration awards in employment cases are based on resolution of factual disputes); Martin H. Malin, Arbitrating Statutory Employment Claims In the Aftermath of Gilmer, 40 ST. LOUIS U. L.J. 77, 104 (1996) (“Most employment disputes are fact-based and not likely to raise the kind of legal issues that would call for significant judicial review.”). In fact, one study done in the 1980s found that discrimination cases involve factual claims approximately 84 % of the time. See Michele Hoyman & Lamont E. Stallworth, The Arbitration of Discrimination Grievances in the Aftermath of Gardner- Denver, 39 ARB. J. 49, 53 (Sept.1984). As a result, in the vast majority of cases, judicial review of legal determinations to ensure compliance with public law should have no adverse impact on the arbitration process. 21 Nonetheless, there will be some cases in which novel or difficult legal issues are presented demanding judicial judgment. In such cases, the courts are empowered to review an arbitrator’s award to ensure that its resolution of public law issues is correct. Indeed, at oral argument, Burns conceded the courts’ authority to engage in such review. Because meaningful judicial review of public law issues is available, Cole’s agreement to arbitrate is not unconscionable or otherwise unenforceable.
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21 The Hoyman/Stallworth study of arbitral awards in discrimination cases found that, even in cases where de novo review was available under Gardner-Denver, only 1.2 % of all discrimination cases were reversed by the courts. See Hoyman & Stallworth, 39 ARB. J. at 55.

Id. at 1487. The “strict deference” accorded the results of collectively bargained arbitration procedures “may not be appropriate in statutory cases in which an employee has been forced to resort to arbitration as a condition of employment.”

First Circuit: In a case involving arbitration under a CBA: “we note that judicial review of an arbitration decision is extremely narrow and extraordinarily deferential.” . . . judicial review of arbitration decisions “is among the narrowest known in the law”). A court cannot vacate an arbitral award as long as the arbitrator is even arguably construing the contract and acting within the scope of his authority. . . . In the end, the court’s task “is limited to determining if the arbitrator’s interpretation of the contract is in any way plausible.” Providence Journal Co. v. Providence Newspaper Guild, 271 F.3d 16, 20, 168 LRRM (BNA) 2804 (1st Cir. 2001) (citations omitted).

In a case not involving a CBA, the court stated: “There are bifurcated standards of review. We review the district court’s ruling on an arbitration award de novo, but we also are mindful that the district court’s review of arbitral awards must be “extremely narrow and exceedingly deferential.” . . . Indeed, “[a]rbitral awards are nearly impervious to judicial oversight.” . . . A court’s review of an arbitration award is highly deferential because the parties “have contracted to have disputes settled by an arbitrator” and thus, “it is the arbitrator’s view of the facts and of the meaning of the contract that they have agreed to accept.” United Paperworkers International Union v. Misco, Inc., 484 U.S. 29, 37-38 (1987). While the arbitrator’s award must “draw its essence from the contract,” as long as the arbitrator is “even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision.” Id. at 38. Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 330 (1st Cir. 2000).

Second Circuit: “Federal court review of an arbitral judgment is highly deferential; such judgments are to be reversed only where the arbitrators have exceeded their authority or made a finding in manifest disregard of the law.” Pike v. Freeman, 266 F.3d 78, 86 (2d Cir. 2001) (citation omitted).

Fifth Circuit: The review of arbitral awards in statutory discrimination cases is more intense than the review in other commercial arbitration contexts:

The Supreme Court’s assumptions and predictions in Gilmer assign heavy responsibilities to arbitrators and the federal courts. Arbitrators have a duty to ensure that, in the prospective subjection of federal statutory employment rights claims to compulsory arbitration, employees will not forgo substantive statutory rights or effective vindication of their statutory causes of action, and the statutes will continue to serve both their remedial and deterrent functions. The federal district courts and courts of appeals are charged with the obligation to exercise sufficient judicial scrutiny to ensure that arbitrators comply with their duties and the requirements of the statutes. In other words, the Gilmer Court anticipated that an employee’s prospective waiver of the right to a court’s decision about the merits of his or her future ADEA or Title VII disputes would not have the effect that it does in ordinary commercial arbitration-“relinquishment [of] much of that right’s practical value.” First Options, 514 U.S. at 942, 115 S. Ct. 1920. Accordingly, the judicial review of arbitral adjudication of federal statutory employment rights under the FAA and the “manifest disregard of the law” standard ” ‘must be sufficient to ensure that arbitrators comply with the requirements of the statute’ at issue.” Gilmer, 500 U.S. at 32 n. 4, 111 S. Ct. 1647 (quoting Shearson/American Express, 482 U.S. at 232, 107 S. Ct. 2332); see Cole, 105 F.3d at 1487. Williams v. Cigna Financial Advisors Inc., 197 F.3d 752, 760 61, 81 FEP Cases 747, 77 E.P.D. ¶ 46,359 (5th Cir. 1999), cert. denied, 529 U.S. 1099 (2000).

Tenth Circuit: “However, ‘we must give extreme deference to the determination of the arbitration panel for the standard of review of arbitral awards is among the narrowest known to law.'” Sheldon v. Vermonty, 269 F.3d 1202 (10th Cir. 2001) (citation omitted). “Brown and Coleman contracted for the arbitrator’s construction of the contract not a judge’s construction.” Brown v. Coleman Co., Inc., 220 F.3d 1180, 1183, 16 IER Cases 966 (10th Cir. 2000), cert. denied, __ U.S. __, 121 S. Ct. 1191, 149 L. Ed. 2d 107 (2001).

13. Grounds to Set An Award Aside

9 U.S.C. § 10(a)(1) to (4) allows a court to set an award aside if (1) the award was procured by corruption, fraud, or undue means; (2) there was evident partiality or corruption in the arbitrators; (3) the arbitrators were guilty of misconduct in refusing to postpone a hearing, in refusing to hear evidence, or in misbehaving in some other way; or (4) the arbitrators exceeded their powers or imperfectly executed them.

“We have also recognized ‘a handful of judicially created reasons’ that a district may rely upon to vacate an arbitration award, and these include violations of public policy, manifest disregard of the law, and denial of a fundamentally fair hearing. . . . ‘Outside of these limited circumstances, an arbitration award must be confirmed,’ and ‘[e]rrors in either the arbitrator’s factual findings or his interpretation[s] of the law . . . do not justify review or reversal. . . .'” (citations omitted). Sheldon v. Vermonty, 269 F.3d 1202 (10th Cir. 2001) (citation omitted).

14. The Role of Public Policy in Review of an Award

Citing W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766, 26 FEP Cases 713, 107 LRRM 3251, 26 E.P.D. ¶ 32,024 (1983), the Supreme Court described the role of public policy in the review of arbitral awards of grievances under a CBA, in United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 43 (1987):

First, a court may refuse to enforce a collective-bargaining agreement when the specific terms contained in that agreement violate public policy. Second, it is apparent that our decision in that case does not otherwise sanction a broad judicial power to set aside arbitration awards as against public policy. Although we discussed the effect of that award on two broad areas of public policy, our decision turned on our examination of whether the award created any explicit conflict with other “laws and legal precedents” rather than an assessment of “general considerations of supposed public interests.” 461 U.S., at 766, 103 S. Ct., at 2183. At the very least, an alleged public policy must be properly framed under the approach set out in W.R. Grace, and the violation of such a policy must be clearly shown if an award is not to be enforced.

The ruling by the United States Supreme Court in Eastern Associated Coal Corp. v. United Mine Workers of America, District 17, 531 U.S. 57, 16 IER Cases (2000), arose from a collective bargaining agreement under which the employer was required to show “just cause” for discharge. The subject of the arbitration was the discharge of a truck driver who lost his job after twice failing drug tests. The arbitrator reinstated the truck driver, reducing the discharge to a several month suspension and imposing other requirements. Appealing the arbitral decision in federal court, the employer argued that the decision contravened the public policy embodied in federal drug testing statutes and regulations governing truck drivers. The Supreme Court found that the statutory scheme did not dictate discharge of truck drivers who test positive for drugs and deferred to the arbitrator’s award.

In Westvaco Corp. v. United Paperworkers International Union, 171 F.3d 971, 79 FEP Cases 595 (4th Cir. 1999), the Fourth Circuit held that the “general public policy against sexual harassment is not sufficient to supplant labor arbitration of employee disciplinary sanctions.” Id. at 977. Here, the collective bargaining agreement allowed the labor arbitrator to review the company’s discipline decisions. The nine month suspension given by the arbitrator instead of the termination sought by the company was a “strict punishment” and would not “prohibit the [the company] from exercising reasonable care to promptly correct harassing behavior.” Id.

15. What Does It Mean that an Arbitrator Exceeded His or Her Powers ?

To determine whether an arbitrator has exceeded his authority under § 10, however, courts ‘do not sit to hear claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts,’ United Paperworkers International, 484 U.S. at 38 . . . and ‘[e]ven where such error is painfully clear, courts are not authorized to reconsider the merits of arbitration awards.'” Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 330 (1st Cir. 2000) (citations and parallel cites omitted).

16. What Does it Take to Show Partiality Under the FAA ?

Partiality cannot be shown by a mere discrepancy between the amount claimed and the amount awarded, even where the only testimony on damages was presented by the claimant, where there were grounds in the record on which the arbitrators could have rejected part of the amount claimed. Dawahare v. Spencer, 210 F.3d 666, 669 (6th Cir.), cert. denied, 531 U.S. 878 (2000). “Only if a reasonable person would have to conclude that the arbitration 531 U.S. 878 (2000). “Only if a reasonable person would have to conclude that the arbitration panel was partial to a party will we find evident partiality. ‘The alleged partiality must be direct, definite, and capable of demonstration, and the party asserting [it] . . . must establish specific facts that indicate improper motives on the part of the arbitrator.'” (Citation and some internal quotation marks omitted.)

Partiality cannot be shown merely by there having been frequent business contacts between the arbitrator and a party to the arbitration. Gianelli Money Purchase Plan and Trust v. ADM Investor Services, Inc., 146 F.3d 1309, 1312 (11th Cir.), cert. denied, 525 U.S. 1016 (1998). The court held that, because review of arbitral awards is limited, the “evident partiality test must be strictly construed. “The alleged partiality must be ‘direct, definite and capable of demonstration rather than remote, uncertain and speculative.'” Id. (citation omitted). The court rejected the more stringent disclosure rule of the Ninth Circuit, which required arbitrators to investigate to determine if they had had prior contacts with a party of which they were not aware. The court stated that the lower court should have followed “the law of our Circuit, which is that an arbitration award may be vacated due to the ‘evident partiality’ of an arbitrator only when either (1) an actual conflict exists, or (2) the arbitrator knows of, but fails to disclose, information which would lead a reasonable person to believe that a potential conflict exists.” Id.

17. What is Manifest Disregard of the Law?

First Circuit: An award is in manifest disregard of the law “‘where an award is contrary to the plain language of the [contract]’ and ‘instances where it is clear from the record that the arbitrator recognized the applicable law and then ignored it.'” Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 330 31 (1st Cir. 2000) (citations and parallel cites omitted).

Second Circuit: “In determining whether arbitrators have “manifestly disregarded the law,” we have held that there must be something beyond and different from a mere error in the law or failure on the part of the arbitrators to understand or apply the law, in order to sustain a finding of manifest disregard of the law. Illustrative of the degree of “disregard” necessary to support vacatur under this standard is our holding that manifest disregard will be found where an arbitrator understood and correctly stated the law but proceeded to ignore it. . . . (‘[C]ourts may vacate awards only for an overt disregard of the law and not merely for an erroneous interpretation. . . . Moreover, the law ignored by the arbitrators must be well defined, explicit, and clearly applicable if the award is to be vacated.’) (internal quotation marks omitted).” Pike v. Freeman, 266 F.3d 78, 86 (2d Cir. 2001) (citations omitted). Accord, Greenberg v. Bear, Stearns & Co., 220 F.3d 22, 28 (2d Cir. 2000), cert. denied, 531 U.S. 1075 (2001).

In Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 77 FEP Cases 182 (2d Cir. 1998), cert. denied, 526 U.S. 1034 (1999), the plaintiff alleged he was terminated due to his age. The employer defended by arguing that, in fact, the plaintiff had retired. The plaintiff presented what the Second Circuit called “very strong evidence of age-based discrimination.” The parties fully informed the arbitrator of the applicable law. However, the arbitrator, without explanation, found for the employer. The Second Circuit held that the arbitrator acted with “manifest disregard of the law.” Id. at 197. “[T]he arbitrators did not explain their award. It is true that we have stated repeatedly that arbitrators have no obligation to do so . . . . We merely observe that where a reviewing court is inclined to find that arbitrators manifestly disregarded the law or the evidence and that an explanation, if given, would have strained credulity, the absence of explanation may reinforce the reviewing court’s confidence that the arbitrators engaged in manifest disregard.” Id.

DiRussa v. Dean Witter Reynolds Inc., 121 F.3d 818, 74 FEP Cases 726 (2d Cir. 1997), cert. denied, 522 U.S. 1049 (1998), affirmed an arbitrator’s award in an ADEA case that did not award attorney’s fees to the plaintiff. The plaintiff argued that the arbitrator’s refusal to grant attorney’s fees constituted a “manifest disregard of the law.” The court held that this standard was more stringent than the clearly erroneous standard and went on to uphold the arbitrator’s order. The court rested it argument primarily on the fact that the plaintiff never brought to the arbitrator’s attention the fact that attorney’s fees were mandated by the ADEA and not at the discretion of the court.

Fifth Circuit: Williams v. CIGNA Financial Advisers, 197 F.3d 752, 761–62, 81 FEP Cases 747, 77 E.P.D. ¶ 46,359 (5th Cir. 1999), cert. denied, 529 U.S. 1099 (2000), stated:

The concept of “manifest disregard of the law” has not been defined by the Supreme Court. The circuits have adopted various formulations. 2 As indicated by our foregoing recognition of the standard, we agree with the D.C. Circuit that, “in this statutory context, the ‘manifest disregard of law’ standard must be defined in light of the bases underlying the Court’s decisions in Gilmer-type cases.” Cole, 105 F.3d at 1487. Professors MacNeil, Speidel, and Stipanowich have made a “modest proposal” that should prove helpful as a basis for articulating and applying the manifest disregard doctrine in the present context:

First, where on the basis of the information available to the court it is not manifest that the arbitrators acted contrary to the applicable law, the award should be upheld.

Second, where on the basis of the information available to the court it is manifest that the arbitrators acted contrary to the applicable law, the award should be upheld unless it would result in significant injustice, taking into account all the circumstances of the case, including powers of arbitrators to judge norms appropriate to the relations between the parties.

MACNEIL, supra, §§ 40.7.2.6, at 40:95 (footnote omitted).
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2 See, e.g., Advest Inc. v. McCarthy, 914 F.2d 6, 8-9 (1st Cir. 1990) (“where it is clear from the record that the arbitrator recognized the applicable law-and then ignored it”); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker, 808 F.2d 930, 933-34 (2d Cir. 1986)(“The error must have been obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator.

Moreover, the term ‘disregard’ implies that the arbitrator appreciates the existence of a clearly governing legal principle but decides to ignore or pay no attention to it.” (citations omitted)); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418, 421 (6th Cir. 1995)(“an arbitration panel does not act in manifest disregard of the law unless (1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrators refused to heed that legal principle.”); Health Services Management Corp. v. Hughes, 975 F.2d 1253, 1267 (7th Cir.1992)(“there must be something beyond and different from mere error in law or failure on the part of the arbitrators to understand or apply the law; it must be demonstrated that the majority of arbitrators deliberately disregarded what they knew to be the law in order to reach the result they did.”).

Sixth Circuit:Dawahare v. Spencer, 210 F.3d 666, 669–70 (6th Cir.), cert. denied, 531 U.S. 878 (2000), stated: “An arbitration decision ‘must fly in the face of established legal precedent’ for us to find manifest disregard of the law. Id. An arbitration panel acts with manifest disregard if ‘(1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrators refused to heed that legal principle.’ Id. Thus, to find manifest disregard a court must find two things: the relevant law must be clearly defined and the arbitrator must have consciously chosen not to apply it. . . . Arbitrators are not required to explain their decisions. If they choose not to do so, it is all but impossible to determine whether they acted with manifest disregard for the law. . . .”

“Chief Judge Martin, concurring in Federated Department Stores, Inc. v. J.V.B. Industries, Inc., 894 F.2d 862 (6th Cir. 1990), recognized the problems inherent in reviewing an arbitration award for manifest disregard of the law where the arbitrators fail to state a reason for their decision. He stated that courts are forced to participate in a ‘judicial snipe hunt’ with the parties arguing about law that may or may not have been disregarded by the arbitrators. See id. at 871. He would allow reversal when there are no reasons given for an arbitration decision and the record is insufficient to show that the arbitrators did not manifestly disregard the law. See id. No panel of this court has adopted this reasoning.”

Eleventh Circuit:Montes v. Shearson Lehman Brothers, Inc., 128 F.3d 1456, 4 WH Cases 2d 385 (11th Cir. 1997), reversed an arbitration panel’s decision because it appeared that the board had disregarded the law. The plaintiff sued the employer for overtime under the FLSA, arguing that she was a non-exempt employee. In its arguments to the arbitrator, the employer specifically asked the arbitrators to do “equity” and to disregard the FLSA. There was no evidence in the record that the arbitral panel did not heed this advice, and thus the court reversed the arbitrator’s decision.

18. How Detailed Must the Decision Be?

“The nature of judicial review of arbitral action is complicated by the fact that arbitrators need not state any reason for their decision, United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 598 . . . (1960), and, if they choose to say anything, are often remarkably terse.” Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 330 31 (1st Cir. 2000) (parallel cites omitted).

Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 77 FEP Cases 182 (2d Cir. 1998), cert. denied, 526 U.S. 1034 (1999), reversed the lower court’s refusal to vacate the ADEA arbitration award in favor of the employer. The court discussed the need for adequate review of arbitral awards in statutory discrimination cases, and its perception that the plaintiff presented “overwhelming evidence” of age discrimination. Id. at 203. The defendant admitted that the plaintiff’s performance would not have justified discharge, but asserted that the plaintiff quit voluntarily. The court stated that the plaintiff “made a very strong showing that he did not choose the ‘option’ of quitting but was fired.” Id. The law was explained to the arbitrators. Id. at 203–04. The court noted that the arbitrators did not explain their award, and that it had previously held that arbitrations were not under an obligation to do so. However, said the court, this case puts the assumptions of Gilmer to the test. Id. at 204. The court continued:

At least in the circumstances here, we believe that when a reviewing court is inclined to hold that an arbitration panel manifestly disregarded the law, the failure of the arbitrators to explain the award can be taken into account. Having done so, we are left with the firm belief that the arbitrators here manifestly disregarded the law or the evidence or both.

Id. at 204. The court stated that it was not holding that arbitrators should write opinions in every case, or in most cases. “We merely observe that where a reviewing court is inclined to find that arbitrators manifestly disregarded the law or the evidence and that an explanation, if given, would have strained credulity, the absence of explanation may reinforce the reviewing court’s confidence that the arbitrators engaged in manifest disregard.” Id.

In Green v. Ameritech Corp., 200 F.3d 967, 81 FEP Cases 993 (6th Cir. 2000), the Sixth Circuit reversed a federal court’s decision to vacate an arbitration award on the grounds that the arbitrator had insufficiently “explained” the basis of his decision as required by the arbitration agreement. The proper remedy, even if the award required further explanation, was to remand the case to the arbitrator, which the district court failed to do.

19. Interesting Award

Brown v. Coleman Co., Inc., 220 F.3d 1180, 16 IER Cases 966 (10th Cir. 2000), cert. denied, __ U.S. __, 121 S. Ct. 1191, 149 L. Ed. 2d 107 (2001), upheld a high-dollar award for an employee, broken down as follows: “A three-member arbitration panel awarded Gerald E. Brown a total of $3,617,930 for breach of employment contract, wrongful termination, and defamation by the Coleman Company (Coleman). Brown brought an action under the Federal Arbitration Act to confirm the award. The district court vacated the $2,322,335 portion of the award that was based on the value of certain stock options and confirmed the rest of the award, including $350,001 for defamation. Brown appeals the vacatur of the $2,322,335 award for the stock options, and Coleman appeals the confirmation of the $350,001 award for defamation.”

G. Class Actions

1. Availability of Rule 23 in Cases Involving Common-Law
Damages

Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 86 FEP Cases 1580 (2d Cir. 2001), cert. denied122 S. Ct. 1349, 152 L. Ed. 2d 251 (2002), reversed the denial of class certification. The plaintiffs were black present and former employees who sought to represent a class of about 1,300 employees seeking traditional Title VII relief as well as compensatory damages. “Specifically, they challenge Metro North’s company-wide policy of delegating to department supervisors discretionary authority to make employment decisions related to discipline and promotion. Relying on statistical and anecdotal evidence, the Class Plaintiffs argue that this delegated authority has been ‘exercised in a racially discriminatory manner and has a disparate impact on African American employees.’” Id. at 155. The court rejected the “incidental damages”-only approach to Rule 23(b)(2) contained in the dicta of the Fifth Circuit in Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998), but see the opinion on denial of rehearing defining the real issues decided, 151 F.3d at 420, and stated:

Thus, the question we must decide is whether this bright-line bar to (b)(2) class treatment of all claims for compensatory damages and other non-incidental damages (e.g., punitive damages) is appropriate. For the reasons we discuss below, we believe that it is not and therefore decline to adopt the incidental damages approach set out by the Fifth Circuit in Allison and followed by the district court below. Rather, we hold that when presented with a motion for (b)(2) class certification of a claim seeking both injunctive relief and non-incidental monetary damages, a district court must “consider[ ] the evidence presented at a class certification hearing and the arguments of counsel,” and then assess whether (b)(2) certification is appropriate in light of “the relative importance of the remedies sought, given all of the facts and circumstances of the case.” . . . The district court may allow (b)(2) certification if it finds in its “informed, sound judicial discretion” that (1) “the positive weight or value [to the plaintiffs] of the injunctive or declaratory relief sought is predominant even though compensatory or punitive damages are also claimed,” Allison, 151 F.3d at 430 (Dennis, J., dissenting), and (2) class treatment would be efficient and manageable, thereby achieving an appreciable measure of judicial economy.

Although the assessment of whether injunctive or declaratory relief predominates will require an ad hoc balancing that will vary from case to case, before allowing (b)(2) certification a district court should, at a minimum, satisfy itself of the following: (1) even in the absence of a possible monetary recovery, reasonable plaintiffs would bring the suit to obtain the injunctive or declaratory relief sought; and (2) the injunctive or declaratory relief sought would be both reasonably necessary and appropriate were the plaintiffs to succeed on the merits. Insignificant or sham requests for injunctive relief should not provide cover for (b)(2) certification of claims that are brought essentially for monetary recovery. . . .

267 F.3d at 164 (citations omitted). The court held that “where non-incidental monetary relief such as compensatory damages are involved, due process may require the enhanced procedural protections of notice and opt out for absent class members.” Id. at 165. The court held that the lower court erred in failing to bifurcate the case and certify a 23(b)(2) class for purposes of liability. Id. at 167. The court explained the utility of a partial (b)(2) certification of liability issues only:

Here, litigating the pattern-or-practice liability phase for the class as a whole would both reduce the range of issues in dispute and promote judicial economy. For example, if the class should succeed and, even assuming that the remedial stage is ultimately resolved on a non-class basis, the issues and evidence relevant to these individual adjudications would be substantially narrowed:

By proving that the defendant engaged in a pattern or practice of discrimination, not only is the plaintiff class’s eligibility for appropriate prospective relief established, a prima facie case with regard to the remedial phase of the suit, in which relief for individuals is considered, is also made out. Thus, the court presumes that the employer unlawfully discriminated against individual class members. In pattern or practice cases, however, the presumption shifts to the employer not only the burden of production, but also the burden of persuading the trier of fact that it is more likely than not that the employer did not unlawfully discriminate against the individual.

Craik v. Minn. State Univ. Bd.731 F.2d 465, 470 (8th Cir.1984) (internal citation omitted). If, on the other hand, Metro North succeeds at the liability stage, the question of whether it engaged in a pattern or practice of intentional discrimination that injured its African American employees would be completely and finally determined, thereby eliminating entirely the need for a remedial stage inquiry on behalf of each class member.
267 F.3d at 168. The court rejected the district court’s assumption that the focus of the liability trial would be an individual-by-individual, supervisor-by-supervisor morass:

However, as we have discussed, see supra Part I(B) (1), the liability phase is largely preoccupied with class-wide statistical evidence directed at establishing an overall pattern or practice of intentional discrimination. See Allison, 151 F.3d at 434 (Dennis, J., dissenting). To the extent that evidence regarding specific instances of alleged discrimination is relevant during the liability stage, it simply provides “texture” to the statistics. Such anecdotal evidence is not introduced to establish that the particular instances of discrimination actually occurred nor that the particular employees were in fact victims of discrimination. See Price Waterhouse v. Hopkins, 490 U.S. 228, 244-45 n.10, 109 S. Ct. 1775, 104 L. Ed. 2d 268 (1989), superseded by statute on other grounds. Indeed, to ensure that the liability phase remains manageable, the district court may limit the anecdotal evidence as it deems appropriate. See Fed. R. Evid. 403.
267 F.3d at 168. The court rejected the argument that partial certification would necessitate the use of separate juries in violation of the Re-Examination Clause of the Seventh Amendment:

As one commentator has observed, avoiding this calls for sound case management, not [outright] avoidance of the procedure…. First, the court needs to carefully define the roles of the two juries so that the first jury does not decide issues within the prerogative of the second jury. Second, the court must carefully craft the verdict form for the first jury so that the second jury knows what has been decided already. If the first jury makes sufficiently detailed findings, those findings are then akin to instructions for the second jury to follow. Steven S. Gensler, Bifurcation Unbound, 75 Wash. L. Rev. 705, 736-37 (2000) (footnotes omitted) . . . .

Id. at 169 n.13. The court held that the lower court abused its discretion by failing to certify the disparate-impact claim for class treatment under Rule 23(b)(2). It rejected the defendant’s argument that Rule 23(b)(2) class certification would defeat the Seventh Amendment’s Trial by Jury Clause. The court held that the right to jury trial would be preserved by trying first to a jury all issues in common between the disparate-treatment and disparate-impact claims:

Where a legal and equitable claim in a suit share a common factual issue, trial of the equitable claim first to a judge would foreclose the later presentation of the common issue to a jury, and thereby violate the trial-by-jury guarantee. . . . Thus, when as here, a pattern-or-practice claim seeking compensatory damages is pled with a disparate impact claim, the pattern-or-practice claim must be tried first to a jury if there are common factual issues necessary to the resolution of each claim.

Id. at 170 (citation omitted). Finally, the court dealt with Metro-North’s argument that the plaintiffs were inadequate class representatives because they had already settled their individual claims, while reserving their right to seek classwide relief. The court observed that the plaintiffs would benefit from classwide injunctive relief, and the defendant was not asserting inadequacy of representation as to such relief. The court continued:

Metro-North’s contention that the Class Plaintiffs may thereafter fail to “vigorously” pursue the individual relief stages is both speculative and premature, and, we believe, is an insufficient basis for rejecting class certification at this juncture. Rather, the preferable course is for the district court to revisit the question of the Class Plaintiffs’ “fitness” to represent the class if and when the individual-relief stages of the claims occur. Then, if the district court deems it appropriate, it can direct that class members who are entitled to seek individual relief be named as additional class representatives.

Id. at 171 (citations omitted).

Celestine v. Petroleos de Venezuella SA, 266 F.3d 343, 355–56, 86 FEP Cases 1462, 81 E.P.D. ¶ 40,799 (5th Cir. 2001), affirmed the grant of summary judgment to the defendant on the plaintiffs’ claims of denial of promotion and training. Although there were 206 individual plaintiffs, the court held that, in light of the earlier denial of class certification, the lower court did not abuse its discretion in barring the plaintiffs from proceeding with their claims on a pattern-and-practice basis and requiring them to proceed on an individual basis under the McDonnell Douglas model.

Smith v. Texaco, Inc., 263 F.3d 394, 86 FEP Cases 1619, 81 E.P.D. ¶ 40,718 (5th Cir. 2001), a decision that attempted to put the dicta of Allison v. Citgo Petroleum Co. 151 F.3d 402 (5th Cir.), reh’g denied, 151 F.3d 434 (5th Cir. 1998), into holdings and shore up its weaker parts, has been withdrawn because of the settlement of all claims in the underlying action, while the matter was still pending on further review by the Circuit. Smith v. Texaco, Inc., 281 F.3d 477, 88 FEP Cases 51 (5th Cir. 2002).

In re Exxon Valdez, 270 F.3d 1215 (9th Cir. 2001), an environmental case, affirmed awards of compensatory damages in the amounts of $22 million for chum salmon fishermen and of $30 million for setnetter fishermen, and determined that punitive damages were appropriate for the class although the particular $5 billion award in the case was too high.

2. The EEOC and Rule 23

In re Bemis Co., Inc., 279 F.3d 419, 87 FEP Cases 1500 (7th Cir. 2002), denied the defendant’s petition to appeal the lower court’s order striking the part of its Answer objecting that the EEOC had not followed Rule 23 in suing on behalf of a number of black employees. The court held that the EEOC is not bound by the constraints of Rule 23.

3. Appeals by Class Member Objectors from Final
Approval of Settlements

Devlin v. Scardelletti, __ U.S. __, 122 S. Ct. 2005 (2002), held that a nonplaintiff class member who objected to a proposed class settlement could appeal from the grant of final approval without first having to intervene. The court stated that it had never restricted the right to appeal to named parties, where the appellant was bound by the order in question. The right of an objector to appeal from final approval of a class settlement, however, is limited to appealing the lower court’s rejection of the appellant’s objections.

4. Consequences of Dismissing or Decertifying Class Actions

Culver v. City of Milwaukee, 277 F.3d 908, 914–15 (7th Cir. 2002), held that in some circumstances, the dismissal of a putative class action or decertification of a class action may impose on plaintiffs’ counsel the obligation to provide notice to all members of the now uncertified class. The obligation does not apply where it is clear that there is no prejudice, such as where the class size is small and all members were likely to learn of the dismissal or decertification through other means. The court also held that, where it is necessary to subdivide the class into mutually exclusive subclasses and the plaintiff or plaintiff’s counsel fail to do so and to invite members of the other subclass to join as representatives, their failure makes representation of the class inadequate. Id. at 912–13.

5. Availability of ADEA Collective Actions

Thiessen v. General Electric Capital Corp., 267 F.3d 1095 (10th Cir. 2001), cert. denied, 2002 WL 1306877, 70 USLW 3775 (U.S., June 17, 2002) (No. 01–881) reversed the decertification of the ADEA collective action. Preliminarily, the court held that the lower court properly adopted the ad hoc, case-by-case approach to determining whether the plaintiffs and opt-in plaintiffs were similarly situated, instead of attempting to import the standards of Rule 23 into 29 U.S.C. § 216(b). Id. at 1105. The court held that the lower court’s failure to focus on the fact that plaintiffs were challenging an alleged pattern and practice of discrimination “adversely impacted its ‘similarly situated’ analysis and resulted in an abuse of discretion.” Id. “Pattern-or-practice cases differ significantly from the far more common cases involving one or more claims of individualized discrimination. In a case involving individual claims of discrimination, the focus is on the reason(s) for the particular employment decisions at issue. . . . In contrast, the initial focus in a pattern-or-practice case is not on individual employment decisions, ‘but on a pattern of discriminatory decisionmaking.’ Id. Thus, the order and allocation of proof, as well as the overall nature of the trial proceedings, in a pattern-or- practice case differ dramatically from a case involving only individual claims of discrimination.” Id. at 1106 (citations omitted.) The court emphasized the benefit, to individual class members in Stage II proceedings, of the presumption of discrimination that arises from the finding of a pattern of discrimination in Stage I.

Given the pattern-or-practice nature of plaintiffs’ claim, this factor necessarily encompasses factual issues relevant to both the first and second stages of trial, e.g., whether the blocker policy continued after Lanik’s alleged repudiation and, if it did, whether a link existed between that policy and the individual employment decisions affecting the named plaintiffs. The problem is that the district court effectively made findings regarding these issues in the guise of determining whether plaintiffs were “similarly situated.” . . . By doing so, the district court essentially deprived plaintiffs of their right to have the issues decided by a jury, or to at least have the court determine, under summary judgment standards, whether there was sufficient evidence to send the issue to the jury. Further, the district court failed to take into account the fact that, if plaintiffs were able to establish a pattern or practice of discrimination, they would be entitled to a presumption that the individual employment actions taken against them were the result of such discrimination. Indeed, the district court effectively deprived plaintiffs of this procedural advantage as well.

Id. at 1106–07. The court held that the lower court’s determinations were flawed by failing to take into account the pattern-and-practice nature of the case. “Although it is true that defendants asserted ‘highly individualized’ defenses to each of the instances of individual discrimination asserted by plaintiffs, those defenses would not become the focal point until the second stage of trial and could be dealt with in a series of individual trials, if necessary. With respect to the first stage of trial and the initial issues of whether they had in place a pattern or practice of discrimination and whether it continued after the fall of 1994, defendants had only a few common defenses.” Id. at 1107. The court explained:

Thus, the presence of the “highly individualized” defenses clearly did not, as the district court concluded, outweigh “any potential benefits in proceeding as a collective action.” As previously noted, there was a significant procedural advantage for plaintiffs to proceed in a collective action: if they prevailed in the first stage of trial, they would be entitled to a presumption of discrimination in subsequent proceedings to decide the merits of their individual claims. By bowing to the individualized defenses relevant only to the second stage of trial, the district court deprived plaintiffs of this opportunity.

The district court’s consideration of the third factor (trial management concerns) was also adversely affected by its failure to recognize the pattern- or-practice nature of plaintiffs’ claim. Most notably, the district court failed to acknowledge that plaintiffs’ proposed trial plan, though perhaps deficient in some respects, was consistent with the framework outlined in Teamsters for pattern-or-practice claims. The court also failed to make any effort to modify the plaintiffs’ proposed trial plan. Finally, the district court was wrong in concluding that trying the case in two phases, as suggested by plaintiffs, “render[ed] individualized consideration of the claims impossible.” . . .

Id. The court concluded that, because of the pattern-and-practice nature of plaintiffs’ case, the “plaintiffs were, in fact, ‘similarly situated’ for purposes of § 216(b).” Id. at 1107–08.

H. Summary Judgment

1. General

Fierros v. Texas Department of Health, 274 F.3d 187, 190–91, 87 FEP Cases 503 (5th Cir. 2001), reversed the grant of summary judgment to the Title VII retaliation defendant. The court cited Reeves, stating:

The Supreme Court recently emphasized the paramount role that juries play in Title VII cases, stressing that in evaluating summary judgment evidence, courts must refrain from the making of “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts,” which “are jury functions, not those of a judge.”

2. Effect of Contradictions in the Employer’s Case

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.273 F.3d 30, 87 FEP Cases 673 (1st Cir. 2001), vacated the grant of summary judgment to the ADEA defendant, based in part on the fact that the defendant’s officials could not get their stories straight. Some accused her of things that others exonerated her for, and defended her for things that the others attacked her for, and there was no contemporaneous documentation supporting any of it.

McCowan v. All Star Maintenance, Inc.273 F.3d 917, 921, 87 FEP Cases 596 (10th Cir. 2001), reversed the grant of summary judgment to the Title VII and § 1981 defendant, because the lower court failed to indulge all reasonable inferences in favor of the nonmoving party, and “ignored some of the facts presented, permitting it to resolve what otherwise would be material facts more appropriately reserved for a rational jury.” The court summarized the evidence of racial harassment and the contradictions in the defendant’s evidence as to the plaintiffs’ firing, and cautioned against the grant of summary judgment in such circumstances:

Thus, All Star’s “business judgment” with the jargon of economics, efficiency, bottom lines and profit is not impervious to alternative proof. The court’s inquiry is not whether the employer made the best choice, but whether it was the real choice for terminating Plaintiffs. With no evidence of the criteria used to evaluate the basis for the decision to retain one painting crew over the other in the face of the inconsistencies and contradictions in the record, the court improperly resolved questions of fact reserved for the jury.

Id. at 926.

3. Harassment Cases

Cardenas v. Massey, 269 F.3d 251, 261–62, 87 FEP Cases 19 (3rd Cir. 2001), reversed the grant of summary judgment to the defendants on the plaintiff’s Title VII and New Jersey Law Against Discrimination racial harassment claim against certain defendants. The alleged harassment included performance evaluations and the practice of assigning all minority employees to the one unit headed by a minority manager. The court stated: “We cannot say that the District Court’s evaluation of the evidence was not a reasonable one for a trier of fact to reach. However, the District Court declined to examine the possibility that defendants’ “management decisions” masked discriminatory intent. As this court has previously emphasized, the advent of more sophisticated and subtle forms of discrimination requires that we analyze the aggregate effect of all evidence and reasonable inferences therefrom, including those concerning incidents of facially neutral mistreatment, in evaluating a hostile work environment claim.”

McCowan v. All Star Maintenance, Inc.273 F.3d 917, 926, 7 FEP Cases 596 (10th Cir. 2001), reversed the grant of summary judgment to the Title VII and § 1981 racial and ethnic harassment defendant. The court held that whether there was actionable conduct depended on the “totality of the circumstances” test, and suggested that summary judgment is not an appropriate means to resolve at least some such cases:

Finally, we would observe the totality of the circumstances analysis in cases like the one before us obviates what would otherwise be the court’s call in deciding how many racist comments constitute harassment or whether general profanity and vulgarity mixed with specific racial, ethnic, or sexual epithets equate to the sum of pervasiveness required by Harris. Rather, by framing the evidence of summary judgment within the context of this particular workplace, we eliminate the suggestion that a certain number of comments is or is not actionable, as All Star has advanced, and leave the resolution to the trier of fact.

4. Summary Judgment in Pattern-and-Practice Cases

Thiessen v. General Electric Capital Corp., 267 F.3d 1095, 1108–09 (10th Cir. 2001), cert. denied, 2002 WL 1306877, 70 USLW 3775 (U.S., June 17, 2002) (No. 01–881)reversed the grant of summary judgment to the ADEA defendant. The court reversed the lower court’s decertification of the class, and discussed the effect of a pending pattern-and-practice claim on summary judgment adjudication:

As with defendants’ motion to decertify, proper consideration of defendants’ motion for summary judgment must take into account the fact that Thiessen and the opt-in plaintiffs were asserting a pattern-or- practice claim. Although there is little case authority discussing summary judgment motions in pattern-or-practice cases, we see no reason why summary judgment motions cannot be aimed at both the first and second stage issues. Presumably, however, such motions must be analyzed in light of the orders of proof peculiar to pattern-or-practice cases, and must be filed and considered at an appropriate stage of the proceedings. During the first stage of a pattern-or-practice case, for example, a summary judgment motion (whether filed by plaintiffs or defendants) must focus solely on whether there is sufficient evidence demonstrating that defendants had in place a pattern or practice of discrimination during the relevant limitations period. . . . Until the first stage is resolved, we question whether it is proper for a court to consider summary judgment motions regarding second stage issues (i.e., whether individual plaintiffs are entitled to relief). Even assuming, arguendo, such motions can properly be considered prior to resolution of the first stage, it is clear they would not be analyzed under the typical McDonnell-Douglas framework. . . . Instead, they would operate under the presumption that (1) defendants had in place a pattern or practice of discrimination, and (2) all employment decisions regarding the class plaintiffs were made pursuant to that pattern or practice. . . .

(Footnote and citations omitted.)

I. Settlement

Hakim v. Payco-General American Credits, Inc., 272 F.3d 932, 87 FEP Cases 555 (7th Cir. 2001), held that the plaintiff was bound by his settlement of his claims with the defendant, in which he agreed to withdraw all claims in return for the defendant’s not seeking fees and costs against him, although he was unaware that, at the time he signed the agreement, the lower court had already entered default judgment for him as a sanction for the defendant’s misconduct. The defendant’s surrender of a claim for fees and costs was consideration for the agreement, even if such a claim was weak.

J. Batson Challenges to Peremptory Strikes of Jurors

Weeks v. New York State (Division of Parole), 273 F.3d 76, 88–90, 87 FEP Cases 161, 81 E.P.D. ¶ 40,822 (2nd Cir. 2001), affirmed the judgment for the defendant on those claims that were tried. The court rejected the plaintiff’s challenge to the defendant’s peremptory strikes because they were made hours after the strikes, after the struck jurors had left the court room, and when the trial judge stated that he could not recall the struck jurors.

K. Evidentiary Rulings

1. Admissible Form

Markel v. Board of Regents of University of Wisconsin System276 F.3d 906, 912, 87 FEP Cases 1131 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant. The court held that an affidavit could not be considered when it was not sworn, not certified, and signed by plaintiff’s counsel instead of by the witness.

2. Prior Claims of Discrimination

Mathis v. Phillips Chevrolet, Inc.269 F.3d 771, 774–77, 87 FEP Cases 219, 81 E.P.D. ¶ 40,807 (7th Cir. 2001), affirmed the $50,000 judgment on a jury verdict for the ADEA plaintiff. The court held that the lower court did not abuse its discretion in barring evidence of the plaintiff’s prior discrimination claims with respect to six other employers at which he had applied. The court held that the evidence of a series of false or insincere applications at other dealerships cannot be admitted Under Rule 404(b), F. R. Evid., to show that the plaintiff was litigious, but could be admitted under the same rule to show a plan, scheme, or modus operandi. Even if relevant, however, the court held that the lower court acted within its discretion in barring the evidence because its probative value was outweighed by the danger of prejudice against the plaintiff.

3. Inferences Arising from Destruction of Records

Hall v. Bodine Electric Co.276 F.3d 345, 358–59, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court held that no inference of pretext arose from the fact that the investigator destroyed his original notes after typing them up on a computer. It stated that employers are not required to keep every piece of scrap paper, and that the investigator’s reasons for throwing out his original notes—that the original notes were rough and contained misspellings and cross-outs, that the typed version contained virtually everything in the notes, and to preserve confidentiality—were plausible. The court did not question the consistency of the second and third reasons. Moreover, there was substantial evidence supporting the investigator’s conclusion that the plaintiff had herself sexually harassed other men at work, including the accused perpetrator. Id. at 359.

4. Hearsay and its Exceptions

EEOC v. University of Chicago Hospitals276 F.3d 326, 333, 87 FEP Cases 1089 (7th Cir. 2002), reversed the grant of summary judgment to the Title VII religious-discrimination constructive-discharge defendant. The court held that the statements of the charging party’s former supervisor, as to the intentions of the decisionmaker, and his testimony as to the charging party’s statements, were not hearsay because they were not admitted to prove the truth of the matter asserted, but the state of the plaintiff’s mind as she returned to work.

Swinton v. Potomac Corp., 270 F.3d 794, 807–08, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The court held that the trial court did not err in admitting summaries of the plaintiff’s accounts of the harassment as part of exhibits prepared by psychologists he consulted, because these records came under the hearsay exception in Fed. R. Evid. 803(4) for “statements made for purposes of medical diagnosis or treatment and describing medical history, or past or present symptoms, pain, or sensations, or the inception or general character of the cause or external source thereof insofar as reasonably pertinent to diagnosis or treatment.”

5. The Balancing Test

Swinton v. Potomac Corp., 270 F.3d 794, 808, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The court held that the lower court did not abuse its discretion in barring evidence that the plaintiff only sought psychological consulting two days after consulting with his attorney, because the defendant had had ample opportunity to cross-examine the plaintiff about his emotional distress.

6. Testimony on Advice of Counsel

Farias v. Instructional Systems, Inc.259 F.3d 91, 100–01 (2nd Cir. 2001), affirmed the judgment of liability on a jury verdict for Title VII retaliation plaintiff Robinson, and affirmed the denial of punitive damages. The court held that the lower court did not abuse its discretion in barring the testimony of defense counsel to the effect that counsel had advised the defendant not to offer a severance payment because the plaintiff had filed an EEOC charge. It explained:

But nothing would prevent ISI from offering the severance in exchange for a release, which no doubt included actual claims as well as hypothetical ones. Dunn’s testimony therefore would only have reinforced the jury’s finding that the denial of severance benefits was retaliatory, and his testimony therefore could not evidence a motive that was both legitimate and non-retaliatory. The retaliatory finding rests on cause and effect, regardless of whether Kaminer acted out of animus and revenge or on the advice of counsel. We need not decide whether there are circumstances where the advice of counsel could constitute or assist a defense to a claim of retaliation.

The court went on to state that the admissibility of this testimony as to punitive damages was a different question, but any error was harmless in light of the reversal of punitive damages. Id. at 101.

7. Judge’s Questions

Swinton v. Potomac Corp., 270 F.3d 794, 808–09, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The court held that the trial judge’s questioning of one of the two co-plant managers was proper clarification of testimony, and revealed little of consequence. Although the trial judge did elicit that plaintiff was the only black employee of the plant, other witnesses had already testified to this.

8. Counsel’s Failure to Follow Through

Swinton v. Potomac Corp., 270 F.3d 794, 809, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. Finally, the court rejected the defendant’s contention that the district court improperly excluded an exhibit, when the lower court only reserved ruling on its admission and plaintiff’s objection, the defendant never asked for an immediate ruling, used it to refresh the recollection of the witness as it had begun to do before offering the exhibit, and never again moved to introduce it.

9. Evidence of Post-Event Occurrences

Swinton v. Potomac Corp., 270 F.3d 794, 811–17, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff was subjected to a frequent barrage of racist slurs and jokes, some of them in the presence of a member of management. The defendant argued that it was entitled to a new trial because the lower court had excluded evidence of one of the post-suit steps it had taken to remedy discrimination. The court distinguished a number of cases excluding evidence of post-event occurrences because they involved the issue of liability, and evidence irrelevant to liability may still be relevant to the imposition of punitive damages. After surveying the law in Federal and State courts, the court held that lower courts have the discretion to decide whether to allow evidence of post-event remedial actions, “as a means to mitigate punitive damages.” Id. at 814. The court stated that, under Faragher and Ellerth, the employer has the right to show that it took prompt and effective remedial action, and that this right cannot be cut off by the plaintiff’s simultaneous quitting under a contention of constructive discharge and filing of suit under § 1981. “The point is that the timing and nature of remedial action are case-specific and will not always fit in a neat box.” Id. at 815. This case is discussed further in the section on punitive damages below.

L. Rule 412, Fed. R. Evid.

Beard v. Flying J, Inc., 266 F.3d 792, 801–02, 87 FEP Cases 1836 (8th Cir. 2001), affirmed the judgment on a jury verdict for the Title VII sexual harassment plaintiff, and the judgment on a jury verdict for the defendant on plaintiff’s constructive-discharge claim. The court stated that it was an open question whether Rule 412 applied to sexual harassment cases, but held in any event that the defendant’s failure to follow the procedures set forth in Rule 412 was harmless in light of the plaintiff’s knowledge that the material on her non-intimate sexual conduct would be offered, and in light of the fact that the conduct took place in a public area.

B.K.B. v. Maui Police Department, 276 F.3d 1091, 1103–06, 87 FEP Cases 1306 (9th Cir. 2002), modified in other respects__ F.3d __, 2002 WL 237764 (9th Cir. Feb. 20, 2002), reversed the lower court’s denial of plaintiff’s motion for a new trial after defense counsel introduced trial testimony as to the plaintiff’s sexually-oriented statements and conduct, without complying with Rule 412. “Having failed in two previous motions to obtain the court’s approval to introduce Rule 412 material, the defendants instead simply sprang the offending testimony upon the court and then misrepresented the nature of Becraft’s testimony to the trial judge in response to plaintiff’s objections that the defense intended to violate Rule 412.” Id. at 1104–05. The court held that Becraft’s testimony as to the plaintiff’s sexual practices did not involve any admissions by the plaintiff as to the advances she rejected, and “Plaintiff’s alleged statements regarding her sexual habits were not probative as to the welcomeness of any harassing conduct by her coworkers.” Id. at 1105. The court held that no instruction could have cured the prejudice of Becraft’s “lurid” testimony, but that the lower court’s curative instruction was in any event not forceful and was diminished in effect by its having been prefaced with a jocular reference to its being nearly lunchtime. Id. at 1105–06 & n.7. The court’s rulings on sanctions are discussed below.

M. Appeals

Conto v. Concord HospitalInc., 265 F.3d 79, 81–82 (1st Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court observed that sexual harassment cases are intensely fact-specific, and deemed the claim waived because the plaintiff did not cite a single record fact in her appellate brief, instead referring to the record in general.

VII. Remedies

A. Injunctive Relief

Cardenas v. Massey, 269 F.3d 251, 265, 87 FEP Cases 19 (3rd Cir. 2001), affirmed the grant of summary judgment to the defendants on the plaintiff’s demands for prospective injunctive relief because he had quit and thus lacked standing to assert such relief, and because he could not benefit personally from such relief and cannot assert the rights of those who could still benefit. The court affirmed the dismissal of plaintiff’s claims for individualized injunctive relief in the form of correcting his employment records to remove the effects of discrimination in his evaluations, because it was unaware of any precedent for doing so.

B. Back Pay and Front Pay

Hoffman Plastics Compounds, Inc. v. N.L.R.B., __ U.S. __, 122 S. Ct. 1275, 169 L.R.R.M. (BNA) 2769 (2002), reversed the Board’s grant of back pay to Jose Castro, an undocumented alien who had never been authorized to work in the United States. Castro testified that he had used a friend’s birth certificate fraudulently to obtain a Social Security card, and a California driver’s license, and he had used these to obtain employment. There was no evidence that he had applied or intended to apply for legal authorization to work in the United States. The Court held that the legal landscape of prior decisions was altered by enactment of the Immigration Reform and Control Act of 1986. Speaking of the fact that “it is impossible for an undocumented alien to obtain employment in the United States without some party directly contravening explicit congressional policies,” such as by the employee’s tender of fraudulent documentation or the employer’s knowing hiring of an undocumented alien, the Court stated:

The Board asks that we overlook this fact and allow it to award backpay to an illegal alien years of work not performed, for wages that could not lawfully have been earned, and for a job obtained in the first instance by a criminal fraud. We find, however, that awarding backpay to illegal aliens runs counter to policies underlying IRCA, policies the Board has no authority to enforce or administer.

The Court pointed out that Castro could not satisfy his duty to mitigate his earnings loss without committing further violations of IRCA. Justice Breyer, joined by Justices Stevens, Souterm and Ginsburg, dissented.

The logic of this decision would seem to apply to back pay awards under all of the antidiscrimination statutes, but not necessarily to awards of compensatory and punitive damages. It is not clear that this decision would bar minimum-wage and overtime awards under the FLSA for work already performed.

The Court’s caveat—that there was no evidence that Castro had applied or intended to apply for legal authorization to work in the United States—raises the question whether Castro could have rehabilitated himself for purposes of a back pay award by applying for such authorization.

Bishop v. Gainer, 272 F.3d 1009, 1016–17, 87 FEP Cases 920 (7th Cir. 2001), affirmed the calculation of back pay based on the “lost chance” method described hypothetically in Doll v. Brown, 75 F.3d 1200, 5 AD Cases 369 (7th Cir. 1996):

Here, Hanford and Robert were competing against each other–as well as the person who actually was promoted. The judge turned to our decision in Doll and took us up on our invitation to apportion damages under a lost-chance theory, borrowed from tort law, which we said “recognizes the inescapably probabilistic character of many injuries.” We analogized by saying that if a patient was entitled to 25 percent of his full damages because he had only a 25 percent chance of survival, he should be entitled to 75 percent of his damages if he had a 75 percent chance of survival–not 100 percent of his damages on the theory that by establishing a 75 percent chance he proved injury by a preponderance of the evidence.

At 1206. Using the tort approach, the judge proceeded to calculate the plaintiffs’ damages by assessing what the chances were that each would have received the promotion he sought. For this promotion, Hanford placed third and Robert fourth on the promotion list. The person who was first received a different promotion and the person who placed second had been out of the particular district for several years, and for that reason the judge reasoned that his chances of getting the promotion would be reduced to 25 percent. Then the judge assessed that Hanford had a 45 percent chance and Robert had a 30 percent chance to receive the promotion. The other appellant, Volle, was competing for a promotion with two other white males who placed higher than he did on the list, so his chances were assessed at 15 percent.

The approach obviously involves more art than science. But as we said in Doll, that is true in all comparative negligence calculations as well. It strikes us that in this particular situation, it was the likeliest way to arrive at a just result. We think the judge (Judge Harry Leinenweber here) did a wonderful job of cutting this Gordian knot. We have examined the evidence and find no reason to disturb the thoughtful calculations he has made and the result they have produced.

Hertzberg v. SRAM Corp.261 F.3d 651 (7th Cir. 2001), cert. denied, 2002 WL 232975, 70 USLW 3395, 70 USLW 3514 (U.S., Feb. 19, 2002) (No. 01–829), reversed the lower court’s award of back pay and front pay in a sexual harassment case in which the jury found for the plaintiff on sexual harassment but found for the defendant on the issue of retaliatory discharge, and in which the plaintiff never presented a claim of constructive discharge. The plaintiff had resigned because of the company’s failure to address her complaints, and then thought better of it and tried to withdraw her resignation. The defendant held her to her resignation. The lower court had awarded back pay and front pay on the theory that the plaintiff’s resignation/termination would not have happened but for the harassment. The court of appeals held that this approach improperly ignored the distinction between harassment and termination claims. “A victim of discrimination that leaves his or her employment as a result of the discrimination must show either an actual or constructive discharge in order to receive the equitable remedy of reinstatement, or back and front pay in lieu of reinstatement. In the absence of such a showing, a plaintiff’s exclusive remedies are those set forth in 42 U.S.C. § 1981a.” Id. at 659. The court stated:

We agree with the district court that Ms. Hertzberg’s lawyers, “in the nature of their presentation, may have shot themselves or their client in the foot on the retaliation claim by the instruction that limited adverse employment action to a termination of plaintiff’s employment by defendant,” Tr. of Dec. 16, 1999, at 6-7; that is, Ms. Hertzberg may well have convinced a jury that she had been constructively discharged. However, Ms. Hertzberg presented only two bases of relief to the jury: sexual harassment and retaliatory discharge. The jury rejected Ms. Hertzberg’s retaliatory discharge claim. Consequently, there was no discriminatory discharge on which the award of lost pay could be based, and we must reverse the lost pay award.

Id. at 660–61.

C. Compensatory Damages

Worth v. Tyer276 F.3d 249, 268–69, 87 FEP Cases 994 (7th Cir. 2001), affirmed the Title VII sexual harassment verdict for the plaintiff. The court held that the plaintiff’s evidence of emotional distress—lack of sleep, humiliation, distress, lost wages, etc.—were significant enough to support the jury’s award of compensatory damages in the amounts of $20,000 for retaliatory discharge, $2,500 for sexual harassment, and $50,000 for battery.

Webner v. Titan Distribution, Inc., 267 F.3d 828, 836, 12 AD Cases 513 (8th Cir. 2001), affirmed the award of $12,500 in emotional-distress damages on the plaintiff’s ADA claim and the award of an equal amount on his State-law claim. The court stated that medical or other expert evidence is not necessary to support an ADA emotional-distress award. The plaintiff can rely on his or her own testimony, but must introduce specific facts supporting the claim of emotional distress. The court stated:

Webner testified that he was emotionally devastated by losing his job–a termination Titan told him explicitly was because of his disability. He testified that immediately after he was terminated he felt “empty,” like he lost his best friend and that there was “a hole in his chest.” . . . He also testified that he was scared that he would be unable to pay his bills and was frustrated with his inability to find other regular work for six months. Titan contends that Webner’s self- serving testimony about his reaction after he was terminated is insufficient to sustain the jury’s award of emotional distress damages. We disagree. As previously stated a plaintiff’s own testimony may provide ample evidence when heard in combination with the circumstances surrounding the plaintiff’s termination. Furthermore, “[a]wards for pain and suffering are highly subjective and the assessment of damages is within the sound discretion of the jury, especially when the jury must determine how to compensate an individual for an injury not easily calculable in economic terms.” . . . We will not disturb the jury’s award of emotional distress damages to Webner on his disability claim.

Id. at 836–37.

Madison v. IBP, Inc.257 F.3d 780, 802–03, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001), vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985), affirmed the award of $266,750 for emotional distress damages, because the evidence supporting the award was much better developed than in cases in which the courts have ordered remittiturs. The court described the evidence:

Madison presented voluminous evidence that she suffered severe emotional distress as a result of the harassment and discrimination she endured after January 13, 1993. She was subjected to egregious and humiliating conduct which wreaked havoc on her emotional health and caused her great anguish which manifested itself physically. The taunting and harassment made her feel humiliated, hurt, and degraded. The undisputed evidence indicated that Madison was made so distraught by the behavior of fellow employees and managers that she often left her work station in tears. Her family life was affected by what went on in the plant. Her working conditions strained her relationship with her husband and nearly caused the breakup of their marriage. The couple separated several times during the course of her employment at IBP. Madison also testified that as a result of her stressful work environment, she lost weight, had trouble sleeping and frequent headaches, and broke out in hives. The evidence about the physical and emotional effects on Madison was corroborated by her family and several coworkers. Keith Ratliffe, a minister who counseled Madison on at least four occasions during these events, described her as depressed and emotionally drained because of her experiences at IBP.

Id. at 802.

D. Liquidated Damages

Mathis v. Phillips Chevrolet, Inc.269 F.3d 771, 777–78, 87 FEP Cases 219, 81 E.P.D. ¶ 40,807 (7th Cir. 2001), affirmed the jury’s award of liquidated damages to the ADEA plaintiff. The court rejected the defendant’s argument that liquidated damages were improper because the hiring manager was ignorant of the ADEA. “Phillips’s general manager did testify that he was not aware that it was illegal to discriminate on the basis of age, but as this circuit has held, leaving managers with hiring authority in ignorance of the basic features of the discrimination laws is an ‘extraordinary mistake’ for a company to make, and a jury can find that such an extraordinary mistake amounts to reckless indifference.” Id. at 778. The court rejected the defendant’s argument that the printed message on its application forms, acknowledging that the ADEA prohibits discriminating against applicants over the age of 40, demonstrates a good-faith effort to comply and bars the imposition of liquidated damages. “However, this evidence appears more harmful to Phillips than helpful, because the jury could easily have concluded that printing this statement on the application but then making no effort to train hiring managers about the ADEA shows that Phillips knew what the law required but was indifferent to whether its managers followed that law.” Id.

E. Punitive Damages

1. Entitlement Where No Compensatory or Nominal
Damages Are Awarded

Cush-Crawford v. Adchem Corp.271 F.3d 352, 87 FEP Cases 456, 81 E.P.D. ¶ 40,800 (2nd Cir. 2001), affirmed the judgment on a jury verdict for the Title VII hostile-environment plaintiff. The jury did not award any compensatory or nominal damages, but did award the statutory maximum of $100,000 in punitive damages. The court summarized the law of the Circuits:

The plain language of the statute does not expressly state whether punitive damages are available absent an award of actual damages, and the Courts of Appeals that have considered the question have reached different results. The Seventh Circuit holds that punitive damages may be awarded in a Title VII case absent an award of actual or compensatory damages. See Timm v. Progressive Steel Treating, Inc. , 137 F.3d 1008, 1010-11 (7th Cir. 1998) (Easterbrook, J.) (affirming jury award of punitive damages without actual damages and apparently without nominal damages). And, under an analogous provision of the Fair Housing Act, the Third Circuit has held that punitive damages are available absent awards of actual or nominal damages. See Alexander v. Riga , 208 F.3d 419, 430-34 (3d Cir. 2000), cert. denied, 531 U.S. 1069, 121 S. Ct. 757, 148 L. Ed. 2d 660 (2001). By contrast, under the First Circuit’s rule, “punitive damages award must be vacated absent either a compensatory damages award, or a timely request for nominal damages.” Kerr-Selgas v. Am. Airlines, Inc. , 69 F.3d 1205, 1215 (1st Cir. 1995). Similarly, on the question of punitive damages under the Fair Housing Act, the Fourth and Fifth Circuits have held that punitive damages are not available absent a compensatory damages award. See Louisiana ACORN Fair Hous. v. LeBlanc , 211 F.3d 298, 303 (5th Cir. 2000) (recognizing that punitive damages are not available in absence of actual damages unless there has been a constitutional violation), cert. denied, __U.S. __ (2001); People Helpers Found., Inc. v. City of Richmond , 12 F.3d 1321, 1327 (4th Cir. 1993).

Id. at 357. Further surveying the law, the court found that there was no consensus on the common-law rule. “The requirement of actual damages has been described by commentators as the majority rule, see Prosser & Keeton on the Law of Torts § 2, at 14 (5th ed. 1984), but it has also been sharply criticized, see id ; see also Restatement (Second) of Torts § 908 cmt. (c) (1979) ( ‘[I]t is not essential to the recovery of punitive damages that the plaintiff should have suffered any harm, either pecuniary or physical.’).” Id. at 358. The court distinguished the general concerns about allowing awards of punitive damages without proof of actual harm: “In Title VII cases, however, the statutory maxima capping punitive damage awards strongly undermine the concerns that underlie the reluctance to award punitive damages without proof of actual harm.” Id. at 359. The court continued:

Furthermore, the objectives of punitive damages by definition differ from the objectives of compensatory damages. There is some unseemliness for a defendant who engages in malicious or reckless violations of legal duty to escape either the punitive or deterrent goal of punitive damages merely because either good fortune or a plaintiff’s unusual strength or resilience protected the plaintiff from suffering harm. It is often “precisely [in the cases where no actual harm is shown] that the policy of providing an incentive for plaintiffs to bring petty outrages into court comes into play.” Prosser & Keeton on Torts § 2, at 14; see also Restatement (Second) of Torts § 908 cmt. (c).

As for nominal damages, they are generally no more than symbolic. The need for such a symbol of opprobrium in the absence of compensatory damages disappears where the factfinder has signified its opprobrium by making an express award of punitive damages. And to make enforcement of the jury’s award of punitive damages turn on whether the jury also awarded purely symbolic nominal damages carries a likelihood of defeating the jury’s intention as the result of confusion.

In conclusion, in Title VII cases, we see no reason to make award of actual or nominal damages a prerequisite to the award of punitive damages. We hold that in Title VII cases, where the factfinder has found in a plaintiff’s favor that the defendant engaged in the prohibited discrimination, punitive damages may be awarded within the limits of the statutory caps if the defendant has been shown to have acted with a state of mind that makes punitive damages appropriate, regardless whether the plaintiff also receives an award of compensatory or nominal damages.

Hertzberg v. SRAM Corp.261 F.3d 651, 656 n.3 (7th Cir. 2001), cert. denied, 2002 WL 232975, 70 USLW 3395, 70 USLW 3514 (U.S., Feb. 19, 2002) (No. 01–829), affirmed the award of $20,000 in punitive damages to the Title VII sexual harassment plaintiff in a case in which no compensatory damages were awarded, and in which the awards of back pay and front pay were reversed.

2. Action Taken Pursuant to Legal Advice

Farias v. Instructional Systems, Inc.259 F.3d 91, 102 (2nd Cir. 2001), affirmed the judgment of liability on a jury verdict for Title VII retaliation plaintiff Robinson, and affirmed the denial of punitive damages. Defense counsel had advised the defendant not to offer a severance payment because the plaintiff had filed an EEOC charge. The court held that “whether or not the advice was appropriate, action taken pursuant to advice that the action is consistent with the law is insufficient to support an award of punitive damages under the standard articulated in Kolstad.

3. Other Questions of Entitlement

Cush-Crawford v. Adchem Corp.271 F.3d 352, 359, 87 FEP Cases 456, 81 E.P.D. ¶ 40,800 (2nd Cir. 2001), affirmed the judgment on a jury verdict for $100,000 in punitive damages for the Title VII hostile-environment plaintiff. The court stated:

Plaintiff testified not just that she was the victim of persistent egregious sexual harassment by a supervisor, but also that she notified company officials about the harassment as early as September 1993—just two months into her employment and over one year before Adchem took any remedial action. Adchem’s theory of the case, to be sure, was that plaintiff did not effectively notify company officials of the sexual harassment until November 1994, and that the earlier complaints had really only been complaints about other problems that were only tangentially related to plaintiff’s relationship with Collin Mars. Nonetheless, the jury could rationally have credited plaintiff’s version that, in spite of her complaints to company officials, the company did nothing to protect her from the abuse for many months.

Worth v. Tyer276 F.3d 249, 269, 87 FEP Cases 994 (7th Cir. 2001), affirmed the Title VII sexual harassment verdict for the plaintiff. The court affirmed the punitive-damages awards of $5,000 for Title VII sexual harassment, $25,000 for retaliatory discharge, and $50,000 for battery in a case involving improper touching for two days, including touching the plaintiff’s breast near the nipple and maintaining the contact for several seconds, lying to police investigators about the incident, and lying in court papers about the incident for three years and not amending the papers until 13 days before the trial.

EEOC v. Indiana Bell Telephone Co.256 F.3d 516, 526–28, 86 FEP Cases 1, 80 E.P.D. ¶ 40,590 (7th Cir. 2001) (en banc), affirmed the judgment of liability for sexual harassment, holding that the employer’s asserted reason for not taking effective action against the alleged harasser—that he would file a grievance under the collective bargaining agreement and be reinstated—was irrelevant on liability but was relevant to the issue of the employer’s state of mind with respect to a punitive damages award. The court held that its exclusion was prejudicial error, and remanded the case for a new trial on punitive damages.

Webner v. Titan Distribution, Inc., 267 F.3d 828, 837–38, 12 AD Cases 513 (8th Cir. 2001), reversed the award of $100,000 in punitive damages on the plaintiff’s ADA claim and the award of an equal amount on his State-law claim. The plaintiff had twice injured his back on the job, and been off for long periods. At the time of his termination, he was working in a different job with an accommodation that eased the strain on his back, and was meeting his production target. When his attorney filed a proceeding to require the company to allow videotaping of his work station for purposes of a workers’ compensation claim, the defendant fired the plaintiff and stated it was because of his “disability.” The court held that there was insufficient evidence of malice or reckless disregard:

Titan’s stated reasons for terminating Webner—that his back injury precluded him from performing all but light duty tasks, Titan was fearful that Webner would reinjure his back, and Titan did not have a job suited to his disability—while culpable, do not rise to the level of maliciousness required to sustain the jury’s award of punitive damages. Instead, Titan’s actions are consistent with an employer acting to protect itself against the possible sporadic absence of an employee.

Id. at 837.

Beard v. Flying J, Inc., 266 F.3d 792, 799, 87 FEP Cases 1836 (8th Cir. 2001), affirmed the award of $12,500 in punitive damages for sexual harassment because “Flying J did nothing to discipline Mr. Krout despite the fact that Mr. Snider testified that he believed the allegations of harassment made against Mr. Krout. Flying J’s management, furthermore, stated that Mr. Krout did nothing wrong, and even accused the women of conspiring to remove Mr. Krout, again despite the fact that the manager responsible for investigating the allegations thought that they were credible.”

Madison v. IBP, Inc.257 F.3d 780, 795, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001), vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985), held that the plaintiff had shown enough evidence to support an award of punitive damages by showing egregious harassment, repeated complaints, and repeated failures to act on the complaints. The court rejected the company’s argument that it was entitled to the defense for good-faith efforts to comply, inasmuch as it had adopted a policy and engaged in regular training of its managers. The court stated:

Madison presented a great deal of evidence from which the jury could find that IBP employees in a managerial capacity acted with malice or reckless disregard to her civil rights in failing to protect her from illegal conduct or to promote her. The evidence indicated that supervisors and managers were among those who harassed and abused her. High level employees such as Personnel Director Alberto Olguin and Plant Manager Larry Moser, both of whom had authority to terminate employees, ignored her complaints about illegal harassment and discrimination, failed to investigate whether her civil rights were being violated, and did not document illegal behavior or discipline perpetrators. The company’s EEO Coordinator, Bernielle Ott, was present at a mediation session at which Madison told Ott and other IBP representatives that she was being physically and verbally harassed almost daily and that she had been repeatedly denied promotions because of her sex. Neither Ott nor any other company representative took action to investigate these allegations or to ensure that Madison’s civil rights were not being violated.

IBP contends that it should escape liability for punitive damages because it made good faith efforts to comply with federal employment laws. The company presented evidence at trial that it had a corporate policy prohibiting racial and sexual discrimination and harassment, that it maintained an affirmative action plan, and that it put on an annual two hour training session for plant managers on the “Legal Aspects of Supervision.” There was also evidence, however, that the written corporate policies were not carried out at the Perry plant and that the company did not make good faith efforts to comply with federal civil rights laws.

Employers have an “affirmative obligation” to prevent civil rights violations in the workplace. . . . There was evidence that IBP did not have effective procedures in place to encourage employees to come forward with employment complaints or to protect them from retaliation. Madison and other employees complained to management on many occasions that their civil rights were being violated, but management did not take reasonable care to investigate or stop such behavior. There was evidence that Personnel Director Olguin, the manager charged with addressing employee grievances, conflicts, and disciplinary matters, did not investigate many complaints of harassment and discrimination. On at least fourteen occasions, an employee was counseled for engaging in harassing conduct, but nothing was recorded in his personnel file. Training Coordinator Mike Miller ignored Madison’s reports that male line workers were grabbing and fondling her, did nothing to discipline her harassers, and relied on an unsubstantiated report from one line worker that Madison had willingly engaged in horseplay on the line. When Madison informed Assistant Personnel Director Sue Menhusen that she was being harassed, Menhusen’s response was that many of the Hispanic males working at the plant “haven’t been in the country for very long” and “don’t take direction very well from females.” There was also evidence that IBP maintained policies which actually served to punish victims and discourage them from reporting illegal behavior, such as telling an alleged harasser the identity of a complainant and putting “counseling for sexual harassment” notations in the personnel files of any complaining employee.

Id. at 795–96 (citation omitted).

4. Vicarious Liability

Hertzberg v. SRAM Corp.261 F.3d 651, 661–62 (7th Cir. 2001), cert. denied, 2002 WL 232975, 70 USLW 3395, 70 USLW 3514 (U.S., Feb. 19, 2002) (No. 01–829), affirmed the award of $20,000 in punitive damages to the Title VII sexual harassment plaintiff, rejecting the defendant’s argument that it could not be held liable for punitive damages because the plaintiff had complained unsuccessfully to her supervisor and to the plant manager, but had not complained to the company President, the last step in the company’s internal complaint procedure. The court first described Circuit precedent applying Kolstad on the question of vicarious liability. In pertinent part, including its footnote 9, it stated:

This court applied the Kolstad standard in Bruso v. United Airlines, Inc., 239 F.3d 848 (7th Cir. 2001). In Bruso, we discussed Kolstad’s “three-part framework for determining whether an award of punitive damages is proper under the statutory standard.” 239 F.3d at 857. The first step requires the plaintiff to “demonstrate that the employer acted with the requisite mental state.” Id. However, we continued, [t]he employer need not be aware that it is engaging in discrimination. Instead, it need only act in the face of a perceived risk that its actions will violate federal law. A plaintiff may satisfy this element by demonstrating that the relevant individuals knew of or were familiar with the antidiscrimination laws and the employer’s policies for implementing those laws.

Id. at 857-58 (internal quotation marks and citations omitted). 9 Once the plaintiff has met this burden, the plaintiff “must demonstrate that the employees who discriminated against him are managerial agents acting within the scope of their employment.” Id. However, even if the plaintiff meets these burdens, “the employer may avoid liability for punitive damages if it can show that it engaged in good faith efforts to implement an antidiscrimination policy.” Id.
_________

9 Another way a plaintiff may meet this burden is “by showing that the defendant’s employees lied, either to the plaintiff or to the jury, in order to cover up their discriminatory actions.” Bruso v. United Airlines, Inc., 239 F.3d 848, 858 (7th Cir. 2001).

The court held that there was evidence that the plaintiff’s supervisor and plant manager knew about the antidiscrimination laws. Id. at 662–63. It held that Lester was not a managerial agent for purposes of punitive damages liability, because he “ had little discretion in hiring, disciplining or terminating employees that reported to him.” Id. at 663. It held that the jury could reasonably find that Plant Manager Margelos was a managerial agent because he “hired the staff for the Elk Grove Village plant, he took care of personnel issues and he had the authority to discipline and terminate the employment of those who worked for him, directly or indirectly.” Id. Finally, the court held that a reasonable jury could reject the defendant’s “good faith” defense because the plaintiff’s co-worker made over a hundred demeaning comments about women in four months, the plaintiff’s supervisor told her she was being too emotional and put his hand on her knee, and the Plant Manager failed to follow the company’s policy by failing to put the complaint in writing, and never did take meaningful action. Id. at 655, 663–64.

Swinton v. Potomac Corp., 270 F.3d 794, 810, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff was subjected to a frequent barrage of racist slurs and jokes, some of them in the presence of a member of management. The court agreed with other Circuits that “the inaction of even relatively low-level supervisors may be imputed to the employer if the supervisors are made responsible, pursuant to company policy, for receiving and acting on complaints of harassment.” Here, such an official not only listened to the racist slurs but laughed at the jokes and told some himself.

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1280, 87 FEP Cases 1209 (11th Cir. 2002), reversed the award of $50,000 in punitive damages against the Title VII and § 1981 racial and ethnic harassment defendant because the plaintiff had not complained and the defendant’s constructive knowledge of the harassment, while sufficient for liability, was not sufficient for punitive damages.

5. Good-Faith Defense

Swinton v. Potomac Corp., 270 F.3d 794, 810–11, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff prevailed on a negligence theory of liability, rather than vicarious liability, because his chief harasser, while a supervisor, was not in the chain of command over the plaintiff. As described above, the affirmative defense was not available to the defendant. The court rejected the defendant’s argument that punitive damages were inappropriate because of its “written materials forbidding harassment and putting in place anti-harassment procedures.” Id. at 810. The court seemed to treat the unavailability of the affirmative defense to liability in a harassment case as tantamount to the unavailability of a good-faith defense to punitive damages, but any such suggestion would be dictum because it also relied on the ineffectiveness of the policy:

Surely, U.S. Mat cannot claim to have implemented its anti-harassment policy in good faith (even if it were conceived in good faith) when the very employee (Stewart) charged with carrying it out vis-a-vis Swinton laughed along with the “nigger” jokes, did nothing to stop them, and never reported the repeated incidents to higher management. U.S. Mat made a considered judgment to place responsibility for reporting on an employee’s direct supervisor. It could well have required some other supervisor or manager further up the chain to be the point of contact. And it could have impressed upon its supervisors, like Stewart, whom it tasked with accepting complaints of harassment, the (we would hope) obvious point that repeatedly subjecting a black employee to “nigger” jokes is wholly unacceptable, and at odds with basic anti-discrimination principles. But it chose not to, and U.S. Mat cannot now be heard to protest that Stewart’s position was too “low-level” to warrant imputation of his actions or inaction to the company.

Id. at 811.

6. Effect of Post-Event Remediation

Swinton v. Potomac Corp., 270 F.3d 794, 811–17, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff was subjected to a frequent barrage of racist slurs and jokes, some of them in the presence of a member of management. The defendant argued that it was entitled to a new trial because the lower court had excluded evidence of one of the post-suit steps it had taken to remedy discrimination. The court stated that evidence of post-charge remediation “would not automatically bar the imposition of punitive damages,” that the trial judge acts as a gatekeeper as to the relevance of the evidence, and that the jury can decide that the evidence is either window-dressing designed to avoid an award of punitive damages, or bona fide evidence of repentance “lessening the need for additional deterrence in the form of punitive damages.” Id. at 815 (footnote omitted). In the case at bar, the trial judge allowed evidence of the post-charge investigation conducted by the company, and only barred evidence that the defendant put all of its supervisors and managers through anti-harassment training two months after the plaintiff filed suit. The court held that the trial court did not abuse its discretion in excluding this evidence and explained: “Such evidence, if introduced, would have done little, if anything, to undermine the uncontroverted evidence that, even after everyone in management became fully cognizant of Swinton’s allegations, no one—not Pat Stewart, none of those at U.S. Mat who had witnessed the harassment and had done nothing about it, and none of the workers who had actually hurled the epithet ‘nigger’ at Swinton—was ever fired, demoted, or in any way disciplined.” Id. at 816 (footnote omitted). Nor was the court persuaded that the exclusion of the evidence was prejudicial in light of the jury argument of plaintiff’s counsel, because the company did nothing in response to the harassment, because the defendant made no contemporaneous objection and the “plain error” standard was not satisfied, because the company did introduce evidence of its investigation, and because the argument actually referred to the company’s failure to take action prior to the harassment of the plaintiff. Id. at 816–17.

7. Amount

Swinton v. Potomac Corp., 270 F.3d 794, 817–22, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff was subjected to a frequent barrage of racist slurs and jokes, some of them in the presence of a member of management. The verdict affirmed by the court was for $5,612 in back pay, $30,000 in emotional-distress damages, and $1,000,000 in punitive damages. Id. at 801. The court rejected the defendant’s argument that its failure to stop the racial slurs and jokes was not reprehensible “because it was, at the end of the day, nothing more than ‘joking.’” It stated that the plaintiff made clear on the witness stand that he did not consider the language a joke. “The only African-American employee of about 140 at the U.S. Mat plant, he was subject to daily abuse featuring the word “nigger,” “perhaps the most offensive and inflammatory racial slur in English, . . . a word expressive of racial hatred and bigotry.” Merriam-Webster’s Collegiate Dictionary 784 (10th ed.1993).” Id. at 817. The court observed that the jury’s verdict did not consider it a laughing matter “and we do not hesitate before agreeing.” Id. The court also rejected the defendant’s argument that the plaintiff had not complained, because the plant official who was the company’s “proxy” for receiving complaints observed the harassment and did nothing to stop it. Id. at 817–18. The court recognized that verbal slurs and jokes are not as serious as actual violence or the threat of violence, but held that “the highly offensive language directed at Swinton, coupled by the abject failure of Potomac to combat the harassment, constitutes highly reprehensible conduct justifying a significant punitive damages award.” Id. at 818. The court combined the back pay and compensatory damages awards to obtain a total compensatory damages package of $35,600, and calculated the ratio of punitive to compensatory damages as 28 to 1. The court stated: “This is precisely the type of case posited by the Court in BMW—the low award of compensatory damages supports a higher ratio of punitive damages because of ‘particularly egregious’ acts and ‘noneconomic harm that might have been difficult to determine.’” Id. The court emphasized that plaintiff’s counsel warned the jury not to go “hog wild,” had stated that an award of ten million dollars would be wrong, and that they should be more moderate. In light of these admonitions, the court took the verdict of one million dollars as a verdict calculated to punish unlawful conduct and deter its repetition. Id. at 819. The court next turned to the magnitude of the harm, and stated:

But for Swinton’s decision that he couldn’t take it any longer and thus had to quit, nothing in the record suggests that U.S. Mat would have done anything to address a workplace replete with racial and ethnic slurs, not only about blacks, but also directed at other minorities and ethnic groups. The fact that the harm from unchecked racial harassment occurring day after day cannot be calculated with any precision does not deflate its magnitude.

Id. The court surveyed the decisions of other Circuits and held that, in light of the low compensatory award, the ratio of 28 to 1 was constitutionally permissible. Id. at 819–20. Finally, the court refused to reduce the award in light of the analogous cap on damages for Title VII violations. While the Title VII cap weighs in favor of a reduction, “we also hasten to add that Congress has not seen fit to impose any recovery caps in cases under § 1981 (or § 1983), although it has had ample opportunity to do so since the 1991 amendments to Title VII.” Id. at 820.

F. The Damages Caps in the 1991 Act

Madison v. IBP, Inc.257 F.3d 780, 804–05, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001), vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985), held that the caps on damages in the Civil Rights Act of 1991 are constitutional. However, the court refused to apply the caps to plaintiff’s § 1981 and State-law claims. Id. at 803–04. The court affirmed the lower court’s decision to allocate all of the plaintiff’s compensatory damages to her State-law claim so that they would not count under the caps. It explained:

In granting Madison’s motion for reallocation of her sex based damages, the district court observed that the verdict had not tied the question of damages to a particular statute, that the standard of liability under all three statutes was the same, and that allocation would permit Madison to recover more of the damages awarded by the jury. Appellate courts have approved the allocation of damages between state and federal claims in cases such as this where the standards of liability are the same and the jury has not been asked to distinguish between statutes in assessing damages. The D.C. Circuit concluded in a similar situation that there was no reason why the plaintiff could not recover her judgment under the local Human Rights Act, “since the local law contains the same standards of liability as Title VII but imposes no cap on damages.” Martini v. Federal National Mortgage Ass’n , 178 F.3d 1336, 1349 (D.C. Cir. 1999) The Martini court noted that the standards of liability for the plaintiff’s local and federal claims were the same, and it reasoned that if courts were not permitted “to treat damages under federal and local law as fungible where the standards of liability are the same, [it] would effectively limit the local jurisdiction’s prerogative to provide greater remedies for employment discrimination than those Congress has afforded under Title VII.” Id. at 1349–50.

The Ninth Circuit has also approved allocation of compensatory damages to a plaintiff’s state law claims where the verdict form permitted the jury to award damages on state and federal civil rights claims without specifically distinguishing them. See Passantino v. Johnson & Johnson Consumer Products, Inc. , 212 F.3d 493 (9th Cir. 2000). Since “the jury had awarded damages without differentiating between the claims, the awards were effectively fungible, and the district court’s action was entirely within its discretion and consistent with the jury’s verdict.” Id. at 509.

We find the reasoning in Martini and Passantino persuasive and consistent with federal policy. Title VII states that nothing in its provisions “shall be deemed to exempt or relieve any person from any liability, duty, penalty, or punishment provided by any present or future law of any State …” 42 U.S.C. § 2000e–7. To prohibit courts from allocating damages after a jury verdict finding liability under both federal and state law would conflict with the statutory framework of Title VII and the congressional policy to deter discrimination and harassment. See Kimzey , 107 F.3d at 576 (“no language in Title VII indicat[es] that its upper limit is to be placed on awards under state anti-discrimination statutes”). The jury in this case found for Madison on both her state and federal sexual harassment and discrimination claims, and no persuasive reason has been shown why she should be prevented from receiving her award for compensatory damages under ICRA instead of under the federal statutes. The trial court did not err in its allocation of Madison’s compensatory damages for sex based violations to her state law claims.

Id. at 801–02.

G. Fees and Expenses

Buckhannon Board and Care Home, Inc., v. West Virginia Department of Health and Human Resources, 532 U.S. 598, 11 AD Cases 1300 (2001), rejected the “catalyst” theory as a basis for entitlement to a fee award under 42 U.S.C. § 1988. The court held that obtaining relief pursuant to a court order or approval of a settlement that changes the legal relationship of the parties is essential requirement for “prevailing party” status and thus for entitlement to fees under the wording of this statute, which parallels the wording of many fee-award provisions. The court rejected as far-fetched petitioners’ argument that defendants would avoid their fee obligations by voluntarily tendering full relief, and thus mooting the action before judgment. “And petitioners’ fear of mischievous defendants only materializes in claims for equitable relief, for so long as the plaintiff has a cause of action for damages, a defendant’s change in conduct will not moot the case. Even then, it is not clear how often courts will find a case mooted: ‘It is well settled that a defendant’s voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice’ unless it is ‘absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.'” Id. at 608–09.

Farias v. Instructional Systems, Inc., 259 F.3d 91, 102–03 (2nd Cir. 2001), affirmed the judgment of liability on a jury verdict for Title VII retaliation plaintiff Robinson, affirmed the denial of punitive damages, and vacated and remanded the fee award. The lower court had awarded $37,194.97 in attorneys’ fees and costs instead of the $132,193.75 in attorney’s and paralegal fees $3,406.59 in costs that had been sought. “To arrive at that amount, the court (i) cited several grounds for reducing the number of hours reasonably expended in the litigation for purposes of calculating the lodestar, and (ii) adjusted the lodestar further downward to reflect Robinson’s limited success.” Id. at 103. The court of appeals held that the lower court’s opinion did not make clear whether it had doubly discounted plaintiffs’ fees for limited success, and remanded the award for clarification, with leave to revisit the entire award, and directed that any new appeal be resolved by the same panel.

Mota v. University of Texas Houston Health Science Center 261 F.3d 512, 530, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), held that investigation fees were recoverable under Title VII, that the costs of videotaped depositions were not recoverable, and that mediation fees were not recoverable.

Bishop v. Gainer, 272 F.3d 1009, 1020, 87 FEP Cases 920 (7th Cir. 2001), affirmed the denial of part of the attorneys’ fees sought by plaintiffs: “The district court awarded plaintiffs over $238,000 in attorneys fees and costs. He denied a request for additional fees arising out of hundreds of hours of long-distance telephone calls. He said he could not assess the reasonableness of the request because counsel refused to describe in general terms the substance of the calls. We fail to see an abuse of discretion in this decision.”

Webner v. Titan Distribution, Inc., 267 F.3d 828, 838, 12 AD Cases 513 (8th Cir. 2001), affirmed the award of attorneys’ fees. The court rejected the defendant’s argument that it was unreasonable to require it to pay for two attorneys at depositions, because the workers’ compensation and ADA issues were intertwined, and it was reasonable to have attorneys specializing in workers’ compensation and fair-employment litigation each present at the depositions. “Titan further contends that the district court should have reduced the attorneys’ fees by 50% because Iowa law does not provide for an award of attorneys’ fees in a wrongful termination case. The district court agreed in part and reduced the amount of fees Webner sought but by only 10%. The court concluded that the evidence Webner submitted was interrelated and overlapped between the two claims, therefore further reduction was not appropriate.” The court of appeals agreed, stating that the most important factor is that the plaintiff won.

H. Sanctions

Parker v. Sony Pictures Entertainment, Inc.260 F.3d 100, 111–14, 12 AD Cases 1 (2nd Cir. 2001), affirmed the grant of judgment as a matter of law to the ADA defendant but reversed the award of attorneys’ fees to the defendant. The court held that the sanction of a fee award to the defendant was improper where the plaintiff proceeded in good faith to trial, based on the same evidence that had held the court on an earlier appeal to reverse the grant of summary judgment to the defendant. There were no intervening factors that would have deprived of its good-faith character a decision to proceed to good faith on a claim previously adjudged trialworthy. The court rejected the lower court’s distinction between summary judgment and trial, to the effect that on summary judgment a defendant is required to prove a negative and at trial the plaintiff is required to prove a positive. The court cited Reeves and held that the standards for summary judgment and judgment as a matter of law were the same.

B.K.B. v. Maui Police Department276 F.3d 1091, 1106–09, 87 FEP Cases 1306 (9th Cir. 2002), modified in other respects, __ F.3d __, 2002 WL 237764 (9th Cir. Feb. 20, 2002), affirmed the award of $5,000 in attorney’s fee sanctions against both the defendant and its counsel under 28 U.S.C. § 1927 and the court’s inherent power for knowing and reckless violation of Rule 412 and having misled the court about the testimony after plaintiff’s counsel had made an anticipatory objection. The court also affirmed the sanction of $5,000 in emotional-distress damages for the plaintiff because of the emotional stress caused by the humiliation of hearing this evidence come in. The nature of the violation is discussed above in the section on Rule 412. The court held that the lower court “clearly erred in stopping short of explicitly finding that the defendant’s lawyers acted in bad faith,” and that the violation was “knowing and intentional.” Id. at 1106–07. The court held that § 1927 was satisfied because the defense counsel’s misconduct caused a mistrial and a sanctions proceeding, and thus multiplied proceedings, and because the lower court’s finding of recklessness was sufficient to support sanctions under the statute. Id. at 1107. The court stated that § 1927 sanctions could also be based on the frivolous nature of the defendant’s Rule 412 argument. Id. at 1107 n.8. Turning to the second award, the court stated: “Here, regardless of whether defense counsel’s behavior constituted bad faith per se, we readily find that counsel’s reckless and knowing conduct in this case was tantamount to bad faith and therefore sanctionable under the court’s inherent power.” Id. at 1108. The court held that the fees and emotional-distress damages assessed by the lower court were proper sanctions. Id. at 1108–09.

VIII. Special Problems Involving State and Local Governmental Employers

A. Eleventh Amendment Immunity

1. Family and Medical Leave Act

Pro: Hibbs v. Department of Human Resources, 273 F.3d 844, 7 WH Cases 2d 865 (9th Cir. 2001), cert. granted, __ U.S. __ (2009), held that the Eleventh Amendment did not bar private suits for monetary relief against State agencies under the FMLA, because the FMLA provision allowing twelve weeks of unpaid leave to care for family members was enacted in part to remedy sex discrimination in violation of the Equal Protection Clause.

Con: Kazmier v. Widmann, 225 F.3d 519, 6 WH Cases 481 (5th Cir. 2000), held that the Eleventh Amendment does bar FMLA claims against State agencies because the legislative record did not contain evidence of constitutional violations sufficient to show that the FMLA’s remedies were proportionate.

2. ADA Title II

The Ninth Circuit has held that the Eleventh Amendment does not bar a Title II ADA claim against a State agency. Hason v. Medical Board of California, 2002 WL 206414 (9th Cir. Feb. 12, 2002) (No. 00-55784).

3. Waiver

Lapides v. Board of Regents of University System of , Georgia __ U.S. __, 122 S. Ct. 1640, 18 IER Cases 961 (2002), held that the defendant waived its Eleventh Amendment immunity to suit in Federal court by removing the case from State court, where the State had previously by statute waived sovereign immunity. The Court limited its holding to State-law claims in States as to which the State had waived immunity from State-court proceedings.

IX. Special Problems with the Federal Government as Employer

Stewart v. Evans275 F.3d 1126, 1129–31, 87 FEP Cases 1298 (D.C. Cir. 2002), reversed the dismissal of the plaintiff’s Bivens claim arising from the warrantless search of her papers. The court held that such a search was not covered by the Civil Service Reform Act, so that a Bivens claim waNational Employment Law Institute
Washington, D.C.
August 1, 2002

Recent Developments in Employment Discrimination: The Year in Review

By Richard T. Seymour*

Click here to download a PDF version of this paper

* Law Office of Richard T. Seymour, P.L.L.C., 1150 Connecticut Avenue N.W., Suite 900, Washington, D.C. 20036-4129. Telephone: 202-862-4320. Cell: 202-549-1454. Facsimile: 800-805-1065. E-mail: [email protected]. Some of the information in this paper is used with permission from an upcoming edition of Richard T. Seymour and John F. Aslin, Equal Employment Law Update (Bureau of National Affairs, Washington, D.C., 2006), copyright © American Bar Association, 2006. For copies, contact BNA at 1-800-960-1220; members of the Labor and Employment Law Section are entitled to a 25% discount as a benefit of Section membership. Mention priority code EQL in order to receive the discount.

Fuller versions of this paper will be updated at various times during the year, and updates can be downloaded from www.rickseymourlaw.com. Many of my other CLE papers are also downloadable from this site.

Table of Contents

Table of Cases

1. Decided Cases

Advest Inc. v. McCarthy,

914 F.2d 6 (1st Cir. 1990)

Alexander v. Riga,

208 F.3d 419 (3d Cir. 2000), cert. denied, 531 U.S. 1069 (2001)

Allison v. Citgo Petroleum Corp.,

151 F.3d 402 (5th Cir. 1998)

Arellano v. Household Finance Corp. III,

2002 WL 221604 (N.D. Ill. Feb. 13, 2002)

Atonio v. Wards Cove Packing Co., Inc.,

275 F.3d 797, 87 FEP Cases 1037 (9th Cir. 2001)

B.K.B. v. Maui Police Department,

276 F.3d 1091, 87 FEP Cases 1306 (9th Cir. 2002), modified in other respects,__ F.3d __, 2002 WL 237764 (9th Cir. Feb. 20, 2002)

Bailey v. Ameriquest Mortgage Co.,

2002 WL 100391 (D. Minn. Jan. 23, 2002)

Bazemore v. Friday,

478 U.S. 385 (1986)

Beard v. Flying J, Inc.,

266 F.3d 792, 87 FEP Cases 1836 (8th Cir. 2001)

In re Bemis Co., Inc.,

279 F.3d 419, 87 FEP Cases 1500 (7th Cir. 2002)

Bennington v. Caterpillar Inc.,

275 F.3d 654, 87 FEP Cases 1050 (7th Cir. 2001)

Bishop v. Gainer,

272 F.3d 1009, 87 FEP Cases 920 (7th Cir. 2001)

Brooks v. City of San Mateo,

229 F.3d 917 (9th Cir. 2000)

Brown v. Coleman Co., Inc.,

220 F.3d 1180, 16 IER Cases 966 (10th Cir. 2000),cert. denied, 531 U.S. 1192 (2001)

Bruso v. United Airlines, Inc.,

239 F.3d 848 (7th Cir. 2001)

Buckhannon Board and Care Home, Inc., v. West Virginia Department of
……….. Health and Human Resources,

530 U.S. 1304, 121 S. Ct. 1835, 11 AD Cases 1300 (2001)

Bull HN Information Systems, Inc. v. Hutson,

229 F.3d 321 (1st Cir. 2000)

Cardenas v. Massey,

269 F.3d 251, 87 FEP Cases 19 (3rd Cir. 2001)

Cassara v. DAC Services, Inc.,

276 F.3d 1210 (10th Cir. 2002)

Celestine v. Petroleos de Venezuella SA,

266 F.3d 343, 86 FEP Cases 1462, 81 E.P.D. ¶ 40,799 (5th Cir. 2001)

Circuit City Stores, Inc. v. Adams,

279 F.3d 889, 87 FEP Cases 1509 (9th Cir. 2002)

Circuit City Stores, Inc. v. Adams,

532 U.S. 105, 121 S. Ct. 1302, 149 L. Ed. 2d 234, 85 FEP Cases 266,17 IER Cases 545, 79 E.P.D. ¶ 40,401 (2001)

Chevron U.S.A. Inc. v. Echazabal,

__ U.S. __, 122 S. Ct. 2045, 13 AD Cases 97 (2002)

Cole v. Burns International Security Services,

105 F.3d 1465, 72 FEP Cases 1775 (D.C. Cir. 1997)

Collins v. NTN-Bower Corp.,

272 F.3d 1006, 7 WH Cases 2d 895, 81 E.P.D. ¶ 40,831 (7th Cir. 2001)

Conto v. Concord Hospital, Inc.,

265 F.3d 79 (1st Cir. 2001)

Cortez Byrd Chips, Inc. v. Harbert Construction Co.,

529 U.S. 193 (2000)

Costa v. Desert Palace, Inc.,

268 F.3d 882, 86 FEP Cases 1456, 81 E.P.D. ¶ 40,723 (9th Cir. 2001)

Craik v. Minn. State University Bd.,

731 F.2d 465 (8th Cir.1984)

Culver v. City of Milwaukee,

277 F.3d 908 (7th Cir. 2002)

Cush-Crawford v. Adchem Corp.,

271 F.3d 352, 87 FEP Cases 456, 81 E.P.D. ¶ 40,800 (2nd Cir. 2001)

Davis v. Coastal International Security, Inc.,

275 F.3d 1119, 87 FEP Cases 1263 (D.C. Cir. 2002)

Dawahare v. Spencer,

210 F.3d 666 (6th Cir.), cert. denied, 531 U.S. 878 (2000)

Dawavendewa v. Salt River Project Agricultural. Improvement and Power District,

276 F.3d 1150, 87 FEP Cases 1106 (9th Cir. 2002)

Dent v. Kaufman,

185 W.Va. 171, 406 S.E.2d 68 (1991)

Devlin v. Scardelletti,

__ U.S. __, 122 S. Ct. 2005 (2002)

DiRussa v. Dean Witter Reynolds Inc.,

121 F.3d 818, 74 FEP Cases 726 (2d Cir. 1997), cert. denied, 522 U.S. 1049 (1998)

Doll v. Brown,

75 F.3d 1200, 5 AD Cases 369 (7th Cir. 1996)

Duty v. Norton-Alcoa Proppants, __ F.3d __, 7 WH Cases 2d 1537,

2002 WL 1312197 (8th Cir. June 18, 2002)

Eastern Associated Coal Corp. v. United Mine Workers of America, District 17,

531 U.S. 57, 16 IER Cases (2000), arose

Edelman v. Lynchburg College,

__ U.S. __, 122 S. Ct. 1145, 88 FEP Cases 321 (2002)

EEOC v. Goodyear Aerospace Corp.,

813 F.2d 1539, 43 FEP Cases 875 (9th Cir. 1987)

EEOC v. Indiana Bell Telephone Co.,

256 F.3d 516, 86 FEP Cases 1, 80 E.P.D. ¶ 40,590 (7th Cir. 2001)

EEOC v. U. S. Steel Corp.,

921 F.2d 489 (CA3 1990)

EEOC v. University of Chicago Hospitals,

…….. 276 F.3d 326, 87 FEP Cases 1089 (7th Cir. 2002)

EEOC v. Waffle House,

193 F.3d 805 (4th Cir. 1999), rev’d, __ U.S. __, 122 S. Ct. 754, 12 AD Cases 1001 (2002)

EEOC v. Waffle House, Inc.,

__ U.S. __, 122 S. Ct. 754, 12 AD Cases 1001 (2002)

In re Exxon Valdez,

270 F.3d 1215 (9th Cir. 2001)

Farias v. Instructional Systems, Inc.,

259 F.3d 91 (2nd Cir. 2001)

Federated Department Stores, Inc. v. J.V.B. Industries, Inc.,

894 F.2d 862 (6th Cir. 1990)

Ferris v. Delta Air Lines, Inc.,

277 F.3d 128, 87 FEP Cases 899 (2nd Cir. 2001)

Fierros v. Texas Department of Health,

274 F.3d 187, 87 FEP Cases 503 (5th Cir. 2001)

First Options of Chicago, Inc., v. Kaplan,

514 U.S. 938 (1995)

Ford Motor Co. v. EEOC,

458 U.S. 219 (1982)

Frazier v. Fairhaven School Committee,

276 F.3d 52 (1st Cir. 2002)

Frazier v. Iowa Beef Processors, Inc.,

200 F.3d 1190 (8th Cir. 2000)

Friend v. Ancillia Systems, Inc.,

68 F. Supp. 2d 969 (N.D. Ill. 1999)

Gawley v. Indiana University,

276 F.3d 301, 87 FEP Cases 1116 (7th Cir. 2001)

Gianelli Money Purchase Plan and Trust v. ADM Investor Services, Inc.,

d 1309 (11th Cir.), cert. denied, 525 U.S. 1016 (1998)

Goodwin v. General Motors Corp.,

275 F.3d 1005, 87 FEP Cases 1651 (10th Cir. 2002)

__ U.S. __, 122 S. Ct. 2097, 13 AD Cases 193 (2002)

Great Western Mortgage Corporation v. Peacock,

110 F.3d 222, 73 FEP Cases 856 (3d Cir. 1997), cert. denied, 522 U.S. 915 (1997)

Green v. Ameritech Corp.,

200 F.3d 967, 81 FEP Cases 993 (6th Cir. 2000)

Greenberg v. Bear, Stearns & Co.,

220 F.3d 22 (2d Cir. 2000), cert. denied, 531 U.S. 1075 (2001)

Griffin v. Steeltek, Inc.,

261 F.3d 1026, 12 AD Cases 248 (10th Cir. 2001)

Hakim v. Payco-General American Credits, Inc.,

272 F.3d 932, 87 FEP Cases 555 (7th Cir. 2001)

Hall v. Bodine Electric Co.,

276 F.3d 345, 87 FEP Cases 1240 (7th Cir. 2002)

Halligan v. Piper Jaffray, Inc.,

148 F.3d 197, 77 FEP Cases 182 (2d Cir. 1998),cert. denied, 526 U.S. 1034 (1999)

Hart Surgical, Inc. v. Ultracision, Inc.,

244 F.3d 231 (1st Cir. 2001)

Hartman v. Lisle Park District

158 F. Supp. 2d 869 (N.D. Ill. 2001)

Health Services Management Corp. v. Hughes,

975 F.2d 1253 (7th Cir.1992)

Hertzberg v. SRAM Corp.,

261 F.3d 651 (7th Cir. 2001), cert. denied, 2002 WL 232975,70 USLW 3395, 70 USLW 3514 (U.S., Feb. 19, 2002)

Hibbs v. Department of Human Resources,

273 F.3d 844, 7 WH Cases 2d 865 (9th Cir. 2001)

Hoffman Plastics Compounds, Inc. v. N.L.R.B.,

__ U.S. __, 122 S. Ct. 1275,169 L.R.R.M. (BNA) 2769 (2002)

Hooters of America, Inc. v. Phillips,

173 F.3d 933, 79 FEP Cases 629, 75 E.P.D. ¶ 45,822 (4th Cir. 1999)

Hutton v. Elf Atochem North America, Inc.,

273 F.3d 884, 12 AD Cases 909 (9th Cir. 2001)

Jackson v. Arkansas Department of Education,

272 F.3d 1020, 87 FEP Cases 888 (8th Cir. 2001)

Johnson v. Cadillac Plastic Group, Inc.,

930 F. Supp. 1437 (D. Colo. 1996)

Johnson v. Federal Express Corp.,

147 F. Supp. 2d 1268 (M.D. Ala. 2001)

Johnson v. ITT Aerospace/Communications Division of ITT Industries, Inc.,

272 F.3d 498, 87 FEP Cases 553 (7th Cir. 2001)

Kazmier v. Widmann,

225 F.3d 519, 6 WH Cases 481 (5th Cir. 2000)

Kerr-Selgas v. America Airlines, Inc.,

69 F.3d 1205 (1st Cir. 1995)

Kiernan v. Piper Jaffray Companies,

137 F.3d 588, 7 AD Cases 1499 (8th Cir.1998)

Kimzey v. Wal-Mart Stores, Inc.,

107 F.3d 568, 73 FEP Cases 87, 69 E.P.D. ¶ 44,503 (8th Cir. 1997)

Kolstad v. American Dental Association,

527 U.S. 526, 79 FEP Cases 1697 (1999)

Lamb v. Household Services,

956 F. Supp. 1511 (N.D. Calif. 1997) 30, 31

Lapides v. Board of Regents of University System of Georgia,

__ U.S. __, 122 S. Ct. 1640, 18 IER Cases 961 (2002)

Legion Insurance Co. v. VCW, Inc.,

198 F.3d 718 (8th Cir. 1999)

Longstreet v. Illinois Department of Corrections,

276 F.3d 379, 87 FEP Cases 1375 (7th Cir. 2002)

Louisiana ACORN Fair Housing v. LeBlanc,

211 F.3d 298 (5th Cir. 2000), cert. denied, 532 U.S. 904 (2001)

Madison v. IBP, Inc.,

257 F.3d 780, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001),vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985)

Markel v. Board of Regents of University of Wisconsin System,

276 F.3d 906, 87 FEP Cases 1131 (7th Cir. 2002)

Martini v. Federal National Mortgage Association,

178 F.3d 1336 (D.C. Cir. 1999), cert. dismissed, 528 U.S. 1147 (2000)

Marzek v. Mori Milk & Ice Cream Co.,

2002 WL 226761 (N.D. Ill. Feb. 13, 2002)

Mathis v. Phillips Chevrolet, Inc.,

269 F.3d 771, 87 FEP Cases 219, 81 E.P.D. ¶ 40,807 (7th Cir. 2001)

McCowan v. All Star Maintenance, Inc.,

273 F.3d 917, 87 FEP Cases 596 (10th Cir. 2001)

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.,

273 F.3d 30, 87 FEP Cases 673 (1st Cir. 2001)

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker,

808 F.2d 930 (2d Cir. 1986)

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros,

70 F.3d 418 (6th Cir. 1995)

Messing, Rudavsky & Weliky, P.C. v. President and Fellows of Harvard College,

436 Mass. 347, 2002 WL 415540 (Mass. 2002)

Miller v. Kenworth of Dothan, Inc.,

277 F.3d 1269, 87 FEP Cases 1209 (11th Cir. 2002)

Montes v. Shearson Lehman Brothers, Inc.,

128 F.3d 1456, 4 WH Cases 2d 385 (11th Cir. 1997)

Mota v. University of Texas Houston Health Science Center,

261 F.3d 512, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001)

National R.R. Passenger Corp. v. Morgan,

536 U.S. __, 122 S. Ct. 2061, 88 FEP Cases 1601 (2002)

New England Health Care Employees Union, District 1199, SEIU,

……….. AFL-CIO v. Rhode Island Legal Services,
273 F.3d 425, 168 L.R.R.M. 2961 (1st Cir. 2001)

Newman v. Federal Express Corp.,

266 F.3d 401, 86 FEP Cases 1375 (6th Cir. 2001)

Niesig v. Team I,

76 N.Y.2d 363, 559 N.Y.S.2d 493, 558 N.E.2d 1030 (1990)

Occidental Life Ins. Co. of Cal. v. EEOC,

432 U.S. 355 (1977)

Parker v. Sony Pictures Entertainment, Inc.,

260 F.3d 100, 12 AD Cases 1 (2nd Cir. 2001) 12, 90

Passantino v. Johnson & Johnson Consumer Products, Inc.,

212 F.3d 493 (9th Cir. 2000)

Patt v. Family Health Systems, Inc.,

280 F.3d 749 (7th Cir. 2002)

Patton v. Indianapolis Public School Board,

276 F.3d 334, 87 FEP Cases 1433 (7th Cir. 2002)

People Helpers Foundation, Inc. v. City of Richmond,

12 F.3d 1321 (4th Cir. 1993)

Pike v. Freeman,

266 F.3d 78 (2d Cir. 2001)

Pipkins v. City of Temple Terrace,

267 F.3d 1197, 86 FEP Cases 1413, 81 E.P.D. ¶ 40,820 (11th Cir. 2001)

Price Waterhouse v. Hopkins,

490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268 (1989)

Providence Journal Co. v. Providence Newspaper Guild,

271 F.3d 16, 168 L.R.R.M. 2804 (1st Cir. 2001)

Quick v. Donaldson Co.,

90 F.3d 1372 (8th Cir.1996)

Ragsdale v. Wolverine World Wide, Inc.,

535 U.S. __, 122 S. Ct. 1155, 7 Wage & Hour Cas.2d (BNA) 1153 (2002)

Raygor v. Regents of the University of Minnesota,

__ U.S. __122 S. Ct. 999, 88 FEP Cases 6 (2002)

Reeves v. Sanderson Plumbing Products, Inc.,

530 U.S. 133, 82 FEP Cases 1748, 78 E.P.D. ¶ 40,045 (2000)

Robinson v. Metro-North Commuter R.R. Co.,

267 F.3d 147, 86 FEP Cases 1580 (2d Cir. 2001),cert. denied122 S. Ct. 1349, 152 L. Ed. 2d 251 (2002)

Schoffstall v. Henderson,

223 F.3d 818, 84 FEP Cases 1411, 79 E.P.D. ¶ 40,335 (8th Cir. 2000)

Sheldon v. Vermonty,

269 F.3d 1202 (10th Cir. 2001)

Sledge v. Goodyear Dunlop Tires North America, Ltd.,

75 F.3d 1014, 87 FEP Cases 823, 81 E.P.D. ¶ 40,828 (11th Cir. 2001)

Smith v. Texaco, Inc.,

263 F.3d 394, 86 FEP Cases 1619, 81 E.P.D. ¶ 40,718 (5th Cir. 2001),

vacated, Smith v. Texaco, Inc.,

281 F.3d 477, 88 FEP Cases 51(5th Cir. 2002)

Stewart v. Evans,

275 F.3d 1126, 87 FEP Cases 1298 (D.C. Cir. 2002)

Stone v. Indianapolis Public Utilities Division,

281 F.3d 640, 88 FEP Cases 162 (7th Cir. 2002)

Stout v. Potter,

276 F.3d 1118, 87 FEP Cases 1255 (9th Cir. 2002)

Succar v. Dade County School Board,

229 F.3d 1343 (11th Cir.2000)

Swenson v. Potter,

271 F.3d 1184, 87 FEP Cases 620, 81 E.P.D. ¶ 40,821 (9th Cir. 2001)

Swierkiewicz v. Sorema N.A.,

__ U.S. __, 122 S. Ct. 992, 88 FEP Cases 1 (2002)

Swinton v. Potomac Corp.,

270 F.3d 794, 87 FEP Cases 65 (9th Cir. 2001)

Teamsters Local 312 v. Matlack, Inc.,

118 F.3d 985, 155 L.R.R.M. 2738 (3d Cir. 1997)

Thiessen v. General Electric Capital Corp.,

267 F.3d 1095 (10th Cir. 2001), cert. denied,2002 WL 1306877, 70 USLW 3775 (U.S., June 17, 2002) (No. 01–881)

Timm v. Progressive Steel Treating, Inc.,

137 F.3d 1008, 76 FEP Cases 321, 72 E.P.D. ¶ 45,232 (7th Cir. 1998)

Ting v. AT&T,

182 F. Supp. 2d 902 (N.D. Calif. 2002)

Torres v. Pisano,

116 F.3d 625, 73 FEP Cases 1771 (2d Cir. 1997)

Toyota Motor Manufacturing, Kentucky, Inc. v. Williams,

534 U.S. 184, 122 S. Ct. 681, 151 L. Ed. 2d 615, 12 AD Cases 993 (2002)

United Paperworkers International Union v. Misco, Inc.,

484 U.S. 29, 126 LRRM 3113 (1987)

United States v. Arvizu,

__ U.S. __, 122 S. Ct. 744 (2002)

United Steelworkers v. Enterprise Wheel & Car Corp.,

363 U.S. 593 (1960)

U.S. Airways, Inc., v. Barnett,

__ U.S. __, 122 S. Ct. 1516, 12 AD Cases 1729 (2002)

W.R. Grace & Co. v. Rubber Workers,

461 U.S. 757, 26 FEP Cases 713, 107 LRRM 3251, 26 E.P.D. ¶ 32,024 (1983)

Waddell v. Valley Forge Dental Associates, Inc.,

276 F.3d 1275, 12 AD Cases 1029 (11th Cir. 2001)

Webner v. Titan Distribution, Inc.,

267 F.3d 828, 12 AD Cases 513 (8th Cir. 2001)

Weeks v. New York State (Division of Parole),

273 F.3d 76, 87 FEP Cases 161, 81 E.P.D. ¶ 40,822 (2nd Cir. 2001)

Westvaco Corp. v. United Paperworkers International Union,

171 F.3d 971, 79 FEP Cases 595 (4th Cir. 1999)

Williams v. Cigna Financial Advisors Inc.,

197 F.3d 752, 81 FEP Cases 747, 77 E.P.D. ¶ 46,359 ( 5th Cir. 1999),cert. denied, 529 U.S. 1099 (2000)

Williams v. Saint Luke’s-Shawnee Mission Health System, Inc.,

276 F.3d 1057, 87 FEP Cases 1473 (8th Cir. 2002)

Windham v. Time Warner, Inc.,

275 F.3d 179, 87 FEP Cases 843 (2nd Cir. 2001)

Woods v. Delta Beverage Group, Inc.,

274 F.3d 295, 87 FEP Cases 737, 81 E.P.D. ¶ 40,833 (5th Cir. 2001)

Worth v. Tyer,

276 F.3d 249, 87 FEP Cases 994 (7th Cir. 2001)

Wright v. Group Health Hospital,

103 Wash.2d 192, 196, 691 P.2d 564 (1984)

Zapata-Matos v. Reckitt & Colman, Inc.,

277 F.3d 40, 87 FEP Cases 1409 (1st Cir. 2002)

Zubi v. AT&T Corp.,

219 F.3d 220, 83 FEP Cases 417, 79 E.P.D. ¶ 40,260 (3d Cir. 2000)

2. Docketed Case

Adams v. Florida Power Corp.,

No. 01-584, cert. dismissed as improvidently granted (2002)

I. The Statistics

The number of new employment discrimination cases filed in Federal district courts in 2001 remained stable from the year before:

  • New EEO Cases Filed in 2000: 21,111
  • New EEO Cases Filed in 2001: 21,062

EEO cases remained a high proportion of civil filings, but the 18,309 Federal-question EEO cases were an even higher proportion of Federal-question filings:

  • EEO Cases in 2001, as % of All Civil Cases: 8.1%, or one out of every 12.3 civil cases Federal-question EEO cases in 2001, 12.2%, or one out of every 8.1 Federal-as % of all Federal-question civil cases: question civil cases

The number of EEO cases initially filed as class actions declined a little from 2000, but the striking factor is that the number of FLSA collective actions surpassed the number of EEO class actions:

  • New EEO Class Action Filings in 2000: 89
  • New EEO Class Action Filings in 2001: 77
  • New FLSA Collective-Action Filings in 2000: 71
  • New FLSA Collective-Action Filings in 2001: 79

804 Federal-question employment appeals were decided after oral argument. This is 21.5% of all Federal-question arguments, the cases most likely to result in published opinions. 842 were decided on the briefs, without oral argument. 1,246 cases were decided procedurally.

II. The Federal Fair-Employment Agencies: Ill Winds Are Blowing

A. The Labor Department

The Secretary of Labor spoke at the Section of Labor and Employment Law luncheon in Chicago in August 2001. In the course of the luncheon, she described her perception that the primary focus of the Labor Department’s work should be helping employers understand how to comply with the laws and regulations enforced by the Department. She has since announced an overall 20% reduction in enforcement actions.

The goal of helping employers understand how to comply is worthy, but there are still employers who have no interest in voluntary compliance. The job of the Department of Labor is to enforce their compliance. If it does that job well, more of these retrograde employers will be interested in avoiding enforcement actions through complying. When the government announces a goal of reducing enforcement across the board, its announcement will inevitably be read by retrograde employers as a safe harbor for noncompliance. Noncompliance will increase and, to the extent that compliance costs money, retrograde employers will have a cost advantage over the many employers that do try to comply with the laws enforced by the Labor Department.

B. The Justice Department

In a throwback to the Reagan Administration, the Justice Department has not been filing disparate-impact cases. In a meeting with civil rights groups, senior Civil Rights Division officials expressed a disinterest in such cases. Relatively few plaintiffs’ attorneys have the training and experience to handle such cases, and the virtual withdrawal of the Civil Rights Division from this field will leave an important void.

The Justice Department’s amicus brief in National R.R. Passenger Corp. v. Morgan, 536 U.S. __, 122 S. Ct. 2061, 88 FEP Cases 1601 (2002), argued that the two-years-before-the-charge limit on back pay in §706(g) of Title VII applies only to cases brought by the government, and that private plaintiffs are not entitled to assert continuing violations.

C. The EEOC

The EEOC’s position in the Waffle House case was quite strong, and quite successful. At the same time, there are other things that are not so good.

Over the past year, there were two unfortunate “firsts” for the agency. In past years, the EEOC has routinely filed excellent amicus briefs in the Supreme Court in defense of its regulations and its construction of the laws it enforces. However, it failed to give a strong recommendation to the Solicitor General that a brief be filed in support of the EEOC’s position that the ADEA covers disparate-impact claims, and Adams v. Florida Power Corp., No. 01–584, cert. dismissed as improvidently granted (2002), could have gone to decision without any contribution by the EEOC.

The EEOC also entered into a consent decree in Texas on behalf of a group of employees that included the waiver of claims under statutes the EEOC does not enforce.

Over the thirty years that I have been following the EEOC, the pendulum has shifted back and forth between tight control of local offices by headquarters stifling local initiative and allowing substantial room for local initiative with little control by headquarters. The last Bush Administration ended with their continuation of tight control, and the Clinton Administration placed heavy emphasis on local initiative. Somewhere in the middle might be right, but the national office badly needs to assert more control over the process.

Based on the calls and messages I’ve received from plaintiffs’ attorneys across the country over the last year, some investigators in local offices of the EEOC are refusing to accept charges of discrimination on a variety of grounds: that the charge involves credibility of witnesses, that the charging party is unable to provide a list of comparators, that the charging party cannot prove at the outset the falsity of the employer’s stated reasons for the employment action in question. More commonly, I have been hearing that investigators are increasingly refusing to allow charging parties to respond to the employer’s position statements with additional documents or witnesses showing that the employer’s explanation is false.

For twenty-five years, through both Democratic and Republican administrations, the EEOC has failed to set forth clear performance criteria for its employees, to train them to meet those criteria, and to return to the private sector those who cannot or will not meet performance criteria. This remains a pressing need, and it is every bit as important as increased funding.

III. Legislative and Regulatory Action, and Related Judicial Action

A. The Definition of “Applicant” for Purposes of the Uniform Guidelines
on Employee Selection Procedures, 29 C.F.R. §§ 1607.1 et seq.

The EEOC, Department of Labor, and Department of Justice are working on proposals for the definition of an “applicant” taking into account the ability of employers to receive and screen large numbers of resumés electronically. The resolution of the issue will affect employers’ legal obligation to maintain records of the identity of applicants and whether any of their selection standards have a disproportionately adverse effect on any of the groups protected by Title VII. Employers using Internet resumé data banks, or which receive large numbers of unsolicited applications by fax or e-mail, argue that the persons they screen should not be considered applicants. Plaintiffs and civil rights organizations argue that the failure to consider the persons being screened as applicants would result in the inability to challenge screening standards that could have a devastating exclusionary effect on blacks, Hispanics, Asians, women, or other protected groups. This issue arose during the Clinton Administration, which was unable to resolve it before leaving office.

B. The Fair Credit Reporting Act

The staff of the Federal Trade Commission have construed the FCRA, 15 U.S.C. §§ 1681 et seq., as barring unconsented outside investigations of employee misconduct by any person or entity that regularly performs such investigations, where the investigation can affect the continued employment of the person being investigated. The FTC staff considers reports of such investigations to be “investigative consumer reports” within the meaning of the FCRA. If the staff interpretation is correct, employers relying on qualified outside investigators—often the only investigative entities that will have credibility within the workforce—have to give any target of the investigation veto power over the investigation, and have to turn over the complete investigative file to the target, on pain of uncapped damages. 15 U.S.C. § 1681(d). Consumer credit reporting agencies, including investigative agencies if the FTC staff interpretation prevails, must have reasonable procedures to ensure the accuracy of reports and can be sued for damages if they lack such procedures and injure the plaintiff through an inaccurate report. Cassara v. DAC Services, Inc., 276 F.3d 1210 (10th Cir. 2002).

Legislative efforts to amend the FCRA to cure the problem have foundered between employers’ desire to be excluded from the investigative-consumer-report provisions altogether, and the desires of consumer and privacy groups, the AFL-CIO, and some civil rights organizations regulate such investigations so as to ensure some notice and fairness to the person being investigated. I spent a very painful year unsuccessfully trying to work out these conflicting interests.

There have been some judicial developments. Hartman v. Lisle Park District158 F. Supp. 2d 869, 876 (N.D. Ill. 2001), a First Amendment retaliation case in which a law firm performed an investigation on behalf of the employer, held that the FTC staff opinion letters “are entitled to respect but not deference.” The court continued:

After careful consideration of the arguments contained in the letters, we find them unpersuasive and we reject their construction of the statute. There is nothing in the FCRA or its history that indicates that Congress intended to abrogate the attorney-client or work-product privileges, as would be the effect of applying the FCRA’s requirements (which include disclosure of the report) to reports of the type at issue in this case. Moreover, we think that a report prepared by an attorney about an employee’s transactions or experiences with the attorney’s client (the employer) qualifies as a “report containing information solely as to transactions or experiences between the consumer and the person making the report” within the meaning of § 1681a(d)(2)(A)(i), even though the report is prepared by an entity other than the employer. Accord, Friend v. Ancillia Systems Inc., 68 F.Supp.2d 969, 974 (N.D. Ill. 1999). An attorney is the agent of his client . . . and the client is bound by the attorney’s acts and statements made within the scope of their relationship. . . . Thus an attorney is not a “third party” in the same way that a credit bureau or a detective agency would be in this context. Unlike those types of contract workers, the attorney has a relationship of trust, confidence, and confidentiality with his client and owes the client a duty of loyalty that among other things precludes the attorney from taking on engagements that would give rise to a conflict with the client’s interests. . . . Indeed, the attorney’s duty to the client survives, to some extent, the end of their relationship. . . . When an attorney conducts for an employer/client an investigation of an employee’s dealings with the employer, he is acting as the client, just as would be the case if the employer had one of its employees conduct the investigation. This is qualitatively different from the situation that exists when an employer contracts with an outside entity lacking a fiduciary and agency relationship like that of attorney and client.

Id. at 876–77 (citations omitted). A forensic document examiner who was hired to perform handwriting analyses of employees’ handwriting in order to determine which employee was threatening supervisors was held not to be covered by the FCRA because he relied on information provided by the employees and on his own knowledge, not on information provided by third parties. Johnson v. Federal Express Corp., 147 F. Supp. 2d 1268, 1274–75 (M.D. Ala. 2001), stated:

The FCRA’s legislative history makes clear that the “transactions or experiences” provision exempts any report based on the reporter’s first-hand experience of the subject, i.e., the handwriting. Indeed, the bill was targeted mainly at insuring the accuracy of information furnished by third parties to credit reporters. See 142 CONG. REC. S. 11868–01, 11869–70 (Sept. 30, 1996) (Sen. Ford). Thus, within the banking industry, for example, the Act’s coverage does not extend to first-hand “information about an individual with whom [the reporters] have had direct financial transactions.” 1970 U.S.C.C.A.N. at 4414.

In applying the 1681a(d)(2)(A)(i) exception, the Fifth Circuit has held that a worker’s urinalysis, authorized by the employer and performed by an outside chemist, fell within the exclusion because the test result derived from “first- hand experience in performing the tests on the urine sample, not on information gathered from outside sources.” . . . The Eleventh Circuit and other courts have reached similar conclusions. . . .

C. ABA Model Rule 4.2: With Which Employees Can a Plaintiff’s Lawyer Speak?

While many States have adopted ABA Model Rule 4.2, which governs communications by counsel with someone of adverse interest known to be represented by counsel, there is enormous variation in the construction of the rule. State and Federal trial courts in Massachusetts, for example, have construed Rule 4.2 as meaning that all employees, from the CEO right down to the janitor, are “represented” by defense counsel and are off limits to plaintiffs’ counsel absent the consent of defense counsel or a grant of permission by the court or administrative agency with jurisdiction over the dispute. Such consent was typically denied by defense counsel, unless they sat in on the interviews. The courts and the Massachusetts Commission Against Discrimination have denied permission. Plaintiffs’ attorneys could not investigate a case, as required by Rule 11 in Federal courts, without doing so in a fishbowl. Defense counsel were under no such constraint. The fiction that defense counsel represent all employees is even thinner than the fiction that law school graduates working for accounting firms are not practicing law as long as they do not draft documents. Such “representation,” for example, did not require defense counsel to obtain the consent of all employees before defending a claim by a present or former employee.

On March 20, 2002,the Supreme Judicial Court of Massachusetts rejected this extraordinary interpretation of Rule 4.2, and reversed a $ 94,418.14 sanction against plaintiff’s counsel. Messing, Rudavsky & Weliky, P.C. v. President and Fellows of Harvard College, 436 Mass. 347, 2002 WL 415540 (Mass. 2002). The court rejected a broad reading of the comment to Model Rule 4.2 barring contact with a represented person by an attorney for a person of adverse interest where the statements of the represented person may constitute an admission of the organization. It surveyed the varying approaches taken by numerous courts, and stated:

d. Our interpretation of rule 4.2. We adopt a test similar to that proposed in Niesig v. Team I, supra. Although the comment’s reference to persons “whose statement may constitute an admission on the part of the organization” was most likely intended as a reference to Fed. R. Evid. 801(d)(2)(D), this interpretation would effectively prohibit the questioning of all employees who can offer information helpful to the litigation. We reject the comment as overly protective of the organization and too restrictive of an opposing attorney’s ability to contact and interview employees of an adversary organization.

We instead interpret the rule to ban contact only with those employees who have the authority to “commit the organization to a position regarding the subject matter of representation.” See Johnson v. Cadillac Plastic Group, Inc., 930 F. Supp. 1437, 1442 (D. Colo.1996); Restatement (Third) of Law Governing Lawyerssupra at § 100 comment e. See also Ethics 2000 Commission Draft for Public Comment Model Rule 4.2 Reporter’s Explanation of Changes (Feb. 21, 2000) (recommending deletion of the third category of the comment). The employees with whom contact is prohibited are those with “speaking authority” for the corporation who “have managing authority sufficient to give them the right to speak for, and bind, the corporation.” . . . Employees who can commit the organization are those with authority to make decisions about the course of the litigation, such as when to initiate suit, and when to settle a pending case. See Restatement (Third) of the Law Governing Lawyers supra at § 100 comment e, at 93 (employees who have the power to make binding evidentiary admissions are “analogous to … person[s] who possess[ ] power to settle a dispute on behalf of the organization”). We recognize that this test is a retrenchment from the broad prohibition on employee contact endorsed by the comment.

This interpretation, when read in conjunction with the other two categories of the comment, would prohibit ex parte contact only with those employees who exercise managerial responsibility in the matter, who are alleged to have committed the wrongful acts at issue in the litigation, or who have authority on behalf of the corporation to make decisions about the course of the litigation. This result is substantially the same as the Niesig test because it “prohibit[s] direct communication … ‘with those officials … who have the legal power to bind the corporation in the matter or who are responsible for implementing the advice of the corporation’s lawyer … or whose own interests are directly at stake in a representation.” Niesig v. Team I, supra at 374, 559 N.Y.S.2d 493, 558 N.E.2d 1030, quoting C. Wolfram, Modern Legal Ethics § 11.6, at 613 (1986).

Our test is consistent with the purposes of the rule, which are not to “protect a corporate party from the revelation of prejudicial facts,” Dent v. Kaufman, supra at 175, 406 S.E.2d 68, quoting Wright v. Group Health Hosp., supra at 200, 691 P.2d 564, but to protect the attorney-client relationship and prevent clients from making ill-advised statements without the counsel of their attorney. Prohibiting contact with all employees of a represented organization restricts informal contacts far more than is necessary to achieve these purposes. See Niesig v. Team I, supra at 372-373, 559 N.Y.S.2d 493, 558 N.E.2d 1030. The purposes of the rule are best served when it prohibits communication with those employees closely identified with the organization in the dispute. The interests of the organization are adequately protected by preventing contact with those employees empowered to make litigation decisions, and those employees whose actions or omissions are at issue in the case. We reject the “control group” test, which includes only the most senior management, as insufficient to protect the “principles motivating [Rule 4.2].” See id. at 373, 559 N.Y.S.2d 493, 558 N.E.2d 1030. The test we adopt protects an organizational party against improper advances and influence by an attorney, while still promoting access to relevant facts. See id. at 373-374, 559 N.Y.S.2d 493, 558 N.E.2d 1030. The Superior Court’s interpretation of the rule would grant an advantage to corporate litigants over nonorganizational parties. It grants an unwarranted benefit to organizations to require that a party always seek prior judicial approval to conduct informal interviews with witnesses to an event when the opposing party happens to be an organization and the events at issue occurred at the workplace.

While our interpretation of the rule may reduce the protection available to organizations provided by the attorney-client privilege, it allows a litigant to obtain more meaningful disclosure of the truth by conducting informal interviews with certain employees of an opposing organization. Our interpretation does not jeopardize legitimate organizational interests because it continues to disallow contacts with those members of the organization who are so closely tied with the organization or the events at issue that it would be unfair to interview them without the presence of the organization’s counsel. Fairness to the organization does not require the presence of an attorney every time an employee may make a statement admissible in evidence against his or her employer. The public policy of promoting efficient discovery is better advanced by adopting a rule which favors the revelation of the truth by making it more difficult for an organization to prevent the disclosure of relevant evidence.

Harvard argues that adopting the Superior Court’s interpretation of rule 4.2 will not prevent parties from conducting informal interviews with an organization’s employees, but will instead simply force them to seek prior judicial approval. However, if we adopt such a rule, too often in cases involving a corporate party the court will be asked to decide the extent of informal interviews permitted. This will result in extensive litigation before the underlying case even begins, and would clearly favor the better-financed party. . . .

Our decision may initially result in some increased litigation to define exactly which employees fall within the bounds of the rule. Although “a bright- line rule” in the form of a “control group” test or a blanket ban on all employee interviews would be easier to apply, the rule we adopt is, as discussed above, fair, and will allow for ex parte interviews without prior counsel’s permission when an employee clearly falls outside of the rule’s scope.
(Citations and footnote omitted).

At its February 2002 meeting, the ABA House of Delegates voted to amend the comment to Model Rule 4.2 dealing with represented organizations by, inter alia, deleting the reference to admissions. The redline version of this comment is as follows:

[4] [7] In the case of an a represented organization, this Rule prohibits communications with a constituent of the organization, who supervises, directs or regularly consults with the organization’s lawyer concerning the matter or has authority to obligate the organization with respect to the matter or whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability or Consent of the organization’s lawyer is not required for communication with a former constituent. If a constituent of the organization is represented in the matter by his or her own counsel, the consent by that counsel to a communication will be sufficient for purposes of this Rule. Compare Rule 3.4(f). In communicating with a current or former constituent of an organization, a lawyer must not use methods of obtaining evidence that violate the legal rights of the organization. See Rule 4.4, Comment [2].

IV. The Constitution and Statutes

A. 42 U.S.C. § 1981

Swinton v. Potomac Corp., 270 F.3d 794, 806, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The court held that the trial court did not err in denying the defendant’s proposed jury instruction stating that the plaintiff was required to prove both intentional discrimination and that white employees were not subject to the same sort of conduct. The court relied on Kolstad v. American Dental Ass’n, 527 U.S. 526, 534, 79 FEP Cases 1697 (1999), for the proposition that intentional-discrimination cases are simply those that do not rely on the disparate-impact theory. The court continued:

Nor was Swinton required to prove that white employees were not subject to similar harassment. To suggest, as Potomac does, that it might escape liability because it equally harassed whites and blacks would give new meaning to equal opportunity. Potomac’s status as a purported “equal opportunity harasser” provides no escape hatch for liability. The fact that Fosdick may have told jokes about racial or ethnic groups other than African-Americans does not excuse the fact that he racially harassed Swinton.

Id. at 807.

B. Title VII of the Civil Rights Act of 1964

1. Separate Entities

Worth v. Tyer276 F.3d 249, 259–60, 87 FEP Cases 994 (7th Cir. 2001), affirmed in part, and reversed in part, the verdict for the Title VII plaintiff. The court held that the affiliated corporate defendants could only be proper Title VII defendants if they (1) possibly maintained an employment relationship with the plaintiff; (2) if they forfeited their limited liability by taking actions that pierce the corporate veil; or (3) by taking actions for the express purpose of avoiding liability or by directing the discriminatory action. To show that the corporate veil has been pierced, the plaintiff must show such unity of interest and ownership that the separate corporations no longer exist, and “‘circumstances must be such that adherence to the fiction of separate corporate existence would sanction a fraud or promote injustice.’” Id. at 260 (citation omitted). The court followed prior case law rejecting the “integrated enterprise” test. Here, one company met the requirements as a successor employer because it knew about the existence and extent of the predecessor’s liability to the plaintiff, the predecessor ceased operating, and the successor acquired the predecessor’s assets. Id. at 260–61. The other corporate defendants were not liable to the plaintiff.

2. Factors Other Than Prohibited Ones

Costa v. Desert Palace, Inc.268 F.3d 882, 888, 86 FEP Cases 1456, 81 E.P.D. ¶ 40,723 (9th Cir. 2001), reversed and vacated the judgment on a jury verdict for the plaintiff, holding that giving more overtime work to a male employee with a family than to a female employee without a family was not prohibited by Title VII. “Comments motivated by consideration of parental or marital status do not establish gender bias, and neither status is protected under Title VII.”

C. Age Discrimination in Employment Act

Bennington v. Caterpillar Inc., 275 F.3d 654, 659, 87 FEP Cases 1050 (7th Cir. 2001), affirmed the grant of summary judgment to the ADEA defendant. The court held that the five-year difference in ages between the plaintiff and his comparator “is not substantial enough (in and of itself) to set forth a prima facie age discrimination case.”

D. Americans with Disabilities Act, Title I

1. Definition of Disability

Toyota Motor Mfg., Kentucky, Inc. v. Williams, 534 U.S. 184, 122 S. Ct. 681, 151 L. Ed. 2d 615, 12 AD Cases 993 (2002), unanimously held that the plaintiff’s carpal tunnel syndrome and related impairments did not automatically make the plaintiff disabled within the meaning of the ADA, and that her inability to perform a range of manual tasks did not make her disabled. “We conclude that the Court of Appeals did not apply the proper standard in making this determination because it analyzed only a limited class of manual tasks and failed to ask whether respondent’s impairments prevented or restricted her from performing tasks that are of central importance to most people’s daily lives.” 122 S. Ct. at 686. The Court held that the medical diagnosis is not enough; an individualized assessment is normally needed. “An individualized assessment of the effect of an impairment is particularly necessary when the impairment is one whose symptoms vary widely from person to person. Carpal tunnel syndrome, one of respondent’s impairments, is just such a condition. While cases of severe carpal tunnel syndrome are characterized by muscle atrophy and extreme sensory deficits, mild cases generally do not have either of these effects and create only intermittent symptoms of numbness and tingling” Id. at 692. The Court again refused to decide whether working is a major life activity. Id. The Court held that the lower court had taken the wrong approach:

Even more critically, the manual tasks unique to any particular job are not necessarily important parts of most people’s lives. As a result, occupation-specific tasks may have only limited relevance to the manual task inquiry. In this case, “repetitive work with hands and arms extended at or above shoulder levels for extended periods of time,” . . . the manual task on which the Court of Appeals relied, is not an important part of most people’s daily lives. The court, therefore, should not have considered respondent’s inability to do such manual work in her specialized assembly line job as sufficient proof that she was substantially limited in performing manual tasks.

At the same time, the Court of Appeals appears to have disregarded the very type of evidence that it should have focused upon. It treated as irrelevant “[t]he fact that [respondent] can … ten[d] to her personal hygiene [and] carr[y] out personal or household chores.” Ibid. Yet household chores, bathing, and brushing one’s teeth are among the types of manual tasks of central importance to people’s daily lives, and should have been part of the assessment of whether respondent was substantially limited in performing manual tasks.

Id. at 693.

2. “Direct Threat”

Chevron U.S.A. Inc. v. Echazabal, __ U.S. __, 122 S. Ct. 2045, 13 AD Cases 97 (2002), unanimously upheld the EEOC regulation, 29 C.F.R. § 1630.15(b)(2), “permitting the defense that a worker’s disability on the job would pose a ‘direct threat’ to his health.” Id. at 2048. The plaintiff had worked for an independent contractor at the defendant’s oil refinery, and twice applied and was rejected for hire by the defendant. His medical examinations showed liver abnormality or damage, apparently caused by Hepatitis C, “which Chevron’s doctors said would be aggravated by continued exposure to toxins at Chevron’s refinery.” Id. Each time, the company withdrew its offer of employment. The second time, Chevron asked the contractor to reassign him to a job where he would not be exposed to harmful chemicals or to remove him from the refinery. He was then laid off. The court recognized that the ADA explicitly provided only that the employer may use a qualification standard that includes “‘a requirement that an individual shall not pose a direct threat to the health or safety of other individuals in the workplace,’ § 12113(b), if the individual cannot perform the job safely with reasonable accommodation, § 12113(a).” Id. at 2049. The Court used a “three strikes” metaphor in rejecting the argument that Congress specified direct threats to others in the workplace, and so must have intended to exclude direct threats to oneself. The Court described the first strike as being in the text of the Act, allowing employers broad authority to establish qualification standards. “Far from supporting Echazabal’s position, the expansive phrasing of ‘may include’ points directly away from the sort of exclusive specification he claims.” Id. at 2050 (citations omitted.) The court also held that the expression unius exclusio alterius maxim has an “essential extrastatutory ingredient” missing from the ADA: “The canon depends on identifying a series of two or more terms or things that should be understood to go hand in hand, which are abridged in circumstances supporting a sensible inference that the term left out must have been meant to be excluded.” Id. The Court then went on: “Strike two in this case is the failure to identify any such established series, including both threats to others and threats to self, from which Congress appears to have made a deliberate choice to omit the latter item as a signal of the affirmative defense’s scope.” Id. It held that no inference could be drawn from Congress’s repetition of the “direct threat” statutory language in the Rehabilitation Act, without the gloss of the EEOC’s Rehabilitation Act regulation including threats to self. Three other agencies had not included threat-to-self provisions in their regulations. The Court held that the Congressional language in light of the regulation was “equivocal.” Id. at 2051. It continued:

Instead of making the ADA different from the Rehabilitation Act on the point at issue, Congress used identical language, knowing full well what the EEOC had made of that language under the earlier statute. Did Congress mean to imply that the agency had been wrong in reading the earlier language to allow it to recognize threats to self, or did Congress just assume that the agency was free to do under the ADA what it had already done under the earlier Act’s identical language? There is no way to tell.

Id. The Court then wrapped up its holding against application of the maxim:

There is even a third strike against applying the expression-exclusion rule here. It is simply that there is no apparent stopping point to the argument that by specifying a threat-to-others defense Congress intended a negative implication about those whose safety could be considered. When Congress specified threats to others in the workplace, for example, could it possibly have meant that an employer could not defend a refusal to hire when a worker’s disability would threaten others outside the workplace? If Typhoid Mary had come under the ADA, would a meat packer have been defenseless if Mary had sued after being turned away? See 42 U.S.C. § 12113(d) . Expressio unius just fails to work here.

Id. The Court held that the EEOC’s regulation is entitled to Chevron deference. It rejected the argument that the EEOC’s regulation “allowed the kind of workplace paternalism the ADA was meant to outlaw,” because the employer here was acting on the basis of specific and documented medical risks to the worker. Id. at 2052–53.

Hutton v. Elf Atochem North America, Inc.273 F.3d 884, 892–95, 12 AD Cases 909 (9th Cir. 2001), affirmed the grant of summary judgment to the ADA and Oregon disability discrimination defendant because the plaintiff posed a direct threat to the safety of others. The plaintiff worked in the manufacture and loading of chlorine, and had had a number of diabetic seizures while at work. “Even if we were to agree with Hutton . . . that the likelihood of an accident is small, we conclude that the severity and scale of the potential harm to others presented by Hutton’s employment nevertheless pose a significant risk under the direct-threat analysis.” Id. at 894 (citation omitted).

Waddell v. Valley Forge Dental Associates, Inc., 276 F.3d 1275, 12 AD Cases 1029 (11th Cir. 2001), affirmed the grant of summary judgment to the ADA defendant. The plaintiff was a dental hygienist who learned while employed that he was HIV-positive, and who was fired after he refused to accept a demotion to clerical duties at half his former pay. The court declined to address the questions whether HIV-positive status is a disability per se, or whether the plaintiff was substantially limited in a major life activity, but stated in dicta that the Supreme Court favors an individualized approach. Id. at 1279–80 n.4. The court held that the plaintiff “carries the burden of establishing” that he was not a direct threat to others, or that reasonable accommodations were available. Id. at 1280. It stated that an employer in the medical field has a duty to consult available objective scientific information, and may not just rely on good faith. Id. The court held that an employer may rely on a “significant risk,” that the likelihood of harm can be low if the risk is of transmitting a fatal infection, and that it is not necessary to show that someone has actually been harmed. Id.at 1280–81. The court held that the procedures used by a dental hygienist were “exposure prone” within the definition of that term by the Centers for Disease Control, because the procedures used to clean teeth can result in commingling of blood. Id. at 1281–83. The court relied on the plaintiff’s medical evidence that the hygienist’s fingers are rarely in the patient’s mouth at the same time as a sharp instrument, as establishing that there were in fact times when this occurred. Id. at 1282–83. Thus, the plaintiff was a direct threat to others while performing the normal functions of his job. Id. at 1284.

3. Reasonable Accommodation and Seniority Systems: U.S. Airways, Inc. v. Barnett

On April 29, 2002, the U.S. Supreme Court decided U.S. Airways, Inc., v. Barnett, __ U.S. __, 122 S. Ct. 1516, 12 AD Cases 1729 (2002). The Court held that an otherwise reasonable ADA accommodation is ordinarily unreasonable if it conflicts with the rights of other employees under a seniority system, whether collectively bargained or unilaterally imposed, unless the plaintiff shows special circumstances that would make an exception to the seniority system reasonable in the case at hand:

The plaintiff might show, for example, that the employer, having retained the right to change the seniority system unilaterally, exercises that right fairly frequently, reducing employee expectations that the system will be followed—to the point where one more departure, needed to accommodate an individual with a disability, will not likely make a difference. The plaintiff might show that the system already contains exceptions such that, in the circumstances, one further exception is unlikely to matter. We do not mean these examples to exhaust the kinds of showings that a plaintiff might make. But we do mean to say that the plaintiff must bear the burden of showing special circumstances that make an exception from the seniority system reasonable in the particular case. And to do so, the plaintiff must explain why, in the particular case, an exception to the employer’s seniority policy can constitute a “reasonable accommodation” even though in the ordinary case it cannot.

Id. at 1525. This is not what employers wanted. The Court also rejected U.S. Airways’ argument that the ADA does not provide for affirmative action, and that any accommodation that would dispense with a rule generally applicable to all employees would constitute affirmative action unwarranted by the statute:

In sum, the nature of the “reasonable accommodation” requirement, the statutory examples, and the Act’s silence about the exempting effect of neutral rules together convince us that the Act does not create any such automatic exemption. The simple fact that an accommodation would provide a “preference”—in the sense that it would permit the worker with a disability to violate a rule that others must obey—cannot, in and of itself, automatically show that the accommodation is not “reasonable.” As a result, we reject the position taken by U.S. Airways and Justice SCALIA to the contrary.

Id. at 1521. The Court’s discussion about the importance of seniority systems in assuring uniform and fair treatment of employees, rewarding their expectations and encouraging them to invest themselves in the company, can provide very persuasive reasons in support of claims for constructive seniority in a hiring or reinstatement case, and it seems to me that the thwarting of these expectations can be used to good effect in presenting a claim for compensatory damages.

The line-up on this decision was extremely interesting:

BREYER, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and STEVENS, O’CONNOR, and KENNEDY, JJ., joined. STEVENS, J., and O’CONNOR, J., filed concurring opinions. SCALIA, J., filed a dissenting opinion, in which THOMAS, J., joined. SOUTER, J., filed a dissenting opinion, in which GINSBURG, J., joined.

4. Reasonable Accommodation — Other

Parker v. Sony Pictures Entertainment, Inc.260 F.3d 100, 106–08, 12 AD Cases 1 (2nd Cir. 2001), affirmed the grant of judgment as a matter of law to the ADA defendant but reversed the award of attorneys’ fees to the defendant. The court stated that an employer is not immunized from ADA liability by a mistaken belief that the plaintiff could not perform the essential duties of the job even with a reasonable accommodation, but held that the plaintiff’s failure to communicate clearly with the defendant was responsible for its mistake and for the breakdown of the interactive process. Id. at 106. The court held that the plaintiff is required to show a causal relationship between the protected characteristic and the injury of which the plaintiff complains. It stated that the requirement of a causal relationship is often left unstated because it is often not an issue in ADA litigation, but it is nonetheless a requirement. Id. at 107–08.

Thus, if an employer failed to provide an accommodation to an employee who needed that accommodation to return to work, but, for whatever reason, the employee did not return to work for reasons entirely unrelated to the refusal of the accommodation, then the ADA’s prohibition on taking adverse employment actions “because of disability” would not be violated. The same would be true when an employer terminated an employee who–because of the absence of an accommodation–could not return to work, if the employer terminated the employee for reasons entirely unrelated to his failure to return to work.

Id. at 108. The court cautioned that the plaintiff is not required to show that the protected characteristic is the sole cause of the injury, just that it is a contributing cause. “Nonetheless, it remains essential to a finding of discrimination that plaintiff’s disability, or the lack of accommodation to that disability, played a ‘substantial’ role that ‘made a difference’ to his employer’s actions.” Id. (citation omitted).

5. Remedies for Technical Violations

Griffin v. Steeltek, Inc., 261 F.3d 1026, 12 AD Cases 248 (10th Cir. 2001), affirmed the judgment for the ADA defendant, holding that a plaintiff who proves only a technical violation of the ADA, such as the employer’s asking questions prior to a conditional job offer, but does not show personal injury, is not entitled to an award of compensatory or punitive damages or an award of attorneys’ fees. The opinion surveys the decisions of other Circuits.

E. Americans with Disabilities Act, Title II, and § 504 of the Rehabilitation Act

Gorman v. Barnes, __ U.S. __, 122 S. Ct. 2097, 13 AD Cases 193 (2002), involved the mishandling of a catheterized paraplegic arrestee, resulting in serious physical injuries and incapacity to work. He sued under Title II of the ADA and § 504 of the Rehabilitation Act of 1973. The Court held that both statutes were enacted pursuant to the power of Congress under the Spending Clause, and that remedies under these statutes should be analogized to contract actions, both as to implying the cause of action and implying the scope of a damages remedy. “But punitive damages, unlike compensatory damages and injunction, are generally not available for breach of contract, see 3 E. Farnsworth, Contracts § 12.8, 192-201 (2d ed.1998); Restatement (Second) of Contracts § 355 ; 1 T. Sedgwick, Measure of Damages § 370 (8th ed. 1891).” Id. at 2102.

F. Title IX of the Education Amendments of 1972

Frazier v. Fairhaven School Committee276 F.3d 52, 65 (1st Cir. 2002), affirmed the dismissal of the plaintiff’s Title IX claims against the discipline matron of her school and other individual defendants because the implied private right of action under Title IX applies only to educational institutions, and does not extend to individuals. The court held that Title IX bars same-sex harassment. Id. at 65–66.

G. The Family and Medical Leave Act

1. Ragsdale and the DOL Regulation Requiring Employers to Notify Employee that Leave is Being Considered FMLA Leave

Ragsdale v. Wolverine World Wide, Inc., 535 U.S. __, 122 S. Ct.1155, 7 Wage & Hour Cas.2d (BNA) 1153 (2002), struck down, as inconsistent with the FMLA, 29 C.F.R. § 825.700(a). This Labor Department regulation requires employers to notify employees in writing when employees’ medical leave is counted against the statutorily required 12 weeks of leave, on pain of not being able to treat the medical leave as FMLA leave. The Court observed that the policy of the FMLA is to require only 12 weeks of qualifying leave per twelve-month period, but to encourage employers to adopt more generous policies on a voluntary basis. The defendant granted plaintiff 30 weeks of leave in 1996 without notifying the plaintiff that it considered 12 weeks of this leave as FMLA leave, refused to grant additional leave, and fired the plaintiff when she did not return to work. The plaintiff sued, contending that the employer’s failure to abide by the regulation entitled her to 12 additional weeks of leave. The Court held the regulation invalid because the penalty is not connected to any prejudice suffered by the person taking leave. It observed that the plaintiff here would have taken the 30 weeks’ leave even if she had received the written notice. Justice O’Connor dissented, joined by Justices Souter, Ginsburg, and Breyer.

2. Unscheduled, Unpredictable, Cumulatively Substantial Absences

Collins v. NTN-Bower Corp.272 F.3d 1006, 7 WH Cases 2d 895, 81 E.P.D. ¶ 40,831 (7th Cir. 2001), affirmed the grant of summary judgment to the FMLA defendant, which fired the plaintiff after she called in “sick” on too many occasions, without informing her employer that she suffered from depression, a serious health condition. Because her condition had developed over years, the court held that the plaintiff was not entitled to the exception in which advance notice is not possible. The court held that adequate FMLA notice also requires telling the employer when the employee will return to work. The court described the testimony of the plaintiff’s expert, who stated that she was incapacitated 10% to 20% of the time, and that the episodes occurred without warning. It continued:

If this is so then it is doubtful that the Act has much to offer Collins. Courts have been reluctant to read the FMLA as allowing unscheduled and unpredictable, but cumulatively substantial, absences, when the Americans with Disabilities Act protects only persons who over the long run are capable of working full time. . . . Collins is not suffering from an acute condition that will improve with time off; instead she asserts a right to take unscheduled leave at a moment’s notice for the rest of her life. This implies that she is not qualified for a position where reliable attendance is a bona fide requirement, and a person not protected by the ADA may be discharged.

Id. at 1007–08.

3. Availability of Emotional-Distress Damages Under the FMLA

Most courts to address the issue have held that the FMLA does not allow recoveries for the emotional distress of employees denied FMLA leave. The Eighth Circuit follows a different rule. Duty v. Norton-Alcoa Proppants, __ F.3d __, 7 WH Cases 2d 1537, 2002 WL 1312197 (8th Cir. June 18, 2002), stated:

NAP claims that Duty was not entitled to compensatory damages because he failed to demonstrate genuine injury as a result of his termination by failing to present any evidence of (1) out-of-pocket expenses incurred as a result of NAP’s conduct, or (2) physical symptoms related to severe emotional distress.

Under the FMLA, an employer is liable for “any wages, salary, employment benefits, or other compensation denied or lost to such employee by reason of the violation.” 29 U.S.C. § 2617(a)(1)(A)(i)(I). The district court properly instructed the jury to assess damages actually sustained by Duty, including lost wages and fringe benefits as well as compensation for “mental anguish, loss of dignity, and other intangible injuries.” . . . Sufficient evidence supported the jury’s compensatory damages award, including Duty’s and his wife’s testimony that Duty suffered emotionally after losing his job. See Frazier v. Iowa Beef Processors, Inc., 200 F.3d 1190 (8th Cir. 2000) (testimony from plaintiff and spouse regarding plaintiff’s loss of dignity and self-esteem, along with feeling of emptiness, deemed sufficient to sustain compensatory damages award for emotional distress under FMLA). The jury reasonably could have relied on this testimony to assess compensatory damages.

V. Theories and Proof

A. Intentional Discrimination

Atonio v. Wards Cove Packing Co., Inc.275 F.3d 797, 802, 87 FEP Cases 1037 (9th Cir. 2001), affirmed the judgment for the defendant, holding that the racial labeling of crews and facilities, as in “the Filipino bunkhouse,” did not violate Title VII because it was not used to stigmatize any employees, did not result in any stigmatizing or social separation of employees during their free time, and was used by the employees of the nationality in question, and because no employee testified that it had any adverse effect on him.

B. The Inferential Model

United States v. Arvizu, __ U.S. __, 122 S. Ct. 744 (2002), a Fourth Amendment case, follows Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 82 FEP Cases 1748, 78 E.P.D. ¶ 40,045 (2000). In both cases, the Court rejected the approach of some lower courts in segmenting evidence when a determination is supposed to be made in light of all the evidence. In Arvizu, the Ninth Circuit considered in isolation each circumstance that led to the stop, and rejected it if the court could conceive of a possible innocent explanation. The same often occurs in appellate review of employment discrimination summary judgments. In Arvizuthe Court stated:

We think that the approach taken by the Court of Appeals here departs sharply from the teachings of these cases. The court’s evaluation and rejection of seven of the listed factors in isolation from each other does not take into account the “totality of the circumstances,” as our cases have understood that phrase. The court appeared to believe that each observation by Stoddard that was by itself readily susceptible to an innocent explanation was entitled to “no weight.” . . . Terry, however, precludes this sort of divide-and-conquer analysis. The officer in Terry observed the petitioner and his companions repeatedly walk back and forth, look into a store window, and confer with one another. Although each of the series of acts was “perhaps innocent in itself,” we held that, taken together, they “warranted further investigation.”

Id. at 751 (citations omitted.) The Court recognized that the Ninth Circuit was attempting to provide more uniform guidance, but held that it went too far:

But the Court of Appeals’ approach would go considerably beyond the reasoning of Ornelas and seriously undercut the “totality of the circumstances” principle which governs the existence vel non of “reasonable suspicion.” Take, for example, the court’s positions that respondent’s deceleration could not be considered because “slowing down after spotting a law enforcement vehicle is an entirely normal response that is in no way indicative of criminal activity” and that his failure to acknowledge Stoddard’s presence provided no support because there were “no ‘special circumstances’ rendering ‘innocent avoidance . . . improbable.’ ” . . . We think it quite reasonable that a driver’s slowing down, stiffening of posture, and failure to acknowledge a sighted law enforcement officer might well be unremarkable in one instance (such as a busy San Francisco highway) while quite unusual in another (such as a remote portion of rural southeastern Arizona). Stoddard was entitled to make an assessment of the situation in light of his specialized training and familiarity with the customs of the area’s inhabitants. . . . To the extent that a totality of the circumstances approach may render appellate review less circumscribed by precedent than otherwise, it is the nature of the totality rule.

Id. at 752 (emphasis supplied). Bright-line tests of isolated factors, such as the “same actor” inference in some Circuits, the ten-year minimum age rule in the Seventh Circuit, the universal-and-exclusive approach to retaliation cases in the Seventh Circuit, and the like, have no place under Arvizu.

Zapata-Matos v. Reckitt & Colman, Inc.277 F.3d 40, 47, 87 FEP Cases 1409 (1st Cir. 2002), affirmed the grant of summary judgment for the Title VII defendant. The court held that the “slight suggestion of pretext present here, absent other evidence from which discrimination can be inferred,” cannot meet the plaintiff’s burden. The court held—correctly, in my view—that the plaintiff’s case was extremely weak and the defendant’s evidence of nondiscrimination was very strong. It reasoned from this that summary judgment was appropriate under Reeves.

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.273 F.3d 30, 34, 87 FEP Cases 673 (1st Cir. 2001), vacated the grant of summary judgment to the ADEA defendant. The court held that some undocumented criticisms of the demoted plaintiff’s work performance were too general to be useful, such as “poor communications with the management.”

Celestine v. Petroleos de Venezuella SA, 266 F.3d 343, 355– 56, 86 FEP Cases 1462, 81 E.P.D. ¶ 40,799 (5th Cir. 2001), affirmed the grant of summary judgment to the defendant on the plaintiffs’ claims of denial of promotion and training. Although there were 206 individual plaintiffs, the court held that, in light of the earlier denial of class certification, the lower court did not abuse its discretion in barring the plaintiffs from proceeding with their claims on a pattern-and-practice basis and requiring them to proceed on an individual basis under the McDonnell Douglas model.

C. Mixed Motives

Costa v. Desert Palace, Inc.268 F.3d 882, 86 FEP Cases 1456, 81 E.P.D. ¶ 40,723 (9th Cir. 2001), reversed and vacated the judgment on a jury verdict for the plaintiff, holding that the lower court erred in giving a mixed-motives instruction. The court stated: “The use of terms such as ‘direct’ evidence should not be read as limiting the type of evidence a plaintiff such as Costa must present in order to receive a mixed-motive instruction. Rather, it is directed at the greater quantum of evidence required to establish a mixed-motive case.” Id. at 888 n.3. Surveying the law of the Circuits, the court held that a plaintiff cannot meet the standard for mixed-motives treatment by drawing an inference from disparate treatment. Id. at 886–88. The plaintiff relied on the fact that she received less overtime work than a man performing the same work, and was told that it was because he had a family to support, and she did not. The court held that this was not even actionable under Title VII: “Comments motivated by consideration of parental or marital status do not establish gender bias, and neither status is protected under Title VII.” Id. at 888. The plaintiff also relied on the fact that a female supervisor had called her a “bitch,” but the court held that this was evidence only of personal dislike, not evidence of gender discrimination, where the plaintiff had been a union steward during a time of contentious labor-management relations, and where the female supervisor had an aggressive management style that had led both men and women to complain. Finally, the court rejected plaintiffs’ reliance on a series of allegedly disparate treatments, observing that these may be enough to show discrimination but were not enough to show that plaintiff’s gender was a motivating factor in her termination. Id. at 888–90.

D. Actionable Discrimination

Weeks v. New York State (Division of Parole), 273 F.3d 76, 85–87, 87 FEP Cases 161, 81 E.P.D. ¶ 40,822 (2nd Cir. 2001), affirmed the dismissal of certain Title VII claims as not involving adverse employment actions. The court stated:

To be “‘materially adverse,’ a change in working conditions must be more disruptive than a mere inconvenience or an alteration of job responsibilities.” . . . Such a change “might be indicated by a termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices . . . unique to a particular situation.”

Id. at 85. The court described her allegations at length, noting that in many instances the plaintiff had not shown that the challenged actions had harmed her in any way. Id. at 85–87.

Fierros v. Texas Department of Health274 F.3d 187, 192–94, 87 FEP Cases 503 (5th Cir. 2001), reversed the grant of summary judgment to the Title VII retaliation defendant, and holding that the denial of a pay increase was an actionable employment decision. The court held that the denial of some pay increases is significant enough to be actionable, and rejected the defendant’s argument that only cuts in pay are actionable: “As Fierros points out, in light of her annual salary of $20,924.97, the $57-per-month pay increase is not, as TDH claims, ‘de minimis.’ It is illogical to construe Title VII as prohibiting discriminatory decreases in pay, but permitting discriminatory denials of pay increases.” Id. at 194. The court held that the denial of the pay increase was an ultimate employment decision because “Fierros seeks Title VII relief from the denial of the pay increase itself, and not from any employment action that the pay increase denial might lead to.” Id. The district court had dismissed plaintiff’s affidavit attesting to the decisionmaker’s statement, that she was denied the increase because of her complaint, as her mere “subjective belief” as to a linkage between the two. The court of appeals pointed out that the affidavit did not speak to the plaintiff’s beliefs, and held that the statement in question was, if believed, direct evidence of discrimination. Id. at 195.

Patt v. Family Health Systems, Inc., 280 F.3d 749 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant on the plaintiff surgeon’s claim of denial of career opportunities after she complained of pay discrimination. The court stated that such a claim may be actionable, but the plaintiff did not present evidence showing such a denial. While she claimed that she was given the easier surgical assignments making it difficult for her to advance professionally, the undisputed evidence was that the assignments were made in rotation, and the plaintiff was responsible for making assignments three months of the year. “ Because Patt has not presented more specific evidence showing how Family Health limited her career opportunities, we cannot conclude that she suffered an adverse employment action.”

Markel v. Board of Regents of University of Wisconsin System276 F.3d 906, 911–12, 87 FEP Cases 1131 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant, holding that the plaintiff’s complaints of denial of better equipment, the ability to travel and make presentations, and removal from some accounts that caused her to lose bonuses, were not independently actionable. “When combined with other actions, differences in office aesthetics between employees might aid the plaintiff in showing discriminatory treatment, however, standing alone they are not readily quantifiable losses Title VII was meant to redress.” Id. at 912 (citations omitted).

E. Retaliation

Cardenas v. Massey, 269 F.3d 251, 264, 87 FEP Cases 19 (3rd Cir. 2001), affirmed the grant of summary judgment to the defendants on the plaintiff’s Title VII and New Jersey Law Against Discrimination retaliation claims because the plaintiff failed to show a causal link between the incidents he alleged to have resulted in his constructive discharge—which were the same as the incidents underlying his racial harassment claim—and his protected activity. The court held that timing alone was not sufficient, because the protected activities took place throughout the incidents in question, and the acceptance of timing as the sole factor would mean an acceptance of a causal relationship as to each incident. While the harassment incidents were linked by the animus of the plaintiff’s chief harasser, the court held that no such thread exists with respect to the retaliation claims. However, his constructive-discharge claim survived as part of his harassment claim.

Mota v. University of Texas Houston Health Science Center, 261 F.3d 512, 520–21, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), affirmed the judgment for the plaintiff on his retaliation claims. The court held that the discontinuation of the plaintiff’s $2,500 stipend, the denial of the plaintiff’s request for paid leave, the denial of the plaintiff’s request for an extension of his unpaid leave, were all adverse employment actions, while ostracism by fellow employees was not.

Stone v. Indianapolis Public Utilities Division, 281 F.3d 640, 644, 88 FEP Cases 162 (7th Cir. 2002) (Posner, J.), announced a new rule governing retaliation plaintiffs’ ability to survive summary judgment in situations in which the plaintiff does not have direct evidence of retaliation:

The second route to summary judgment, the adaptation of McDonnell Douglas to the retaliation context, requires the plaintiff to show that after filing the charge only he, and not any similarly situated employee who did not file a charge, was subjected to an adverse employment action even though he was performing his job in a satisfactory manner. If the defendant presents no evidence in response, the plaintiff is entitled to summary judgment. If the defendant presents unrebutted evidence of a noninvidious reason for the adverse action, he is entitled to summary judgment. Otherwise there must be a trial.

This is unworkable. No court has previously held that all the employer has to do to thwart retaliation claims is to sacrifice another employee who did not engage in protected activity, or to leave one charging party or witness unpunished. This panel would undoubtedly pull back from such a result. So why invite such actions?

Similarly, Stone rejected any burden on a plaintiff to prove even an attenuated causal relationship between the protected activity and the adverse employment action:

Evidence, though not conclusive, that the cause was retaliation should be enough to entitle the plaintiff to a jury trial unless the defendant can produce uncontradicted evidence that he would have fired the plaintiff anyway, in which event the defendant’s retaliatory motive, even if unchallenged, was not a but-for cause of the plaintiff’s harm.

(Citations omitted.) The same concept then comes in again by the back door, but without the same name:

The question of how much evidence the plaintiff must present to establish a triable issue that the adverse employment action of which he complains was retaliatory is not susceptible of a general answer. But we remind that mere temporal proximity between the filing of the charge of discrimination and the action alleged to have been taken in retaliation for that filing will rarely be sufficient in and of itself to create a triable issue.

(Citations omitted.) The court’s formulation is far too broad and vastly outstrips its citations. The question in the Seventh and all other Circuits has always been the length of time between the protected activity and the adverse employment action, in the context of the case. A firing a very short time after the employer learns of the charge or adverse testimony has generally been taken in all Circuits as sufficient evidence of causation, while a long delay has generally been taken in all Circuits as inadequate. To the extent that Stone seeks to lay down ironclad rules, it is inconsistent with Reeves.

Johnson v. ITT Aerospace/Communications Div. of ITT Industries, Inc.272 F.3d 498, 500, 87 FEP Cases 553 (7th Cir. 2001), affirmed the grant of summary judgment to the defendant, holding that an employer did not violate Title VII by refusing to authorize absences for the purpose of prosecuting cases while authorizing the absences of nonparty witnesses pursuant to a court order. The court also held that an employer does not violate Title VII by denying leave to an employee pursuing frivolous claims against the employer. Id. at 501.

Longstreet v. Illinois Department of Corrections, 276 F.3d 379, 383–84, 87 FEP Cases 1375 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII retaliation defendant. The court held that there was no evidence that the plaintiff’s reassignment to Tower 5 was a materially adverse employment action because the plaintiff presented only her own description of increased difficulties working there, and she did manage to work there for almost two years before being reassigned back to her former position. The court also held that no inference of causation could be drawn from the four-month lapse between her sexual harassment complaints and her reassignment.

Pipkins v. City of Temple Terrace, 267 F.3d 1197, 1201, 86 FEP Cases 1413, 81 E.P.D. ¶ 40,820 (11th Cir. 2001), affirmed the grant of summary judgment to the Title VII retaliation defendant. The court held that the plaintiff could not show a causal link between her poor performance evaluations and her complaints of harassment because the earlier poor evaluations preceded any protected activity, and her later poor evaluations were accompanied by “ well-documented job performance deficiencies.” (Footnote omitted.)

F. Comparators

Zapata-Matos v. Reckitt & Colman, Inc.277 F.3d 40, 46–47, 87 FEP Cases 1409 (1st Cir. 2002), affirmed the grant of summary judgment for the Title VII defendant. The court rejected the discharged Puerto Rican plaintiff’s comparison of himself to an interim Anglo replacement who was given the Regional Director title the plaintiff had been denied, because the plaintiff had effectively driven out the entire top management structure below him, the interim replacement was called in to fill the void, and the interim replacement was already a Vice-President of the company. The court accepted the defendant’s comparator, the Puerto Rican who was brought into the company as a permanent replacement.

Patt v. Family Health Systems, Inc., 280 F.3d 749 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant on the plaintiff surgeon’s compensation claim. The court rejected her comparator: “ Although Rosner was paid a higher salary, the record shows that Rosner worked at Family Health at least a year longer than Patt, and that Rosner had completed four years of post-residency work to Patt’s two years at the time she was hired. Patt asserts that Rosner’s prior post-residency work had ‘no bearing on nor relationship to surgery,’ but Rosner’s curriculum vitae states that he previously served as ‘Director of Surgical Critical Care’ at a medical facility in New York. Years of service and prior experience are legitimate, non-discriminatory reasons for a wage disparity.”

Markel v. Board of Regents of University of Wisconsin System276 F.3d 906, 913, 87 FEP Cases 1131 (7th Cir. 2002), affirmed the grant of summary judgment to the Equal Pay Act defendant, holding that a plaintiff with a nine-month contract was not comparable to a permanent employee with seniority.

Williams v. Saint Luke’s-Shawnee Mission Health System, Inc.276 F.3d 1057, 87 FEP Cases 1473 (8th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant. The black plaintiff worked as a Behavioral Health Technician at a facility for troubled adolescent girls, most of whom had been either promiscuous or sexually abused. He was fired for assertedly engaging in horseplay with the patients, getting manicures and head rubs from them, and giving his phone number to a patient’s mother and insinuating that he would like to have a relationship with her. The court rejected his comparison to a white co-worker who had been accused of being in a patient’s room with the door closed, because the co-worker explained that the door had closed by itself, and an investigation had exonerated him. The court also rejected his comparison to a white co-worker who was counseled but not disciplined after female co-workers had complained that he was sexually harassing them. “Neither employee was found to have had improper physical contact with minor patients or inappropriate conversations with any patients, nor did either give his telephone number to a patient or family member.” Id. at 1060. The court stated that comparators, for purposes of proof of disparate treatment, must be similarly situated in all relevant respects, including the commission of offenses that were the same or were of comparable seriousness. Id.

G. Discriminatory Statements

Zapata-Matos v. Reckitt & Colman, Inc.277 F.3d 40, 87 FEP Cases 1409 (1st Cir. 2002), affirmed the grant of summary judgment for the Title VII defendant. Michael Gallagher had been involved in the hiring and promotion of the plaintiff, the increase of his responsibilities, and his raise the year before his discharge. The plaintiff was responsible for Puerto Rican, Mexican, and Caribbean markets, and was directed to increase the prices for his company’s goods to mainland levels because the 30% discount was causing mainland buyers to obtain their goods in Puerto Rico and resell them for less than the mainland price. The resellers were reaping what should have been the company’s profits. When the plaintiff objected that that large a price increase would cause a loss of sales in Puerto Rico, Gallagher said “Fuck Puerto Rico . . . . We’ve got to change and we’ve got to fix this situation, because we don’t want this happening.” Id. at 43. The court held that no rational factfinder would regard this statement as evidence of national-origin discrimination against Puerto Ricans. Id. at 46.

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.273 F.3d 30, 33–34, 87 FEP Cases 673 (1st Cir. 2001), vacated the grant of summary judgment to the ADEA defendant, holding that a two-year series of age-biased statements by the plaintiff’s direct supervisor, Larry Cancel, coupled with the lack of contemporaneous documentary support for his criticisms of her work performance and mutually conflicting accusations of poor performance by different supervisors created a jury issue. The plaintiff and others “quoted him as saying, among other things, that the ages of his accounting employees added up to more than a thousand years; that his employees were as old as Methuseleh [sic]; that they were ‘old women,’ ‘a bunch of incapacitated people,’ and ‘useless old women’ and that ‘what I have here is Social Security.’ Melendez also said that Cancel told her that she was an old hag, an old lady and that ‘her age didn’t allow her to think.’” Id.

Markel v. Board of Regents of University of Wisconsin System276 F.3d 906, 910–11, 87 FEP Cases 1131 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant, holding that assertedly discriminatory statements cannot be considered direct evidence of discrimination unless they are clearly discriminatory, without resort to any inference or presumption, and unless they are made contemporaneously with the challenged action.

EEOC v. University of Chicago Hospitals276 F.3d 326, 333, 87 FEP Cases 1089 (7th Cir. 2002), reversed the grant of summary judgment to the Title VII religious-discrimination constructive-discharge defendant. The court rejected the defendant’s assertions that the incidents surrounding the constructive discharge themselves did not show religious discrimination. It held that the decisionmaker’s references within the prior two months to the charging party as a religious fanatic, and to the problems the decisionmaker had with the charging party’s religious beliefs and to her bringing religion into the workplace, her instruction to a manager that he fire the charging party, the manager’s belief that the instruction was based on religious animosity, and her firing the manager when he refused to fire the charging party, were evidence of a religious bias which, in combination with other evidence, was sufficient to defeat summary judgment.

Costa v. Desert Palace, Inc.268 F.3d 882, 888, 86 FEP Cases 1456, 81 E.P.D. ¶ 40,723 (9th Cir. 2001), reversed and vacated the judgment on a jury verdict for the plaintiff, holding that the lower court erred in giving a mixed-motives instruction. The court rejected plaintiff’s argument that being called a “bitch” by a female supervisor was evidence of gender discrimination. The court held that this was evidence only of personal dislike, where the plaintiff had been a union steward during a time of contentious labor-management relations, and where the female supervisor had an aggressive management style that had led both men and women to complain.

McCowan v. All Star Maintenance, Inc.273 F.3d 917, 926, 87 FEP Cases 596 (10th Cir. 2001), reversed the grant of summary judgment to the Title VII and § 1981 defendant on both their hostile-environment claim and their discriminatory-discharge claim. The facts of the hostile environment claim are described below. The court held that the “totality of the circumstances” test applies to the discharge claim as well as the harassment claim, and that plaintiffs did not need to establish a nexus between the harassing remarks and their termination unless they were claiming that the remarks were direct evidence of discrimination in their discharges.

H. Disparate Impact

Stout v. Potter276 F.3d 1118, 1122–24, 87 FEP Cases 1255 (9th Cir. 2002), affirmed the grant of summary judgment to the Title VII gender discrimination defendant. The court rejected the Postal Service’s argument that there was no disparate impact because one out of six female candidates was promoted, compared to about one out of ten male applicants, because plaintiffs’ disparate impact challenge was directed at selection for interview, an intermediate pass-or-fail hurdle. The court also rejected plaintiffs’ argument that the first and second interviews should be analyzed separately. Ten males and no women had been selected for the first round, which had originally been intended to be the only round of interviews. When the selection process was re-opened for further interviews, women were two of the five new interviewees. The court held that there was a functional reason to separate the interview selection stage from the final selections, because it operated as a pass-or-fail barrier, but that there was no such barrier between the first and second rounds. Id. at 1122. Because intent plays no role in a disparate-impact case, the court held it irrelevant that the first round had originally been intended to be the only round. Id. at 1123. The court held that the relevant population for purposes of disparate-impact analysis was the composition of the persons seeking promotion. It held that the difference between the percentage of applicants who were female (15.8%) and the percentage of interviewees who were female (13.3%) was too small to support a claim of disparate impact. Id. It pointed out that the selection of one more female applicant for an interview would have resulted in a higher percentage of interviewees who were female than the percentage of applicants who were male. “This potential reversal of fortunes underscores the problem in working with a small sample size.” Id. at 1123 n.2 (citation omitted). The court applied the four-fifths rule, and found that the selection rate for women was 81% of the selection rate for men. Id. at 1124. Finally, the court stated in dicta or alternative holding that the selection of interviewees was a process that had several elements, the plaintiffs did not argue that the elements could not be isolated for analysis, and the plaintiffs did not isolate any element and show a causal relationship linking disparate impact to that factor. Id. at 1124–25.

Sledge v. Goodyear Dunlop Tires North America, Ltd., 275 F.3d 1014, 87 FEP Cases 823, 81 E.P.D. ¶ 40,828 (11th Cir. 2001) (per curiam), reversed the grant of summary judgment to the Title VII and § 1981 racial discrimination defendant and held that a reasonable jury could find that the black plaintiff was qualified to be a maintenance mechanic and that the company’s examinations for mechanic “were nothing more than a pretext for racial discrimination.” Id. at 1019. The plaintiff applied for vacant mechanic positions and was not interviewed. At his request, his supervisors signed a letter to Human Resources stating that he was qualified. The Plant Engineer then devised a test. The plaintiff applied for the next two openings, and was not allowed to take the test. Two whites who had not taken the test were promoted. He protested, but applied for another vacancy, and was not allowed to take the test. The white promotee had failed the test. The Plant Engineer then rewrote the test to include drawing and verbal problems. A white applicant was told to disregard the word problems and passed. The company finally allowed the plaintiff to take the test, but insisted he take it at the end of a twelve-hour shift. He passed the practical but failed the word problems. The union pursued a grievance on behalf of a white employee, and an arbitrator ruled that the white employee could take the test again. The plaintiff was also given the opportunity to take the test again. A new test was devised, neither man passed, and the white employee received the promotion. Id. at 1016–18. The court noted that, at the time the plaintiff filed suit, there was only one black Mechanic in the Maintenance Department, out of 107. Id. at 1019. It described the evidence of discrimination as “compelling.” Id. at 1020.

I. Constructive Discharge

EEOC v. University of Chicago Hospitals276 F.3d 326, 332, 87 FEP Cases 1089 (7th Cir. 2002), reversed the grant of summary judgment to the Title VII constructive-discharge defendant. The court held that a plaintiff can show constructive discharge not only by showing an intolerable working environment, but also by showing that the employer has acted “in a manner so as to have communicated to a reasonable employee that she will be terminated,” and that the employee has then resigned. The lower court had held that the conditions at the time the plaintiff submitted her resignation letter—such as the fact that she had been told by her supervisor while she was on vacation that an asserted mistake was the “‘last straw’” and, when she returned, she found that her belongings were packed and her office was being used for storage space—were irrelevant, because she had prepared the resignation letter ahead of time. Reversing, the court of appeals stated that even though the letter had been prepared ahead of time, “her decision to submit that letter could have surely been based on” those conditions, (Emphasis in original.)

Jackson v. Arkansas Department of Education272 F.3d 1020, 1026–27, 87 FEP Cases 888 (8th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant, rejecting the plaintiff’s constructive-discharge claim and upholding the affirmative defense to the plaintiff’s claim of sexual harassment by her supervisor, Robert Gwatney. The court observed in dictum that, if the plaintiff were found to have been constructively discharged, that would have been a tangible employment action and the defendant would have been deprived of the affirmative defense. Id. at 1026. The court rejected the plaintiff’s constructive-discharge claim because “ the Department’s expectation that Jackson would return to work, especially after Gwatney had been terminated, does not rise to the level of an objectively intolerable working condition.” Id. at 1027. The court also relied on the facts that the plaintiff did not cooperate with the defendant’s investigation and efforts to correct the problem, and that the problem was in fact corrected “by changing Gwatney’s schedule, reimbursing her sick leave time, checking on her continued state of mind, and ultimately firing Gwatney.” Id.

Pipkins v. City of Temple Terrace, 267 F.3d 1197, 1201, 86 FEP Cases 1413, 81 E.P.D. ¶ 40,820 (11th Cir. 2001), affirmed the grant of summary judgment to the Title VII retaliation defendant. The court held that the plaintiff had not shown working conditions so bad that a reasonable person would have felt compelled to resign. “ Repeatedly receiving poor evaluations would be unpleasant for anyone, but it does not rise to the level of such intolerable conditions that no reasonable person would remain on the job.” Moreover, the Assistant City Manager, with whom the plaintiff had formerly had a consensual affair, was effectively discharged as soon as the affair came to light.

J. Reductions in Force

Windham v. Time Warner, Inc.275 F.3d 179, 190, 87 FEP Cases 843 (2nd Cir. 2001), vacated the grant of summary judgment to the Title VII racial-discrimination RIF defendant because the lower court failed to understand the plaintiffs’ argument. Plaintiffs did not argue that the defendant made a bad decision by choosing to terminate three black employees in a RIF, but argued that the decisionmaker did not consider white employees for the RIF. “From the admitted facts and the inferences raised by the record, a reasonable jury could find Harvey gave McLoughlin and Sherman additional responsibilities to make their jobs indispensable after she knew the department was overstaffed.” In addition, the court found that all employees had engaged in the types of negative conduct that the decisionmaker had relied on to justify the termination of the plaintiffs.

K. Compensation

Goodwin v. General Motors Corp.275 F.3d 1005, 1013, 87 FEP Cases 1651 (10th Cir. 2002), reversed the grant of summary judgment to the Title VII gender discrimination defendant, holding that the district court erred in considering only the amounts of percentage increases in pay rather than the absolute amounts of pay raises, where the plaintiff alleged that she had been paid less from the beginning of her employment.

L. Harassment

1. What is Actionable Conduct?

a. Not a Single Episode of Profane Language

Stewart v. Evans, 275 F.3d 1126, 87 FEP Cases 1298 (D.C. Cir. 2002), affirmed the grant of judgment on the pleadings to the Title VII sexual harassment defendant, based on the annexed opinion of the district court. The claim rested solely on a single telephone call in which the Inspector General of the U.S. Department of Commerce berated her and repeatedly used profane language. The district court opinion stated: “During the call, Ms. Stewart alleges that Mr. DeGeorge used offensive profanities, including the following: ‘…you’re a fucking idiot…;’ ‘…you are full of shit…;’ ‘…can’t you fucking read…;’ ‘…fuck the goddamn memo…;’ ‘…just between us girls…;’ ‘…I want to know where your fucking head was at…;’ and ‘…I don’t have to listen to your fucking bullshit.’ Mr. DeGeorge also allegedly said that Ms. Stewart would ‘rue the day [she] ever did this to [him]’ and that ‘somebody’s going to pay for this.’ Complaint, ¶ 14.” Id. at 1131. The lower court held that the conduct in question had nothing to do with sexual discrimination, and was motivated by DeGeorge’s rage at her handling of a workplace matter.

b. Not if the Conduct is Alleged to be Mere Rudeness

Patton v. Indianapolis Public School Board276 F.3d 334, 339, 87 FEP Cases 1433 (7th Cir. 2002), affirmed the grant of summary judgment for the defendants. The plaintiffs were African-American officials who had been in charge of student transportation for the Indianapolis Public Schools at the time of a disastrous planning failure that left thousands of children stranded at their bus stops or delivered to the wrong schools. Superintendent Gilbert and Donald Coleman, an official asked by Gilbert to help rectify the situation, were both African-American. Plaintiff Patton accused them of creating a hostile working environment by treating her in a rude and abrupt manner, ignoring her suggestions, failing to keep her informed of changes at work, and criticizing her for taking three days of sick leave in the middle of the crisis. The court held that this was not enough to constitute an actionable hostile environment and that, in any event, the plaintiff’s contention that the treatment was “purely personal,” doomed her claim.

Bennington v. Caterpillar Inc., 275 F.3d 654, 660, 87 FEP Cases 1050 (7th Cir. 2001), affirmed the grant of summary judgment to the ADEA defendant. The court held that, even assuming a hostile-environment claim could be brought under the ADEA, rudeness or unfairness did not rise to the level of actionable conduct.

c. Not if Sexual in Form, But Motivated by a Nonsexual Grudge.

Davis v. Coastal International Security, Inc.275 F.3d 1119, 87 FEP Cases 1263 (D.C. Cir. 2002), affirmed the grant of summary judgment to the defendants. The court held that the harassment of one man by other men is not sexual harassment violating Title VII if it is motivated by a workplace grudge unrelated to sexual discrimination, even if it takes the form of sexual innuendos and unmeant propositions.

Patton v. Indianapolis Public School Board276 F.3d 334, 339, 87 FEP Cases 1433 (7th Cir. 2002), affirmed the grant of summary judgment for the defendants. The court held in the alternative that the plaintiff’s contention that the treatment was “purely personal” doomed her claim.

d. Not in the Common Aftermath of Consensual Relationships

Pipkins v. City of Temple Terrace, 267 F.3d 1197, 1199–1201, 86 FEP Cases 1413, 81 E.P.D. ¶ 40,820 (11th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court summarized the context of its decision: “From approximately June 1993 until May 1994, Houldsworth maintained an on-again, off-again personal relationship with Daniel Klein, City Finance Director and Assistant City Manager. Although Klein held a supervisory position within Houldsworth’s department, Houldsworth’s immediate overseer was Florence Lewis-Begin, Assistant Finance Director. After May 1994, Houldsworth and Klein ceased to have a sexual relationship. Houldsworth asserts, however, that Klein continued to pursue her romantically even subsequent to this date.” Id. at 1199. She alleged that, after their relationship came to light, her evaluations declined, affecting her pay. Id. The court stated: “Applying Oncale , this court has distinguished between actions based on discriminatory animus and those based on personal animosity resulting from failed consensual relationships. See Succar v. Dade County Sch. Bd. , 229 F.3d 1343, 1345 (11th Cir.2000).” Id. at 1200. Succar involved a hostile work environment claim, but the plaintiff relied on a quid pro quo theory for her claim. The court extended the Succar rule “to claims arising out of consensual relationships in the quid pro quo context.” It held that any harassment committed by the plaintiff’s immediate supervisor in order to please her friend, Klein’s wife, would have been motivated by personal animosity rather than gender, and that the same applied to any harassing actions committed by Klein in light of the plaintiff’s characterization of them as reflecting his disappointment at the end of their relationship. The court cautioned that its ruling was limited: “This court does not today decide that once a consensual relationship between a supervisor and a subordinate is established, the subordinate could never then become victim to quid pro quo sexual harassment by that supervisor subsequent to the termination of the relationship. We hold only that the facts and circumstances of this case operate to take the motivation for any harassment that might have occurred out of the scope of Title VII.” Id. at 1201.

e. Not if the Plaintiff Was Not Bothered by the Incidents

Newman v. Federal Express Corp.266 F.3d 401, 86 FEP Cases 1375 (6th Cir. 2001), affirmed the grant of summary judgment on the plaintiff’s racial harassment claims, because he did not consider the anonymous racially-charged letter “a big deal,” and thought the anonymous voice-mail communication was just “silly.”

f. Yes, if Neutral in Form But Motivated by a Prohibited Motive

Cardenas v. Massey, 269 F.3d 251, 261–62, 87 FEP Cases 19 (3rd Cir. 2001), reversed the grant of summary judgment to the defendants on the plaintiff’s Title VII and New Jersey Law Against Discrimination racial harassment claim against certain defendants. The alleged harassment included performance evaluations with a practice of rounding up the evaluations of non-Hispanic employees and rounding down the evaluations of Hispanic employees, id. at 259, and the practice of assigning all minority employees to the one unit headed by a minority manager. The court held that the record must be considered as a whole in determining whether the challenged conduct is actionable. Id. at 260–61. In holding that there was sufficient evidence that the harassment affected the plaintiff’s work performance, the court relied on evidence that plaintiff’s chief harassers may have “set him up to fail,” with one of them asking the plaintiff to curtail a presentation requested by the other, and with the result that the second publicly berated the plaintiff. Another example was the assignment of too many complex matters to his unit, which had a high proportion of trainees Id. at 262. The court held that the plaintiff’s constructive-discharge claim survived as part of his harassment claim, and assumed without deciding that such a discharge is a tangible employment action. Id. at 266 n.10.

g. Yes, if One Gender is the Primary, But Not Exclusive, Target

Beard v. Flying J, Inc., 266 F.3d 792, 798, 87 FEP Cases 1836 (8th Cir. 2001), affirmed the judgment on a jury verdict for the Title VII sexual harassment plaintiff. The court rejected the defendant’s “equal opportunity harasser” defense, in which the breasts of males were sometimes twisted and sexual terms used in speaking with them, because women remained the primary target of the harassment:

Flying J next contends that the harassment was not based on sex because Mr. Krout harassed male employees by occasionally giving them so- called “titty-twisters” and speaking to them in sexual terms. Because of this, Flying J contends that women were not “exposed to disadvantageous terms or conditions of employment to which [males w ere] not exposed.” Schoffstall, 223 F.3d at 826. We observe, first of all, that this conduct is not the same as what occurred to Ms. Beard, partly because it is probably not sexual, and in any case it carries an entirely different cultural and contextual message. A plaintiff in this kind of case need not show, moreover, that only women were subjected to harassment, so long as she shows that women were the primary target of such harassment. See Quick v. Donaldson Co., 90 F.3d 1372, 1378 (8th Cir.1996). Viewing the evidence in the light most favorable to Ms. Beard, a jury could reasonably find that the vast majority of Mr. Krout’s activities of a harassing nature was directed toward female employees, and could thus conclude that the harassment of Ms. Beard was based on sex.

h. Hotel Rooms Can Sometimes Be Part of a Working Environment

Ferris v. Delta Air Lines, Inc.277 F.3d 128, 135, 87 FEP Cases 899 (2nd Cir. 2001), reversed the grant of summary judgment to the Title VII defendant. The plaintiff flight attendant alleged that she had been raped by a male flight attendant in his hotel room during a stopover in Rome. The court of appeals rejected the district court’s finding that the alleged assault had not occurred in a work environment because no Delta policy encouraged flight attendants to socialize in their rooms. “The circumstances that surround the lodging of an airline’s flight crew during a brief layover in a foreign country in a block of hotel rooms booked and paid for by the employer are very different from those that arise when stationary employees go home at the close of their normal workday.” The court held that a jury could properly find that the male flight attendant’s hotel room was a part of the plaintiff’s work environment for purposes of Title VII. The court held that a single instance of harassment can establish a hostile environment “when it is sufficiently egregious.” Id. at 136. The court reversed the lower court’s decision that no ongoing hostile environment could arise from the plaintiff’s “hypothetical and speculative” fear and trepidation at further direct encounters with the rapist, because the evidence showed that the plaintiff “suffered real emotional trauma from her fear of seeing Young again,” tried to keep informed about his work schedule so she could attempt to avoid working on those flights, sought psychiatric help, and took antidepressants. Id. at 137.

i. Improper Physical Contact

Worth v. Tyer276 F.3d 249, 268, 87 FEP Cases 994 (7th Cir. 2001), affirmed the Title VII sexual harassment verdict for the plaintiff. The court held that improper physical contact with the plaintiff over two days was actionable. It stated that even one act of harassment can be actionable if it is sufficiently egregious, and that touching increases the severity of the situation. Here, the harasser touched the plaintiff’s breast near the nipple and maintained the contact for several seconds.

j. Racial or Ethnic Slurs

Swinton v. Potomac Corp., 270 F.3d 794, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law plaintiff. The court held that frequently repeated racial slurs were actionable, id. at 804, although Fosdick, a company supervisor who was the chief racial harasser of the plaintiff, was also the uncle of the plaintiff’s fiancée and although the plaintiff socialized with Fosdick at work and outside of work “to maintain harmonious family relations.” Id. at 800.

McCowan v. All Star Maintenance, Inc.273 F.3d 917, 87 FEP Cases 596 (10th Cir. 2001), reversed the grant of summary judgment to the Title VII and § 1981 defendant. The court held that the plaintiffs had shown sufficient evidence of severe and pervasive racial and national-origin harassment for it to be actionable. The court rejected the defendants’ contention that the ethnic slurs and references directed at plaintiffs over the three weeks of their employment could not have been pervasive “because Plaintiffs spent only a few minutes at the beginning and end of the day in the office where some of the offensive language might have been voiced and otherwise worked alone in a house for the entire day over a period of only three weeks.” Id. at 920. Some of the language used was particularly vile, such as “stupid f—–g Mexican” and “burrito-eating m—–f——.” Id. at 924. Hispanics were not the only group singled out for contempt; indeed, one witness defended himself by denying that he had ever said “worthless n—–“ while admitting that he might have said “n—–.” Id. The court disapproved of the lower court’s trivialization of these incidents: “In light of a record that spans only three weeks, the court’s characterizing the racial harassment as ‘isolated’ evincing more ‘casual comments, or accidental or sporadic conversation,’ and as statements of personal opinion not made by individuals responsible for their hiring or firing misses the mark.” Id. at 925. The court held that the totality of the circumstances must be examined, and stated that “we look at both specific hostility targeting Plaintiffs as well as the general work atmosphere.” Id. It added: “This, even if a comment about Plaintiffs’ baggy pants or low riders might not be explicitly racial, given the context of the statement, it could be reasonably inferred the remarks were related to Plaintiffs’ race and were part of an ongoing, pervasive environment of racial taunting.” Id. (footnote omitted). The court held that the lower court erred in disregarding racial and ethnic slurs directed at others; such evidence “must be weighed on the side of reasonable inferences.” Id. at 925 n.10. The court also rejected the lower court’s approach to the fact that plaintiffs were exposed for only a few minutes a day, and worked for only three weeks: “These circumstances, however, cut both ways. Alternatively, the shorter exposure time supports the equally plausible inference the abuse was so offensive as to taint the entire job site.” Id. at 926.

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 87 FEP Cases 1209 (11th Cir. 2002), affirmed the jury verdict for the plaintiff, holding that a reasonable jury could find that ethnic slurs, shouted angrily three or four times a day over a period of a month, often in the course of reprimanding the plaintiff, with lesser harassment over a period of three months, were sufficiently severe and pervasive to be actionable. The court held that the “totality of the circumstances” approach was to be followed in determining whether the harassment unreasonably interfered with his work performance, and the evidence was sufficient for the jury to draw that conclusion. Id. at 1276. The court explained:

Miller did not suffer from overhearing occasional off-color comments. Rather, as one of his coworkers testified, Galpin and other technicians in the Service Department used the derogatory names in an intimidating manner, shouting them at Miller during the course of berating him for his job performance, or when they were “arguing with him,” were “mad with him,” or were “taunting him.” This conduct rose above the level of off-handed comments in the course of casual conversation that the Supreme Court has refused to find actionable. . . . Third, the testimony makes it clear that these incidents were humiliating and degrading to Miller. The very nature of the coworkers’ utterances, coupled with the fact that they were directed at Miller and were sometimes used in the course of reprimanding him in front of others, establishes this factor. Finally, there was evidence that Galpin’s behavior prevented Miller from performing his job, on at least one occasion. Kenworth emphasizes testimony that Miller engaged in horse play at work, used his time to make personal phone calls, and was often seen loafing with other employees, and suggests these as alternative reasons for Miller’s poor job performance. Even if true, this would not prevent the jury from reasonably finding that Galpin’s conduct also interfered with Miller’s job performance. The Supreme Court has cautioned that harassment need not be shown to be so extreme that it produces tangible effects on job performance in order to be actionable. . . . Thus, having established the frequency, severity, and humiliating nature of the conduct, Miller’s failure to establish convincingly how Galpin’s conduct interfered with his duties is not fatal to his hostile environment claim, given the totality of the circumstances. We therefore cannot conclude that the jury unreasonably found Galpin’s conduct to be sufficiently severe and pervasive such that the terms or conditions of Miller’s employment were altered.

Id. at 1277 (citations omitted).

2. Who is a Supervisor?

a. For Purposes of Faragher and Ellerth

Hall v. Bodine Electric Co.276 F.3d 345, 355, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court applied prior case law holding that a supervisor within the meaning of Ellerth is someone possessing at least some of the authority to hire, fire, demote, promote, transfer, or discipline, an employee. The court held that the asserted authority of Samuel Lopez, plaintiff’s harasser, was not enough to make him her supervisor although he assertedly had authority to direct her work operations by telling her which machines to run, provide input into her performance evaluations, and train her. The court distinguished between overseeing aspects of the plaintiff’s work performance and having “the authority to directly affect the terms and conditions of a victim’s employment.” (Emphasis in original; citations omitted.) “The type of marginal discretion Lopez had over Hall’s work operations is not sufficient to impute Title VII vicarious liability to an employer.” (Citation omitted.) The court also found it relevant that the plaintiff always took her complaints to her “real supervisor” or to Human Resources, rather than to her harasser or someone at his level. Id. at 355–56.

Swinton v. Potomac Corp., 270 F.3d 794, 803, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law plaintiff. The court stated that Fosdick, a company supervisor who was the chief racial harasser of the plaintiff, was not a supervisor within the meaning of Faragher and Ellerth because he was not the plaintiff’s supervisor.

b. For Purposes of the Negligence Theory

Swinton v. Potomac Corp., 270 F.3d 794, 804–05, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law plaintiff. The court relied on Brooks v. City of San Mateo, 229 F.3d 917, 925 n.6 (9th Cir. 2000), and Lamb v. Household Services, 956 F. Supp. 1511, 1516–18 (N.D. Calif. 1997), in defining employees who qualify as members of management for purposes of imposing liability on the defendant in a negligence case:

The court in Lamb identified two categories of employees who qualify as management for these purposes. First, an employee is a member of management if a “supervisor[ ] possessing substantial authority and discretion to make decisions concerning the terms of the harasser’s or harassee’s employment,” such as “authority to counsel, investigate, suspend, or fire the accused harasser, or to change the conditions of the harassee’s employment.” Id. at 1517. Second, a supervisor who lacks such authority is nonetheless classified as “management” if he “has an official or strong de facto duty to act as a conduit to management for complaints about work conditions.” Id. ; see also Distasio , 157 F.3d at 64 (“An official’s knowledge will be imputed to an employer when: ‘ . . . (B) the official is charged with a duty to act on the knowledge [of harassment] and stop the harassment; or (C) the official is charged with a duty to inform the company of the harassment.’”) (quoting Torres v. Pisano , 116 F.3d 625, 636- 37 (2d Cir. 1997) (citations omitted)).

It is beyond dispute that Stewart fell into the second category of “management” employees identified by Lamb : employees with “an official or strong de facto duty to act as a conduit to management for complaints about work conditions.” 956 F.Supp. at 1517. The duty here was official and explicit, not left to chance. By the very terms of U.S. Mat’s employee manual, Stewart was charged with accepting reports of harassment; he was the one to whom Swinton was to report first if he experienced harassment. And it is also undisputed that Stewart personally witnessed the harassment; he admitted as much. It could even be said that he participated in it himself by laughing along with Fosdick’s jokes. Under these circumstances, we are confident in concluding that Swinton presented overwhelming and undisputed evidence justifying a verdict in his favor under a negligence theory, as outlined in Instruction 10.

Id. at 804–05 (footnote omitted).

3. Tangible Employment Actions

Cardenas v. Massey, 269 F.3d 251, 266–67, 87 FEP Cases 19 (3rd Cir. 2001), reversed the grant of summary judgment to the defendants on the plaintiff’s Title VII and New Jersey Law Against Discrimination racial harassment claim against certain defendants, including his constructive-discharge claim arising from the harassment. The court assumed without deciding that a constructive discharge is a tangible employment action. Id. at 266 n.10.

Mota v. University of Texas Houston Health Science Center , 261 F.3d 512, 520, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), affirmed the judgment for the plaintiff on his same-sex sexual harassment claim. The court held that a tangible employment action for purposes of a sexual harassment claim is not necessarily the same as an adverse employment action for purposes of a retaliation claim. “Retaliation occurs in response to protected activity, whereas a tangible employment action is the result of the harassment itself. A rational jury could have concluded both that no tangible employment action resulted from the harassment and that the University subsequently retaliated against Mota for filing a complaint.”

4. Harassment by Persons Other than Supervisors

Ferris v. Delta Air Lines, Inc.277 F.3d 128, 136–37, 87 FEP Cases 899 (2nd Cir. 2001), reversed the grant of summary judgment to the Title VII defendant. The plaintiff flight attendant alleged that she had been raped by a male flight attendant in his hotel room during a stopover in Rome. The court stated that a reasonable factfinder could conclude that the defendant was responsible for the rape because of its negligence in responding to past complaints by other flight attendants who had stated that the same flight attendant had raped them. The court stated:

Delta had notice of Young’s proclivity to rape co-workers. The fact that Young’s prior rapes were not of Ferris but of other co-workers is not preclusive. If an employer is on notice of a likelihood that a particular employee’s proclivities place other employees at unreasonable risk of rape, the employer does not escape responsibility to warn or protect likely future victims merely because the abusive employee has not previously abused those particular employees.

Id. at 136. The court rejected the lower court’s trivialization of the prior rapes:

Had the earlier non-work related incidents consisted of less grave conduct, such as off-duty flirtation, sexual innuendo, or crude talk, we might agree that such off-premises, off-duty conduct does not reasonably give notice of a likelihood that the person will represent a danger to co-employees or import his harassment into a work environment and therefore does not give rise to an employer’s duty to protect co-workers. But rape is obviously a far more serious matter. The more egregious the abuse and the more serious the threat of which the employer has notice, the more the employer will be required under a standard of reasonable care to take steps for the protection of likely future victims. The district court may have been correct that Delta’s ability to investigate was curtailed by the fact that the Feingold and Ballweg rapes occurred off-duty. It does not follow, however, that the off-duty nature of the rapes absolved Delta of all responsibility to take reasonable care to protect co-workers, much less justified a supervisor’s affirmative steps to prevent a victim from filing a written complaint and warning co-workers.

Id. at 137.

Hall v. Bodine Electric Co., 276 F.3d 345, 356, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court held that notice or knowledge is a prerequisite for employer liability for co-worker harassment. “Title VII neither requires nor expects the management of a company to be aware of every impropriety committed by every low-level employee.” (Citation omitted.)

Swenson v. Potter, 271 F.3d 1184, 1192, 87 FEP Cases 620, 81 E.P.D. ¶ 40,821 (9th Cir. 2001), reversed the judgment for plaintiff, holding that the defendant Postal Service could not be liable for harassment by a co-worker prior to its actual notice of the asserted harassing conduct.

Swinton v. Potomac Corp., 270 F.3d 794, 803–04, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law plaintiff. The court held that the company was liable for racial harassment by a person who was not in a direct chain of command over the plaintiff, and that the affirmative defense is not available under the negligence theory. The court rejected the defendant’s argument that such a result would leave an employer better off if the harasser is a supervisor over the plaintiff, because at least then the employee would be required to complain. “This reasoning rests on the faulty premise that an employer is ‘better off’ in the strict liability context than in the negligence context.” Id. at 803. The court explained that the actual difference came down to an allocation of the burden of persuasion:

While it is strictly true that it is not available as an affirmative defense, the principle embodied in the defense—that an employer can avoid liability in situations where it acts promptly to remedy harassment—is contained in the requirements for a prima facie case based on negligence. In the context of this case, it was Swinton’s burden, in accord with Jury Instruction 10, to prove that management knew or should have known of the harassment and “failed to take reasonably prompt, corrective action . . . .” And, as the Second Circuit has explained, a plaintiff alleging co-worker harassment must prove that the employer “either provided no reasonable avenue for complaint or knew of the harassment but did nothing about it.” . . . . This formulation is substantively similar to the Ellerth / Faragher defense; the chief difference is that in the negligence context, the plaintiff bears the burden of proving the employer’s failure to respond adequately to the harassment, while, in a vicarious liability regime, the defendant must establish the corrective action as an affirmative defense.

Id. at 803–04 (citations omitted). Although the lower court gave an erroneous instruction on vicarious liability, the court of appeals held that the error was harmless in light of the strength of the plaintiff’s case under the negligence theory.

5. Failure to Complain

Jackson v. Arkansas Department of Education272 F.3d 1020, 1025–26, 87 FEP Cases 888 (8th Cir. 2001), affirmed the grant of summary judgment to the defendant, upholding the affirmative defense. The plaintiff was subjected to harassing conduct by her supervisor for nine months before her fiancé complained on August 31, 1994, to one of her supervisors. On receipt of the complaint, the defendant immediately began an investigation, but the result was inconclusive. When the defendant later learned on June 23, 1995, from a co-worker that the alleged harasser had lied in the investigation, it immediately fired him. The court rejected the plaintiff’s argument that the lapse of time before the defendant found out that the co-worker had lied meant that its policy was ineffective and that the plaintiff was therefore excused from complaining.

6. Adequacy of a Complaint, and Reasons for Not Complaining
Earlier

Cush-Crawford v. Adchem Corp.271 F.3d 352, 359, 87 FEP Cases 456, 81 E.P.D. ¶ 40,800 (2nd Cir. 2001), affirmed the judgment on a jury verdict for $100,000 in punitive damages for the Title VII hostile-environment plaintiff. The court held that a jury could reasonably conclude that the plaintiff’s complaints to company officials about her supervisor’s continual demands to go out with him, and about her fears that failure to comply would result in bad evaluations, were adequate complaints of sexual harassment notwithstanding her failure to use that phrase, and notwithstanding the defendant’s prompt action a year later when she did use the phrase. See the discussion of this case in the section on punitive damages.

Mota v. University of Texas Houston Health Science Center 261 F.3d 512, 525–26, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), affirmed the judgment for the plaintiff on his same-sex sexual harassment claims, holding that a jury could reasonably find that the plaintiff’s otherwise problematic delay of up to nine months in reporting the harassment was not unreasonable in light of the harasser’s threats of retaliation and assertions of ability to influence the outcome of any action the University might take. Moreover, the court held that a jury could find the plaintiff’s refusal to turn over his tape recordings to the internal investigative board was not unreasonable, given his testimony before the panel and his provision of an extensive written complaint. “He may have viewed the production of additional evidence, such as recordings of conversations, as futile, given his concerns over the effectiveness of the panel’s inquiry, the composition of the panel, and Caffesse’s influence. A jury could have concluded that Mota’s actions did not constitute an unreasonable failure to take advantage of preventive or corrective opportunities.” Id. at 526.

Hall v. Bodine Electric Co.276 F.3d 345, 356, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court stated that, if the employer designated a channel for making harassment complaints, complainants can normally be expected to use it. “If a point person has not been identified, or is not easily accessible, ‘an employer can receive notice of harassment from a ‘department head’ or someone that ‘the complainant reasonably believed” was authorized to receive and forward (or respond to a complaint of harassment.’” (Emphasis in original; citation omitted.) The court rejected the plaintiff’s argument that she did not complain about the earlier harassment because the defendant had failed to implement a published and widely distributed sexual harassment policy. “But we have never held that Title VII employers must institute formal sexual harassment policies. Instead, we have focused on whether an employer has a reasonable mechanism in place for ‘detecting and correcting harassment.’” (Citations omitted.) The court held that the defendant had an effective channel in place, because each time the plaintiff complained, she knew with whom to make her complaint. Id. at 356–57.

Gawley v. Indiana University, 276 F.3d 301, 311–12, 87 FEP Cases 1116 (7th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant because the university had a procedure in place because the harassment of the plaintiff ended shortly after she complained, and because the plaintiff let ongoing and repeated harassment continue for seven months before she complained. “Gawley’s neglect of the university’s formal procedures during seven months of escalating harassment, in combination with the insufficiency of her repeated informal efforts to stop Minger constitute an unreasonable failure to take advantage of the university’s corrective procedures.” Id. at 312.

7. How Many Times Must a Complainant Complain?

Woods v. Delta Beverage Group, Inc., 274 F.3d 295, 87 FEP Cases 737, 81 E.P.D. ¶ 40,833 (5th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant because the plaintiff failed to complain that her harasser had resumed his unwelcome conduct after he had been counseled. The plaintiff complained about the harassing actions of a co-worker, Gary Eddy. The company promptly investigated the complaint, counseled Eddy and warned him that he could be fired if he continued, and told the plaintiff to let it know immediately if any further improper conduct occurred. The harassment assertedly continued, but the plaintiff did not report it. The court held that her failure to report the resumption doomed her claim. Id. at 299–300. There was no evidence of any prior harassment of other women by Eddy, and the defendant was not liable simply because its first corrective action was unsuccessful. Id. at 300. When the plaintiff made her first complaint, “Delta Beverage was not legally obligated to fire Eddy or separate him from work interaction with Woods.” (Citation omitted.) The court stated that, if the plaintiff had complained and the defendant had merely given Eddy another verbal counseling, “Woods might have an objective basis for concluding that further reports of harassment would be futile.” Id.

8. Actual or Constructive Notice of the Harassment

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1278–79, 87 FEP Cases 1209 (11th Cir. 2002), affirmed the jury verdict for the plaintiff, holding that a reasonable jury could find that the defendant had constructive notice of co-workers’ repeated racial or ethnic slurs against the plaintiff. The court held that the plaintiff’s request to his supervisor, to the effect that the supervisor should tell Galpin, the chief harasser, to watch what he says, was not specific enough to constitute actual notice to the defendant. Id. at 1278. The court continued:

Unfortunately for Kenworth, this was not the only notice Brooks received. There is ample evidence in the record establishing that Brooks had constructive knowledge of Galpin’s abusive comments. We have held the following factors to be germane to the issue of constructive notice of harassment: “(1) the remoteness of the location of the harassment as compared to the location of management; (2) whether the harassment occurs intermittently over a long period of time; (3) whether the victims were employed on a part-time or full-time basis; and (4) whether there were only a few, discrete instances of harassment.” . . . Brooks’ office was located in the Service Department shop, where much of Miller’s abuse occurred. Viewed in the light most favorable to Miller, the evidence presented at trial established that Brooks was actually present at times when Galpin shouted the ethnic insults at Miller. The abuse occurred on a daily basis for the month that Galpin and Miller were both full-time employees of Kenworth. Finally, Galpin’s harassment of Miller occurred up to three to four times a day, and was often directed at Miller in the presence of others. Considering the relevant factors, we find that the evidence set forth in the record, viewed in the light most favorable to Miller, was sufficient to support a jury finding of constructive notice on the part of Kenworth.

Id. at 1278–79. The court rejected the defendant’s argument that Brooks was too far down the corporate ladder for notice to him to be notice to the corporation. Unlike isolated store managers in a giant corporation, Brooks had only one person between him and the President and owner of the defendant. Id. at 1279.

9. Adequacy of the Policy

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1279–80, 87 FEP Cases 1209 (11th Cir. 2002), affirmed the jury verdict for the plaintiff, holding that the defendant’s harassment policy did not provide it with a defense because it was simply a document new employees had to sign, managers were unfamiliar with it, and supervisors did not step in to stop harassment of which they were aware.

10. Adequacy of Corrective Action

Woods v. Delta Beverage Group, Inc., 274 F.3d 295, 300, 87 FEP Cases 737, 81 E.P.D. ¶ 40,833 (5th Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant because the plaintiff failed to complain that her harasser had resumed his unwelcome conduct after he had been counseled. When the plaintiff made her first complaint, “Delta Beverage was not legally obligated to fire Eddy or separate him from work interaction with Woods.” (Citation omitted.) The court stated that, if the plaintiff had complained and the defendant had merely given Eddy another verbal counseling, “Woods might have an objective basis for concluding that further reports of harassment would be futile.”

Mota v. University of Texas Houston Health Science Center261 F.3d 512, 525, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), affirmed the judgment for the plaintiff on his same-sex sexual harassment claims, holding that a jury could reasonably find the defendant’s corrective actions inadequate because the investigating body did not make a finding of harassment, did not discipline the harasser, took no step more affirmative than directing that the plaintiff and his harasser work out an accommodation, and did not even issue a reprimand or warning. “Finally, the University’s retaliation against Mota undermines its claim that it was attempting to prevent future harassment.”

Longstreet v. Illinois Department of Corrections, 276 F. 3d 379, 382–83, 87 FEP Cases 1375 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The plaintiff was subjected to two incidents of harassment by two different perpretrators. In both instances, the defendant took adequate corrective action. The court rejected the plaintiff’s contention that, if it had taken adequate corrective action on earlier complaints against the harassers by earlier victims, she would never have been exposed to their harassment. Only one prior incident had been reported, resulting in the reassignment of one of the harassers after he told a female Sergeant, Tracey Terry, that he would pay her money to perform a sexual act on him. That victim was never bothered again. The court held that the defendant’s response to that incident “was not obviously unreasonable,” id. at 382, and continued:

It would push the role of deterrence too far to say that a response which seemed to be within the realm of reasonableness in one situation can, if ultimately it did not have the proper deterrent effect, be the sole basis for liability in another case even if the employer’s response in the second case was clearly sufficient. . . .

Although Longstreet’s argument has superficial appeal, we cannot conclude that an employer is subject to what amounts to strict liability for every second incident of harassment committed by an employee, especially when the first incident was far less serious than the second. Had Bester’s acts toward Terry been more severe—and as a result he had merely been reassigned to another duty station—we would be faced with a different situation. Or were there actual nonhearsay complaints that he harassed several other women, and that despite complaints he had not been disciplined, the situation would also be different. But what we have here is, in effect, one prior incident which may or may not rise to the level of actionable harassment and which was not ignored by the employer, followed by a second incident which resulted in the de facto discharge of the harasser. To say that the employer must be held liable in the second incident would be to impose strict liability on an employer any time an employee commits two acts of harassment. It would be a two-strikes-and-you’re-out rule. To be safe from liability, an employer would always have to discharge a person accused of any kind of harassment because no employer can predict with certainty, any more than any judge sentencing a criminal defendant can predict with certainty, that an offender will not offend again.

Id. at 383.

EEOC v. Indiana Bell Telephone Co.256 F.3d 516, 521–26, 86 FEP Cases 1, 80 E.P.D. ¶ 40,590 (7th Cir. 2001) (en banc), affirmed the judgment of liability for sexual harassment, holding that the employer’s asserted reason for not taking effective action against the alleged harasser—that he would file a grievance under the collective bargaining agreement and be reinstated—was irrelevant on liability.

Jackson v. Arkansas Department of Education272 F.3d 1020, 1025–26, 87 FEP Cases 888 (8th Cir. 2001), affirmed the grant of summary judgment to the defendant, upholding the affirmative defense. The plaintiff was subjected to harassing conduct by her supervisor for nine months before her fiancé complained to one of her supervisors. On receipt of the complaint, the defendant immediately began an investigation, took steps to ensure that there would be no repetition of the offensive conduct, asked the plaintiff to inform it if anything further happened, and checked regularly with the plaintiff. The defendant’s investigation was inconclusive, but it changed the plaintiff’s work hours to eliminate any opportunity for the alleged harasser to interact with her in the workplace and, when she desired to return to her former hours because of child-care problems, it changed the alleged harasser’s work hours to achieve the same effect. When the defendant later learned from a co-worker that the alleged harasser had lied in the investigation, it immediately fired him. The court held that this was adequate corrective action and demonstrated the existence of an adequate policy.

Beard v. Flying J, Inc., 266 F.3d 792, 799–800, 87 FEP Cases 1836 (8th Cir. 2001), affirmed the judgment on a jury verdict for the Title VII sexual harassment plaintiff, and rejected the company’s argument that it was entitled to the affirmative defense because it conducted an incomplete investigation, and took no corrective action even when it believed the allegations of harassment.

Swenson v. Potter, 271 F.3d 1184, 1192, 87 FEP Cases 620, 81 E.P.D. ¶ 40,821 (9th Cir. 2001), reversed the judgment for plaintiff, holding that the defendant Postal Service took adequate corrective action. The court held that there are two types of corrective action. “The first consists of the temporary steps the employer takes to deal with the situation while it determines whether the complaint is justified. The second consists of the permanent remedial steps the employer takes once it has completed its investigation.” (Citations omitted.) The court held that the defendant’s moving the harasser to minimize his contact with the plaintiff was adequate:

Separating Swenson and Feiner did not eliminate all contact between them, but the Postal Service was not required to provide Swenson a Feiner-free workplace merely because she complained about him. The degree of separation imposed, if any, must be a function of the severity of the alleged harassment and the evidence provided to the employer in support of the complaint. The more egregious the conduct alleged, and the more substantial the proof supporting the allegation, the harder the employer must try to minimize further contact between the two employees pending the outcome of the investigation.8
________

8 The employer is not required to separate the complainant and the accused employee pending the outcome of the investigation. Depending on the circumstances, which can include the employer’s legitimate interest in avoiding disruption to its business, the employer may reasonably decide that the employees must continue working together while awaiting the outcome of the investigation. At the very least, however, the employer must try to eliminate contact between the two employees that is not strictly business-related. If it reasonably concludes that the two employees must continue to have regular business contact during the course of the investigation, the employer must take reasonable steps to expedite the investigation.

Id. at 1192–93. The court went on to state that a prompt investigation is the “most significant immediate measure an employer can take.” Id. at 1193. “An investigation is a warning, not by words but by action.” Id. The court also held that the defendant’s permanent steps were adequate. Although it found that it could not sustain the claims, it gave the plaintiff a permanent job assignment that kept her free from daily contact with Steiner, without her having to go through the bidding process, and offered her customized hours to minimize contact with him. The court stated that not all transfers of complainants are inappropriate. “ If it decides to separate the two employees in the workplace, the employer may properly consider the relative ease of moving them and their respective importance to its business operations. The employer has wide discretion in choosing how to minimize contact between the two employees, so long as the accuser is not moved to an objectively less desirable position.” Id. at 1194. The court relied on the EEOC Compliance Manual § 615.4(a)(9)(iii) (2000) in defining such a position. The court held that the defendant’s inability to sustain the charge gave it a legitimate reason for not disciplining Steiner. Id. at 1196. The court explained:

As a matter of policy, it makes no sense to tell employers that they act at their legal peril if they fail to impose discipline even if they do not find what they consider to be sufficient evidence of harassment. . . . Employees are no better served by a wrongful determination that harassment occurred than by a wrongful determination that no harassment occurred. We should be wary of tempting employers to conduct investigations that are less than fully objective and fair. Title VII “in no way requires an employer to dispense with fair procedures for those accused or to discharge every alleged harasser.” . . .

The dissent makes much of supposed defects in the The Postal Service’s investigation. While we believe that the investigation was competent, it ultimately doesn’t matter. In considering whether the employer’s response was appropriate, we consider the overall picture. Even assuming that the investigation was less than perfect, the Postal Service nevertheless took prompt action to remedy the situation. The harassment stopped. The only possible consequence of a better investigation could have been to make out a stronger case for disciplining Feiner. But the purpose of Title VII is remedial-avoiding and preventing discrimination-rather than punitive. Failure to punish the accused harasser only matters if it casts doubt on the employer’s commitment to maintaining a harassment-free workplace. Where an employee is not punished even though there is strong evidence that he is guilty of harassment, such failure can embolden him to continue the misconduct and encourage others to misbehave. But where the proof of harassment is weak and disputed, as it was in this case, the employer need not take formal disciplinary action simply to prove that it is serious about stopping sexual harassment in the workplace. Where, as here, the employer takes prompt steps to stop the harassment, liability cannot be premised on perceived inadequacies in the investigation.

Id. at 1196–98 (footnotes and citations omitted). Judge Fletcher dissented.

11. Direct Liability

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1280, 87 FEP Cases 1209 (11th Cir. 2002), affirmed the jury verdict for the plaintiff, holding that the jury could find the defendant directly liable for co-worker harassment “if it concluded that Kenworth failed to take immediate and appropriate corrective action. There is absolutely no evidence in the record to indicate that Kenworth took any action whatsoever against Galpin, let alone that which would rise to the level of appropriate and immediate.”

12. Failure to Mitigate

Ferris v. Delta Air Lines, Inc.277 F.3d 128, 137, 87 FEP Cases 899 (2nd Cir. 2001), reversed the grant of summary judgment to the Title VII defendant. The plaintiff flight attendant alleged that she had been raped by a male flight attendant in his hotel room during a stopover in Rome. The court reversed the lower court’s decision that no ongoing hostile environment could arise from the plaintiff’s “hypothetical and speculative” fear and trepidation at further direct encounters with the rapist, because the evidence showed that the plaintiff “suffered real emotional trauma from her fear of seeing Young again,” tried to keep informed about his work schedule so she could attempt to avoid working on those flights, sought psychiatric help, and took antidepressants. It stated:

Under the circumstances, we do not think that Ferris’s fear of encountering her rapist at her workplace is too hypothetical and speculative to sustain an award of damages. We do not rule out, however, that Ferris may be chargeable with partial, or even full, responsibility for this later injury or its duration by reason of her failure to mitigate her damages when she delayed reporting the event to Delta and naming her assailant.

VI. Litigation

A. Administrative Exhaustion

Edelman v. Lynchburg College, __ U.S. __, 122 S. Ct. 1145, 88 FEP Cases 321 (2002), upheld the EEOC regulation, 29 CFR §1601.12(b) (1997), allowing an unverified charge to be filed if it is later verified while the charge is before the agency, even if the verification is after the expiration of the charge-filing period, and providing that the verification relates back to the original filing of the charge. However, Part III of the opinion raised a new question. It stated that there was some factual support in the record for the proposition that Edelman’s unverified letter might not be a charge because it was not treated by Edelman or the EEOC as a charge, and that this question was open on remand. The decision in the Fourth Circuit quoted Edelman’s letter:

At the conclusion of his letter, Edelman wrote, “I hereby file a charge of employment discrimination against Lynchburg College (Dean Jacqueline Asbury, President Charles Warren and the Board of Trustees) and I call upon the EEOC to investigate this case [.]”

228 F.3d 503, 505–06, 83 FEP Cases 1708, 79 E.P.D. ¶ 40,264 (4th Cir. 2000). The Supreme Court cited a letter from plaintiff’s counsel sent eight days after the EEOC received Edelman’s letter:

On November 26, 1997, Edelman =s attorney sent another letter to the EEOC that stated:

Professor Edelman would like to have a personal interview with an EEOC investigator prior to the final charging documents being served on the college. It is my understanding that delay occasioned by the interview will not compromise the filing date, which will remain as November 14, 1997. Please advise if my understanding in this regard is not correct.

* * * * * *

Finally, please have the investigator contact this office to schedule the interview at a mutually convenient time.

Shortly thereafter, the EEOC sent a letter to Edelman advising him that it needed additional information in order to investigate his case. The EEOC =s letter urged Edelman to set up an interview Aas soon as possible because a charge of discrimination must be filed within the time limits imposed by law[.] @

Id. at 506. For its part, the EEOC did not serve the respondent with the statutorily required ten-day notice until after the verification was filed. I would suggest that this decision means that it is extremely risky for plaintiffs to file an unverified charge and/or to state that a future charge will be filed, particularly if the charging party asks the EEOC not to serve the charge until some later time.

Worth v. Tyer276 F.3d 249, 258–59, 87 FEP Cases 994 (7th Cir. 2001), affirmed in part, and reversed in part, the verdict for the Title VII plaintiff. The court rejected the defendant’s argument that the trial court lacked jurisdiction because the plaintiff had not received a Notice of Right to Sue when she filed suit. The court held that receipt of the letter was not a jurisdictional prerequisite, and lack of such receipt was only a defense the defendant could raise. In any event, receipt of the letter prior to dismissal cures any defect.

B.K.B. v. Maui Police Department276 F.3d 1091, 1099–1103, 87 FEP Cases 1306 (9th Cir. 2002), modified in other respects, __ F.3d __, 2002 WL 237764 (9th Cir. Feb. 20, 2002), reversed the grant of summary judgment to the defendant on plaintiff’s Title VII and Hawaii civil rights claims, for failure to exhaust administrative remedies. Plaintiff’s charge simply alleged race, sex, and national origin discrimination and race and retaliation harassment, including retaliatory harassment of a verbal nature. She checked boxes stating that she was complaining of racial, sexual and national origin discrimination and harassment. She did not mention the rapes to which she was allegedly subjected. Her pre-charge questionnaire gave examples showing that some of the harassment was combined racial and sexual harassment. The court stated that reliance on the questionnaire to interpret the scope of the charge impaired the notice function of the charge. Id. at 1101. “However, we do not take the respondent’s notice of the charge itself to be of paramount consideration where the failure of notification is due to agency negligence.” Id. at 1101–02 (citation omitted). The court continued:

If the charge itself is deficient in recording her theory of the case due to the negligence of an agency representative who completes the charge form, then the plaintiff may present her pre-complaint questionnaire as evidence that her claim for relief was properly exhausted.

Id. at 1102 (citations omitted). The court rejected what it regarded as the contrary conclusion of the Seventh Circuit. The plaintiff presented an affidavit of the official of the Hawaii Civil Rights Commission who had assisted her, stating that her Right to Sue letter “was intended by the agency to afford her the right to pursue claims of sexual as well as racial harassment.” Id. The court treated this statement as effectively admitting negligence. Based on all this, the court held that the “close question” should be resolved in favor of construing the word “harassment” in her charge broadly. Id. at 1103.

B. Timeliness

1. Existence of Continuing Violations

National R.R. Passenger Corp. v. Morgan, 536 U.S. __, 122 S. Ct. 2061, 88 FEP Cases 1601 (2002), rejected the doctrine of continuing violations under Title VII for discrete actions, but upheld the doctrine for hostile-environment cases, subject to a laches defense of uncertain scope. “ A discrete retaliatory or discriminatory act ‘occurred’ on the day that it ‘happened.’ A party, therefore, must file a charge within either 180 or 300 days of the date of the act or lose the ability to recover for it.” Id. at 2070–71. The Court looked to the language of § 703(a) for examples of “numerous discrete acts,” which include hiring, firing, compensation, terms and conditions of employment, and the like. Id. at 2071. A discrete act or occurrence is a “practice” “even when it has a connection to other acts.” Id. It relied upon Evans, Ricks, and Robbins & Myers, Inc., holding that “discrete acts that fall within the statutory time period do not make timely acts that fall outside the time period.” Id. at 2071–72. The court summarized this part of its holding:

We derive several principles from these cases. First, discrete discriminatory acts are not actionable if time barred, even when they are related to acts alleged in timely filed charges. Each discrete discriminatory act starts a new clock for filing charges alleging that act. The charge, therefore, must be filed within the 180- or 300-day time period after the discrete discriminatory act occurred. The existence of past acts and the employee’s prior knowledge of their occurrence, however, does not bar employees from filing charges about related discrete acts so long as the acts are independently discriminatory and charges addressing those acts are themselves timely filed. Nor does the statute bar an employee from using the prior acts as background evidence in support of a timely claim.

As we have held, however, this time period for filing a charge is subject to equitable doctrines such as tolling or estoppel. . . . Courts may evaluate whether it would be proper to apply such doctrines, although they are to be applied sparingly.

Id. at 2072 (citations omitted.) The Court saw little practical difficulty in identifying discrete acts “such as termination, failure to promote, denial of transfer, or refusal to hire.” Id. at 2073. It stated: “Each incident of discrimination and each retaliatory adverse employment decision constitutes a separate actionable ‘unlawful employment practice.’” Id. The “discovery rule” was not presented by the case, but both the majority and dissenting opinions seemed to find a way of speaking of it with favor while not deciding whether it is proper. Justice Thomas wrote for the majority, at 2073 n. 7:

There may be circumstances where it will be difficult to determine when the time period should begin to run. One issue that may arise in such circumstances is whether the time begins to run when the injury occurs as opposed to when the injury reasonably should have been discovered. But this case presents no occasion to resolve that issue.

Justice O’Connor’s dissent agreed:

Like the Court, I see no need to resolve fully the application of the discovery rule to claims based on discrete discriminatory acts. . . . I believe, however, that some version of the discovery rule applies to discrete-act claims. . . . In my view, therefore, the charge-filing period precludes recovery based on discrete actions that occurred more than 180 or 300 days after the employee had, or should have had, notice of the discriminatory act.

Id. at 2078. Justice O’Connor’s dissent further emphasized the discovery rule. Discussing the two-year limit on back pay under § 706(g)(1) of Title VII, 42 U.S.C. § 2000e–5(g)(1), she stated:

Because of the potential adjustments to the charge-filing period based on equitable doctrines, two years of backpay will sometimes be available even under my view. For example, two years of backpay may be available where an employee failed to file a timely charge with the EEOC because his employer deceived him in order to conceal the existence of a discrimination claim.

Id. at 2079. The majority opinion signaled that there might be an exception to its rule for discrete acts. It stated at 2073 n.9:

We have no occasion here to consider the timely filing question with respect to “pattern-or-practice” claims brought by private litigants as none are at issue here.

The Court then turned to hostile-environment claims and held that they were “different in kind from discrete acts” because their nature involves repeated conduct and the cumulative effect of individual acts. Id. at 2073. It made clear that racial and sexual hostile environments are to be judged by the same standards, id. at 2074 n.10, and stated that Title VII’s prohibition of discrimination “is not limited to ‘economic’ or ‘tangible’ discrimination.” Id. at 2073 (citations omitted). The Court summarized its holding as to hostile environment claims:

A hostile work environment claim is comprised of a series of separate acts that collectively constitute one “unlawful employment practice.” 42 U.S.C. § 2000e-5(e)(1) . The timely filing provision only requires that a Title VII plaintiff file a charge within a certain number of days after the unlawful practice happened. It does not matter, for purposes of the statute, that some of the component acts of the hostile work environment fall outside the statutory time period. Provided that an act contributing to the claim occurs within the filing period, the entire time period of the hostile environment may be considered by a court for the purposes of determining liability. That act need not, however, be the last act. As long as the employer has engaged in enough activity to make out an actionable hostile environment claim, an unlawful employment practice has “occurred,” even if it is still occurring. Subsequent events, however, may still be part of the one hostile work environment claim and a charge may be filed at a later date and still encompass the whole.

Id. at 2074 (footnote omitted.) The Court provided guidance by comparing a 400-day pattern of harassment to one in which there was a 100-day period of harassment, a 300-day break in the hostile environment, and then a resumption on day 401. Id. at 2075. It stated:

In truth, all other things being equal, there is little difference between the two scenarios as a hostile environment constitutes one “unlawful employment practice” and it does not matter whether nothing occurred within the intervening 301 days so long as each act is part of the whole. Nor, if sufficient activity occurred by day 100 to make out a claim, does it matter that the employee knows on that day that an actionable claim happened; on day 401 all incidents are still part of the same claim. On the other hand, if an act on day 401 had no relation to the acts between days 1–100, or for some other reason, such as certain intervening action by the employer, was no longer part of the same hostile environment claim, then the employee can not recover for the previous acts, at least not by reference to the day 401 act.

Id. The Court made explicit that “the statute in no way bars a plaintiff from recovering damages for that portion of the hostile environment that falls outside the period for filing a timely charge.” Id. In the case at bar, the Court held, the claimed racially hostile environment outside the 300-day period was the same as that inside the 300-day period because harassing incidents were relatively frequent, perpetrated by the same managers, and involved similar types of conduct, in that “managers made racial jokes, performed racially derogatory acts, made negative comments regarding the capacity of blacks to be supervisors, and used various racial epithets.” Id. at 2076. The Court held that employers have means of protecting themselves from unreasonably long delays. Because the timely-filing requirement is not jurisdictional but is subject to equitable exceptions, the Court stated, equity allows courts to take into account the employer’s interest in prompt notice. Id. at 2076–77. It continued:

In addition to other equitable defenses, therefore, an employer may raise a laches defense, which bars a plaintiff from maintaining a suit if he unreasonably delays in filing a suit and as a result harms the defendant. This defense “‘requires proof of (1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting the defense.’” We do not address questions here such as “how—and how much—prejudice must be shown” or “what consequences follow if laches is established.” 2 Lindemann 1496–1500. We observe only that employers may raise various defenses in the face of unreasonable and prejudicial delay.

Id. at 2077 (footnote omitted.) The Court stated at 2077 n.14 that it was not addressing the question whether laches may be applied against the EEOC when it sues, but added:

We note, however, that in Occidental there seemed to be general agreement that courts can provide relief to defendants against inordinate delay by the EEOC. See Occidental Life Ins. Co. of Cal. v. EEOC, 432 U.S. 355, 373 (1977). Cf. id., at 383 (REHNQUIST, J., dissenting in part) (“Since here the suit is to recover backpay for an individual that could have brought her own suit, it is impossible to think that the EEOC was suing in the sovereign capacity of the United States”).

Now-Chief Justice Rehnquist’s quoted statement is presumably no longer valid in light of EEOC v. Waffle House, Inc., __ U.S. __, 122 S. Ct. 754, 12 AD Cases 1001 (2002).

2. Juries Are to Determine Disputed Facts on Limitations
Questions

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.273 F.3d 30, 37–39, 87 FEP Cases 673 (1st Cir. 2001), vacated the grant of summary judgment to the ADEA defendant, holding that there were genuine issues of material fact as to whether the plaintiff’s severe depression—triggered by her demotion but reaching a state in which she could not dress herself or brush her teeth—equitably tolled her 300-day charge-filing period “Where questions of fact are presented, statute of limitations defenses are ordinarily submitted to the jury.” Id. at 38.

3. What is Needed to Invoke the Continuing-Violation Doctrine

Weeks v. New York State (Division of Parole), 273 F.3d 76, 82–83, 87 FEP Cases 161, 81 E.P.D. ¶ 40,822 (2nd Cir. 2001), affirmed the dismissal of certain Title VII claims as time-barred, rejecting the plaintiff’s contention that she could invoke the continuing-violation doctrine merely by alleging a general “custom and policy” of discrimination, without providing any specific information. The court stated that “what must be alleged to withstand dismissal on the pleadings, or supported by evidence to withstand summary judgment, is a discriminatory policy or practice, not the undertaking to come up with one.” Id. at 83. Moreover, the plaintiff’s complaints related to numerous isolated incidents, all of which were remedied if she had chosen to report them.

4. Special Rule for Claims of Pay Discrimination

Cardenas v. Massey, 269 F.3d 251, 87 FEP Cases 19 (3rd Cir. 2001), reversed the grant of summary judgment to the defendants on the plaintiff’s Title VII disparate-pay claim. The district court had dismissed the claim on the ground that the plaintiff’s current pay was a mere consequence of his initial pay classification. The court stated: “The Evans Ricks Lorance line of cases bars claims where the relevant aspect of the employment system (such as promotion, seniority, or termination) is facially neutral, and any discrete discriminatory conduct took place and ceased outside the period of limitations.” Id. at 256. Here, however, the plaintiff alleged that the decision to pay him less was made on an ongoing basis. Citing Bazemore v. Friday, 478 U.S. 385 (1986)the court held that discrimination in pay is a continuing violation, and the receipt of each check constitutes a new violation. Id. at 257–58.

5. Exceptions to the Continuing-Violation Doctrine

Celestine v. Petroleos de Venezuella SA, 266 F.3d 343, 350–52, 86 FEP Cases 1462, 81 E.P.D. ¶ 40,799 (5th Cir. 2001), affirmed the district court’s rejection of the plaintiffs’ continuing-violation theory with respect to both their promotional and training claims and their racial harassment claims. The court held that denials of promotion and training are one-time events not suited to continuing-violation treatment, id. at 352, and while “hostile work environment claims are potentially more compatible with the continuing violation doctrine,” the “doctrine does not automatically attach” because “the burden remains on the employee to demonstrate an organized scheme led to and included the present violation.” Id. In addition, the court held, the plaintiff has to show that the same type of conduct took place before and within the period of limitations, and a plaintiff cannot simply sit back once it is clear that the conduct is discriminatory. Id. at 353.

Hall v. Bodine Electric Co.276 F.3d 345, 353, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual discrimination defendant. The court re-affirmed its case law to the effect that the continuing-violations doctrine applies only to pre-limitations period conduct when it “‘would have been unreasonable to expect the plaintiff to sue before the statute ran out on that conduct,’” such as where the conduct could only have been recognized as discriminatory or as actionable harassment in the light of the events occurring within the period of limitations. (Citation omitted.) The court held that some discrimination must have taken place within the period of limitations.

Swenson v. Potter, 271 F.3d 1184, 1191, 87 FEP Cases 620, 81 E.P.D. ¶ 40,821 (9th Cir. 2001), reversed the judgment for plaintiff, but held that the plaintiff’s sexual harassment charge was timely because the charge-filing period is not measured from the date of the harassing incident, but from the date that the employer took final action on her internal complaint.

Goodwin v. General Motors Corp.275 F.3d 1005, 1009–11, 87 FEP Cases 1651 (10th Cir. 2002), reversed the grant of summary judgment to the Title VII gender discrimination defendant, holding that the district court erred in considering only the pay raise occurring within the charge-filing period. The court relied on Bazemore v. Friday, 478 U.S. 385 (1986), and held that each pay check constituted a separate violation. The court also held that the plaintiff’s back pay would cut off at two years before the filing of the charge.

6. 42 U.S.C. § 1981 and the Four-Year Limitations Period of 28
U.S.C. § 1658

To date, two courts of appeals have held that the four-year period of limitations in 28 U.S.C. § 1658 does not apply to the amendments to § 1981 in the Civil Rights Act of 1991 because § 1658 is limited to the enactment of new statutes, not the amendment of old statutes. Madison v. IBP, Inc.257 F.3d 780, 797–98, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001), vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985); Zubi v. AT&T Corp. , 219 F.3d 220, 225–26, 83 FEP Cases 417, 79 E.P.D. ¶ 40,260 (3d Cir. 2000). The issue is pending before the Seventh Circuit.

C. Pleading

Swierkiewicz v. Sorema N.A., __ U.S. __122 S. Ct. 992, 88 FEP Cases 1 (2002) (Thomas, J.), unanimously rejected the requirements of the Second and Sixth Circuits that employment-discrimination plaintiffs plead facts sufficient to constitute a prima facie case, on pain of dismissal. “The prima facie case under McDonnell Douglas . . . is an evidentiary standard, not a pleading requirement.” The Court pointed out that discovery may produce direct evidence of discrimination, enabling a plaintiff to escape the McDonnell Douglas approach entirely, and added: “ Before discovery has unearthed relevant facts and evidence, it may be difficult to define the precise formulation of the required prima facie case in a particular case. Given that the prima facie case operates as a flexible evidentiary standard, it should not be transposed into a rigid pleading standard for discrimination cases.” The court also rejected the Second Circuit’s holding that the facts alleged in the Complaint were insufficient to make out a case on which the plaintiff could prevail.

D. Supplemental Jurisdiction

Raygor v. Regents of the University of Minnesota, __ U.S.__, 122 S. Ct. 999, 88 FEP Cases 6 (2002), held that the savings provision of 28 U.S.C. § 1367(d) does not apply to State-law claims brought against a State agency in Federal court under the court’s supplemental jurisdiction where the State agency is entitled to Eleventh Amendment immunity. The statute generally “purports to toll the period of limitations for supplemental claims while they are pending in federal court and for 30 days after they are dismissed.” The Court held that the provision does not apply to suits against nonconsenting States.

E. Indispensable Parties

Dawavendewa v. Salt River Project Agricultural. Improvement and Power District276 F.3d 1150, 1153, 87 FEP Cases 1106 (9th Cir. 2002), affirmed the dismissal without prejudice of the plaintiff’s Title VII challenge to the hiring preference for Navajos that the defendant was required to provide by the terms of its lease with the Navajo Nation. “As a signatory to the lease, we conclude the Nation is a necessary party that cannot be joined because it enjoys tribal sovereign immunity,” and that “tribal officials cannot be joined to replace the immune Nation.”

F. Arbitration

1. Circuit City Stores v. Adams

Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S. Ct. 1302, 149 L. Ed. 2d 234, 85 FEP Cases 266, 17 IER Cases 545, 79 E.P.D. ¶ 40,401 (2001), held that the exception for contracts of employment in § 1 of the Federal Arbitration Act, 9 U.S.C. § 1, is limited to persons who directly move goods in interstate or foreign commerce, i.e., that it is a “schlepper” provision.

Circuit City Stores, Inc. v. Adams, 279 F.3d 889, 87 FEP Cases 1509 (9th Cir. 2002), on remand from the Supreme Court, held that Circuit City’s arbitration provisions were unenforceable because procedurally and substantively unconscionable. Discussing the terms of the Dispute Resolution Agreement (“DRA”), the court described its provisions:

Incorporated into the DRA are a set of “Dispute Resolution Rules and Procedures” (“dispute resolution rules” or “rules”) that define the claims subject to arbitration, discovery rules, allocation of fees, and available remedies. Under these rules, the amount of damages is restricted: back pay is limited to one year, front pay to two years, and punitive damages to the greater of the amount of front and back pay awarded or $5000. In addition, the employee is required to split the costs of the arbitration, including the daily fees of the arbitrator, the cost of a reporter to transcribe the proceedings, and the expense of renting the room in which the arbitration is held, unless the employee prevails and the arbitrator decides to order Circuit City to pay the employee’s share of the costs. Notably, Circuit City is not required under the agreement to arbitrate any claims against the employee.
Id. at 891.

2. EEOC v. Waffle House: What Has the Supreme Court Wrought?

On January 15, 2002, the Supreme Court handed down

EEOC v. Waffle House, Inc., __ U.S. __, 122 S. Ct. 754, 12 AD Cases 1001 (2002). The facts of the case are simple, but its implications are not.

a. The Facts

Before Eric Baker started to work for Waffle House, he was required to sign an arbitration “agreement” stating as follows:

The parties agree that any dispute or claim concerning Applicant’s employment with Waffle House, Inc., or any subsidiary or Franchisee of Waffle House, Inc., or the terms, conditions or benefits of such employment, including whether such dispute or claim is arbitrable, will be settled by binding arbitration. The arbitration proceedings shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association in effect at the time a demand for arbitration is made. A decision and award of the arbitrator made under the said rules shall be exclusive, final and binding on both parties, their heirs, executors, administrators, successors and assigns. The costs and expenses of the arbitration shall be borne evenly by the parties.
122 S. Ct. at 758 n.1. Sixteen days later, he had a seizure at work and was fired.

Baker filed an EEOC charge, alleging a violation of Title I of the Americans with Disabilities Act. Neither he nor his employer initiated arbitration. Baker never filed suit. When the EEEOC brought suit on his behalf, Baker had a statutory right to intervene, but did not exercise it. He relied exclusively on the EEOC to protect his interests.

For its part, the EEOC represented to the lower court that it was suing on behalf of Baker. “The complaint requested the court to grant injunctive relief to ‘eradicate the effects of [respondent’s] past and present unlawful employment practices,’ to order specific relief designed to make Baker whole, including backpay, reinstatement, and compensatory damages, and to award punitive damages for malicious and reckless conduct.” 122 S. Ct. at 759. The EEOC did not seek any individualized relief on behalf of any other applicants or employees who were disabled or regarded as disabled.

The defendant moved to stay the action and to compel arbitration under the “agreement.” The district court held that “agreement” was not part of the plaintiff’s contract of employment and was unenforceable. Waffle House appealed, and the U.S. Court of Appeals for the Fourth Circuit reversed. EEOC v. Waffle House, 193 F. 3d 805, 808 (4th Cir. 1999). The court of appeals held that the EEOC could seek a judicial award of general relief against discrimination, but “held that the EEOC was precluded from seeking victim-specific relief in court because the policy goals expressed in the FAA required giving some effect to Baker’s arbitration agreement.” Id.

The EEOC petitioned for certiorari, and it was granted.

b. The Narrow Holding

The Court held 6–3 that the EEOC could not be bound by a charging party’s arbitration agreement because the EEOC was not a party to it, that the EEOC exercised a power to sue in furtherance of the public interest that is independent of the charging party’s personal rights, and that the EEOC does not act as the attorney for the charging party when it sues on the charging party’s behalf. It therefore retains its full right to seek victim-specific relief—compensatory and punitive damages, back pay, and an order of reinstatement or instatement—just as if the charging party had never signed the “agreement.”

The Court found the Fourth Circuit’s distinction between general relief and victim-specific relief unworkable because relief running to the victim’s direct benefit, such as an award of punitive damages, may serve the broad deterrent purposes of the EEOC and thus help enforce the statute generally.

c. The Doors the Court Opened

The holding is interesting, but the questions the Court flagged without answering are even more interesting. Here is the discussion that is our springboard:

It is true, as respondent and its amici have argued, that Baker’s conduct may have the effect of limiting the relief that the EEOC may obtain in court. If, for example, he had failed to mitigate his damages, or had accepted a monetary settlement, any recovery by the EEOC would be limited accordingly. See, e.g., Ford Motor Co. v. EEOC, 458 U.S. 219, 231-32 (1982) (Title VII claimant “forfeits his right to backpay if he refuses a job substantially equivalent to the one he was denied”); EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1542 (CA9 1987) (employee’s settlement “rendered her personal claims moot”); EEOC v. U.S. Steel Corp., 921 F.2d 489, 495 (CA3 1990) (individuals who litigated their own claims were precluded by res judicata from obtaining individual relief in a subsequent EEOC action based on the same claims). As we have noted, it “goes without saying that the courts can and should preclude double recovery by an individual.” General Telephone, 446 U.S., at 333.

But no question concerning the validity of his claim or the character of the relief that could be appropriately awarded in either a judicial or an arbitral forum is presented by this record. Baker has not sought arbitration of his claim, nor is there any indication that he has entered into settlement negotiations with respondent. It is an open question whether a settlement or arbitration judgment would affect the validity of the EEOC’s claim or the character of relief the EEOC may seek. The only issue before this Court is whether the fact that Baker has signed a mandatory arbitration agreement limits the remedies available to the EEOC. The text of the relevant statutes provides a clear answer to that question. They do not authorize the courts to balance the competing policies of the ADA and the FAA or to second-guess the agency’s judgment concerning which of the remedies authorized by law that it shall seek in any given case.

Id. at 765–66.

1. Limitation of Arbitration “Agreements” to Changes of Forum

The Court again stated what it has stated in many of its arbitration cases under the FAA: all that an enforceable arbitration agreement does is change the forum for determination of a dispute. “We have held that federal statutory claims may be the subject of arbitration agreements that are enforceable pursuant to the FAA because the agreement only determines the choice of forum.” Id. at 765 n.10. The court went on to quote some of its earlier language stating that the parties to an arbitration agreement do not agree to waive any of their substantive rights under the statutes. It then concluded:

To the extent the Court of Appeals construed an employee’s agreement to submit his claims to an arbitral forum as a waiver of the substantive statutory prerogative of the EEOC to enforce those claims for whatever relief and in whatever forum the EEOC sees fit, the court obscured this crucial distinction and ran afoul of our precedent.

Id.

What does this mean in practical terms? Having the government litigate one’s case on one’s behalf is a substantive right, even if there is not a dime’s worth of difference between the relief Baker could get and the relief the EEOC could get for Baker.

2. Practical Consequences

What else does it mean? It seems to me that the following consequences can flow:

  • If the arbitration “agreement” had contained a clause waiving the right to have the EEOC proceed on the charge and file suit, it would not have been enforceable.
  • What about arbitration “agreements” that specify an inconvenient venue? If the inconvenience is large enough, plaintiffs may be able to escape the “agreement.”
  • What about arbitration “agreements” that impose any kind of restrictions on relief? It seems to me that they are now all unenforceable.
  • It seems to me that the same applies to “agreements” that shorten the time for bringing claims.
  • What about arbitration “agreements” that restrict discovery? It seems to me that the question is one of degree. If the “agreement” restricts discovery to the extent that the plaintiff is denied a fair opportunity to litigate the merits of the claim, the plaintiff should be able to escape the “agreement.” If the “agreement” restricts discovery but allows enough discovery to make a fair contest possible, the “agreement” should not be affected. “Agreements” that allow the plaintiff to make a showing of need to the arbitrator, who has discretion to allow more discovery and in practice acts reasonably, will likely pass muster.
  • What about arbitration “agreements” that directly restrict the use of class actions or that have that effect? Congress actually addressed class actions in enacting the 1972 amendments to Title VII, rejecting a proposed change that would have required every class member to exhaust EEOC remedies. I think Waffle House sounds the death knell for these “agreements,” both from the standpoint of the complainant and the standpoint of other employees, who have a right to have their claims litigated as part of a class without their having to become parties. There are, of course, potential problems for both sides with the litigation of class claims in an arbitral context. The problems are magnified if the arbitrator is not law-trained.

d. What if the Charging Party Had Taken Enforcement
Action?

Justice Thomas’s dissent presents an intriguing scenario:

Assuming that the Court means what it says, an arbitral judgment will not preclude the EEOC’s claim for victim-specific relief from going forward, and courts will have to adjust damages awards to avoid double recovery. See ante, at 766. If an employee, for instance, is able to recover $20,000 through arbitration and a court later concludes in an action brought by the EEOC that the employee is actually entitled to $100,000 in damages, one assumes that a court would only award the EEOC an additional $80,000 to give to the employee. Suppose, however, that the situation is reversed: An arbitrator awards an employee $100,000, but a court later determines that the employee is only entitled to $20,000 in damages. Will the court be required to order the employee to return $80,000 to his employer? I seriously doubt it.

The Court’s decision thus places those employers utilizing arbitration agreements at a serious disadvantage. Their employees will be allowed two bites at the apple—one in arbitration and one in litigation conducted by the EEOC—and will be able to benefit from the more favorable of the two rulings. This result, however, discourages the use of arbitration agreements and is thus completely inconsistent with the policies underlying the FAA.

Id. at 773.

The majority neither agreed nor disagreed, but stated: “It is an open question whether a settlement or arbitration judgment would affect the validity of the EEOC’s claim or the character of relief the EEOC may seek.” Id. at 766. The Court continued:

And, in this context, the statute specifically grants the EEOC exclusive authority over the choice of forum and the prayer for relief once a charge has been filed. The fact that ordinary principles of res judicata, mootness, or mitigation may apply to EEOC claims, does not contradict these decisions, nor does it render the EEOC a proxy for the employee.

Id. Stay tuned.

e. Settlements

The EEOC argued to the Court that it was not bound by any action the charging party takes on his or her charge of discrimination, even settlements with the respondent. For many years, the EEOC’s regulations have stated that it is not bound by a charging party’s request to withdrawn his or her charge. I have always thought that the principal reason for the regulation was twofold: (a) to provide protection against the retaliation that might occur if the EEOC were to accept automatically charging parties’ requests to withdraw charges; and (b) to preserve the right to seek broad systemic relief even if the individual accepted an individual settlement.

The Commission’s arguments in Waffle House suggest that the EEOC is seeking to obtain or preserve a general right to take enforcement action on its own, even as to individualized relief, notwithstanding an individual settlement.

We are all familiar with the supervised-release question in the Fair Labor Standards Act, and the enactment of the Older Workers Benefits Protection Act. What we are not familiar with is the notion that the EEOC might sue on behalf of persons who had already settled privately. Many attorneys on both sides of the fence would not be happy with such a prospect, or with having to share with the EEOC the details of a private individual settlement.

Fortunately, the EEOC’s regulations provide a default closing point for the EEOC’s taking of independent action. 28 C.F.R. § 1601.28(a)(3) states:

3) Issuance of a notice of right to sue shall terminate further proceeding of any charge not a Commissioner charge unless the District Director; Area Director; Local Director; Program Director, Office of Program Operations or upon delegation, the Director of Systemic Programs, Office of Program Operations or the Directors, Field Management Programs, Office of Program Operations; or the General Counsel, determines at that time or at a later time that it would effectuate the purpose of title VII or the ADA to further process the charge. Issuance of a notice of right to sue shall not terminate the processing of a Commissioner charge.

The EEOC would still retain the ability to intervene in a case brought by the charging party, but that is not our concern here.

f. The EEOC’s Future Litigation Priorities

The Court took clear comfort from the fact that the EEOC brings so few cases per year. Speaking of the Fourth Circuit’s decision, it stated:

The court also neglected to take into account that the EEOC files suit in a small fraction of the charges employees file. For example, in fiscal year 2000, the EEOC received 79,896 charges of employment discrimination. Although the EEOC found reasonable cause in 8,248 charges, it only filed 291 lawsuits and intervened in 111 others. Equal Employment Opportunity Commission, Enforcement Statistics and Litigation (as visited Nov. 18, 2001), http://www.eeoc.gov/stats/enforcement.html.

In contrast, 21,032 employment discrimination lawsuits were filed in 2000. See Administrative Office, Judicial Business of the United States Courts 2000, Table C-2A (Sept. 30, 2000). These numbers suggest that the EEOC files less than two percent of all antidiscrimination claims in federal court. Indeed, even among the cases where it finds reasonable cause, the EEOC files suit in less than five percent of those cases. Surely permitting the EEOC access to victim-specific relief in cases where the employee has agreed to binding arbitration, but has not yet brought a claim in arbitration, will have a negligible effect on the federal policy favoring arbitration.

Id. at 762 n.7.

Given the limited resources of the Commission, it is difficult to imagine any large increase in the number of cases it files.

What may be more likely is that the Commission will adjust its litigation priorities in light of this decision. It already needs to do so in light of the Court’s holdings in the last few years that private parties are barred by the Eleventh Amendment from suing State agencies for monetary relief for violations of the Age Discrimination in Employment Act or of the Americans with Disabilities Act.

If so, I expect that the Commission will do two things. First, it will continue to bring individual cases based on charges on which it has found reasonable cause, using its normal case-selection guidelines, and will pay no attention whatsoever to the existence of an arbitration “agreement.” Cases like Baker’s will arise in small numbers.

Second, however, I would not be surprised if the Commission were to decide in the future to target for litigation employers with arbitration “agreements” like that discussed at the 2001 Chicago Annual Meeting of the ADR Committee, which bear the hallmark of attorneys vying with each other to see who could come up with the most oppressive conditions to impose on captive employees. The worse off the employee under the terms of a particular employer’s arbitration “agreement,” the likelier a sensible EEOC litigation priority would target that employer for suit.

My experience in reading a lot of arbitration rules and cases is that many employers find it difficult to resist the temptation to stack the deck in their favor when they unilaterally develop arbitration “agreements” and rules, or when they choose to use an intimidating provider or one with business relationships with their companies or commercial rules rather than rules subject to the Due Process Protocol. Arbitration is like Christmas for them. Any countervailing pressure making them less likely to take unfair advantage would be in the public interest.

3. Arbitrability

a. Terms of Collective Bargaining Agreements

New England Health Care Employees Union, District 1199, SEIU, AFL-CIO v. Rhode Island Legal Services273 F.3d 425, 168 LRRM 2961 (1st Cir. 2001), affirmed the grant of summary judgment to the defendant. The union had sought to arbitrate the claim of a former employee who claimed that she had been fired because of a disability. After the union filed a grievance on her behalf, she filed charges of discrimination with the Rhode Island Commission on Human Rights and the EEOC. The court held that the arbitrator was correct that this rendered her dispute nonarbitrable in light of the language of the collective bargaining agreement stating that the employer “shall not be required to arbitrate any dispute which is pending before any administrative or judicial agency.”

b. Class Actions

The enforceability of arbitration clauses not allowing for class actions is currently one of the hottest issues in arbitration.

Enforcing Arbitration “Agreements” Barring Class Treatment: Arellano v. Household Finance Corp. III, 2002 WL 221604 (N.D. Ill. Feb. 13, 2002) (Guzman, J.) (enforcing arbitration “agreement” as to Truth in Lending Act claim although class claims were not arbitrable under the agreement, holding that the statutory reference to class actions did not convey a right to bring class claims); Marzek v. Mori Milk & Ice Cream Co., 2002 WL 226761 (N.D. Ill. Feb. 13, 2002) (Guzman, J.) (same as to FLSA collective action).

Refusing to Enforce Arbitration “Agreements” Barring Class Treatment:Ting v. AT&T, 182 F. Supp. 2d 902, 927 (N.D. Calif. 2002) (consumer case; “agreement” held unconscionable); Bailey v. Ameriquest Mortgage Co., 2002 WL 100391 (D. Minn. Jan. 23, 2002) (FLSA action) (“Applying that case by case principle to the facts of this case, the Court finds that the inability to proceed collectively, particularly when considered in connection with the venue and other provisions discussed above, has the effect of rendering plaintiff’s individual claims impractical to pursue. The right to proceed collectively is particularly critical to these plaintiffs, who, as previously mentioned, have relatively small individual claims.”).

4. Arbitration Services Providers

The following is from an October 14, 2001, editorial in the San Francisco Chronicle, following a three-part investigative series on the American Arbitration Association and cram-down arbitration “agreements”:

“ ‑‑ Conflicts of interest: The arbitration system allows conflicts that would not be permitted by the court system. The American Arbitration Association invests in major corporations whose legal disputes the firm’s arbitrators hear; companies are allowed to buy ‘memberships’ in the association, and their executives sit on its board of directors. Arbitration firms often court clients by touting their small awards and perfunctory procedures. Also, arbitrators face an inherent conflict to ‘please’ companies to keep them coming back for repeat business.”

5. The Rules Governing the Arbitration

The National Rules for the Resolution of Employment Disputes of the American Arbitration Association (AAA) have been held to authorize the grant of broad injunctive relief. Brown v. Coleman Co., Inc., 220 F.3d 1180, 1183–84, 16 IER Cases 966 (10th Cir. 2000), cert. denied, 531 U.S. 1192 (2001). “We now hold that Rule 34(d) of the AAA Employment Disputes Rules permits the crafting of broad equitable relief, and that the panel did not exceed its power by granting the equitable relief of extending the time in which stock options could be exercised.” Id. at 1184.

Plaintiffs’ counsel should get a copy; do not assume they will be like other rules you have seen. Cf.Hooters of America, Inc. v. Phillips, 173 F.3d 933, 79 FEP Cases 629, 75 E.P.D. ¶ 45,822 (4th Cir. 1999), stated: “Because Hooters set up a dispute resolution process utterly lacking in the rudiments of even-handedness, we hold that Hooters breached its agreement to arbitrate. Thus, we affirm the district court’s refusal to compel arbitration.”

Even if the unfairness of the rules has not saved the plaintiff from an arbitration requirement, it may still be possible to seek an arbitral decision striking the unfair provision. Great Western Mortgage Corporation v. Peacock, 110 F.3d 222, 231–32, 73 FEP Cases 856 (3d Cir. 1997), cert. denied, 522 U.S. 915 (1997), held that, once the dispute has been determined arbitrable, all other issues are for the arbitrator. Thus, the arbitrator had to determine the validity of the waiver of punitive damages in the arbitration agreement.

The parties can agree to waive some provisions and amend others. Discovery rights, for example, can be expanded by agreement. The parties to an arbitration agreement can contractually specify additional grounds for review, however, and it may be in the interest of both sides to exercise this option in advance of the arbitration. Employers and employees share a common interest in avoiding the consequences of “runaway arbitrators” issuing arbitrary awards, particularly where broad injunctive relief is claimed or awarded. Even if an agreement has been signed three times, as in Peacock, both sides can still agree to substantial changes where these seem mutually reasonable. In Peacock itself, for example, the employer represented to the Third Circuit that it would provide informal discovery during the arbitration and that attorneys’ fees could be awarded by the arbitrator. Id. at 231 nn. 37, 38. If a thrice-signed agreement can be amended by representations in court, the parties can certainly sit down and reach modifying or clarifying agreements on their own. Valid arbitration agreements are contracts on paper, not engravings on stone.

6. Bifurcating the Arbitration

Ordinarily, a party to an arbitration can move to confirm or vacate the award only after the entire arbitration has concluded. However, the parties can make a formal agreement to bifurcate an arbitration. For example, the parties can agree that there will be a final award on liability, and that the arbitration will then resume solely as to the remedy. The First Circuit has held that such an agreement allows a motion to confirm or vacate the award on liability even though the arbitration is proceeding on the other issues. Hart Surgical, Inc. v. Ultracision, Inc., 244 F.3d 231, 235 (1st Cir. 2001).

The First Circuit has held that the parties can achieve the same result by informally but consistently treating the arbitration as bifurcated, even without an explicit agreement. Providence Journal Co. v. Providence Newspaper Guild, 271 F.3d 16, 20, 168 LRRM 2804 (1st Cir. 2001). The court explained:

It is evident from the November arbitration hearing that the parties intended, though never formally stated, to bifurcate the proceedings. They divided the arbitration into separate phases and requested that the arbitrator retain jurisdiction over the remedy issue. In fact, had the parties not been stipulating to bifurcation, there would have been no need for the parties to specifically request that the arbitrator retain jurisdiction over the remedial phase. Clearly, then, both the parties and the arbitrator agreed to bifurcate the arbitral proceeding and understood the determination of liability to be a final award.

In Teamsters Local 312 v. Matlack, Inc., 118 F.3d 985, 155 LRRM 2738 (3d Cir. 1997), the Third Circuit affirmed the district court’s vacating of an arbitrator’s decision based on procedural irregularities. The arbitrator had verbally instructed the parties that his ruling would be on only one of two issues and that a later hearing would be held on the second if it was needed. However, the arbitrator issued a ruling that appeared to decide both issues without a second hearing. In a later letter the arbitrator clarified his ruling to have decided only the first issue. The union argued that the functus officio doctrine, a doctrine that deprives the arbitrator of power to decide a dispute after having made his ruling, prevented the second letter from having any effect. The court found that the second letter was merely a clarification of the procedural status of the case and did not alter any substantive decision of the arbitrator. The court relied on the exceptions to the functus officio doctrine, as well as similar language in the FAA, in its decision to affirm the vacation of one of the apparent rulings in the initial decision of the arbitrator.

Legion Insurance Co. v. VCW, Inc., 198 F.3d 718, 721 (8th Cir. 1999), held that, where an arbitral panel “by the language it uses makes clear that it intends its award to be indivisible, the district court must take the award as it finds it and either vacate the entire award under section 10 or modify the award using section 11.”

7. Dismissals Before Hearing

The NASD Manual and Code of Arbitration Procedure allows an arbitrator to dismiss a fatally defective claim with prejudice based on the pleadings alone, “so long as the dismissal does not deny a party fundamental fairness.” The opportunity to brief and argue the dismissal motion was adequate. Sheldon v. Vermonty, 269 F.3d 1202 (10th Cir. 2001).

8. Waiver

The Second Circuit has held that an indemnification claim subject to an arbitration clause that was not presented in the arbitration of other claims under the agreement, where there was an opportunity to do so, results in waiver of the claims not pursued. “Arbitration is not a trial run in which a party may sit quietly by without raising pertinent issues, wait to see if the result is in his favor and then seek judicial relief as an afterthought.” Pike v. Freeman, 266 F.3d 78, 89 (2d Cir. 2001) (citation omitted). The court remanded the counterclaim and cross-claims for indemnification to determine if they were subject to the arbitration agreement. Id. at 91–93.

A party submitting a disability discrimination claim to arbitration could not subsequently argue that the arbitration panel did not have the authority to decide the claim. In Kiernan v. Piper Jaffray Companies, 137 F.3d 588, 7 AD Cases 1499 (8th Cir. 1998), a plaintiff submitted his disability discrimination claim against his employer to an arbitration panel. After losing, he argued that his ADA claim was not arbitrable based on the NASD rules and the ADA’s history. The court held that the plaintiff’s submission of the claim defined the authority of the arbitration panel regardless of whether he had a prior legal obligation to arbitrate the claim.

9. The Basis for an Award

In arbitrations involving contract rights under collective bargaining agreements, the arbitrator can base the award not only on the language of the CBA, but also on the practice of the parties. E.g., Providence Journal Co. v. Providence Newspaper Guild, 271 F.3d 16, 21, 168 LRRM (BNA) 2804 (1st Cir. 2001).

10. Questions of Appealability

An order confirming, denying confirmation of, or vacating an arbitration award is appealable. 9 U.S.C. § 16(a).

An order compelling arbitration is not appealable. 9 U.S.C. § 16(b).

Cortez Byrd Chips, Inc. v. Harbert Construction Co., 529 U.S. 193 (2000), held that the venue provisions in §§ 9, 10(a), and 11 of the FAA are permissive rather than exclusive, and allow the filing of motions to confirm, vacate, or modify an arbitral award either in the district in which the award was made, or in any district proper under the general venue statute.

An order denying confirmation of an arbitration award and directing the submission of the dispute to a new arbitrator does not lose its appealability because of the additional element. Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 327-28 (1st Cir. 2000).

11. Jurisdiction

“Because the FAA itself does not create a basis for federal subject matter jurisdiction, there must be an independent basis for federal jurisdiction,” including jurisdictional amount. Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 328 (1st Cir. 2000).

Where there is no other basis for Federal-court jurisdiction:

“We conclude that: (1) the fact that the arbitration itself concerns issues of federal law does not, on its own, confer subject matter jurisdiction on a federal district court to review the award; but (2) federal jurisdiction may lie where the petitioner seeks to vacate the award primarily on the ground of manifest disregard of federal law.” Greenberg v. Bear, Stearns & Co., 220 F.3d 22, 25 (2d Cir. 2000), cert. denied, 531 U.S. 1075 (2001).

12. The Standard of Review

The Supreme Court seems to have accepted that there can be review of an arbitral award on certain limited grounds in addition to those specified in the FAA, particularly where the award is in “manifest disregard of the law.” First Options of Chicago, Inc., v. Kaplan, 514 U.S. 938, 942 (1995).

The findings in a district court order on review of an arbitration award are reviewed by a court of appeals for clear error, and the district court’s legal rulings are reviewed de novo. First Options of Chicago, Inc., v. Kaplan, 514 U.S. 938, 947 (1995).

The same standard should be followed whether a party is seeking to confirm or vacate the arbitral award. Gianelli Money Purchase Plan and Trust v. ADM Investor Services, Inc., 146 F.3d 1309, 1311 (11th Cir.), cert. denied, 525 U.S. 1016 (1998).

Arbitration of Grievances based on a CBA: United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 36, 126 LRRM 3113 (1987), stated: “Collective-bargaining agreements commonly provide grievance procedures to settle disputes between union and employer with respect to the interpretation and application of the agreement and require binding arbitration for unsettled grievances. In such cases, and this is such a case, the Court made clear almost 30 years ago that the courts play only a limited role when asked to review the decision of an arbitrator. The courts are not authorized to reconsider the merits of an award even though the parties may allege that the award rests on errors of fact or on misinterpretation of the contract. ‘The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards.’ Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596 . . . (1960). As long as the arbitrator’s award ‘draws its essence from the collective bargaining agreement,’ and is not merely ‘his own brand of industrial justice,’ the award is legitimate. Id., at 597.” The Court stated that “improvident, even silly, factfinding . . . is hardly a sufficient basis for disregarding what the agent appointed by the parties determined to be the historical facts.” Id. at 39. The Court continued:

Even in the very rare instances when an arbitrator’s procedural aberrations rise to the level of affirmative misconduct, as a rule the court must not foreclose further proceedings by settling the merits according to its own judgment of the appropriate result, since this step would improperly substitute a judicial determination for the arbitrator’s decision that the parties bargained for in the collective-bargaining agreement. Instead, the court should simply vacate the award, thus leaving open the possibility of further proceedings if they are permitted under the terms of the agreement. The court also has the authority to remand for further proceedings when this step seems appropriate.

Id. at 40 n.10.

D.C. Circuit:Cole v. Burns International Security Services, 105 F.3d 1465, 1469, 72 FEP Cases 1775 (D.C. Cir. 1997), held that the arbitrators’ decisions on legal issues must be subject to judicial review “sufficiently rigorous” to ensure that the arbitrators “have properly interpreted and applied statutory law.” The court explained:

The value and finality of an employer’s arbitration system will not be undermined by focused review of arbitral legal determinations. Most employment discrimination claims are entirely factual in nature and involve well-settled legal principles. See Alleyne, 13 HOFSTRA LAB. L.J. at 422 (most arbitration awards in employment cases are based on resolution of factual disputes); Martin H. Malin, Arbitrating Statutory Employment Claims In the Aftermath of Gilmer, 40 ST. LOUIS U. L.J. 77, 104 (1996) (“Most employment disputes are fact-based and not likely to raise the kind of legal issues that would call for significant judicial review.”). In fact, one study done in the 1980s found that discrimination cases involve factual claims approximately 84 % of the time. See Michele Hoyman & Lamont E. Stallworth, The Arbitration of Discrimination Grievances in the Aftermath of Gardner- Denver, 39 ARB. J. 49, 53 (Sept.1984). As a result, in the vast majority of cases, judicial review of legal determinations to ensure compliance with public law should have no adverse impact on the arbitration process. 21 Nonetheless, there will be some cases in which novel or difficult legal issues are presented demanding judicial judgment. In such cases, the courts are empowered to review an arbitrator’s award to ensure that its resolution of public law issues is correct. Indeed, at oral argument, Burns conceded the courts’ authority to engage in such review. Because meaningful judicial review of public law issues is available, Cole’s agreement to arbitrate is not unconscionable or otherwise unenforceable.
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21 The Hoyman/Stallworth study of arbitral awards in discrimination cases found that, even in cases where de novo review was available under Gardner-Denver, only 1.2 % of all discrimination cases were reversed by the courts. See Hoyman & Stallworth, 39 ARB. J. at 55.

Id. at 1487. The “strict deference” accorded the results of collectively bargained arbitration procedures “may not be appropriate in statutory cases in which an employee has been forced to resort to arbitration as a condition of employment.”

First Circuit: In a case involving arbitration under a CBA: “we note that judicial review of an arbitration decision is extremely narrow and extraordinarily deferential.” . . . judicial review of arbitration decisions “is among the narrowest known in the law”). A court cannot vacate an arbitral award as long as the arbitrator is even arguably construing the contract and acting within the scope of his authority. . . . In the end, the court’s task “is limited to determining if the arbitrator’s interpretation of the contract is in any way plausible.” Providence Journal Co. v. Providence Newspaper Guild, 271 F.3d 16, 20, 168 LRRM (BNA) 2804 (1st Cir. 2001) (citations omitted).

In a case not involving a CBA, the court stated: “There are bifurcated standards of review. We review the district court’s ruling on an arbitration award de novo, but we also are mindful that the district court’s review of arbitral awards must be “extremely narrow and exceedingly deferential.” . . . Indeed, “[a]rbitral awards are nearly impervious to judicial oversight.” . . . A court’s review of an arbitration award is highly deferential because the parties “have contracted to have disputes settled by an arbitrator” and thus, “it is the arbitrator’s view of the facts and of the meaning of the contract that they have agreed to accept.” United Paperworkers International Union v. Misco, Inc., 484 U.S. 29, 37-38 (1987). While the arbitrator’s award must “draw its essence from the contract,” as long as the arbitrator is “even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision.” Id. at 38. Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 330 (1st Cir. 2000).

Second Circuit: “Federal court review of an arbitral judgment is highly deferential; such judgments are to be reversed only where the arbitrators have exceeded their authority or made a finding in manifest disregard of the law.” Pike v. Freeman, 266 F.3d 78, 86 (2d Cir. 2001) (citation omitted).

Fifth Circuit: The review of arbitral awards in statutory discrimination cases is more intense than the review in other commercial arbitration contexts:

The Supreme Court’s assumptions and predictions in Gilmer assign heavy responsibilities to arbitrators and the federal courts. Arbitrators have a duty to ensure that, in the prospective subjection of federal statutory employment rights claims to compulsory arbitration, employees will not forgo substantive statutory rights or effective vindication of their statutory causes of action, and the statutes will continue to serve both their remedial and deterrent functions. The federal district courts and courts of appeals are charged with the obligation to exercise sufficient judicial scrutiny to ensure that arbitrators comply with their duties and the requirements of the statutes. In other words, the Gilmer Court anticipated that an employee’s prospective waiver of the right to a court’s decision about the merits of his or her future ADEA or Title VII disputes would not have the effect that it does in ordinary commercial arbitration-“relinquishment [of] much of that right’s practical value.” First Options, 514 U.S. at 942, 115 S. Ct. 1920. Accordingly, the judicial review of arbitral adjudication of federal statutory employment rights under the FAA and the “manifest disregard of the law” standard ” ‘must be sufficient to ensure that arbitrators comply with the requirements of the statute’ at issue.” Gilmer, 500 U.S. at 32 n. 4, 111 S. Ct. 1647 (quoting Shearson/American Express, 482 U.S. at 232, 107 S. Ct. 2332); see Cole, 105 F.3d at 1487. Williams v. Cigna Financial Advisors Inc., 197 F.3d 752, 760 61, 81 FEP Cases 747, 77 E.P.D. ¶ 46,359 (5th Cir. 1999), cert. denied, 529 U.S. 1099 (2000).

Tenth Circuit: “However, ‘we must give extreme deference to the determination of the arbitration panel for the standard of review of arbitral awards is among the narrowest known to law.'” Sheldon v. Vermonty, 269 F.3d 1202 (10th Cir. 2001) (citation omitted). “Brown and Coleman contracted for the arbitrator’s construction of the contract not a judge’s construction.” Brown v. Coleman Co., Inc., 220 F.3d 1180, 1183, 16 IER Cases 966 (10th Cir. 2000), cert. denied, __ U.S. __, 121 S. Ct. 1191, 149 L. Ed. 2d 107 (2001).

13. Grounds to Set An Award Aside

9 U.S.C. § 10(a)(1) to (4) allows a court to set an award aside if (1) the award was procured by corruption, fraud, or undue means; (2) there was evident partiality or corruption in the arbitrators; (3) the arbitrators were guilty of misconduct in refusing to postpone a hearing, in refusing to hear evidence, or in misbehaving in some other way; or (4) the arbitrators exceeded their powers or imperfectly executed them.

“We have also recognized ‘a handful of judicially created reasons’ that a district may rely upon to vacate an arbitration award, and these include violations of public policy, manifest disregard of the law, and denial of a fundamentally fair hearing. . . . ‘Outside of these limited circumstances, an arbitration award must be confirmed,’ and ‘[e]rrors in either the arbitrator’s factual findings or his interpretation[s] of the law . . . do not justify review or reversal. . . .'” (citations omitted). Sheldon v. Vermonty, 269 F.3d 1202 (10th Cir. 2001) (citation omitted).

14. The Role of Public Policy in Review of an Award

Citing W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766, 26 FEP Cases 713, 107 LRRM 3251, 26 E.P.D. ¶ 32,024 (1983), the Supreme Court described the role of public policy in the review of arbitral awards of grievances under a CBA, in United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 43 (1987):

First, a court may refuse to enforce a collective-bargaining agreement when the specific terms contained in that agreement violate public policy. Second, it is apparent that our decision in that case does not otherwise sanction a broad judicial power to set aside arbitration awards as against public policy. Although we discussed the effect of that award on two broad areas of public policy, our decision turned on our examination of whether the award created any explicit conflict with other “laws and legal precedents” rather than an assessment of “general considerations of supposed public interests.” 461 U.S., at 766, 103 S. Ct., at 2183. At the very least, an alleged public policy must be properly framed under the approach set out in W.R. Grace, and the violation of such a policy must be clearly shown if an award is not to be enforced.

The ruling by the United States Supreme Court in Eastern Associated Coal Corp. v. United Mine Workers of America, District 17, 531 U.S. 57, 16 IER Cases (2000), arose from a collective bargaining agreement under which the employer was required to show “just cause” for discharge. The subject of the arbitration was the discharge of a truck driver who lost his job after twice failing drug tests. The arbitrator reinstated the truck driver, reducing the discharge to a several month suspension and imposing other requirements. Appealing the arbitral decision in federal court, the employer argued that the decision contravened the public policy embodied in federal drug testing statutes and regulations governing truck drivers. The Supreme Court found that the statutory scheme did not dictate discharge of truck drivers who test positive for drugs and deferred to the arbitrator’s award.

In Westvaco Corp. v. United Paperworkers International Union, 171 F.3d 971, 79 FEP Cases 595 (4th Cir. 1999), the Fourth Circuit held that the “general public policy against sexual harassment is not sufficient to supplant labor arbitration of employee disciplinary sanctions.” Id. at 977. Here, the collective bargaining agreement allowed the labor arbitrator to review the company’s discipline decisions. The nine month suspension given by the arbitrator instead of the termination sought by the company was a “strict punishment” and would not “prohibit the [the company] from exercising reasonable care to promptly correct harassing behavior.” Id.

15. What Does It Mean that an Arbitrator Exceeded His or Her Powers?

To determine whether an arbitrator has exceeded his authority under § 10, however, courts ‘do not sit to hear claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts,’ United Paperworkers International, 484 U.S. at 38 . . . and ‘[e]ven where such error is painfully clear, courts are not authorized to reconsider the merits of arbitration awards.'” Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 330 (1st Cir. 2000) (citations and parallel cites omitted).

16. What Does it Take to Show Partiality Under the FAA?

Partiality cannot be shown by a mere discrepancy between the amount claimed and the amount awarded, even where the only testimony on damages was presented by the claimant, where there were grounds in the record on which the arbitrators could have rejected part of the amount claimed. Dawahare v. Spencer, 210 F.3d 666, 669 (6th Cir.), cert. denied, 531 U.S. 878 (2000). “Only if a reasonable person would have to conclude that the arbitration 531 U.S. 878 (2000). “Only if a reasonable person would have to conclude that the arbitration panel was partial to a party will we find evident partiality. ‘The alleged partiality must be direct, definite, and capable of demonstration, and the party asserting [it] . . . must establish specific facts that indicate improper motives on the part of the arbitrator.'” (Citation and some internal quotation marks omitted.)

Partiality cannot be shown merely by there having been frequent business contacts between the arbitrator and a party to the arbitration. Gianelli Money Purchase Plan and Trust v. ADM Investor Services, Inc., 146 F.3d 1309, 1312 (11th Cir.), cert. denied, 525 U.S. 1016 (1998). The court held that, because review of arbitral awards is limited, the “evident partiality test must be strictly construed. “The alleged partiality must be ‘direct, definite and capable of demonstration rather than remote, uncertain and speculative.'” Id. (citation omitted). The court rejected the more stringent disclosure rule of the Ninth Circuit, which required arbitrators to investigate to determine if they had had prior contacts with a party of which they were not aware. The court stated that the lower court should have followed “the law of our Circuit, which is that an arbitration award may be vacated due to the ‘evident partiality’ of an arbitrator only when either (1) an actual conflict exists, or (2) the arbitrator knows of, but fails to disclose, information which would lead a reasonable person to believe that a potential conflict exists.” Id.

17. What is Manifest Disregard of the Law?

First Circuit: An award is in manifest disregard of the law “‘where an award is contrary to the plain language of the [contract]’ and ‘instances where it is clear from the record that the arbitrator recognized the applicable law and then ignored it.'” Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 330 31 (1st Cir. 2000) (citations and parallel cites omitted).

Second Circuit: “In determining whether arbitrators have “manifestly disregarded the law,” we have held that there must be something beyond and different from a mere error in the law or failure on the part of the arbitrators to understand or apply the law, in order to sustain a finding of manifest disregard of the law. Illustrative of the degree of “disregard” necessary to support vacatur under this standard is our holding that manifest disregard will be found where an arbitrator understood and correctly stated the law but proceeded to ignore it. . . . (‘[C]ourts may vacate awards only for an overt disregard of the law and not merely for an erroneous interpretation. . . . Moreover, the law ignored by the arbitrators must be well defined, explicit, and clearly applicable if the award is to be vacated.’) (internal quotation marks omitted).” Pike v. Freeman, 266 F.3d 78, 86 (2d Cir. 2001) (citations omitted). Accord, Greenberg v. Bear, Stearns & Co., 220 F.3d 22, 28 (2d Cir. 2000), cert. denied, 531 U.S. 1075 (2001).

In Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 77 FEP Cases 182 (2d Cir. 1998), cert. denied, 526 U.S. 1034 (1999), the plaintiff alleged he was terminated due to his age. The employer defended by arguing that, in fact, the plaintiff had retired. The plaintiff presented what the Second Circuit called “very strong evidence of age-based discrimination.” The parties fully informed the arbitrator of the applicable law. However, the arbitrator, without explanation, found for the employer. The Second Circuit held that the arbitrator acted with “manifest disregard of the law.” Id. at 197. “[T]he arbitrators did not explain their award. It is true that we have stated repeatedly that arbitrators have no obligation to do so . . . . We merely observe that where a reviewing court is inclined to find that arbitrators manifestly disregarded the law or the evidence and that an explanation, if given, would have strained credulity, the absence of explanation may reinforce the reviewing court’s confidence that the arbitrators engaged in manifest disregard.” Id.

DiRussa v. Dean Witter Reynolds Inc., 121 F.3d 818, 74 FEP Cases 726 (2d Cir. 1997), cert. denied, 522 U.S. 1049 (1998), affirmed an arbitrator’s award in an ADEA case that did not award attorney’s fees to the plaintiff. The plaintiff argued that the arbitrator’s refusal to grant attorney’s fees constituted a “manifest disregard of the law.” The court held that this standard was more stringent than the clearly erroneous standard and went on to uphold the arbitrator’s order. The court rested it argument primarily on the fact that the plaintiff never brought to the arbitrator’s attention the fact that attorney’s fees were mandated by the ADEA and not at the discretion of the court.

Fifth Circuit: Williams v. CIGNA Financial Advisers, 197 F.3d 752, 761–62, 81 FEP Cases 747, 77 E.P.D. ¶ 46,359 (5th Cir. 1999), cert. denied, 529 U.S. 1099 (2000), stated:

The concept of “manifest disregard of the law” has not been defined by the Supreme Court. The circuits have adopted various formulations. 2 As indicated by our foregoing recognition of the standard, we agree with the D.C. Circuit that, “in this statutory context, the ‘manifest disregard of law’ standard must be defined in light of the bases underlying the Court’s decisions in Gilmer-type cases.” Cole, 105 F.3d at 1487. Professors MacNeil, Speidel, and Stipanowich have made a “modest proposal” that should prove helpful as a basis for articulating and applying the manifest disregard doctrine in the present context:

First, where on the basis of the information available to the court it is not manifest that the arbitrators acted contrary to the applicable law, the award should be upheld.

Second, where on the basis of the information available to the court it is manifest that the arbitrators acted contrary to the applicable law, the award should be upheld unless it would result in significant injustice, taking into account all the circumstances of the case, including powers of arbitrators to judge norms appropriate to the relations between the parties.

MACNEIL, supra, §§ 40.7.2.6, at 40:95 (footnote omitted).
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2 See, e.g., Advest Inc. v. McCarthy, 914 F.2d 6, 8-9 (1st Cir. 1990) (“where it is clear from the record that the arbitrator recognized the applicable law-and then ignored it”); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker, 808 F.2d 930, 933-34 (2d Cir. 1986)(“The error must have been obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator.

Moreover, the term ‘disregard’ implies that the arbitrator appreciates the existence of a clearly governing legal principle but decides to ignore or pay no attention to it.” (citations omitted)); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418, 421 (6th Cir. 1995)(“an arbitration panel does not act in manifest disregard of the law unless (1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrators refused to heed that legal principle.”); Health Services Management Corp. v. Hughes, 975 F.2d 1253, 1267 (7th Cir.1992)(“there must be something beyond and different from mere error in law or failure on the part of the arbitrators to understand or apply the law; it must be demonstrated that the majority of arbitrators deliberately disregarded what they knew to be the law in order to reach the result they did.”).

Sixth Circuit:Dawahare v. Spencer, 210 F.3d 666, 669–70 (6th Cir.), cert. denied, 531 U.S. 878 (2000), stated: “An arbitration decision ‘must fly in the face of established legal precedent’ for us to find manifest disregard of the law. Id. An arbitration panel acts with manifest disregard if ‘(1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrators refused to heed that legal principle.’ Id. Thus, to find manifest disregard a court must find two things: the relevant law must be clearly defined and the arbitrator must have consciously chosen not to apply it. . . . Arbitrators are not required to explain their decisions. If they choose not to do so, it is all but impossible to determine whether they acted with manifest disregard for the law. . . .”

“Chief Judge Martin, concurring in Federated Department Stores, Inc. v. J.V.B. Industries, Inc., 894 F.2d 862 (6th Cir. 1990), recognized the problems inherent in reviewing an arbitration award for manifest disregard of the law where the arbitrators fail to state a reason for their decision. He stated that courts are forced to participate in a ‘judicial snipe hunt’ with the parties arguing about law that may or may not have been disregarded by the arbitrators. See id. at 871. He would allow reversal when there are no reasons given for an arbitration decision and the record is insufficient to show that the arbitrators did not manifestly disregard the law. See id. No panel of this court has adopted this reasoning.”

Eleventh Circuit:Montes v. Shearson Lehman Brothers, Inc., 128 F.3d 1456, 4 WH Cases 2d 385 (11th Cir. 1997), reversed an arbitration panel’s decision because it appeared that the board had disregarded the law. The plaintiff sued the employer for overtime under the FLSA, arguing that she was a non-exempt employee. In its arguments to the arbitrator, the employer specifically asked the arbitrators to do “equity” and to disregard the FLSA. There was no evidence in the record that the arbitral panel did not heed this advice, and thus the court reversed the arbitrator’s decision.

18. How Detailed Must the Decision Be?

“The nature of judicial review of arbitral action is complicated by the fact that arbitrators need not state any reason for their decision, United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 598 . . . (1960), and, if they choose to say anything, are often remarkably terse.” Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 330 31 (1st Cir. 2000) (parallel cites omitted).

Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 77 FEP Cases 182 (2d Cir. 1998), cert. denied, 526 U.S. 1034 (1999), reversed the lower court’s refusal to vacate the ADEA arbitration award in favor of the employer. The court discussed the need for adequate review of arbitral awards in statutory discrimination cases, and its perception that the plaintiff presented “overwhelming evidence” of age discrimination. Id. at 203. The defendant admitted that the plaintiff’s performance would not have justified discharge, but asserted that the plaintiff quit voluntarily. The court stated that the plaintiff “made a very strong showing that he did not choose the ‘option’ of quitting but was fired.” Id. The law was explained to the arbitrators. Id. at 203–04. The court noted that the arbitrators did not explain their award, and that it had previously held that arbitrations were not under an obligation to do so. However, said the court, this case puts the assumptions of Gilmer to the test. Id. at 204. The court continued:

At least in the circumstances here, we believe that when a reviewing court is inclined to hold that an arbitration panel manifestly disregarded the law, the failure of the arbitrators to explain the award can be taken into account. Having done so, we are left with the firm belief that the arbitrators here manifestly disregarded the law or the evidence or both.

Id. at 204. The court stated that it was not holding that arbitrators should write opinions in every case, or in most cases. “We merely observe that where a reviewing court is inclined to find that arbitrators manifestly disregarded the law or the evidence and that an explanation, if given, would have strained credulity, the absence of explanation may reinforce the reviewing court’s confidence that the arbitrators engaged in manifest disregard.” Id.

In Green v. Ameritech Corp., 200 F.3d 967, 81 FEP Cases 993 (6th Cir. 2000), the Sixth Circuit reversed a federal court’s decision to vacate an arbitration award on the grounds that the arbitrator had insufficiently “explained” the basis of his decision as required by the arbitration agreement. The proper remedy, even if the award required further explanation, was to remand the case to the arbitrator, which the district court failed to do.

19. Interesting Award

Brown v. Coleman Co., Inc., 220 F.3d 1180, 16 IER Cases 966 (10th Cir. 2000), cert. denied, __ U.S. __, 121 S. Ct. 1191, 149 L. Ed. 2d 107 (2001), upheld a high-dollar award for an employee, broken down as follows: “A three-member arbitration panel awarded Gerald E. Brown a total of $3,617,930 for breach of employment contract, wrongful termination, and defamation by the Coleman Company (Coleman). Brown brought an action under the Federal Arbitration Act to confirm the award. The district court vacated the $2,322,335 portion of the award that was based on the value of certain stock options and confirmed the rest of the award, including $350,001 for defamation. Brown appeals the vacatur of the $2,322,335 award for the stock options, and Coleman appeals the confirmation of the $350,001 award for defamation.”

G. Class Actions

1. Availability of Rule 23 in Cases Involving Common-Law
Damages

Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 86 FEP Cases 1580 (2d Cir. 2001), cert. denied122 S. Ct. 1349, 152 L. Ed. 2d 251 (2002), reversed the denial of class certification. The plaintiffs were black present and former employees who sought to represent a class of about 1,300 employees seeking traditional Title VII relief as well as compensatory damages. “Specifically, they challenge Metro North’s company-wide policy of delegating to department supervisors discretionary authority to make employment decisions related to discipline and promotion. Relying on statistical and anecdotal evidence, the Class Plaintiffs argue that this delegated authority has been ‘exercised in a racially discriminatory manner and has a disparate impact on African American employees.’” Id. at 155. The court rejected the “incidental damages”-only approach to Rule 23(b)(2) contained in the dicta of the Fifth Circuit in Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998), but see the opinion on denial of rehearing defining the real issues decided, 151 F.3d at 420, and stated:

Thus, the question we must decide is whether this bright-line bar to (b)(2) class treatment of all claims for compensatory damages and other non-incidental damages (e.g., punitive damages) is appropriate. For the reasons we discuss below, we believe that it is not and therefore decline to adopt the incidental damages approach set out by the Fifth Circuit in Allison and followed by the district court below. Rather, we hold that when presented with a motion for (b)(2) class certification of a claim seeking both injunctive relief and non-incidental monetary damages, a district court must “consider[ ] the evidence presented at a class certification hearing and the arguments of counsel,” and then assess whether (b)(2) certification is appropriate in light of “the relative importance of the remedies sought, given all of the facts and circumstances of the case.” . . . The district court may allow (b)(2) certification if it finds in its “informed, sound judicial discretion” that (1) “the positive weight or value [to the plaintiffs] of the injunctive or declaratory relief sought is predominant even though compensatory or punitive damages are also claimed,” Allison, 151 F.3d at 430 (Dennis, J., dissenting), and (2) class treatment would be efficient and manageable, thereby achieving an appreciable measure of judicial economy.

Although the assessment of whether injunctive or declaratory relief predominates will require an ad hoc balancing that will vary from case to case, before allowing (b)(2) certification a district court should, at a minimum, satisfy itself of the following: (1) even in the absence of a possible monetary recovery, reasonable plaintiffs would bring the suit to obtain the injunctive or declaratory relief sought; and (2) the injunctive or declaratory relief sought would be both reasonably necessary and appropriate were the plaintiffs to succeed on the merits. Insignificant or sham requests for injunctive relief should not provide cover for (b)(2) certification of claims that are brought essentially for monetary recovery. . . .

267 F.3d at 164 (citations omitted). The court held that “where non-incidental monetary relief such as compensatory damages are involved, due process may require the enhanced procedural protections of notice and opt out for absent class members.” Id. at 165. The court held that the lower court erred in failing to bifurcate the case and certify a 23(b)(2) class for purposes of liability. Id. at 167. The court explained the utility of a partial (b)(2) certification of liability issues only:

Here, litigating the pattern-or-practice liability phase for the class as a whole would both reduce the range of issues in dispute and promote judicial economy. For example, if the class should succeed and, even assuming that the remedial stage is ultimately resolved on a non-class basis, the issues and evidence relevant to these individual adjudications would be substantially narrowed:

By proving that the defendant engaged in a pattern or practice of discrimination, not only is the plaintiff class’s eligibility for appropriate prospective relief established, a prima facie case with regard to the remedial phase of the suit, in which relief for individuals is considered, is also made out. Thus, the court presumes that the employer unlawfully discriminated against individual class members. In pattern or practice cases, however, the presumption shifts to the employer not only the burden of production, but also the burden of persuading the trier of fact that it is more likely than not that the employer did not unlawfully discriminate against the individual.

Craik v. Minn. State Univ. Bd.731 F.2d 465, 470 (8th Cir.1984) (internal citation omitted). If, on the other hand, Metro North succeeds at the liability stage, the question of whether it engaged in a pattern or practice of intentional discrimination that injured its African American employees would be completely and finally determined, thereby eliminating entirely the need for a remedial stage inquiry on behalf of each class member.
267 F.3d at 168. The court rejected the district court’s assumption that the focus of the liability trial would be an individual-by-individual, supervisor-by-supervisor morass:

However, as we have discussed, see supra Part I(B) (1), the liability phase is largely preoccupied with class-wide statistical evidence directed at establishing an overall pattern or practice of intentional discrimination. See Allison, 151 F.3d at 434 (Dennis, J., dissenting). To the extent that evidence regarding specific instances of alleged discrimination is relevant during the liability stage, it simply provides “texture” to the statistics. Such anecdotal evidence is not introduced to establish that the particular instances of discrimination actually occurred nor that the particular employees were in fact victims of discrimination. See Price Waterhouse v. Hopkins, 490 U.S. 228, 244-45 n.10, 109 S. Ct. 1775, 104 L. Ed. 2d 268 (1989), superseded by statute on other grounds. Indeed, to ensure that the liability phase remains manageable, the district court may limit the anecdotal evidence as it deems appropriate. See Fed. R. Evid. 403.
267 F.3d at 168. The court rejected the argument that partial certification would necessitate the use of separate juries in violation of the Re-Examination Clause of the Seventh Amendment:

As one commentator has observed, avoiding this calls for sound case management, not [outright] avoidance of the procedure…. First, the court needs to carefully define the roles of the two juries so that the first jury does not decide issues within the prerogative of the second jury. Second, the court must carefully craft the verdict form for the first jury so that the second jury knows what has been decided already. If the first jury makes sufficiently detailed findings, those findings are then akin to instructions for the second jury to follow. Steven S. Gensler, Bifurcation Unbound, 75 Wash. L. Rev. 705, 736-37 (2000) (footnotes omitted) . . . .

Id. at 169 n.13. The court held that the lower court abused its discretion by failing to certify the disparate-impact claim for class treatment under Rule 23(b)(2). It rejected the defendant’s argument that Rule 23(b)(2) class certification would defeat the Seventh Amendment’s Trial by Jury Clause. The court held that the right to jury trial would be preserved by trying first to a jury all issues in common between the disparate-treatment and disparate-impact claims:

Where a legal and equitable claim in a suit share a common factual issue, trial of the equitable claim first to a judge would foreclose the later presentation of the common issue to a jury, and thereby violate the trial-by-jury guarantee. . . . Thus, when as here, a pattern-or-practice claim seeking compensatory damages is pled with a disparate impact claim, the pattern-or-practice claim must be tried first to a jury if there are common factual issues necessary to the resolution of each claim.

Id. at 170 (citation omitted). Finally, the court dealt with Metro-North’s argument that the plaintiffs were inadequate class representatives because they had already settled their individual claims, while reserving their right to seek classwide relief. The court observed that the plaintiffs would benefit from classwide injunctive relief, and the defendant was not asserting inadequacy of representation as to such relief. The court continued:

Metro-North’s contention that the Class Plaintiffs may thereafter fail to “vigorously” pursue the individual relief stages is both speculative and premature, and, we believe, is an insufficient basis for rejecting class certification at this juncture. Rather, the preferable course is for the district court to revisit the question of the Class Plaintiffs’ “fitness” to represent the class if and when the individual-relief stages of the claims occur. Then, if the district court deems it appropriate, it can direct that class members who are entitled to seek individual relief be named as additional class representatives.

Id. at 171 (citations omitted).

Celestine v. Petroleos de Venezuella SA, 266 F.3d 343, 355–56, 86 FEP Cases 1462, 81 E.P.D. ¶ 40,799 (5th Cir. 2001), affirmed the grant of summary judgment to the defendant on the plaintiffs’ claims of denial of promotion and training. Although there were 206 individual plaintiffs, the court held that, in light of the earlier denial of class certification, the lower court did not abuse its discretion in barring the plaintiffs from proceeding with their claims on a pattern-and-practice basis and requiring them to proceed on an individual basis under the McDonnell Douglas model.

Smith v. Texaco, Inc., 263 F.3d 394, 86 FEP Cases 1619, 81 E.P.D. ¶ 40,718 (5th Cir. 2001), a decision that attempted to put the dicta of Allison v. Citgo Petroleum Co. 151 F.3d 402 (5th Cir.), reh’g denied, 151 F.3d 434 (5th Cir. 1998), into holdings and shore up its weaker parts, has been withdrawn because of the settlement of all claims in the underlying action, while the matter was still pending on further review by the Circuit. Smith v. Texaco, Inc., 281 F.3d 477, 88 FEP Cases 51 (5th Cir. 2002).

In re Exxon Valdez, 270 F.3d 1215 (9th Cir. 2001), an environmental case, affirmed awards of compensatory damages in the amounts of $22 million for chum salmon fishermen and of $30 million for setnetter fishermen, and determined that punitive damages were appropriate for the class although the particular $5 billion award in the case was too high.

2. The EEOC and Rule 23

In re Bemis Co., Inc., 279 F.3d 419, 87 FEP Cases 1500 (7th Cir. 2002), denied the defendant’s petition to appeal the lower court’s order striking the part of its Answer objecting that the EEOC had not followed Rule 23 in suing on behalf of a number of black employees. The court held that the EEOC is not bound by the constraints of Rule 23.

3. Appeals by Class Member Objectors from Final
Approval of Settlements

Devlin v. Scardelletti, __ U.S. __, 122 S. Ct. 2005 (2002), held that a nonplaintiff class member who objected to a proposed class settlement could appeal from the grant of final approval without first having to intervene. The court stated that it had never restricted the right to appeal to named parties, where the appellant was bound by the order in question. The right of an objector to appeal from final approval of a class settlement, however, is limited to appealing the lower court’s rejection of the appellant’s objections.

4. Consequences of Dismissing or Decertifying Class Actions

Culver v. City of Milwaukee, 277 F.3d 908, 914–15 (7th Cir. 2002), held that in some circumstances, the dismissal of a putative class action or decertification of a class action may impose on plaintiffs’ counsel the obligation to provide notice to all members of the now uncertified class. The obligation does not apply where it is clear that there is no prejudice, such as where the class size is small and all members were likely to learn of the dismissal or decertification through other means. The court also held that, where it is necessary to subdivide the class into mutually exclusive subclasses and the plaintiff or plaintiff’s counsel fail to do so and to invite members of the other subclass to join as representatives, their failure makes representation of the class inadequate. Id. at 912–13.

5. Availability of ADEA Collective Actions

Thiessen v. General Electric Capital Corp., 267 F.3d 1095 (10th Cir. 2001), cert. denied, 2002 WL 1306877, 70 USLW 3775 (U.S., June 17, 2002) (No. 01–881)reversed the decertification of the ADEA collective action. Preliminarily, the court held that the lower court properly adopted the ad hoc, case-by-case approach to determining whether the plaintiffs and opt-in plaintiffs were similarly situated, instead of attempting to import the standards of Rule 23 into 29 U.S.C. § 216(b). Id. at 1105. The court held that the lower court’s failure to focus on the fact that plaintiffs were challenging an alleged pattern and practice of discrimination “adversely impacted its ‘similarly situated’ analysis and resulted in an abuse of discretion.” Id. “Pattern-or-practice cases differ significantly from the far more common cases involving one or more claims of individualized discrimination. In a case involving individual claims of discrimination, the focus is on the reason(s) for the particular employment decisions at issue. . . . In contrast, the initial focus in a pattern-or-practice case is not on individual employment decisions, ‘but on a pattern of discriminatory decisionmaking.’ Id. Thus, the order and allocation of proof, as well as the overall nature of the trial proceedings, in a pattern-or- practice case differ dramatically from a case involving only individual claims of discrimination.” Id. at 1106 (citations omitted.) The court emphasized the benefit, to individual class members in Stage II proceedings, of the presumption of discrimination that arises from the finding of a pattern of discrimination in Stage I.

Given the pattern-or-practice nature of plaintiffs’ claim, this factor necessarily encompasses factual issues relevant to both the first and second stages of trial, e.g., whether the blocker policy continued after Lanik’s alleged repudiation and, if it did, whether a link existed between that policy and the individual employment decisions affecting the named plaintiffs. The problem is that the district court effectively made findings regarding these issues in the guise of determining whether plaintiffs were “similarly situated.” . . . By doing so, the district court essentially deprived plaintiffs of their right to have the issues decided by a jury, or to at least have the court determine, under summary judgment standards, whether there was sufficient evidence to send the issue to the jury. Further, the district court failed to take into account the fact that, if plaintiffs were able to establish a pattern or practice of discrimination, they would be entitled to a presumption that the individual employment actions taken against them were the result of such discrimination. Indeed, the district court effectively deprived plaintiffs of this procedural advantage as well.

Id. at 1106–07. The court held that the lower court’s determinations were flawed by failing to take into account the pattern-and-practice nature of the case. “Although it is true that defendants asserted ‘highly individualized’ defenses to each of the instances of individual discrimination asserted by plaintiffs, those defenses would not become the focal point until the second stage of trial and could be dealt with in a series of individual trials, if necessary. With respect to the first stage of trial and the initial issues of whether they had in place a pattern or practice of discrimination and whether it continued after the fall of 1994, defendants had only a few common defenses.” Id. at 1107. The court explained:

Thus, the presence of the “highly individualized” defenses clearly did not, as the district court concluded, outweigh “any potential benefits in proceeding as a collective action.” As previously noted, there was a significant procedural advantage for plaintiffs to proceed in a collective action: if they prevailed in the first stage of trial, they would be entitled to a presumption of discrimination in subsequent proceedings to decide the merits of their individual claims. By bowing to the individualized defenses relevant only to the second stage of trial, the district court deprived plaintiffs of this opportunity.

The district court’s consideration of the third factor (trial management concerns) was also adversely affected by its failure to recognize the pattern- or-practice nature of plaintiffs’ claim. Most notably, the district court failed to acknowledge that plaintiffs’ proposed trial plan, though perhaps deficient in some respects, was consistent with the framework outlined in Teamsters for pattern-or-practice claims. The court also failed to make any effort to modify the plaintiffs’ proposed trial plan. Finally, the district court was wrong in concluding that trying the case in two phases, as suggested by plaintiffs, “render[ed] individualized consideration of the claims impossible.” . . .

Id. The court concluded that, because of the pattern-and-practice nature of plaintiffs’ case, the “plaintiffs were, in fact, ‘similarly situated’ for purposes of § 216(b).” Id. at 1107–08.

H. Summary Judgment

1. General

Fierros v. Texas Department of Health, 274 F.3d 187, 190–91, 87 FEP Cases 503 (5th Cir. 2001), reversed the grant of summary judgment to the Title VII retaliation defendant. The court cited Reeves, stating:

The Supreme Court recently emphasized the paramount role that juries play in Title VII cases, stressing that in evaluating summary judgment evidence, courts must refrain from the making of “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts,” which “are jury functions, not those of a judge.”

2. Effect of Contradictions in the Employer’s Case

Melendez-Arroyo v. Cutler-Hammer de P.R. Co., Inc.273 F.3d 30, 87 FEP Cases 673 (1st Cir. 2001), vacated the grant of summary judgment to the ADEA defendant, based in part on the fact that the defendant’s officials could not get their stories straight. Some accused her of things that others exonerated her for, and defended her for things that the others attacked her for, and there was no contemporaneous documentation supporting any of it.

McCowan v. All Star Maintenance, Inc.273 F.3d 917, 921, 87 FEP Cases 596 (10th Cir. 2001), reversed the grant of summary judgment to the Title VII and § 1981 defendant, because the lower court failed to indulge all reasonable inferences in favor of the nonmoving party, and “ignored some of the facts presented, permitting it to resolve what otherwise would be material facts more appropriately reserved for a rational jury.” The court summarized the evidence of racial harassment and the contradictions in the defendant’s evidence as to the plaintiffs’ firing, and cautioned against the grant of summary judgment in such circumstances:

Thus, All Star’s “business judgment” with the jargon of economics, efficiency, bottom lines and profit is not impervious to alternative proof. The court’s inquiry is not whether the employer made the best choice, but whether it was the real choice for terminating Plaintiffs. With no evidence of the criteria used to evaluate the basis for the decision to retain one painting crew over the other in the face of the inconsistencies and contradictions in the record, the court improperly resolved questions of fact reserved for the jury.

Id. at 926.

3. Harassment Cases

Cardenas v. Massey, 269 F.3d 251, 261–62, 87 FEP Cases 19 (3rd Cir. 2001), reversed the grant of summary judgment to the defendants on the plaintiff’s Title VII and New Jersey Law Against Discrimination racial harassment claim against certain defendants. The alleged harassment included performance evaluations and the practice of assigning all minority employees to the one unit headed by a minority manager. The court stated: “We cannot say that the District Court’s evaluation of the evidence was not a reasonable one for a trier of fact to reach. However, the District Court declined to examine the possibility that defendants’ “management decisions” masked discriminatory intent. As this court has previously emphasized, the advent of more sophisticated and subtle forms of discrimination requires that we analyze the aggregate effect of all evidence and reasonable inferences therefrom, including those concerning incidents of facially neutral mistreatment, in evaluating a hostile work environment claim.”

McCowan v. All Star Maintenance, Inc.273 F.3d 917, 926, 7 FEP Cases 596 (10th Cir. 2001), reversed the grant of summary judgment to the Title VII and § 1981 racial and ethnic harassment defendant. The court held that whether there was actionable conduct depended on the “totality of the circumstances” test, and suggested that summary judgment is not an appropriate means to resolve at least some such cases:

Finally, we would observe the totality of the circumstances analysis in cases like the one before us obviates what would otherwise be the court’s call in deciding how many racist comments constitute harassment or whether general profanity and vulgarity mixed with specific racial, ethnic, or sexual epithets equate to the sum of pervasiveness required by Harris. Rather, by framing the evidence of summary judgment within the context of this particular workplace, we eliminate the suggestion that a certain number of comments is or is not actionable, as All Star has advanced, and leave the resolution to the trier of fact.

4. Summary Judgment in Pattern-and-Practice Cases

Thiessen v. General Electric Capital Corp., 267 F.3d 1095, 1108–09 (10th Cir. 2001), cert. denied, 2002 WL 1306877, 70 USLW 3775 (U.S., June 17, 2002) (No. 01–881)reversed the grant of summary judgment to the ADEA defendant. The court reversed the lower court’s decertification of the class, and discussed the effect of a pending pattern-and-practice claim on summary judgment adjudication:

As with defendants’ motion to decertify, proper consideration of defendants’ motion for summary judgment must take into account the fact that Thiessen and the opt-in plaintiffs were asserting a pattern-or- practice claim. Although there is little case authority discussing summary judgment motions in pattern-or-practice cases, we see no reason why summary judgment motions cannot be aimed at both the first and second stage issues. Presumably, however, such motions must be analyzed in light of the orders of proof peculiar to pattern-or-practice cases, and must be filed and considered at an appropriate stage of the proceedings. During the first stage of a pattern-or-practice case, for example, a summary judgment motion (whether filed by plaintiffs or defendants) must focus solely on whether there is sufficient evidence demonstrating that defendants had in place a pattern or practice of discrimination during the relevant limitations period. . . . Until the first stage is resolved, we question whether it is proper for a court to consider summary judgment motions regarding second stage issues (i.e., whether individual plaintiffs are entitled to relief). Even assuming, arguendo, such motions can properly be considered prior to resolution of the first stage, it is clear they would not be analyzed under the typical McDonnell-Douglas framework. . . . Instead, they would operate under the presumption that (1) defendants had in place a pattern or practice of discrimination, and (2) all employment decisions regarding the class plaintiffs were made pursuant to that pattern or practice. . . .

(Footnote and citations omitted.)

I. Settlement

Hakim v. Payco-General American Credits, Inc., 272 F.3d 932, 87 FEP Cases 555 (7th Cir. 2001), held that the plaintiff was bound by his settlement of his claims with the defendant, in which he agreed to withdraw all claims in return for the defendant’s not seeking fees and costs against him, although he was unaware that, at the time he signed the agreement, the lower court had already entered default judgment for him as a sanction for the defendant’s misconduct. The defendant’s surrender of a claim for fees and costs was consideration for the agreement, even if such a claim was weak.

J. Batson Challenges to Peremptory Strikes of Jurors

Weeks v. New York State (Division of Parole), 273 F.3d 76, 88–90, 87 FEP Cases 161, 81 E.P.D. ¶ 40,822 (2nd Cir. 2001), affirmed the judgment for the defendant on those claims that were tried. The court rejected the plaintiff’s challenge to the defendant’s peremptory strikes because they were made hours after the strikes, after the struck jurors had left the court room, and when the trial judge stated that he could not recall the struck jurors.

K. Evidentiary Rulings

1. Admissible Form

Markel v. Board of Regents of University of Wisconsin System276 F.3d 906, 912, 87 FEP Cases 1131 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII defendant. The court held that an affidavit could not be considered when it was not sworn, not certified, and signed by plaintiff’s counsel instead of by the witness.

2. Prior Claims of Discrimination

Mathis v. Phillips Chevrolet, Inc.269 F.3d 771, 774–77, 87 FEP Cases 219, 81 E.P.D. ¶ 40,807 (7th Cir. 2001), affirmed the $50,000 judgment on a jury verdict for the ADEA plaintiff. The court held that the lower court did not abuse its discretion in barring evidence of the plaintiff’s prior discrimination claims with respect to six other employers at which he had applied. The court held that the evidence of a series of false or insincere applications at other dealerships cannot be admitted Under Rule 404(b), F. R. Evid., to show that the plaintiff was litigious, but could be admitted under the same rule to show a plan, scheme, or modus operandi. Even if relevant, however, the court held that the lower court acted within its discretion in barring the evidence because its probative value was outweighed by the danger of prejudice against the plaintiff.

3. Inferences Arising from Destruction of Records

Hall v. Bodine Electric Co.276 F.3d 345, 358–59, 87 FEP Cases 1240 (7th Cir. 2002), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court held that no inference of pretext arose from the fact that the investigator destroyed his original notes after typing them up on a computer. It stated that employers are not required to keep every piece of scrap paper, and that the investigator’s reasons for throwing out his original notes—that the original notes were rough and contained misspellings and cross-outs, that the typed version contained virtually everything in the notes, and to preserve confidentiality—were plausible. The court did not question the consistency of the second and third reasons. Moreover, there was substantial evidence supporting the investigator’s conclusion that the plaintiff had herself sexually harassed other men at work, including the accused perpetrator. Id. at 359.

4. Hearsay and its Exceptions

EEOC v. University of Chicago Hospitals276 F.3d 326, 333, 87 FEP Cases 1089 (7th Cir. 2002), reversed the grant of summary judgment to the Title VII religious-discrimination constructive-discharge defendant. The court held that the statements of the charging party’s former supervisor, as to the intentions of the decisionmaker, and his testimony as to the charging party’s statements, were not hearsay because they were not admitted to prove the truth of the matter asserted, but the state of the plaintiff’s mind as she returned to work.

Swinton v. Potomac Corp., 270 F.3d 794, 807–08, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The court held that the trial court did not err in admitting summaries of the plaintiff’s accounts of the harassment as part of exhibits prepared by psychologists he consulted, because these records came under the hearsay exception in Fed. R. Evid. 803(4) for “statements made for purposes of medical diagnosis or treatment and describing medical history, or past or present symptoms, pain, or sensations, or the inception or general character of the cause or external source thereof insofar as reasonably pertinent to diagnosis or treatment.”

5. The Balancing Test

Swinton v. Potomac Corp., 270 F.3d 794, 808, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The court held that the lower court did not abuse its discretion in barring evidence that the plaintiff only sought psychological consulting two days after consulting with his attorney, because the defendant had had ample opportunity to cross-examine the plaintiff about his emotional distress.

6. Testimony on Advice of Counsel

Farias v. Instructional Systems, Inc.259 F.3d 91, 100–01 (2nd Cir. 2001), affirmed the judgment of liability on a jury verdict for Title VII retaliation plaintiff Robinson, and affirmed the denial of punitive damages. The court held that the lower court did not abuse its discretion in barring the testimony of defense counsel to the effect that counsel had advised the defendant not to offer a severance payment because the plaintiff had filed an EEOC charge. It explained:

But nothing would prevent ISI from offering the severance in exchange for a release, which no doubt included actual claims as well as hypothetical ones. Dunn’s testimony therefore would only have reinforced the jury’s finding that the denial of severance benefits was retaliatory, and his testimony therefore could not evidence a motive that was both legitimate and non-retaliatory. The retaliatory finding rests on cause and effect, regardless of whether Kaminer acted out of animus and revenge or on the advice of counsel. We need not decide whether there are circumstances where the advice of counsel could constitute or assist a defense to a claim of retaliation.

The court went on to state that the admissibility of this testimony as to punitive damages was a different question, but any error was harmless in light of the reversal of punitive damages. Id. at 101.

7. Judge’s Questions

Swinton v. Potomac Corp., 270 F.3d 794, 808–09, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The court held that the trial judge’s questioning of one of the two co-plant managers was proper clarification of testimony, and revealed little of consequence. Although the trial judge did elicit that plaintiff was the only black employee of the plant, other witnesses had already testified to this.

8. Counsel’s Failure to Follow Through

Swinton v. Potomac Corp., 270 F.3d 794, 809, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. Finally, the court rejected the defendant’s contention that the district court improperly excluded an exhibit, when the lower court only reserved ruling on its admission and plaintiff’s objection, the defendant never asked for an immediate ruling, used it to refresh the recollection of the witness as it had begun to do before offering the exhibit, and never again moved to introduce it.

9. Evidence of Post-Event Occurrences

Swinton v. Potomac Corp., 270 F.3d 794, 811–17, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff was subjected to a frequent barrage of racist slurs and jokes, some of them in the presence of a member of management. The defendant argued that it was entitled to a new trial because the lower court had excluded evidence of one of the post-suit steps it had taken to remedy discrimination. The court distinguished a number of cases excluding evidence of post-event occurrences because they involved the issue of liability, and evidence irrelevant to liability may still be relevant to the imposition of punitive damages. After surveying the law in Federal and State courts, the court held that lower courts have the discretion to decide whether to allow evidence of post-event remedial actions, “as a means to mitigate punitive damages.” Id. at 814. The court stated that, under Faragher and Ellerth, the employer has the right to show that it took prompt and effective remedial action, and that this right cannot be cut off by the plaintiff’s simultaneous quitting under a contention of constructive discharge and filing of suit under § 1981. “The point is that the timing and nature of remedial action are case-specific and will not always fit in a neat box.” Id. at 815. This case is discussed further in the section on punitive damages below.

L. Rule 412, Fed. R. Evid.

Beard v. Flying J, Inc., 266 F.3d 792, 801–02, 87 FEP Cases 1836 (8th Cir. 2001), affirmed the judgment on a jury verdict for the Title VII sexual harassment plaintiff, and the judgment on a jury verdict for the defendant on plaintiff’s constructive-discharge claim. The court stated that it was an open question whether Rule 412 applied to sexual harassment cases, but held in any event that the defendant’s failure to follow the procedures set forth in Rule 412 was harmless in light of the plaintiff’s knowledge that the material on her non-intimate sexual conduct would be offered, and in light of the fact that the conduct took place in a public area.

B.K.B. v. Maui Police Department, 276 F.3d 1091, 1103–06, 87 FEP Cases 1306 (9th Cir. 2002), modified in other respects__ F.3d __, 2002 WL 237764 (9th Cir. Feb. 20, 2002), reversed the lower court’s denial of plaintiff’s motion for a new trial after defense counsel introduced trial testimony as to the plaintiff’s sexually-oriented statements and conduct, without complying with Rule 412. “Having failed in two previous motions to obtain the court’s approval to introduce Rule 412 material, the defendants instead simply sprang the offending testimony upon the court and then misrepresented the nature of Becraft’s testimony to the trial judge in response to plaintiff’s objections that the defense intended to violate Rule 412.” Id. at 1104–05. The court held that Becraft’s testimony as to the plaintiff’s sexual practices did not involve any admissions by the plaintiff as to the advances she rejected, and “Plaintiff’s alleged statements regarding her sexual habits were not probative as to the welcomeness of any harassing conduct by her coworkers.” Id. at 1105. The court held that no instruction could have cured the prejudice of Becraft’s “lurid” testimony, but that the lower court’s curative instruction was in any event not forceful and was diminished in effect by its having been prefaced with a jocular reference to its being nearly lunchtime. Id. at 1105–06 & n.7. The court’s rulings on sanctions are discussed below.

M. Appeals

Conto v. Concord HospitalInc., 265 F.3d 79, 81–82 (1st Cir. 2001), affirmed the grant of summary judgment to the Title VII sexual harassment defendant. The court observed that sexual harassment cases are intensely fact-specific, and deemed the claim waived because the plaintiff did not cite a single record fact in her appellate brief, instead referring to the record in general.

VII. Remedies

A. Injunctive Relief

Cardenas v. Massey, 269 F.3d 251, 265, 87 FEP Cases 19 (3rd Cir. 2001), affirmed the grant of summary judgment to the defendants on the plaintiff’s demands for prospective injunctive relief because he had quit and thus lacked standing to assert such relief, and because he could not benefit personally from such relief and cannot assert the rights of those who could still benefit. The court affirmed the dismissal of plaintiff’s claims for individualized injunctive relief in the form of correcting his employment records to remove the effects of discrimination in his evaluations, because it was unaware of any precedent for doing so.

B. Back Pay and Front Pay

Hoffman Plastics Compounds, Inc. v. N.L.R.B., __ U.S. __, 122 S. Ct. 1275, 169 L.R.R.M. (BNA) 2769 (2002), reversed the Board’s grant of back pay to Jose Castro, an undocumented alien who had never been authorized to work in the United States. Castro testified that he had used a friend’s birth certificate fraudulently to obtain a Social Security card, and a California driver’s license, and he had used these to obtain employment. There was no evidence that he had applied or intended to apply for legal authorization to work in the United States. The Court held that the legal landscape of prior decisions was altered by enactment of the Immigration Reform and Control Act of 1986. Speaking of the fact that “it is impossible for an undocumented alien to obtain employment in the United States without some party directly contravening explicit congressional policies,” such as by the employee’s tender of fraudulent documentation or the employer’s knowing hiring of an undocumented alien, the Court stated:

The Board asks that we overlook this fact and allow it to award backpay to an illegal alien years of work not performed, for wages that could not lawfully have been earned, and for a job obtained in the first instance by a criminal fraud. We find, however, that awarding backpay to illegal aliens runs counter to policies underlying IRCA, policies the Board has no authority to enforce or administer.

The Court pointed out that Castro could not satisfy his duty to mitigate his earnings loss without committing further violations of IRCA. Justice Breyer, joined by Justices Stevens, Souterm and Ginsburg, dissented.

The logic of this decision would seem to apply to back pay awards under all of the antidiscrimination statutes, but not necessarily to awards of compensatory and punitive damages. It is not clear that this decision would bar minimum-wage and overtime awards under the FLSA for work already performed.

The Court’s caveat—that there was no evidence that Castro had applied or intended to apply for legal authorization to work in the United States—raises the question whether Castro could have rehabilitated himself for purposes of a back pay award by applying for such authorization.

Bishop v. Gainer, 272 F.3d 1009, 1016–17, 87 FEP Cases 920 (7th Cir. 2001), affirmed the calculation of back pay based on the “lost chance” method described hypothetically in Doll v. Brown, 75 F.3d 1200, 5 AD Cases 369 (7th Cir. 1996):

Here, Hanford and Robert were competing against each other–as well as the person who actually was promoted. The judge turned to our decision in Doll and took us up on our invitation to apportion damages under a lost-chance theory, borrowed from tort law, which we said “recognizes the inescapably probabilistic character of many injuries.” We analogized by saying that if a patient was entitled to 25 percent of his full damages because he had only a 25 percent chance of survival, he should be entitled to 75 percent of his damages if he had a 75 percent chance of survival–not 100 percent of his damages on the theory that by establishing a 75 percent chance he proved injury by a preponderance of the evidence.

At 1206. Using the tort approach, the judge proceeded to calculate the plaintiffs’ damages by assessing what the chances were that each would have received the promotion he sought. For this promotion, Hanford placed third and Robert fourth on the promotion list. The person who was first received a different promotion and the person who placed second had been out of the particular district for several years, and for that reason the judge reasoned that his chances of getting the promotion would be reduced to 25 percent. Then the judge assessed that Hanford had a 45 percent chance and Robert had a 30 percent chance to receive the promotion. The other appellant, Volle, was competing for a promotion with two other white males who placed higher than he did on the list, so his chances were assessed at 15 percent.

The approach obviously involves more art than science. But as we said in Doll, that is true in all comparative negligence calculations as well. It strikes us that in this particular situation, it was the likeliest way to arrive at a just result. We think the judge (Judge Harry Leinenweber here) did a wonderful job of cutting this Gordian knot. We have examined the evidence and find no reason to disturb the thoughtful calculations he has made and the result they have produced.

Hertzberg v. SRAM Corp.261 F.3d 651 (7th Cir. 2001), cert. denied, 2002 WL 232975, 70 USLW 3395, 70 USLW 3514 (U.S., Feb. 19, 2002) (No. 01–829), reversed the lower court’s award of back pay and front pay in a sexual harassment case in which the jury found for the plaintiff on sexual harassment but found for the defendant on the issue of retaliatory discharge, and in which the plaintiff never presented a claim of constructive discharge. The plaintiff had resigned because of the company’s failure to address her complaints, and then thought better of it and tried to withdraw her resignation. The defendant held her to her resignation. The lower court had awarded back pay and front pay on the theory that the plaintiff’s resignation/termination would not have happened but for the harassment. The court of appeals held that this approach improperly ignored the distinction between harassment and termination claims. “A victim of discrimination that leaves his or her employment as a result of the discrimination must show either an actual or constructive discharge in order to receive the equitable remedy of reinstatement, or back and front pay in lieu of reinstatement. In the absence of such a showing, a plaintiff’s exclusive remedies are those set forth in 42 U.S.C. § 1981a.” Id. at 659. The court stated:

We agree with the district court that Ms. Hertzberg’s lawyers, “in the nature of their presentation, may have shot themselves or their client in the foot on the retaliation claim by the instruction that limited adverse employment action to a termination of plaintiff’s employment by defendant,” Tr. of Dec. 16, 1999, at 6-7; that is, Ms. Hertzberg may well have convinced a jury that she had been constructively discharged. However, Ms. Hertzberg presented only two bases of relief to the jury: sexual harassment and retaliatory discharge. The jury rejected Ms. Hertzberg’s retaliatory discharge claim. Consequently, there was no discriminatory discharge on which the award of lost pay could be based, and we must reverse the lost pay award.

Id. at 660–61.

C. Compensatory Damages

Worth v. Tyer276 F.3d 249, 268–69, 87 FEP Cases 994 (7th Cir. 2001), affirmed the Title VII sexual harassment verdict for the plaintiff. The court held that the plaintiff’s evidence of emotional distress—lack of sleep, humiliation, distress, lost wages, etc.—were significant enough to support the jury’s award of compensatory damages in the amounts of $20,000 for retaliatory discharge, $2,500 for sexual harassment, and $50,000 for battery.

Webner v. Titan Distribution, Inc., 267 F.3d 828, 836, 12 AD Cases 513 (8th Cir. 2001), affirmed the award of $12,500 in emotional-distress damages on the plaintiff’s ADA claim and the award of an equal amount on his State-law claim. The court stated that medical or other expert evidence is not necessary to support an ADA emotional-distress award. The plaintiff can rely on his or her own testimony, but must introduce specific facts supporting the claim of emotional distress. The court stated:

Webner testified that he was emotionally devastated by losing his job–a termination Titan told him explicitly was because of his disability. He testified that immediately after he was terminated he felt “empty,” like he lost his best friend and that there was “a hole in his chest.” . . . He also testified that he was scared that he would be unable to pay his bills and was frustrated with his inability to find other regular work for six months. Titan contends that Webner’s self- serving testimony about his reaction after he was terminated is insufficient to sustain the jury’s award of emotional distress damages. We disagree. As previously stated a plaintiff’s own testimony may provide ample evidence when heard in combination with the circumstances surrounding the plaintiff’s termination. Furthermore, “[a]wards for pain and suffering are highly subjective and the assessment of damages is within the sound discretion of the jury, especially when the jury must determine how to compensate an individual for an injury not easily calculable in economic terms.” . . . We will not disturb the jury’s award of emotional distress damages to Webner on his disability claim.

Id. at 836–37.

Madison v. IBP, Inc.257 F.3d 780, 802–03, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001), vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985), affirmed the award of $266,750 for emotional distress damages, because the evidence supporting the award was much better developed than in cases in which the courts have ordered remittiturs. The court described the evidence:

Madison presented voluminous evidence that she suffered severe emotional distress as a result of the harassment and discrimination she endured after January 13, 1993. She was subjected to egregious and humiliating conduct which wreaked havoc on her emotional health and caused her great anguish which manifested itself physically. The taunting and harassment made her feel humiliated, hurt, and degraded. The undisputed evidence indicated that Madison was made so distraught by the behavior of fellow employees and managers that she often left her work station in tears. Her family life was affected by what went on in the plant. Her working conditions strained her relationship with her husband and nearly caused the breakup of their marriage. The couple separated several times during the course of her employment at IBP. Madison also testified that as a result of her stressful work environment, she lost weight, had trouble sleeping and frequent headaches, and broke out in hives. The evidence about the physical and emotional effects on Madison was corroborated by her family and several coworkers. Keith Ratliffe, a minister who counseled Madison on at least four occasions during these events, described her as depressed and emotionally drained because of her experiences at IBP.

Id. at 802.

D. Liquidated Damages

Mathis v. Phillips Chevrolet, Inc.269 F.3d 771, 777–78, 87 FEP Cases 219, 81 E.P.D. ¶ 40,807 (7th Cir. 2001), affirmed the jury’s award of liquidated damages to the ADEA plaintiff. The court rejected the defendant’s argument that liquidated damages were improper because the hiring manager was ignorant of the ADEA. “Phillips’s general manager did testify that he was not aware that it was illegal to discriminate on the basis of age, but as this circuit has held, leaving managers with hiring authority in ignorance of the basic features of the discrimination laws is an ‘extraordinary mistake’ for a company to make, and a jury can find that such an extraordinary mistake amounts to reckless indifference.” Id. at 778. The court rejected the defendant’s argument that the printed message on its application forms, acknowledging that the ADEA prohibits discriminating against applicants over the age of 40, demonstrates a good-faith effort to comply and bars the imposition of liquidated damages. “However, this evidence appears more harmful to Phillips than helpful, because the jury could easily have concluded that printing this statement on the application but then making no effort to train hiring managers about the ADEA shows that Phillips knew what the law required but was indifferent to whether its managers followed that law.” Id.

E. Punitive Damages

1. Entitlement Where No Compensatory or Nominal
Damages Are Awarded

Cush-Crawford v. Adchem Corp.271 F.3d 352, 87 FEP Cases 456, 81 E.P.D. ¶ 40,800 (2nd Cir. 2001), affirmed the judgment on a jury verdict for the Title VII hostile-environment plaintiff. The jury did not award any compensatory or nominal damages, but did award the statutory maximum of $100,000 in punitive damages. The court summarized the law of the Circuits:

The plain language of the statute does not expressly state whether punitive damages are available absent an award of actual damages, and the Courts of Appeals that have considered the question have reached different results. The Seventh Circuit holds that punitive damages may be awarded in a Title VII case absent an award of actual or compensatory damages. See Timm v. Progressive Steel Treating, Inc. , 137 F.3d 1008, 1010-11 (7th Cir. 1998) (Easterbrook, J.) (affirming jury award of punitive damages without actual damages and apparently without nominal damages). And, under an analogous provision of the Fair Housing Act, the Third Circuit has held that punitive damages are available absent awards of actual or nominal damages. See Alexander v. Riga , 208 F.3d 419, 430-34 (3d Cir. 2000), cert. denied, 531 U.S. 1069, 121 S. Ct. 757, 148 L. Ed. 2d 660 (2001). By contrast, under the First Circuit’s rule, “punitive damages award must be vacated absent either a compensatory damages award, or a timely request for nominal damages.” Kerr-Selgas v. Am. Airlines, Inc. , 69 F.3d 1205, 1215 (1st Cir. 1995). Similarly, on the question of punitive damages under the Fair Housing Act, the Fourth and Fifth Circuits have held that punitive damages are not available absent a compensatory damages award. See Louisiana ACORN Fair Hous. v. LeBlanc , 211 F.3d 298, 303 (5th Cir. 2000) (recognizing that punitive damages are not available in absence of actual damages unless there has been a constitutional violation), cert. denied, __U.S. __ (2001); People Helpers Found., Inc. v. City of Richmond , 12 F.3d 1321, 1327 (4th Cir. 1993).

Id. at 357. Further surveying the law, the court found that there was no consensus on the common-law rule. “The requirement of actual damages has been described by commentators as the majority rule, see Prosser & Keeton on the Law of Torts § 2, at 14 (5th ed. 1984), but it has also been sharply criticized, see id ; see also Restatement (Second) of Torts § 908 cmt. (c) (1979) ( ‘[I]t is not essential to the recovery of punitive damages that the plaintiff should have suffered any harm, either pecuniary or physical.’).” Id. at 358. The court distinguished the general concerns about allowing awards of punitive damages without proof of actual harm: “In Title VII cases, however, the statutory maxima capping punitive damage awards strongly undermine the concerns that underlie the reluctance to award punitive damages without proof of actual harm.” Id. at 359. The court continued:

Furthermore, the objectives of punitive damages by definition differ from the objectives of compensatory damages. There is some unseemliness for a defendant who engages in malicious or reckless violations of legal duty to escape either the punitive or deterrent goal of punitive damages merely because either good fortune or a plaintiff’s unusual strength or resilience protected the plaintiff from suffering harm. It is often “precisely [in the cases where no actual harm is shown] that the policy of providing an incentive for plaintiffs to bring petty outrages into court comes into play.” Prosser & Keeton on Torts § 2, at 14; see also Restatement (Second) of Torts § 908 cmt. (c).

As for nominal damages, they are generally no more than symbolic. The need for such a symbol of opprobrium in the absence of compensatory damages disappears where the factfinder has signified its opprobrium by making an express award of punitive damages. And to make enforcement of the jury’s award of punitive damages turn on whether the jury also awarded purely symbolic nominal damages carries a likelihood of defeating the jury’s intention as the result of confusion.

In conclusion, in Title VII cases, we see no reason to make award of actual or nominal damages a prerequisite to the award of punitive damages. We hold that in Title VII cases, where the factfinder has found in a plaintiff’s favor that the defendant engaged in the prohibited discrimination, punitive damages may be awarded within the limits of the statutory caps if the defendant has been shown to have acted with a state of mind that makes punitive damages appropriate, regardless whether the plaintiff also receives an award of compensatory or nominal damages.

Hertzberg v. SRAM Corp.261 F.3d 651, 656 n.3 (7th Cir. 2001), cert. denied, 2002 WL 232975, 70 USLW 3395, 70 USLW 3514 (U.S., Feb. 19, 2002) (No. 01–829), affirmed the award of $20,000 in punitive damages to the Title VII sexual harassment plaintiff in a case in which no compensatory damages were awarded, and in which the awards of back pay and front pay were reversed.

2. Action Taken Pursuant to Legal Advice

Farias v. Instructional Systems, Inc.259 F.3d 91, 102 (2nd Cir. 2001), affirmed the judgment of liability on a jury verdict for Title VII retaliation plaintiff Robinson, and affirmed the denial of punitive damages. Defense counsel had advised the defendant not to offer a severance payment because the plaintiff had filed an EEOC charge. The court held that “whether or not the advice was appropriate, action taken pursuant to advice that the action is consistent with the law is insufficient to support an award of punitive damages under the standard articulated in Kolstad.

3. Other Questions of Entitlement

Cush-Crawford v. Adchem Corp.271 F.3d 352, 359, 87 FEP Cases 456, 81 E.P.D. ¶ 40,800 (2nd Cir. 2001), affirmed the judgment on a jury verdict for $100,000 in punitive damages for the Title VII hostile-environment plaintiff. The court stated:

Plaintiff testified not just that she was the victim of persistent egregious sexual harassment by a supervisor, but also that she notified company officials about the harassment as early as September 1993—just two months into her employment and over one year before Adchem took any remedial action. Adchem’s theory of the case, to be sure, was that plaintiff did not effectively notify company officials of the sexual harassment until November 1994, and that the earlier complaints had really only been complaints about other problems that were only tangentially related to plaintiff’s relationship with Collin Mars. Nonetheless, the jury could rationally have credited plaintiff’s version that, in spite of her complaints to company officials, the company did nothing to protect her from the abuse for many months.

Worth v. Tyer276 F.3d 249, 269, 87 FEP Cases 994 (7th Cir. 2001), affirmed the Title VII sexual harassment verdict for the plaintiff. The court affirmed the punitive-damages awards of $5,000 for Title VII sexual harassment, $25,000 for retaliatory discharge, and $50,000 for battery in a case involving improper touching for two days, including touching the plaintiff’s breast near the nipple and maintaining the contact for several seconds, lying to police investigators about the incident, and lying in court papers about the incident for three years and not amending the papers until 13 days before the trial.

EEOC v. Indiana Bell Telephone Co.256 F.3d 516, 526–28, 86 FEP Cases 1, 80 E.P.D. ¶ 40,590 (7th Cir. 2001) (en banc), affirmed the judgment of liability for sexual harassment, holding that the employer’s asserted reason for not taking effective action against the alleged harasser—that he would file a grievance under the collective bargaining agreement and be reinstated—was irrelevant on liability but was relevant to the issue of the employer’s state of mind with respect to a punitive damages award. The court held that its exclusion was prejudicial error, and remanded the case for a new trial on punitive damages.

Webner v. Titan Distribution, Inc., 267 F.3d 828, 837–38, 12 AD Cases 513 (8th Cir. 2001), reversed the award of $100,000 in punitive damages on the plaintiff’s ADA claim and the award of an equal amount on his State-law claim. The plaintiff had twice injured his back on the job, and been off for long periods. At the time of his termination, he was working in a different job with an accommodation that eased the strain on his back, and was meeting his production target. When his attorney filed a proceeding to require the company to allow videotaping of his work station for purposes of a workers’ compensation claim, the defendant fired the plaintiff and stated it was because of his “disability.” The court held that there was insufficient evidence of malice or reckless disregard:

Titan’s stated reasons for terminating Webner—that his back injury precluded him from performing all but light duty tasks, Titan was fearful that Webner would reinjure his back, and Titan did not have a job suited to his disability—while culpable, do not rise to the level of maliciousness required to sustain the jury’s award of punitive damages. Instead, Titan’s actions are consistent with an employer acting to protect itself against the possible sporadic absence of an employee.

Id. at 837.

Beard v. Flying J, Inc., 266 F.3d 792, 799, 87 FEP Cases 1836 (8th Cir. 2001), affirmed the award of $12,500 in punitive damages for sexual harassment because “Flying J did nothing to discipline Mr. Krout despite the fact that Mr. Snider testified that he believed the allegations of harassment made against Mr. Krout. Flying J’s management, furthermore, stated that Mr. Krout did nothing wrong, and even accused the women of conspiring to remove Mr. Krout, again despite the fact that the manager responsible for investigating the allegations thought that they were credible.”

Madison v. IBP, Inc.257 F.3d 780, 795, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001), vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985), held that the plaintiff had shown enough evidence to support an award of punitive damages by showing egregious harassment, repeated complaints, and repeated failures to act on the complaints. The court rejected the company’s argument that it was entitled to the defense for good-faith efforts to comply, inasmuch as it had adopted a policy and engaged in regular training of its managers. The court stated:

Madison presented a great deal of evidence from which the jury could find that IBP employees in a managerial capacity acted with malice or reckless disregard to her civil rights in failing to protect her from illegal conduct or to promote her. The evidence indicated that supervisors and managers were among those who harassed and abused her. High level employees such as Personnel Director Alberto Olguin and Plant Manager Larry Moser, both of whom had authority to terminate employees, ignored her complaints about illegal harassment and discrimination, failed to investigate whether her civil rights were being violated, and did not document illegal behavior or discipline perpetrators. The company’s EEO Coordinator, Bernielle Ott, was present at a mediation session at which Madison told Ott and other IBP representatives that she was being physically and verbally harassed almost daily and that she had been repeatedly denied promotions because of her sex. Neither Ott nor any other company representative took action to investigate these allegations or to ensure that Madison’s civil rights were not being violated.

IBP contends that it should escape liability for punitive damages because it made good faith efforts to comply with federal employment laws. The company presented evidence at trial that it had a corporate policy prohibiting racial and sexual discrimination and harassment, that it maintained an affirmative action plan, and that it put on an annual two hour training session for plant managers on the “Legal Aspects of Supervision.” There was also evidence, however, that the written corporate policies were not carried out at the Perry plant and that the company did not make good faith efforts to comply with federal civil rights laws.

Employers have an “affirmative obligation” to prevent civil rights violations in the workplace. . . . There was evidence that IBP did not have effective procedures in place to encourage employees to come forward with employment complaints or to protect them from retaliation. Madison and other employees complained to management on many occasions that their civil rights were being violated, but management did not take reasonable care to investigate or stop such behavior. There was evidence that Personnel Director Olguin, the manager charged with addressing employee grievances, conflicts, and disciplinary matters, did not investigate many complaints of harassment and discrimination. On at least fourteen occasions, an employee was counseled for engaging in harassing conduct, but nothing was recorded in his personnel file. Training Coordinator Mike Miller ignored Madison’s reports that male line workers were grabbing and fondling her, did nothing to discipline her harassers, and relied on an unsubstantiated report from one line worker that Madison had willingly engaged in horseplay on the line. When Madison informed Assistant Personnel Director Sue Menhusen that she was being harassed, Menhusen’s response was that many of the Hispanic males working at the plant “haven’t been in the country for very long” and “don’t take direction very well from females.” There was also evidence that IBP maintained policies which actually served to punish victims and discourage them from reporting illegal behavior, such as telling an alleged harasser the identity of a complainant and putting “counseling for sexual harassment” notations in the personnel files of any complaining employee.

Id. at 795–96 (citation omitted).

4. Vicarious Liability

Hertzberg v. SRAM Corp.261 F.3d 651, 661–62 (7th Cir. 2001), cert. denied, 2002 WL 232975, 70 USLW 3395, 70 USLW 3514 (U.S., Feb. 19, 2002) (No. 01–829), affirmed the award of $20,000 in punitive damages to the Title VII sexual harassment plaintiff, rejecting the defendant’s argument that it could not be held liable for punitive damages because the plaintiff had complained unsuccessfully to her supervisor and to the plant manager, but had not complained to the company President, the last step in the company’s internal complaint procedure. The court first described Circuit precedent applying Kolstad on the question of vicarious liability. In pertinent part, including its footnote 9, it stated:

This court applied the Kolstad standard in Bruso v. United Airlines, Inc., 239 F.3d 848 (7th Cir. 2001). In Bruso, we discussed Kolstad’s “three-part framework for determining whether an award of punitive damages is proper under the statutory standard.” 239 F.3d at 857. The first step requires the plaintiff to “demonstrate that the employer acted with the requisite mental state.” Id. However, we continued, [t]he employer need not be aware that it is engaging in discrimination. Instead, it need only act in the face of a perceived risk that its actions will violate federal law. A plaintiff may satisfy this element by demonstrating that the relevant individuals knew of or were familiar with the antidiscrimination laws and the employer’s policies for implementing those laws.

Id. at 857-58 (internal quotation marks and citations omitted). 9 Once the plaintiff has met this burden, the plaintiff “must demonstrate that the employees who discriminated against him are managerial agents acting within the scope of their employment.” Id. However, even if the plaintiff meets these burdens, “the employer may avoid liability for punitive damages if it can show that it engaged in good faith efforts to implement an antidiscrimination policy.” Id.
_________

9 Another way a plaintiff may meet this burden is “by showing that the defendant’s employees lied, either to the plaintiff or to the jury, in order to cover up their discriminatory actions.” Bruso v. United Airlines, Inc., 239 F.3d 848, 858 (7th Cir. 2001).

The court held that there was evidence that the plaintiff’s supervisor and plant manager knew about the antidiscrimination laws. Id. at 662–63. It held that Lester was not a managerial agent for purposes of punitive damages liability, because he “ had little discretion in hiring, disciplining or terminating employees that reported to him.” Id. at 663. It held that the jury could reasonably find that Plant Manager Margelos was a managerial agent because he “hired the staff for the Elk Grove Village plant, he took care of personnel issues and he had the authority to discipline and terminate the employment of those who worked for him, directly or indirectly.” Id. Finally, the court held that a reasonable jury could reject the defendant’s “good faith” defense because the plaintiff’s co-worker made over a hundred demeaning comments about women in four months, the plaintiff’s supervisor told her she was being too emotional and put his hand on her knee, and the Plant Manager failed to follow the company’s policy by failing to put the complaint in writing, and never did take meaningful action. Id. at 655, 663–64.

Swinton v. Potomac Corp., 270 F.3d 794, 810, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff was subjected to a frequent barrage of racist slurs and jokes, some of them in the presence of a member of management. The court agreed with other Circuits that “the inaction of even relatively low-level supervisors may be imputed to the employer if the supervisors are made responsible, pursuant to company policy, for receiving and acting on complaints of harassment.” Here, such an official not only listened to the racist slurs but laughed at the jokes and told some himself.

Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1280, 87 FEP Cases 1209 (11th Cir. 2002), reversed the award of $50,000 in punitive damages against the Title VII and § 1981 racial and ethnic harassment defendant because the plaintiff had not complained and the defendant’s constructive knowledge of the harassment, while sufficient for liability, was not sufficient for punitive damages.

5. Good-Faith Defense

Swinton v. Potomac Corp., 270 F.3d 794, 810–11, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff prevailed on a negligence theory of liability, rather than vicarious liability, because his chief harasser, while a supervisor, was not in the chain of command over the plaintiff. As described above, the affirmative defense was not available to the defendant. The court rejected the defendant’s argument that punitive damages were inappropriate because of its “written materials forbidding harassment and putting in place anti-harassment procedures.” Id. at 810. The court seemed to treat the unavailability of the affirmative defense to liability in a harassment case as tantamount to the unavailability of a good-faith defense to punitive damages, but any such suggestion would be dictum because it also relied on the ineffectiveness of the policy:

Surely, U.S. Mat cannot claim to have implemented its anti-harassment policy in good faith (even if it were conceived in good faith) when the very employee (Stewart) charged with carrying it out vis-a-vis Swinton laughed along with the “nigger” jokes, did nothing to stop them, and never reported the repeated incidents to higher management. U.S. Mat made a considered judgment to place responsibility for reporting on an employee’s direct supervisor. It could well have required some other supervisor or manager further up the chain to be the point of contact. And it could have impressed upon its supervisors, like Stewart, whom it tasked with accepting complaints of harassment, the (we would hope) obvious point that repeatedly subjecting a black employee to “nigger” jokes is wholly unacceptable, and at odds with basic anti-discrimination principles. But it chose not to, and U.S. Mat cannot now be heard to protest that Stewart’s position was too “low-level” to warrant imputation of his actions or inaction to the company.

Id. at 811.

6. Effect of Post-Event Remediation

Swinton v. Potomac Corp., 270 F.3d 794, 811–17, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff was subjected to a frequent barrage of racist slurs and jokes, some of them in the presence of a member of management. The defendant argued that it was entitled to a new trial because the lower court had excluded evidence of one of the post-suit steps it had taken to remedy discrimination. The court stated that evidence of post-charge remediation “would not automatically bar the imposition of punitive damages,” that the trial judge acts as a gatekeeper as to the relevance of the evidence, and that the jury can decide that the evidence is either window-dressing designed to avoid an award of punitive damages, or bona fide evidence of repentance “lessening the need for additional deterrence in the form of punitive damages.” Id. at 815 (footnote omitted). In the case at bar, the trial judge allowed evidence of the post-charge investigation conducted by the company, and only barred evidence that the defendant put all of its supervisors and managers through anti-harassment training two months after the plaintiff filed suit. The court held that the trial court did not abuse its discretion in excluding this evidence and explained: “Such evidence, if introduced, would have done little, if anything, to undermine the uncontroverted evidence that, even after everyone in management became fully cognizant of Swinton’s allegations, no one—not Pat Stewart, none of those at U.S. Mat who had witnessed the harassment and had done nothing about it, and none of the workers who had actually hurled the epithet ‘nigger’ at Swinton—was ever fired, demoted, or in any way disciplined.” Id. at 816 (footnote omitted). Nor was the court persuaded that the exclusion of the evidence was prejudicial in light of the jury argument of plaintiff’s counsel, because the company did nothing in response to the harassment, because the defendant made no contemporaneous objection and the “plain error” standard was not satisfied, because the company did introduce evidence of its investigation, and because the argument actually referred to the company’s failure to take action prior to the harassment of the plaintiff. Id. at 816–17.

7. Amount

Swinton v. Potomac Corp., 270 F.3d 794, 817–22, 87 FEP Cases 65 (9th Cir. 2001), affirmed the judgment on a jury verdict for the § 1981 and Washington State-law racial harassment plaintiff. The plaintiff was subjected to a frequent barrage of racist slurs and jokes, some of them in the presence of a member of management. The verdict affirmed by the court was for $5,612 in back pay, $30,000 in emotional-distress damages, and $1,000,000 in punitive damages. Id. at 801. The court rejected the defendant’s argument that its failure to stop the racial slurs and jokes was not reprehensible “because it was, at the end of the day, nothing more than ‘joking.’” It stated that the plaintiff made clear on the witness stand that he did not consider the language a joke. “The only African-American employee of about 140 at the U.S. Mat plant, he was subject to daily abuse featuring the word “nigger,” “perhaps the most offensive and inflammatory racial slur in English, . . . a word expressive of racial hatred and bigotry.” Merriam-Webster’s Collegiate Dictionary 784 (10th ed.1993).” Id. at 817. The court observed that the jury’s verdict did not consider it a laughing matter “and we do not hesitate before agreeing.” Id. The court also rejected the defendant’s argument that the plaintiff had not complained, because the plant official who was the company’s “proxy” for receiving complaints observed the harassment and did nothing to stop it. Id. at 817–18. The court recognized that verbal slurs and jokes are not as serious as actual violence or the threat of violence, but held that “the highly offensive language directed at Swinton, coupled by the abject failure of Potomac to combat the harassment, constitutes highly reprehensible conduct justifying a significant punitive damages award.” Id. at 818. The court combined the back pay and compensatory damages awards to obtain a total compensatory damages package of $35,600, and calculated the ratio of punitive to compensatory damages as 28 to 1. The court stated: “This is precisely the type of case posited by the Court in BMW—the low award of compensatory damages supports a higher ratio of punitive damages because of ‘particularly egregious’ acts and ‘noneconomic harm that might have been difficult to determine.’” Id. The court emphasized that plaintiff’s counsel warned the jury not to go “hog wild,” had stated that an award of ten million dollars would be wrong, and that they should be more moderate. In light of these admonitions, the court took the verdict of one million dollars as a verdict calculated to punish unlawful conduct and deter its repetition. Id. at 819. The court next turned to the magnitude of the harm, and stated:

But for Swinton’s decision that he couldn’t take it any longer and thus had to quit, nothing in the record suggests that U.S. Mat would have done anything to address a workplace replete with racial and ethnic slurs, not only about blacks, but also directed at other minorities and ethnic groups. The fact that the harm from unchecked racial harassment occurring day after day cannot be calculated with any precision does not deflate its magnitude.

Id. The court surveyed the decisions of other Circuits and held that, in light of the low compensatory award, the ratio of 28 to 1 was constitutionally permissible. Id. at 819–20. Finally, the court refused to reduce the award in light of the analogous cap on damages for Title VII violations. While the Title VII cap weighs in favor of a reduction, “we also hasten to add that Congress has not seen fit to impose any recovery caps in cases under § 1981 (or § 1983), although it has had ample opportunity to do so since the 1991 amendments to Title VII.” Id. at 820.

F. The Damages Caps in the 1991 Act

Madison v. IBP, Inc.257 F.3d 780, 804–05, 86 FEP Cases 77, 80 E.P.D. ¶ 40,628 (8th Cir. 2001), vacated and remanded for further consideration in light of National R.R. Passenger Corp. v. Morgan2002 WL 1306024, 70 USLW 3773 (U.S., June 17, 2002) (No. 01–985), held that the caps on damages in the Civil Rights Act of 1991 are constitutional. However, the court refused to apply the caps to plaintiff’s § 1981 and State-law claims. Id. at 803–04. The court affirmed the lower court’s decision to allocate all of the plaintiff’s compensatory damages to her State-law claim so that they would not count under the caps. It explained:

In granting Madison’s motion for reallocation of her sex based damages, the district court observed that the verdict had not tied the question of damages to a particular statute, that the standard of liability under all three statutes was the same, and that allocation would permit Madison to recover more of the damages awarded by the jury. Appellate courts have approved the allocation of damages between state and federal claims in cases such as this where the standards of liability are the same and the jury has not been asked to distinguish between statutes in assessing damages. The D.C. Circuit concluded in a similar situation that there was no reason why the plaintiff could not recover her judgment under the local Human Rights Act, “since the local law contains the same standards of liability as Title VII but imposes no cap on damages.” Martini v. Federal National Mortgage Ass’n , 178 F.3d 1336, 1349 (D.C. Cir. 1999) The Martini court noted that the standards of liability for the plaintiff’s local and federal claims were the same, and it reasoned that if courts were not permitted “to treat damages under federal and local law as fungible where the standards of liability are the same, [it] would effectively limit the local jurisdiction’s prerogative to provide greater remedies for employment discrimination than those Congress has afforded under Title VII.” Id. at 1349–50.

The Ninth Circuit has also approved allocation of compensatory damages to a plaintiff’s state law claims where the verdict form permitted the jury to award damages on state and federal civil rights claims without specifically distinguishing them. See Passantino v. Johnson & Johnson Consumer Products, Inc. , 212 F.3d 493 (9th Cir. 2000). Since “the jury had awarded damages without differentiating between the claims, the awards were effectively fungible, and the district court’s action was entirely within its discretion and consistent with the jury’s verdict.” Id. at 509.

We find the reasoning in Martini and Passantino persuasive and consistent with federal policy. Title VII states that nothing in its provisions “shall be deemed to exempt or relieve any person from any liability, duty, penalty, or punishment provided by any present or future law of any State …” 42 U.S.C. § 2000e–7. To prohibit courts from allocating damages after a jury verdict finding liability under both federal and state law would conflict with the statutory framework of Title VII and the congressional policy to deter discrimination and harassment. See Kimzey , 107 F.3d at 576 (“no language in Title VII indicat[es] that its upper limit is to be placed on awards under state anti-discrimination statutes”). The jury in this case found for Madison on both her state and federal sexual harassment and discrimination claims, and no persuasive reason has been shown why she should be prevented from receiving her award for compensatory damages under ICRA instead of under the federal statutes. The trial court did not err in its allocation of Madison’s compensatory damages for sex based violations to her state law claims.

Id. at 801–02.

G. Fees and Expenses

Buckhannon Board and Care Home, Inc., v. West Virginia Department of Health and Human Resources, 532 U.S. 598, 11 AD Cases 1300 (2001), rejected the “catalyst” theory as a basis for entitlement to a fee award under 42 U.S.C. § 1988. The court held that obtaining relief pursuant to a court order or approval of a settlement that changes the legal relationship of the parties is essential requirement for “prevailing party” status and thus for entitlement to fees under the wording of this statute, which parallels the wording of many fee-award provisions. The court rejected as far-fetched petitioners’ argument that defendants would avoid their fee obligations by voluntarily tendering full relief, and thus mooting the action before judgment. “And petitioners’ fear of mischievous defendants only materializes in claims for equitable relief, for so long as the plaintiff has a cause of action for damages, a defendant’s change in conduct will not moot the case. Even then, it is not clear how often courts will find a case mooted: ‘It is well settled that a defendant’s voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice’ unless it is ‘absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.'” Id. at 608–09.

Farias v. Instructional Systems, Inc., 259 F.3d 91, 102–03 (2nd Cir. 2001), affirmed the judgment of liability on a jury verdict for Title VII retaliation plaintiff Robinson, affirmed the denial of punitive damages, and vacated and remanded the fee award. The lower court had awarded $37,194.97 in attorneys’ fees and costs instead of the $132,193.75 in attorney’s and paralegal fees $3,406.59 in costs that had been sought. “To arrive at that amount, the court (i) cited several grounds for reducing the number of hours reasonably expended in the litigation for purposes of calculating the lodestar, and (ii) adjusted the lodestar further downward to reflect Robinson’s limited success.” Id. at 103. The court of appeals held that the lower court’s opinion did not make clear whether it had doubly discounted plaintiffs’ fees for limited success, and remanded the award for clarification, with leave to revisit the entire award, and directed that any new appeal be resolved by the same panel.

Mota v. University of Texas Houston Health Science Center 261 F.3d 512, 530, 86 FEP Cases 1140, 81 E.P.D. ¶ 40,728 (5th Cir. 2001), held that investigation fees were recoverable under Title VII, that the costs of videotaped depositions were not recoverable, and that mediation fees were not recoverable.

Bishop v. Gainer, 272 F.3d 1009, 1020, 87 FEP Cases 920 (7th Cir. 2001), affirmed the denial of part of the attorneys’ fees sought by plaintiffs: “The district court awarded plaintiffs over $238,000 in attorneys fees and costs. He denied a request for additional fees arising out of hundreds of hours of long-distance telephone calls. He said he could not assess the reasonableness of the request because counsel refused to describe in general terms the substance of the calls. We fail to see an abuse of discretion in this decision.”

Webner v. Titan Distribution, Inc., 267 F.3d 828, 838, 12 AD Cases 513 (8th Cir. 2001), affirmed the award of attorneys’ fees. The court rejected the defendant’s argument that it was unreasonable to require it to pay for two attorneys at depositions, because the workers’ compensation and ADA issues were intertwined, and it was reasonable to have attorneys specializing in workers’ compensation and fair-employment litigation each present at the depositions. “Titan further contends that the district court should have reduced the attorneys’ fees by 50% because Iowa law does not provide for an award of attorneys’ fees in a wrongful termination case. The district court agreed in part and reduced the amount of fees Webner sought but by only 10%. The court concluded that the evidence Webner submitted was interrelated and overlapped between the two claims, therefore further reduction was not appropriate.” The court of appeals agreed, stating that the most important factor is that the plaintiff won.

H. Sanctions

Parker v. Sony Pictures Entertainment, Inc.260 F.3d 100, 111–14, 12 AD Cases 1 (2nd Cir. 2001), affirmed the grant of judgment as a matter of law to the ADA defendant but reversed the award of attorneys’ fees to the defendant. The court held that the sanction of a fee award to the defendant was improper where the plaintiff proceeded in good faith to trial, based on the same evidence that had held the court on an earlier appeal to reverse the grant of summary judgment to the defendant. There were no intervening factors that would have deprived of its good-faith character a decision to proceed to good faith on a claim previously adjudged trialworthy. The court rejected the lower court’s distinction between summary judgment and trial, to the effect that on summary judgment a defendant is required to prove a negative and at trial the plaintiff is required to prove a positive. The court cited Reeves and held that the standards for summary judgment and judgment as a matter of law were the same.

B.K.B. v. Maui Police Department276 F.3d 1091, 1106–09, 87 FEP Cases 1306 (9th Cir. 2002), modified in other respects, __ F.3d __, 2002 WL 237764 (9th Cir. Feb. 20, 2002), affirmed the award of $5,000 in attorney’s fee sanctions against both the defendant and its counsel under 28 U.S.C. § 1927 and the court’s inherent power for knowing and reckless violation of Rule 412 and having misled the court about the testimony after plaintiff’s counsel had made an anticipatory objection. The court also affirmed the sanction of $5,000 in emotional-distress damages for the plaintiff because of the emotional stress caused by the humiliation of hearing this evidence come in. The nature of the violation is discussed above in the section on Rule 412. The court held that the lower court “clearly erred in stopping short of explicitly finding that the defendant’s lawyers acted in bad faith,” and that the violation was “knowing and intentional.” Id. at 1106–07. The court held that § 1927 was satisfied because the defense counsel’s misconduct caused a mistrial and a sanctions proceeding, and thus multiplied proceedings, and because the lower court’s finding of recklessness was sufficient to support sanctions under the statute. Id. at 1107. The court stated that § 1927 sanctions could also be based on the frivolous nature of the defendant’s Rule 412 argument. Id. at 1107 n.8. Turning to the second award, the court stated: “Here, regardless of whether defense counsel’s behavior constituted bad faith per se, we readily find that counsel’s reckless and knowing conduct in this case was tantamount to bad faith and therefore sanctionable under the court’s inherent power.” Id. at 1108. The court held that the fees and emotional-distress damages assessed by the lower court were proper sanctions. Id. at 1108–09.

VIII. Special Problems Involving State and Local Governmental Employers

A. Eleventh Amendment Immunity

1. Family and Medical Leave Act

Pro: Hibbs v. Department of Human Resources, 273 F.3d 844, 7 WH Cases 2d 865 (9th Cir. 2001), cert. granted, __ U.S. __ (2009), held that the Eleventh Amendment did not bar private suits for monetary relief against State agencies under the FMLA, because the FMLA provision allowing twelve weeks of unpaid leave to care for family members was enacted in part to remedy sex discrimination in violation of the Equal Protection Clause.

Con: Kazmier v. Widmann, 225 F.3d 519, 6 WH Cases 481 (5th Cir. 2000), held that the Eleventh Amendment does bar FMLA claims against State agencies because the legislative record did not contain evidence of constitutional violations sufficient to show that the FMLA’s remedies were proportionate.

2. ADA Title II

The Ninth Circuit has held that the Eleventh Amendment does not bar a Title II ADA claim against a State agency. Hason v. Medical Board of California, 2002 WL 206414 (9th Cir. Feb. 12, 2002) (No. 00-55784).

3. Waiver

Lapides v. Board of Regents of University System of , Georgia __ U.S. __, 122 S. Ct. 1640, 18 IER Cases 961 (2002), held that the defendant waived its Eleventh Amendment immunity to suit in Federal court by removing the case from State court, where the State had previously by statute waived sovereign immunity. The Court limited its holding to State-law claims in States as to which the State had waived immunity from State-court proceedings.

IX. Special Problems with the Federal Government as Employer

Stewart v. Evans275 F.3d 1126, 1129–31, 87 FEP Cases 1298 (D.C. Cir. 2002), reversed the dismissal of the plaintiff’s Bivens claim arising from the warrantless search of her papers. The court held that such a search was not covered by the Civil Service Reform Act, so that a Bivens claim was possible.