Newport Beach & Orange County DUI Defense Attorneys

California Legal Team, Orange County and Newport Beach DUI Attorneys Phone: (800) 285-1763

2010-01-09T10:26:00.000-08:00

California Legal Team’s lawyers represent those accused of Drunk Driving or DUI in Orange County.

If you need more information, visit www.CPRSLAW.com DUI Expert Okorie Okorocha's biography at http://www.bhglaw.com/OkorieOkorocha.html

Toll Free: (800) 285-1763
Newport Beach: (949 719-2649
Pasadena: (626) 792-1301
Los Angeles: (310) 871-3217

California Jury Issues $992,650 Verdict In Case Where Employee Alleged He Was Verbally Abused

2010-01-06T14:22:00.000-08:00

2008 Mealey’s CA Jury Verdicts & Settlements 123

HEADLINE: California Jury Issues $992,650 Verdict In Case Where Employee Alleged He Was Verbally Abused

Case Name: Gurpreet Singh v. Southland Stone U.S.A. Inc., et al.

Case Number: BC350196

Court: Calif. Super., Los Angeles Co.

Judge: Mary Thornton

Verdict/Settlement (breakdown): $992,650 plaintiff verdict ($253,750 for the intentional infliction of emotional distress claim, $337,100 for the intentional misrepresentation claim, $45,000 for breach of implied covenant of good faith and fair dealing, $6,800 for nonpayment of wages and $350,000 in punitive damages)

Plaintiff(s): Gurpreet Singh

Defendant(s): Southland Stone U.S.A. Inc.

Date: April 16, 2008

Claim: Breach of written contract, breach of the covenant of good faith and fair dealing, promissory fraud, wrongful termination, intentional infliction of emotional distress and promissory estoppel

Defense: Singh voluntarily resigned from the position; Singh was employed under an “at-will’ agreement; there was ample cause shown by Singh’s lack of performance and violations of company policies.

Background: Gurpreet Singh worked for Southland Stone U.S.A. Inc. as a general manager.Singh said that before he was hired, he was a resident of New Delhi, India, and worked for a different company. Singh said he was approached by a Southland representative, who solicited him to join Southland. Singh said the representative promised that Southland would sponsor his and his family’s immigration to the United States, would pay an annual salary of $120,000 and would provide health benefits and paid vacation time.However, Singh said, once he began to work for Southland, he was verbally abused. He said that four months after he began to work for the company, he received a 50 percent pay cut. Singh said he was not provided with any explanation for the pay cut. As a result of the sudden and unexpected pay cut, Singh said he had to move his wife and children back to India.Singh said that based on increasingly hostile circumstances that included verbal abuse, he was forced to resign.Singh filed an amended complaint against Southland on April 25, 2007, in the Los Angeles Superior Court.

Other: The case went to a jury trial on Jan. 30, 2008, before Judge Mary Thornton.The jury found that Southland was exercising its legal rights but that its conduct was not lawful and consistent with community standards. The jury also found that Southland’s conduct was outrageous and that it knowingly acted with disregard of the probability that Singh would suffer from emotional distress. The jury further found that Singh suffered from severe emotional distress and that Southland’s conduct was a substantial factor in causing the emotional distress.Additionally, the jury found that Southland knowingly made false representations of an important fact to Singh and that it intended Singh to rely on the misrepresentation. The jury also found that Singh’s reliance was a substantial factor on causing him harm.The jury also found in favor of Singh on the concealment claim. However, the jury found that Singh was not entitled to damages for this claim. The jury found in favor of Singh on the breach of implied covenant of good faith and fair dealing claim.

Plaintiff Attorneys: Okorie Okorocha and Krishna R. Malhotra, Malhotra & Malhotra, Los Angeles

Defense Attorneys: Hitendra Bhakta, Law Offices of Norman A. Filer, Orange, Calif.

Sexual Harassment Law Firm -- Sexual Harassment Training

2010-01-05T16:41:00.000-08:00

Preventing Sexual Harassment

Employers are required by law to be committed to eliminating Sexual Harassment from the workplace.

The best way an employer can prevent Sexual Harassment is to have a Sexual Harassment reporting system that the employees can use with ease and to act immediately upon the information, once it is received.

Employers should also do their best to train and educate all of their employees about Sexual Harassment.

Sexual Harassment Lawyer -- Employer Obligation Guidelines

2010-01-05T16:38:00.000-08:00

Employer Obligations

All employers have a legal obligation to prevent sexual harassment.

* Employers must take all reasonable steps to prevent discrimination and harassment from occurring.

* Employers must help ensure a workplace free from sexual harassment by posting in the workplace a poster made available by the Department of Fair Employment and Housing.

* Employers must help ensure a workplace free from sexual harassment by distributing to employees information on sexual harassment. An employer may either distribute a brochure that may be obtained from the Department of Fair Employment and Housing or develop an equivalent document, which must meet the following requirements:

o The illegality of sexual harassment

o The definition of sexual harassment under state and federal laws

o A description of sexual harassment, utilizing examples

o The internal complaint process of the employer available to the employee

o The legal remedies and complaint process available through the Department and the Fair Employment and Housing Commission

o Directions on how to contact the Department and the Fair Employment and Housing Commission

o The protection against retaliation for opposing the practices prohibited by law or for filing a complaint with, or otherwise participating in investigative activities conducted by, the Department or the Commission

* # Employers with 50 or more employees must provide at least two hours of classroom or other effective interactive training and education regarding sexual harassment to all supervisory employees who are employed as of July 1, 2005, and to all new supervisory employees within six months of assuming a supervisory position. There after, covered employers must provide sexual harassment training and education to each supervisory employee once every two years.

Typical Sexual Harassment Cases

2010-01-04T16:42:00.000-08:00

Typical Sexual Harassment Cases

There are three kinds of Sexual Harassment Cases that typically get litigated as follows:

* When an employer fires, refuses to employ an individual or in some way refuses to give them a benefit or something of value at work because the person refuses to engage in some or of sexual conduct. These cases can also have a "Retaliation" element, which occurs when an employer in some manner punishes an employee for refusing to engage in some sort of sexual conduct, which is also illegal .

* When an employee suffers so much Sexual Harassment or "retaliation" and is forced to resign instead of continuing to suffer. When an employer's conduct is so bad that the employee is forced to quit. When this occurs, the employee can often obtain the same legal results the employee would have obtained had she been fired.

* When an employee suffers Sexual Harassment that is either "severe" or " pervasive," meaning the Sexual Harassment carried on for a long time or was incredibly offensive (or both).

Los Angeles Sexual Harassment Attorneys

2010-01-04T16:33:00.000-08:00

Employer Liability

All employers are prohibited from harassing employees in the workplace. If harassment occurs, an employer may be liable even if management was not aware of the harassment.

An employer might avoid liability if the harasser is a non-management employee, the employer had no knowledge of the harassment, and there was a program to prevent harassment. If the harasser is a non-management employee, the employer may avoid liability if the employer takes immediate and appropriate corrective action to stop the harassment once the employer learns about it. Employers are strictly liable for harassment by their supervisors or agents. The harasser can be held personally liable for damages.

Additionally, Government Code section 12940, subdivision (k), requires an entity to take "all reasonable steps to prevent harassment from occurring." If an employer has failed to take such preventative measures, that employer can be held liable for the harassment.

A victim may be entitled to monetary damages even though no employment opportunity has been denied and there is no actual loss of pay or benefits.

General Facts about Sexual Harassment

2010-01-03T09:25:00.000-08:00

Facts About Sexual Harassment

Sexual harassment is a form of sex discrimination that violates the Civil Rights Act of 1964 and the Fair Employment and Housing Act.

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitutes sexual harassment when submission to or rejection of this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance or creates an intimidating, hostile or offensive work environment.

Sexual harassment can occur in a variety of circumstances, including but not limited to the following:

The victim as well as the harasser may be a woman or a man. The victim does not have to be of the opposite sex.
The harasser can be the victim's supervisor, an agent of the employer, a supervisor in another area, a co-worker, or a non-employee.
The victim does not have to be the person harassed but could be anyone affected by the offensive conduct.
Unlawful sexual harassment may occur without economic injury to or discharge of the victim.
The harasser's conduct must be unwelcome.

It is helpful for the victim to directly inform the harasser that the conduct is unwelcome and must stop. The victim should use any employer complaint mechanism or grievance system available.

When investigating allegations of sexual harassment, EEOC looks at the whole record: the circumstances, such as the nature of the sexual advances, and the context in which the alleged incidents occurred. A determination on the allegations is made from the facts on a case-by-case basis.

Prevention is the best tool to eliminate sexual harassment in the workplace. Employers are encouraged to take steps necessary to prevent sexual harassment from occurring. They should clearly communicate to employees that sexual harassment will not be tolerated. They can do so by establishing an effective complaint or grievance process and taking immediate and appropriate action when an employee complains.

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2008-11-14T20:13:00.001-08:00

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Los Angeles Employment Lawyers and Attorneys Resource: Oates v. Discovery Zone

2008-06-07T13:45:00.001-07:00

IN THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT

No. 96-1205

ARTHUR OATES,
Plaintiff-Appellant,

DISCOVERY ZONE,
Defendant-Appellee.

On Appeal from the United States District Court
for the Northern District of Illinois
(Leinenweber, J.)

BRIEF OF THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION AS AMICUS CURIAE
IN SUPPORT OF PLAINTIFF-APPELLANT

C. GREGORY STEWART
General Counsel

GWENDOLYN YOUNG REAMS
Associate General Counsel

CAROLYN L. WHEELER
Assistant General Counsel

PAULA R. BRUNER
Attorney

EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
1801 L Street, N.W. Rm. 7044
Washington, D.C. 20507
(202) 663-4731

TABLE OF CONTENTS

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . .ii

STATEMENT OF INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . 1

JURISDICTIONAL STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . 1

STATEMENT OF THE ISSUES. . . . . . . . . . . . . . . . . . . . . . . . . 1

STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . 2

1. Nature of the Case. . . . . . . . . . . . . . . . . . . . . . . 2
2. Statement of the Facts. . . . . . . . . . . . . . . . . . . . . 2
3. The District Court's Oral Ruling. . . . . . . . . . . . . . . . 5

STATEMENT OF THE STANDARD OF REVIEW. . . . . . . . . . . . . . . . . . . 6

ARGUMENT:

THE DISTRICT COURT MADE LEGAL ERRORS IN GRANTING SUMMARY
JUDGMENT FOR DISCOVERY ZONE. . . . . . . . . . . . . . . . . . . . . . . 6

A. The District Court Erred In Dismissing The Claim Of
Racial Harassment . . . . . . . . . . . . . . . . . . . . . . . . . 6

B. The District Court Erred In Granting Summary Judgment
On The Claim Of Discriminatory Discharge. . . . . . . . . . . . . .14

C. The District Court Erred In Granting Summary Judgment
On The Retaliation Claim. . . . . . . . . . . . . . . . . . . . . .20

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

ATTACHMENTS

CERTIFICATE OF SERVICE

TABLE OF AUTHORITIES

CASES

Adler v. Madigan,
939 F.2d 476 (7th Cir. 1991). . . . . . . . . . . . . . . . . . . .14

Alexander v. Gerhardt Enter., Inc.,
40 F.3d 187 (7th Cir. 1994) . . . . . . . . . . . . . . . . . . . .20

Anderson v. Baxter Healthcare Corp.,
13 F.3d 1120 (7th Cir. 1994). . . . . . . . . . . . . . . . . .14, 18

Anderson v. Local 201 Reinforcing Rodmen,
886 F. Supp. 94 (D.D.C. 1995) . . . . . . . . . . . . . . . . . . . 9

Anderson v. Liberty Lobby, Inc.,
477 U.S. 242 (1986) . . . . . . . . . . . . . . . . . . . . . . . . .
6

Bailey v. Binyon,
583 F. Supp. 923 (N.D. Ill. 1984) . . . . . . . . . . . . . . . . .11

Bell v. City of Milwaukee,
746 F.2d 1205 (7th Cir. 1984) . . . . . . . . . . . . . . . . . . . 9

Bennett v. Corroon & Black Corp.,
845 F.2d 104 (5th Cir. 1988),
cert. denied, 489 U.S. 1020 (1989). . . . . . . . . . . . . . . . .11

Brewer v. Quaker State Oil Ref. Corp.,
72 F.3d 326 (3d Cir. 1995). . . . . . . . . . . . . . . . . . . . .19

Brooms v. Regal Tube Co.,
881 F.2d 412 (7th Cir. 1989). . . . . . . . . . . . . . . . . . . . 7

Brown v. East Miss. Elec. Power Ass'n,
989 F.2d 858 (5th Cir. 1993). . . . . . . . . . . . . . . . . . . .15

Burton v. Crowell Pub. Co.,
82 F.2d 154 (2d Cir. 1936). . . . . . . . . . . . . . . . . . . . .11

Chrysler Motors Corp. v. International Union, Allied Indus.
Workers of Am., 959 F.2d 685 (7th Cir.),
cert. denied, 506 U.S. 908 (1992) . . . . . . . . . . . . . . . . .13

Compston v. Borden, Inc.,
424 F. Supp. 157 (S.D. Ohio 1976) . . . . . . . . . . . . . . . . .12

Cox v. NFL,
889 F. Supp. 118 (S.D.N.Y. 1995). . . . . . . . . . . . . . . . . . 9

Daniels v. Essex Group, Inc.,
937 F.2d 1264 (7th Cir. 1991) . . . . . . . . . . . . . . . . . 7, 10

Dey v. Colt Constr. & Dev. Co.,
28 F.3d 1446 (7th Cir. 1994). . . . . . . . . . . . . . . . . . . . 6

Doe v. University of Mich.,
721 F. Supp. 852 (E.D. Mich. 1989). . . . . . . . . . . . . . . 9, 13

EEOC v. Alton Packaging Corp.,
901 F.2d 920 (11th Cir. 1990) . . . . . . . . . . . . . . . . . . .15

Faragher v. City of Boca Raton,
76 F.3d 1155 (11th Cir. 1996) . . . . . . . . . . . . . . . . . . .12

Harris v. Forklift Sys., Inc.,
114 S. Ct. 367 (1993) . . . . . . . . . . . . . . . . . . . . . 7, 12

Harris v. School Annual Publishing Co.,
466 So.2d 963 (Ala. 1985) . . . . . . . . . . . . . . . . . . . . . 9

Harris v. State,
209 Miss. 141, 46 So.2d 91 (1950) . . . . . . . . . . . . . . . . . 9

Jeffries v. Metro-Mark, Inc.,
45 F.3d 258 (8th Cir.),
cert. denied, 116 S. Ct. 102 (1995) . . . . . . . . . . . . . . . . 8

King v. Board of Regents of Univ. of Wis. Sys.,
898 F.2d 533 (7th Cir. 1990). . . . . . . . . . . . . . . . . . . .11

Knox v. First Nat. Bank of Chicago,
909 F. Supp. 569 (N.D. Ill. 1995) . . . . . . . . . . . . . . . . .15

Landon v. Northwest Airlines, Inc.,
72 F.3d 620 (8th Cir. 1995) . . . . . . . . . . . . . . . . . . . .17

Legrand v. Trustees of Univ. of Ark. at Pine Bluff,
821 F.2d 478 (8th Cir. 1987), cert. denied,
485 U.S. 1034 (1988). . . . . . . . . . . . . . . . . . . . . . . .17

Lipsett v. University of Puerto Rico,
864 F.2d 881 (1st Cir. 1988). . . . . . . . . . . . . . . . . . . .19

McCarthy v. Kempfer Life Ins. Cos.,
924 F.2d 683 (7th Cir. 1991). . . . . . . . . . . . . . . . . . . .15

McDonnell Douglas Corp. v. Green,
411 U.S. 792 (1973) . . . . . . . . . . . . . . . . . . . . 5, 14, 17

Meritor Sav. Bank v. Vinson,
477 U.S. 57 (1986). . . . . . . . . . . . . . . . . . . . . 7, 11, 19

Morgan v. McDonough,
540 F.2d 527 (1st Cir. 1976),
cert. denied, 429 U.S. 1042 (1977). . . . . . . . . . . . . . . . . 9

Patterson v. McLean Credit Union,
491 U.S. 164 (1989) . . . . . . . . . . . . . . . . . . . . . . . . .
6

Price Waterhouse v. Hopkins,
490 U.S. 228 (1989) . . . . . . . . . . . . . . . . . . . . . . . .14

Randle v. LaSalle Telecommun., Inc.,
876 F.2d 563 (7th Cir. 1989). . . . . . . . . . . . . . . . . . . .14

Rodgers v. Western-Southern Life Ins. Co.,
12 F.3d 668 (7th Cir. 1993) . . . . . . . . . . . . . . . . 7, 10, 11

Rogers v. EEOC,
454 F.2d 234 (5th Cir. 1971),
cert. denied, 406 U.S. 957 (1972) . . . . . . . . . . . . . . . . . 7

Rush v. McDonald's Corp.,
966 F.2d 1104 (7th Cir. 1992) . . . . . . . . . . . . . . . . . . .17

Shager v. Upjohn Co.,
913 F.2d 398 (7th Cir. 1990). . . . . . . . . . . . . . . . . . . .18

St. Mary's Honor Ctr. v. Hicks,
509 U.S. 502 (1993) . . . . . . . . . . . . . . . . . . . . . . . .19

State v. Blanks,
479 N.W.2d 601 (Iowa Ct. App. 1992) . . . . . . . . . . . . . . . .11

Talley v. Bravo Pittino Restaurant,
61 F.3d 1241 (6th Cir. 1995). . . . . . . . . . . . . . . . . . . .15

Toletino v. Friedman,
46 F.3d 645 (7th Cir. 1995),
cert. denied, 115 S. Ct. 2613 (1995). . . . . . . . . . . . . . . . 6

Troupe v. May Dep't Stores,
20 F.3d 734 (7th Cir. 1994) . . . . . . . . . . . . . . . . . . 5, 18

Williams v. Williams Elecs., Inc.,
856 F.2d 920 (7th Cir. 1988). . . . . . . . . . . . . . . . . . . .17

CONSTITUTIONAL AMENDMENT, STATUTES, AND OTHER LEGISLATIVE
AUTHORITY

U.S. CONST., Art. I § 2 cl. 3. . . . . . . . . . . . . . . . . . . . . . 8

42 U.S.C. § 2000e. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

29 C.F.R. § 1604.11. . . . . . . . . . . . . . . . . . . . . . . . . . . 7

29 C.F.R. § 1604.11(a)(3). . . . . . . . . . . . . . . . . . . . . . . . 7

29 C.F.R. § 1604.11(d) . . . . . . . . . . . . . . . . . . . . . . . . .13

OTHER AUTHORITY

B. SCHLEI & P. GROSSMAN, EMPLOYMENT DISCRIMINATION LAW
(Five-Year Cum. Supp. 1989) . . . . . . . . . . . . . . . . . . . .12

Courtland Milloy, The Blinding Racism of His Comment, Wash. Post,
Mar. 6, 1996 at C1 . . . . . . . . . . . . . . . . . . . . . . . . . 8, 10

George Lawrence, An Oration on the Abolition of the Slave Trade
(N.Y. 1813). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8

Herbert Alptheker, Vol. I A DOCUMENTARY HISTORY OF THE NEGRO PEOPLE IN THE
UNITED STATES 58 (1951). . . . . . . . . . . . . . . . . . . . . . . . . 8

Jennifer M. Russell, On Being a Gorilla in Your Midst, or the Life
of One Blackwoman in the Legal Academy, 28 Harv. C.R.-C.L. L. Rev.
259 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10, 13

Larry L. King, CONFESSIONS OF A WHITE RACIST (1969). . . . . . . . . .8, 9

Phyllis A. Katz, TOWARDS THE ELIMINATION OF RACISM (1976). . . . . . . .13

Thomas Kochman, BLACK AND WHITE STYLES IN CONFLICT (1981). . . . . . . .13

STATEMENT OF INTEREST

The Equal Employment Opportunity Commission is the agency charged
by Congress with
the interpretation, administration, and enforcement of Title VII of
the Civil Rights Act of 1964,
as amended, 42 U.S.C. § 2000e et seq. ("Title VII") and other federal
statutes prohibiting
employment discrimination. In this case, the district court granted
summary judgment on
plaintiff's claims of discriminatory discharge and retaliation in
violation of Title VII, despite
conflicting evidence on the reason for his discharge. The court also
dismissed his racial
harassment claim without addressing its merits in apparent disregard
of the independent nature a
racial harassment claim under Title VII. The court's dispositions
raise an important issue
regarding how derogatory and racially offensive slurs and conduct,
beyond the use of the
pejorative term "nigger," should be evaluated in the context of
harassment and discharge claims.
Because proper resolution of the claims in this case is important to
effective enforcement of Title
VII, the Commission offers its views.

JURISDICTIONAL STATEMENT

The Commission adopts the appellant's jurisdictional statement as
accurate and complete.

STATEMENT OF THE ISSUES

1. Whether there was sufficient evidence of racial harassment to
survive summary judgment,
where plaintiff, the only black employee in his office, complained to
his supervisor that a picture
of gorillas with his name written on it was racially offensive, and
his supervisor laughed at his
complaint, refused to take the picture down, and allowed it to remain
on display for a week after
his complaint.
2. Whether the termination of the company's only black employee four
days after he complained
about a racially offensive poster to his supervisor raised a genuine
issue of fact as to his claims
of discriminatory discharge and retaliation, where record evidence not
only shows that his
supervisor laughed at his complaint, refused to take the poster down,
and participated in the
termination decision, but also that plaintiff's performance may not
have been the true reason for
his discharge.

STATEMENT OF THE CASE

1. Nature of the Case
This is an appeal from the district court's order granting
summary judgment for Discovery
Zone on the discriminatory discharge and retaliation claims and
dismissing the case. R. 53.

2. Statement of the Facts<1>
Arthur Oates, a technical support representative, was responsible
for providing telephonic
support to Discovery Zone FunCenter stores regarding their computer
systems. He was the only
African-American employee at Discovery Zone's office in Rosemont,
Illinois. His immediate
supervisor was Bonnie Christenson. On April 8, 1994, Mark McDermott
became Christenson's
supervisor and assumed responsibility for overseeing the Rosemont
office. The week of April 11,
McDermott met with Christenson and she informed him that she had
contemplated terminating
Oates. Pl. Ex. C, McDermott Dep. at 21, 24, 32.<2>
On Friday, April 15, 1994, Oates met with McDermott at the
Chicago office. Pl. Ex. A,
Oates Dep. at 84; Pl. Ex. C, McDermott Dep. at 25. During this
session, McDermott praised his
job performance. Pl. Ex. A, Oates Dep. at 85. McDermott testified
that after their meeting he
was "impressed" with Oates and considered him "intelligent, very
cordial," with "a lot of
potential." Pl. Ex. C, McDermott Dep. at 30.
In early April, Christenson posted a picture of five gorillas on
a bulletin board located in
the main area of the office. Pl. Ex. A, Oates Dep. at 114. On April
18, Oates saw that his name
had been written above one of the gorillas on the poster. Plaintiff
immediately informed
Christenson that, as an African American, he was offended by the
analogy drawn between him and
the gorilla, and that he considered the inscribed poster to be
racially offensive. Pl. Ex. A, Oates
Dep. at 115. Christenson laughed, id. at 223, and told Oates that he
"was being oversensitive"
and that the poster was "no big deal." Id. at 115. Oates testified
that he felt "embarrassed,
ridiculed, [and] humiliated" by Christenson. Id. at 223. On April 19,
he sent a letter complaining
about the incident via interoffice mail to Mary Mierkiewicz in Human
Resources. Discovery Zone
had no company policy or procedures for redressing harassment
grievances during Oates' tenure.
Pl. Ex. B, Christenson Dep. at 161; Pl. Ex. D, Mierkiewicz Dep. at 17;
Pl. Ex. E, Dublin Dep.
at 64.
On April 21, Oates left a message on Christenson's voice mail
informing her that he was
sick. Discovery Zones' phones went unanswered and Christenson told
McDermott it was because
Oates did not come to work. Pl. Ex. B, Christenson Dep. at 48, 148;
Pl Ex. C, McDermott Dep.
at 38. The next day, Christenson fired Oates, telling him that his
job had been eliminated. Pl.
Ex. A, Oates Dep. at 59. At deposition, McDermott testified, however,
that Oates was terminated
because he failed to follow proper call-in procedures on April 21.
Pl. Ex. C, McDermott Dep.
at 38, 75-76, 83, 85. He also said that, because he had known Oates
for only "a couple of
weeks," he "had to agree with Bonnie [Christenson] that" Oates should
be fired. Id. at 76; see
also id. at 84 (indicating that both McDermott and Christenson made
termination decision).
At deposition, Christenson testified that while she fired Oates,
it was not her decision. Pl.
Ex. B, Christenson Dep. at 23. She claimed Oates was "very
intelligent" and knew software and
hardware very well. She stated that on "numerous occasions" she told
McDermott she "did not
want to fire" Oates, but had discussed Oates' performance with
McDermott often. Id. at 30.
Christenson also testified that the decision to terminate Oates had
been made before Oates' absence
on April 21,<3> and that the decision was not based on Oates' absence
or failure to follow proper
call-in procedures on that day. Id. at 67-68.
On April 25, Mary Mierkiewicz received by interoffice mail Oates'
letter complaining
about the poster and Christenson's reaction. The gorilla poster was
still hanging on that day. Pl.
Ex. B, Christenson Dep. at 36, 157; Pl. Ex. D, Mierkiewicz Dep. at 38.
Oates filed a timely action in the district court against
Discovery Zone, alleging inter alia
racial harassment and retaliatory discharge in violation of Title VII
and discriminatory discharge
in violation of 42 U.S.C. § 1981. R. 21, Second Amended Complaint.
Discovery Zone moved
for summary judgment on the discharge claims. R. 29.

3. District Court's Oral Ruling <4>
Without addressing the merits of Oates' racial harassment claim,
the district court
concluded that Oates did not prove that his discharge was
discriminatory or retaliatory. Citing to
Troupe v. May Dep't Stores, 20 F.3d 734, 736 (7th Cir. 1994), the
court held that Oates did not
proffer direct evidence of discriminatory intent because Christenson's
reaction to the monkey
poster on which Oates' name was written constituted "stray remarks"
that would not prove Oates'
discharge was discriminatory without reliance on inference or
presumption. In addition, it ruled
that the circumstantial evidence of suspicious timing and ambiguous
comments was insufficient
to create a genuine issue as to whether his supervisor's stray
remarks, rather than his poor
performance, led to his discharge. The court also held that plaintiff
did not prove his
discriminatory discharge claim under McDonnell Douglas Corp. v. Green,
411 U.S. 792 (1973),
because he did not establish a prima facie case by showing that he was
performing satisfactorily
or that similarly situated employees outside his protected class were
treated more favorably than
he. Finally, the court held that plaintiff did not make out a prima
facie case of retaliation because
he failed to prove Christenson participated in the termination
decision. The court then decided
that even if Oates had established a prima facie case, he did not
offer any evidence showing that
the proffered poor performance reason for the decision to terminate
him was pretextual.
Accordingly, the district court entered summary judgment for Discovery
Zone and dismissed the
case. R. 47.

STATEMENT OF THE STANDARD OF REVIEW

Review of a district court's decision granting summary judgment
is de novo. Dey v. Colt
Constr. & Dev. Co., 28 F.3d 1446, 1453 (7th Cir. 1994). In
determining whether the moving
party has met its burden, all inferences are to be drawn in favor of
the nonmoving party, Toletino
v. Friedman, 46 F.3d 645, 649 (7th Cir.), cert. denied, 115 S. Ct.
2613 (1995), and any doubts
are to be resolved against the moving party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255
(1986).
ARGUMENT

THE DISTRICT COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR
DISCOVERY ZONE

In its motion for summary judgment, Discovery Zone asserted that
even though the
allegations regarding the monkey poster incident were in dispute,
summary judgment was
appropriate on the discriminatory and retaliatory discharge claims
because Oates' termination was
"made by a person wholly unaware of the alleged 'monkey picture'
incident." R. 30, Def. Summ.
J. Mem. at 2. The district court agreed, entered summary judgment on
both claims, and
terminated the case without specifically addressing the harassment
claim. R. 47. The court erred
in dismissing Oates' case because the record reveals material factual
disputes on his claims of
racial harassment, discriminatory discharge, and retaliatory discharge
rendering summary
judgment inappropriate.

A. The District Court Erred In Dismissing the Racial Harassment Claim

Racial harassment is an independent basis for liability under
Title VII. Patterson v.
McLean Credit Union, 491 U.S. 164, 180 (1989). Race-based conduct
that affects the terms,
conditions, and privileges of employment gives rise to a Title VII
claim of racial harassment if it
is so severe or pervasive that it creates a hostile or offensive
working environment. Rodgers v.
Western-Southern Life Ins. Co., 12 F.3d 668, 673 (7th Cir. 1993);
Daniels v. Essex Group Inc.,
937 F.2d 1264, 1270 (7th Cir. 1991). Such harassment can include
racial slurs, epithets and
comments that, by themselves, violate Title VII if they unreasonably
interfere with an individual's
work performance or create an intimidating, hostile, or offensive
working environment. 29
C.F.R. § 1604.11(a)(3) (1995).<5> See also Meritor Sav. Bank v.
Vinson, 477 U.S. 57, 65-67
(1989) (approving Commission guidelines, and noting that "Title VII
affords employees the right
to work in an environment free from discriminatory intimidation,
ridicule, and insult"); Rogers
v. EEOC, 454 F.2d 234, 238 (5th Cir. 1971) ("discriminatory verbal
intimidation, ridicule and
insults may be sufficiently severe or pervasive to alter the
conditions of the victim's employment
and create an abusive working environment that violates Title VII"),
cert. denied, 406 U.S. 957
(1972). To determine liability, the court must consider the totality
of circumstances, Harris v.
Forklift Sys., Inc., 114 S. Ct. 367, 371 (1993), and employ both an
objective and a subjective
standard to assess the "'likely effect of a defendant's conduct upon a
reasonable person's ability
to perform his or her work and upon his or her well-being as well as
the actual effect upon the
particular plaintiff bringing the claim.'" Daniels, 937 F.2d at 1270
(quoting Brooms v. Regal
Tube Co., 881 F.2d 412, 419 (7th Cir. 1989).
In this case, there was sufficient evidence of racial harassment
to raise a genuine issue of
fact as to whether Oates was objectively subjected to a racially
hostile working environment
because the display of the monkey poster with his name on it was, by
itself, actionable harassment,
and that harassment was exacerbated by the supervisor's refusal to
take corrective action. To
begin with, the use of primate imagery, such as gorillas, monkeys, and
apes, to refer to African-
Americans is as offensive as calling a black person a "nigger."
Historically, African-Americans have been considered, referred to
and treated like
subhumans or animals and, out of lack of appreciation of their
culture, were regarded as
uncivilized, and intellectually and culturally inferior.<6> In the
perpetuation of this racial prejudice,
African-Americans have been, and often still are,<7> referred to as
"beasts," "gorillas,<8>" "apes," or
"monkeys." See, e.g., Jeffries v. Metro-Mark, Inc., 45 F.3d 258, 260
(8th Cir.) (racial
harassment suit in which multiple incidents included supervisor
calling black plaintiff a
"monkey"), cert. denied, 116 S. Ct. 102 (1995); Bell v. City of
Milwaukee, 746 F.2d 1205 (7th
Cir. 1984) (civil rights suit allowing testimony of police officer
that he thought black people were
"apes"); Morgan v. McDonough, 540 F.2d 527, 530 (1st Cir. 1976) (civil
rights case challenging
school's inaction towards racial incidents including racial chants by
white students such as
"2,4,6,8 assassinate the nigger apes" and their request to play music
over school address system
because "music soothes the savage beasts"), cert. denied, 429 U.S.
1042 (1977); Cox v. NFL, 889
F. Supp. 118, 119 (S.D.N.Y. 1995) (regarding crowds' verbal abuse
using terms like "nigger"
and "monkey" directed at black football player as based on race); Doe
v. University of Mich., 721
F. Supp. 852, 854 (E.D. Mich. 1989) (race discrimination case
protesting fliers placed around
campus that referred to black persons as "saucer lips, porch monkeys,
jigaboo" and display of
KKK uniform in dorm window); Harris v. State, 209 Miss. 141, 147-48,
46 So.2d 91, 93 (1950)
(describing African American defendant as a "big, black gorilla");
CONFESSIONS OF A WHITE
RACIST at 68 (recounting incident where Texas Tech crowd directed
racial exhortations like "kill
that black ape" at a black football player on the opposing team).
The clear purpose or effect of using racist animal slurs to refer
to African Americans is to
demean, offend, humiliate, or ridicule them. See, e.g., Anderson v.
Local 201 Reinforcing
Rodmen, 886 F. Supp. 94, 95 (D.D.C. 1995) (noting that black employee
alleged he was "hurt"
when his white foreman called him a "mule"); Harris v. School Annual
Publishing Co., 466 So.2d
963 (Ala. 1985) (defamation case in which black school teacher
regarded cartoon of monkey eating
a banana beneath which appeared her name and the inscription "out
munching" as a derogatory
reference "'traditionally used to dehumanize, insult, belittle and
degrade persons of [her] race'")<9>.
Accordingly, a jury could fairly construe a poster inscribed with the
name of the company's only
black employee as a deliberate appeal to racial prejudices, invoking
ridicule, inciting racial
oppression, and generating racial hostility, and conclude therefore
that the gorilla picture created
conditions that would reasonably affect the employment atmosphere,
performance and emotional
well-being of a black employee.
A factfinder could also decide that the facts in this case
support a racial harassment claim
because they are similar to facts in other cases in which this Court
has found harassment. This
Court has held that calling an African American employee a "nigger"
sufficiently alters the
conditions of that worker's employment to support a hostile working
environment claim. See,
e.g., Rodgers, 12 F.3d at 673 (finding credible plaintiff's testimony
that racial remarks, including
use of "nigger," significantly impaired his work performance,
contributed to stress that compelled
him to quit his job and harmed his self-esteem).<10> The adverse and
hostile conditions created by
the initial and continued display of the offensive poster inscribed
with Oates' name are so similar
to those created by the slur "nigger" that the poster incident could
also be viewed as sufficiently
severe or pervasive to constitute actionable harassment. Meritor, 477
U.S. at 67 ("discriminatory
intimidation, ridicule, and insult, . . . is sufficiently severe or
pervasive to alter the conditions of
the victim's employment and create an abusive working environment");
accord Burton v. Crowell
Pub. Co., 82 F.2d 154, 156 (2d Cir. 1936) (defamation case in which
mere association of plaintiff
with gorilla lowered him in others' esteem); State v. Blanks, 479
N.W.2d 601, 602 (Iowa Ct.
App. 1992) (acknowledging that prosecutorial reference to movie
"Gorillas in the Mist" in case
involving black male defendant charged with criminally assaulting his
former white girlfriend has
"racial overtones" and by itself is sufficiently demeaning as to
constitute reversible error).
Further, because the gorilla picture is as offensive as the slur
"nigger," and "nigger" need
only be said once to alter sufficiently the conditions of an African
American employee's work
environment to be actionable harassment, see, e.g., Rodgers, 12 F.3d
at 675 (quoting Meritor,
477 U.S. at 67) ("perhaps no single act can more quickly 'alter the
conditions of employment and
create an abusive working environment,' than the use of an
unambiguously racial epithet such as
'nigger'"); Bailey v. Binyon, 583 F. Supp. 923, 927 (N.D. Ill. 1984)
("use of the word 'nigger'
automatically separates the person addressed from every non-black
person; this is discrimination
per se"), the single incident of the display of the offensive poster
is sufficiently severe to support
a hostile environment claim. See, e.g., King v. Board of Regents of
Univ. of Wis. Sys., 898 F.2d
533, 537 (7th Cir. 1990) (stating that even a "single act" of
harassment can be sufficiently severe
to "'alter the conditions of employment and create an abusive working
environment"); Bennett v.
Corroon & Black Corp., 845 F.2d 104, 105-06 (5th Cir. 1988) (holding
that the one-time posting
of a cartoon depicting plaintiff in an obscene fashion was sufficient
to support a claim of hostile
environment discrimination), cert. denied, 489 U.S. 1020 (1989); B.
SCHLEI & P. GROSSMAN,
EMPLOYMENT DISCRIMINATION LAW 90 (Five-Year Cum. Supp. 1989) ("Evidence of a
single egregious racial slur [may be] sufficient to present a triable
issue of fact[.]").
Next, Oates' complaint to his supervisor about the poster with
his name on it and assertions
of mental distress and humiliation caused by the poster's display are
sufficient subjective evidence
that the display of the monkey poster altered the conditions of Oates'
employment and created an
abusive environment. Harris, 114 S. Ct. at 370 (for workplace
environment to be sufficiently
hostile or abusive, victim must subjectively perceive conditions of
employment as abusive);
Faragher v. City of Boca Raton, 76 F.3d 1155, 1161 (11th Cir. 1996)
(subjective prong of the
harassment standard, i.e. the victim's perception, ensures that the
conditions altered the work
environment).
Finally, even if the display of the inscribed picture by itself
were not sufficiently severe
or pervasive to support a hostile work environment claim, a factfinder
could decide that the
supervisor's conduct of ridiculing Oates and refusing to remove the
poster further poisoned the
environment and altered the terms of Oates' employment enough to
support his harassment claim.
See, e.g., Compston v. Borden, Inc., 424 F. Supp. 157, 160-61 (S.D.
Ohio 1976) (holding that
a supervisor "vested with managerial responsibilities" is liable under
Title VII when he "embarks
upon a course of conduct calculated to demean an employee" because
"such activity will
necessarily have the effect of altering the conditions of [the
employee's] employment"). A jury
could view Christenson's laughter in response to Oates' harassment
complaint and her retort that
Oates was being "oversensitive,"<11> as a demonstration of racial
insensitivity that is often at the
bottom of prejudices and bigotry that poison the workplace. A
factfinder could also view her
refusal to remove the poster as condoning an abusive and hostile
environment, perpetuating a
racial myth that African Americans are not entirely human or entitled
to be treated with human
dignity, and sending a message to his coworkers that they could
continue to harass Oates with
impunity.
The factfinder could conclude then that Discovery Zone is liable
for racial harassment
because Christenson's knowledge of the harassment and failure to take
remedial action can be
imputed to it. See 29 C.F.R. 1604.11(d). See also Doe, 42 F.3d at
446 ("[k]nowledge of the
agent is imputed to the corporate principal only if the agent receives
the knowledge while acting
within the scope of the agent's authority and when knowledge concerns
a matter within the scope
of that authority"); Chrysler Motors Corp. v. International Union,
Allied Indus. Workers of Am.,
959 F.2d 685, 687-88 (7th Cir.) ("[e]mployers must take all necessary
steps to prevent sexual
harassment in the workplace, such as expressing strong disapproval of
the conduct and developing
appropriate sanctions"), cert. denied, 506 U.S. 908 (1992). Since
there is sufficient evidence of
racial harassment from which a jury could determine that the terms and
conditions of Oates'
employment were adversely affected, and that Discovery Zone is liable
for the harassment, the
hostile environment claim should not have been dismissed by the
district court, but rather should
have gone to a jury.

B. The District Court Erred in Granting Summary Judgment on the
Discriminatory
Discharge Claim

In an employment discrimination action, a plaintiff may prove his
case using direct or
indirect methods of proof. Randle v. LaSalle Telecommunications,
Inc., 876 F.2d 563, 569 (7th
Cir. 1989). Under the direct method, plaintiff must show that the
"decisionmakers placed
substantial negative reliance on an illegitimate criterion in reaching
their decision," Price
Waterhouse v. Hopkins, 490 U.S. 228, 277 (1989) (O'Connor, J.,
concurring), or put differently,
that there is a direct link between the discriminatory intent and the
challenged employment action
sufficient to prove the disputed fact "without reliance upon inference
or presumption." Randle,
876 F.2d at 569. The indirect method, in contrast, permits the
plaintiff to prove intentional
discrimination by making out a prima facie case and by establishing
that either the prohibited
reason more likely than not motivated the adverse employment action or
that the articulated reason
is untrue. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-03
(1973). On a motion for
summary judgment, if plaintiff successfully produces direct evidence
of discriminatory intent or
establishes a prima facie case and produces enough evidence of pretext
from which the factfinder
could infer the ultimate fact of intentional discrimination, the case
should go to a jury. Anderson
v. Baxter Healthcare Corp., 13 F.3d 1120, 1123-24 (7th Cir. 1994)
(summary judgment is
precluded by evidence of prima facie case and pretext); Adler v.
Madigan, 939 F.2d 476, 479 (7th
Cir. 1991) ("'[m]ixed motives' situations are ordinarily not grist for
the summary judgment mill").

Here, the district court erred in deciding that Oates did not
offer enough evidence from
which a factfinder could infer the ultimate fact of intentional
discrimination as to his discharge
under either proof method. In reaching this conclusion, the court
first incorrectly rejected Oates'
argument that Christenson's offensive conduct is direct evidence of
discriminatory intent under
Price Waterhouse. See McCarthy v. Kempfer Life Ins. Cos., 924 F.2d
683, 687 (7th Cir. 1991)
(racial epithets or discriminatory conduct directed at the plaintiff
by an individual closely involved
in the challenged decisional process are direct evidence of
discriminatory animus); Knox v. First
Nat. Bank of Chicago, 909 F. Supp. 569, 572 (N.D. Ill. 1995)
("plaintiff may present direct proof
of discriminatory intent by introducing stray, stereotyped racial
remarks if the remarks are made
by a decisionmaker, are causally related to or have a nexus with the
employment decision at issue,
and are proximately related in time to the employment decision")
(internal citations omitted)<12>.
Oates' evidence of harassment and Christenson's offensive behavior,
which was as severe as
calling an African American a "nigger," are proof of discriminatory
animus because the evidence
is probative of Christenson's discriminatory attitude and the
circumstances which may have
influenced the decision to terminate Oates.
Next, Oates' termination four days after the racial incident
involving Christenson
constitutes "suspicious timing" from which a factfinder could infer a
causal connection between
Christenson's animus and Oates' termination because there is evidence
in the record from which
a jury could conclude that Christenson participated in the termination
decision. McDermott
testified that, starting with his first meeting with her, Christenson
had recommended that Oates
be terminated, they arranged for Oates to be terminated on April 22,
Christenson conducted the
termination meeting, he "agreed" with Christenson to terminate Oates,
and that together they
decided to terminate him. Pl. Ex. C, McDermott Dep. at 25, 32, 73-76,
84-85. Christenson
testified that Oates' termination was not her decision and she had
never recommended Oates'
termination to McDermott. Pl. Ex. B, Christenson Dep. at 23, 30.
While this evidence clearly
raises a factual dispute as to whether she actually participated in
the termination decision,
resolving all doubts in favor of the plaintiff, a jury could conclude
that, since Christenson
admittedly provided the information on which the termination was based
and fired Oates, that she
participated in the termination decision. Id. at 23, 45. Moreover, a
jury could find it implausible
that McDermott alone made the termination decision when he had only
known Oates a couple of
weeks and had formed a favorable impression of him after their initial
meeting. In any event, this
factual dispute defeats summary judgment and is enough to refute the
district court's conclusion
that Christenson's conduct was a "stray remark" made by a nondecisionmaker.
Even if the evidence of Christenson's bias and role in the
termination decision are
insufficient under the Price Waterhouse direct evidence standard,
Oates has produced enough
evidence to survive summary judgment under the indirect proof scheme
of McDonnell Douglas.
The district court reached a contrary conclusion because, in
evaluating Oates' discriminatory
discharge claim, it erroneously took a rigid and mechanical approach
in deciding that Oates did
not establish a prima facie case of race discrimination.
Specifically, the court improperly
considered Discovery Zone's articulated reason for the discharge in
deciding that Oates had not
shown the second element of the prima facie case -- that he was
performing his job satisfactorily.
An employer's assessment of a plaintiff's work is more appropriately
considered in connection
with the pretext stage of proof in a Title VII case. Legrand v.
Trustees of Univ. of Ark. at Pine
Bluff, 821 F.2d 478, 481 n.4 (8th Cir. 1987), cert. denied, 485 U.S.
1034 (1988). The court also
erroneously disregarded Oates' testimony that his performance was
satisfactory, which is sufficient
to meet his prima facie burden. Williams v. Williams Elecs., Inc.,
856 F.2d 920, 923 n.6 (7th
Cir. 1988) ("determination that individual is performing a job well
enough to meet an employer's
legitimate expectations, when made in the context of a prima facie
case, may be based solely upon
the employee's testimony concerning the quality of his work").
Further, the district court erred
in requiring Oates, as the fourth element of the prima facie case, to
prove that similarly situated
employees outside his protected class were treated more favorably than
he because that element
can be satisfied when there is other evidence in the record from which
discrimination could be
inferred, as there was in this case. See Rush v. McDonald's Corp.,
966 F.2d 1104, 1113 (7th Cir.
1992) ("plaintiff may establish a prima facie case of intentional
discrimination by offering evidence
adequate to raise an inference that he was discharged on the basis of
race"); also see Landon v.
Northwest Airlines Inc., 72 F.3d 620, 624 (8th Cir. 1995) (identifying
fourth element of prima
facie case as requiring a showing that "there is some evidence that
would allow the inference of
improper motivation"); accord McDonnell Douglas, 411 U.S. at 802 n.13
(noting that "the
specification above of the prima facie proof [the fourth element of
which was evidence that
position denied plaintiff remained open and employer continued to seek
applicants with similar
qualifications] required from respondent is not necessarily applicable
in every respect to differing
factual situations").
In addition to the evidence establishing the prima facie case,
the record contains "other bits
and pieces" of evidence from which an inference of discriminatory
intent might be drawn. Troupe
v. May Dep't Stores Co., 20 F.3d 734, 736 (7th Cir. 1994). For
example, Oates proffered
enough pretext evidence to raise a genuine issue as to whether his
performance was the true reason
for his discharge. Discovery Zone asserted that it terminated Oates
because he failed to follow
proper call-in procedures on April 21 to cover his absence from work.
R. 30, Def. Summ. J.
Mem. at 3. According to testimonial evidence in the record, however,
the termination decision
was made before April 21 and therefore was not based on Oates' absence
or failure to follow
proper call-in procedures on April 21. Pl. Ex. B, Christenson Dep. at
68-69; Pl. Ex. D,
Mierkiewicz Dep. at 13; Pl. Ex. E, Dublin Dep. at 15. In addition,
the record also contained
evidence showing that the company gave inconsistent reasons to justify
Oates' termination. Oates
testified that he was told he was being discharged because his job had
been eliminated. Pl. Ex.
A, Oates Dep. at 59. McDermott testified at deposition that Oates was
terminated because he
failed to follow proper call-in procedures. Pl. Ex. C, McDermott Dep.
at 38, 75-76, 83, 85.
Christenson testified that it was not Oates' absence on April 21 or
failure to call-in but rather his
job performance on which his termination was based. Pl. Ex. B,
Christenson Dep. at 68-69.
Making all credibility assessments in favor of Oates, as the district
court and reviewing court must
on a motion for summary judgment, a jury could have inferred from the
contradictory explanations
that none of them were true and instead were offered to cover up a
discriminatory motive.
Anderson, 13 F.3d at 1123-24 (to survive summary judgment, plaintiff
"must only 'produce
evidence from which a rational factfinder could infer that the company
lied' about its proffered
reasons") (quoting Shager v. Upjohn Co., 913 F.2d 398, 401 (7th Cir. 1990)).
Evidence in the record also established that the company did not
have an anti-harassment
policy or grievance procedure in place during Oates' employment with
Discovery Zone. Pl. Ex.
A, Oates Dep. at 161; Pl. Ex. D, Mierkiewicz Dep. at 17; Pl. Ex. E,
Dublin Dep. at 64. The lack
of a policy could be viewed as discouraging victims of harassment from
exercising their right to
be in a work environment free from discrimination, cf. Meritor, 477
U.S. at 73 (sexual harassment
policy and grievance procedure should be "calculated to encourage
victims of harassment to come
forward"), and, in light of Christenson's failure to take remedial
action regarding the monkey
poster, be considered evidence of the "corporate culture" in which the
decision to terminate Oates
was made. Cf. Brewer v. Quaker State Oil Ref. Corp., 72 F.3d 326, 333
(3d Cir. 1995) ("a
supervisor's statement about the employer's employment practices or
managerial policy is relevant
to show the corporate culture in which a company makes its employment
decisions and may be
used to build a circumstantial case of discrimination"); Lipsett v.
University of Puerto Rico, 864
F.2d 881, 907 n.27 (1st Cir. 1988) (noting that, even though defendant
had policy against sex
discrimination, "it had no official grievance procedure to facilitate
the airing of complaints about
such discrimination in an atmosphere of trust and confidence").
Inasmuch as Oates proffered enough evidence to establish a prima
facie case of
discrimination, that evidence combined with his evidence of pretext is
sufficient to raise a genuine
issue of fact as to whether race was the true reason for Oates'
dismissal, and therefore defeat
summary judgment. St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 113
S. Ct. 2742, 2749
(1993). Thus, we urge this Court to reverse the district court's
granting of summary judgment
on Oates' discriminatory discharge claim.

C. The District Court Erred in Granting Summary Judgment on the
Retaliation Claim
The district court also erred in granting summary judgment on the
retaliation claim because
the same evidence of pretext and the supervisor's participation in the
termination process proffered
in support of the discriminatory discharge claim is sufficient to
establish a prima facie case and
to raise a genuine issue of fact as to whether Oates was terminated
for complaining about the
monkey poster or because his employer made "an 'honest assessment of
inadequate performance.'"
Opinion (quoting Alexander v. Gerhardt Enter., Inc., 40 F.3d 187, 197
(7th Cir. 1994)).
Therefore, the retaliation claim should have been resolved by a jury.

CONCLUSION

The district court erred in granting summary judgment for
Discovery Zone. The racial
harassment claim raised a genuine issue of fact as to whether Oates
was subjected to a racially
hostile environment. Further, the record contained enough evidence of
racial animus and pretext
that, combined with evidence of the supervisor's participation in both
the racial incident and the
termination decision, would have permitted a rational factfinder to
infer that Oates' termination
four days after the monkey poster incident was either discriminatory
or retaliatory. Therefore,
we urge this Court to reverse the district court's order granting
summary judgment for Discovery
Zone and remand the case for jury consideration.

Respectfully submitted,

C. GREGORY STEWART
General Counsel
PAULA R. BRUNER, Attorney

GWENDOLYN YOUNG REAMS EQUAL EMPLOYMENT OPPORTUNITY
Associate General Counsel COMMISSION
1801 L Street, N.W. Rm. 7044
CAROLYN L. WHEELER Washington, D.C. 20507
Assistant General Counsel (202) 663-4731

CERTIFICATE OF SERVICE

This is to certify that on April 4, 1996, two copies of the foregoing brief

were mailed first class, postage prepaid, to the following counsel of record:

H. Candace Gorman
GORMAN & GORMAN
542 South Dearborn, Suite 1060
Chicago, Illinois 60605

John P. Morrison, Esq.
Joanne L. Hyman, Esq.
BELL, BOYD & LLOYD
Three First National Plaza
70 West Madison Street, Suite 3200
Chicago, Illinois 60602

PAULA R. BRUNER
Attorney
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
1801 L Street, N.W. Rm. 7044
Washington, D.C. 20507
(202) 663-4731

April 4, 1996

A T T A C H M E N T S

TABLE OF CONTENTS

1. Courtland Milloy, The Blinding Racism of His Comment, Wash. Post,
Mar. 6, 1996

2. Jennifer M. Russell, On Being a Gorilla in Your Midst, or the Life
of One Blackwoman in the Legal Academy, 28 Harv. C.R.-C.L. L. Rev.
259 (1993)

A T T A C H M E N T 1

A T T A C H M E N T 2

*******************************
<NOTES>

<1> The record contains disputed facts regarding, inter alia, Oates' work
performance, attendance and adherence to "call-in" procedures when
missing work,
Discovery Zone's reason for Oates' discharge, whether the monkey
poster incident
occurred, whether Oates complained to Human Resources prior to his
termination, and
whether he wrote his own name on the gorilla poster. We present the
facts here in
the light most favorable to Oates, as summary judgment standards
require. The facts
are largely taken from the district court's oral ruling. Record
references have been
provided for facts not appearing in the court's opinion.

<2> R. 38 is the record reference for all of plaintiff's exhibits
which were in the
appendix to his response to defendant's summary judgment motion.

<3> Discovery Zone's human resources managers also testified that they
were aware
Oates was going to be terminated prior to Thursday, April 21, the day
he was absent.
Mierkiewicz said that she knew Oates was going to be terminated a "few
days" before
April 22 and that it was possibly on Tuesday, April 19 or Wednesday,
April 20, that
she learned of this matter.

Pl. Ex. D, Mierkiewicz Dep. at 13. James Dublin said that he found
out "possibly
the week before" but that he was definitely involved in conversations regarding
Oates' termination the week it occurred. Pl. Ex. E, Dublin Dep. at 15.

<4> There are no page references to the transcript of the district court's oral
ruling because it is not paginated.

<5> Although the Commission's guidelines refer to discrimination based
on sex, the
Commission has made it clear that the liability principles governing sexual
harassment and discrimination also apply to race. 29 C.F.R. § 1604.11
n.1 (1995).

<6> The federal Constitution is illustrative of the subhuman status
accorded African
Americans during slavery because it quantified, for representation
purposes, enslaved
black people as three-fifths of a person. U.S. CONST., Art. I § 2
cl.3. See also
Herbert Alptheker, Vol. I A DOCUMENTARY HISTORY OF THE NEGRO PEOPLE IN
THE UNITED
STATES 58 (1951) (quoting George Lawrence, An Oration on the Abolition
of the Slave
Trade (N.Y. 1813)) ("[t]here was a time whilst shrowded in ignorance,
the African was
estimated no higher than beasts of burden").

<7> See, e.g., Courtland Milloy, The Blinding Racism of His Comment,
Wash. Post, Mar.
6, 1996, at C1 (noting that sports analyst Billy Packer's reference to a black
Georgetown basketball player as "a tough monkey" was not only racist
and offensive
to "many African American viewers" but that Packer's response that his
comment had "
'nothing to do with race'. . . reflects the arrogance and denial that are the
cornerstones of racist thinking in America today") (Att. 1).

<8> The association of black people with gorillas has its origins in Christian
theology. As one commentator expressed:

One of the favored topics of those unlettered priests was the vast amount of
Scriptural authority accounting for the black man's lowly state and substandard
conduct. Ham [one of Noah's sons who survived the Great Flood] had
taken a wife
from among a tribe marked by the curse of Cain -- some low-rated beast
of the field
she was, probably little better than a first cousin to the gorilla. From this
unnatural union (so ran the prevailing theology) had been produced the
most primitive
form of the black race.

Larry L. King, CONFESSIONS OF A WHITE RACIST at 18-19 (1969).

<9> Accord Jennifer M. Russell, On Being a Gorilla in Your Midst, or
the Life of One
Blackwoman in the Legal Academy, 28 Harv. C.R.-C.L. L. Rev. 259, 260
(1993) (first
and sole African-American law school female professor's view that picture of a
gorilla found in her school mail box at Case Western University
communicated the
"loud, unambiguous message" that she could "[c]laim no membership to
the human race"
because she was "not even a sub-species" but rather a "brute"
"[a]nimal, not human;"
a "time-worn message communicated to persons who are not white") (Att. 2); The
Blinding Racism of His Comment, Wash. Post at C1 (noting that white
sportscaster
Billy Packer's reference to a black Georgetown basketball player as "a
tough monkey"
is "particularly egregious because of a centuries-old effort to
dehumanize African
Americans by linking them genetically with primates").

<10> See also Daniels, 937 F.2d at 1272-75 (holding that racial
incidents involving
hanging dummy, KKK and racial graffiti, and slurs using "Buckwheat"
and "nigger"
were sufficiently severe and pervasive to support racial harassment claim).

<11> The term "oversensitive" in this context is consistent with a
genre of code
words often used to mask unconscious racism and perpetuate the
racist's denial of,
and arrogance about, the offensiveness of his or her conduct. See
Phyllis A. Katz,
TOWARDS THE ELIMINATION OF RACISM 27 (1976) (for a discussion of code
words used to
describe African Americans and their characteristics). Accord On Being
a Gorilla in
Your Midst, 28 Harv. C.R.-C.L. L. Rev. at 261-62 (when confronted with racial
incidents, "the blackwoman scholar must appear neither hypersensitive
nor paranoid.
Her white male (and female) colleagues will quickly note the
occurrence of facially
similar events involving themselves to discredit what she knows to be
the truth");
Thomas Kochman, BLACK AND WHITE STYLES IN CONFLICT 61 (1981) (because
"in the past
blacks were not even allowed to express and assert themselves to the
extent that
white cultural norms allow, let alone black ones[,] . . . as blacks begin to
experience a greater sense of freedom to express and assert themselves publicly
according to black norms, they find themselves vulnerable again to whites who
consider such behavior excessively emotional and provocative and to which they
respond with incomprehension and violence").

<12> See also Talley v. Bravo Pittino Restaurant, 61 F.3d 1241,
1248-49 (6th Cir.
1995) (racial comments by white managers constituted direct evidence
that plaintiff's
termination was racially motivated); Brown v. East Miss. Elec. Power
Ass'n, 989 F.2d
858, 861 (5th Cir. 1993) (supervisor's routine use of "nigger" is
direct evidence
that racial animus motivated contested employee's discharge); EEOC v.
Alton Packaging
Corp., 901 F.2d 920, 924 (11th Cir. 1990) (evidence of racial
hostility by employer's
general manager, one of persons responsible for denying plaintiff a
promotion, was
direct evidence of discrimination under Price Waterhouse).

Los Angeles Employment Lawyers and Attorneys Resource: EEOC v. Pemco

2008-06-07T13:44:00.003-07:00

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_______________________

No. 03-10719
_______________________

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Plaintiff-Appellant,
v.

PEMCO AEROPLEX, INC.,

Defendant-Appellee.

_______________________________________________

On Appeal from the United States District Court
for the Northern District of Alabama
Southern Division
_______________________________________________

REPLY BRIEF OF THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
_______________________________________________

ERIC S. DREIBAND
General Counsel

CAROLYN L. WHEELER
Acting Associate General Counsel

VINCENT J. BLACKWOOD
Assistant General Counsel

BARBARA L. SLOAN
Attorney

EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
Office of the General Counsel
1801 L Street, N.W.
Washington, D.C. 20507
(202) 663-4721

EEOC v. Pemco Aeroplex, Inc., No. 03-10719

CERTIFICATE OF INTERESTED PERSONS
In accordance with Eleventh Circuit Rules 26.1-1, I certify
that the following persons or entities have an interest in the
outcome of this case:
The Honorable William M. Acker, U.S. District Judge, N.D. Ala.
*Air International, Inc., Pemco-Related Legal Entity.
Mitchell G. Allen, Attorney for Defendant.
Naomi Hilton Archer, Senior Trial Attorney, EEOC.
Vincent J. Blackwood, Associate General Counsel, EEOC.
Stephen E. Brown, Attorney for Defendant.
Mildred Byrd, Supervisory Trial Attorney, EEOC.
*N. Lee Cooper, Attorney for Defendant.
Eric S. Dreiband, General Counsel, EEOC.
Equal Employment Opportunity Commission, Plaintiff-Appellant.
Charles Guerrier, Regional Attorney, EEOC.
Jeffrey A. Lee, Attorney for Defendant.
Maynard, Cooper & Gale, P.C., Attorneys for Defendant.
Pemco Aeroplex, Inc., Defendant-Appellee.
*Pemco Aircraft Engineering Services, Pemco-Related Legal Entity.
*Pemco Air Services System, Inc., Pemco-Related Legal Entity.
*Pemco Aviation Group, Inc., Pemco's Parent Corporation.
*Pemco Engineers, Inc., Pemco-Related Legal Entity.
*Pemco World-Air Services, Pemco-Related Legal Entity.
Barbara L. Sloan, Attorney, EEOC.
*Space Vector Corporation, Pemco-Related Legal Entity.
Carolyn L. Wheeler, Acting Associate General Counsel, EEOC

* from Pemco's Certificate Of Interested Persons

_______________________________
Barbara L. Sloan

TABLE OF CONTENTS
Page(s)
CERTIFICATE OF INTERESTED PERSONS . . . . . . . . . . . . . . .i
TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . .iii
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . iv
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . 26
CERTIFICATE OF COMPLIANCE . . . . . . . . . . . . . . . . . . 27
CERTIFICATE OF SERVICE

TABLE OF AUTHORITIES
CASES Page(s)
Ameritech Benefit Plan Committee v. CWA,
220 F.3d 814 (7th Cir. 2000). . . . . . . . . . . . . . . .5
Benson & Ford v. Wanda Petroleum Co.,
833 F.2d 1172 (5th Cir. 1987) . . . . . . . . . . . . . . 14
Citibank v. Data Lease Finance Corp.,
904 F.2d 1498 (11th Cir. 1990). . . . . . . . . . . . . . 6
Drummond v. United States,
324 U.S. 316 (1945) . . . . . . . . . . . . . . . . . . . 16
EEOC v. Hernando Bank,
724 F.2d 1188 (5th Cir. 1984) . . . . . . . . . . . . . . 24
EEOC v. Huttig Sash & Door Co.,
511 F.2d 453 (5th Cir. 1975). . . . . . . . . . . . 4, 6, 8
EEOC v. Johnson & Higgins,
91 F.3d 1529 (2d Cir. 1996) . . . . . . . . . . . . . . . 24
EEOC v. Mitsubishi Motor Manufacturing of America,
960 F. Supp. 164 (N.D. Ill. 1997) . . . . . . . . . . . . 24
EEOC v. Waffle House,
534 U.S. 279 (2002) . . . . . . . . . . . . . . . . . . 4, 7
Freeman v. Lester Coggins Trucking,
771 F.2d 860 (5th Cir. 1985). . . . . . . . . . . . . . . 9
General Telegraph Co v. EEOC,
446 U.S. 318 (1980) . . . . . . . . . . . . . . . . . . 4, 7
Gonzalez v. Banco Central Corp.,
27 F.3d 751 (1st Cir. 1994) . . . . . . . . . . . . . . . 14
Herman v. South Carolina National Bank,
140 F.3d 1413 (11th Cir. 1998). . . . . . . . . . . . . 4, 6
Humphreys v. Tann,
487 F.2d 666 (6th Cir. 1973). . . . . . . . . . . . . . . 10
In re Bemis,
279 F.3d 419 (7th Cir. 2002). . . . . . . . . . . . . . . 4
In re Birmingham Reverse Discrimination Employment Litigation,
833 F.2d 1492 (11th Cir. 1988)
aff'd sub nom Martin v. Wilks, 490 U.S. 755 (1989). . . . 9
In re Piper Aircraft Corp.,
244 F.3d 1289 (11th Cir. 2001). . . . . . . . . . . . . . 10
International Ass'n of Machinists Nat'l Pension Fund v. Dickey,
808 F.2d 483 (6th Cir. 1987). . . . . . . . . . . . . . . 12
Lawlor v. National Screen Service Corp.,
349 U.S. 322 (1955) . . . . . . . . . . . . . . . . . . . 6
Lovejoy v. Murray,
70 U.S. 1, 3 Wall. 1 (1865) . . . . . . . . . . . . . . . 16

Mann v. City of Albany, Ga.,
883 F.2d 999 (11th Cir. 1989)). . . . . . . . . . . . . . 11
Montana v. United States,
440 U.S. 147 (1979) . . . . . . . . . . . . . 6, 11, 17, 22
NAACP v. Michot,
480 F.2d 547 (5th Cir. 1973). . . . . . . . . . . . . . . 19
National Railroad Passenger Corp. v. Morgan,
536 U.S. 101 (2002) . . . . . . . . . . . . . . . . . . . 23
Parklane Hosiery Co. v. Shore,
439 U.S. 322 (1979) . . . . . . . . . . . . . . . 9, 10, 25
Peralta v. U.S. Attorney's Office,
136 F.3d 169 (D.C. Cir. 1998) . . . . . . . . . . . . . . 12
Petit v. City of Chicago,
1999 WL 66539 (N.D. Ill. Feb. 8, 1999) (unpublished). . . 13
Pollard v. Cockrell,
578 F.2d 1002 (5th Cir. 1978) . . . . . . . . . . . . 11, 13
Price Waterhouse v. Hopkins,
490 U.S. 228 (1989) . . . . . . . . . . . . . . . . . . . 20
Richards v. Jefferson County, Ala.,
517 U.S. 793 (1996) . . . . . . . . . . . . . . . . . . . 15
Riddle v. Cerro Wire & Cable Group,
902 F.2d 918 (11th Cir. 1990) . . . . . . . . . . . . . . 7
South Central Bell Telegraph Co. v. Alabama,
526 U.S. 160 (1999) . . . . . . . . . . . . . . . 14, 15, 16
Tice v. American Airlines,
162 F.3d 966 (7th Cir. 1999). . . . . . . . . . . . . . . 15
United States v. East Baton Rouge Parish School Board,
594 F.2d 56 (5th Cir. 1979) . . . . . . . . . . . . . . . 4

STATUTES AND RULES
Title VII of the Civil Rights Act of 1964
42 U.S.C. §§ 2000e et seq.. . . . . . . . . . . . . . passim
Federal Rule of Appellate Procedure 28 . . . . . . . . . . . . 12

OTHER AUTHORITY
Restatement (Second) of Judgments § 39 . . . . . . . . . . . . 16

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_______________________

No. 03-10719
_______________________

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Plaintiff-Appellant,
v.

PEMCO AEROPLEX, INC.,

Defendant-Appellee.
_______________________________________________

On Appeal from the United States District Court
for the Northern District of Alabama
_______________________________________________

REPLY BRIEF
_______________________________________________
INTRODUCTION
EEOC alleges that Pemco Aeroplex violated Title VII by
maintaining a racially hostile work environment potentially
affecting all of the company's African-American employees. The
district court granted summary judgment, holding that EEOC is
precluded from litigating this enforcement action because a jury
rejected the individual harassment claims of 22 Pemco employees in
Thomas, et al. v. Pemco Aeroplex, No. 99-CV-3280-S (N.D. Ala.), a
private suit that was tried separately from EEOC's action
notwithstanding EEOC's repeated requests to have the cases
consolidated.
In our opening brief, we noted that, because EEOC was not a
party to the Thomas litigation, it could be precluded by the
judgment in that action only if EEOC was in privity with the Thomas
plaintiffs. We argued that under prevailing law there is no basis
for finding privity here. We also argued that, even if there were
privity, preclusion would not be proper because the claims in the
two suits are not the same. Finally, we argued that the logistical
concerns raised by the district court are overstated and, in any
event, cannot serve as a basis for binding the government to the
judgment in a case in which it was not a party or in privity with
a party.
In its brief, Pemco argues strenuously that EEOC should not be
permitted to continue to litigate this action in light of the jury
verdicts in Thomas. Rather than address our arguments, however,
Pemco relies largely on general arguments about the unfairness and
inefficiency of permitting further litigation against the company
on the issue of racial harassment after it prevailed in Thomas.
The company has no response to our argument that there was no
privity between EEOC and the Thomas plaintiffs under the prevailing
legal standard, and, in the absence of privity, EEOC cannot be
bound by the Thomas judgment, even if Pemco's complaints were well-
founded. In any event, Pemco's arguments are based on a distorted
characterization of the proceedings in Thomas and in this action,
and completely overlook the fact that Pemco vigorously opposed
EEOC's attempts to consolidate the two actions thereby avoiding the
inefficiencies against which Pemco now rails.
ARGUMENT
1. It is a fundamental principle, acknowledged by the
district court and not disputed by Pemco, that a party may not be
precluded from litigating a claim on the basis of a judgment in a
previous action unless it was a party to that action or in privity
with a party. In our opening brief, we argued that EEOC, which was
not a party to the Thomas action, is not precluded from proceeding
with this Title VII enforcement action by the judgment in Thomas
because there is no basis for finding that EEOC was in privity with
the Thomas plaintiffs. We noted first that courts including this
one have uniformly held that federal enforcement agencies including
EEOC are not bound by the judgment in a private suit they did not
control, especially where, as here, the agency's allegations are
broader than the allegations in the private suit. We explained
that these decisions are largely based, explicitly or implicitly,
on the lack of privity between the agency and the private
litigants. Even where it seeks victim-specific relief, the agency
litigates its own independent claim and has an interest in law
enforcement that is not shared by the private litigants. See EEOC
Brief at 18-23, citing, e.g., EEOC v. Waffle House, 534 U.S. 279
(2002); General Tel. Co v. EEOC, 446 U.S. 318 (1980); Herman v.
South Carolina Nat'l Bank, 140 F.3d 1413 (11th Cir. 1998); United
States v. East Baton Rouge Parish Sch. Bd., 594 F.2d 56 (5th Cir.
1979); EEOC v. Huttig Sash & Door Co., 511 F.2d 453 (5th Cir.
1975); see also In re Bemis, 279 F.3d 419, 421-22 (7th Cir. 2002)
("EEOC's primary role is that of a law enforcement agency").
Pemco cites no contrary authority. Instead, the company
characterizes the long line of precedent we rely on as "entirely
distinguishable" because in those cases the parallel private
litigation ended in a settlement or consent decree whereas here,
the Thomas suit ended in a jury verdict. Based on this factual
distinction and the lack of authority for its position, Pemco
asserts that this case is "one of first impression." See Pemco
Brief at 10. The company reasons that EEOC's separate enforcement
action should not be precluded by a private settlement since,
according to the company, settlements "only serve the private
financial interest of that particular litigant" and raise concerns
about potential "sweetheart" deals. A different rule should apply,
however, in cases such as this one where the private litigants went
to trial since, Pemco notes, jury trials serve the public interest.
Accordingly, the company states, contrary to what it characterizes
as our argument, "the 'public interest' was [] served in Thomas"
because the case was fully tried to and disposed of by a jury. Id.
at 10-15 (emphasis added).
There are several problems with this argument. First, the
case is "one of first impression" only in that the decision below
is not based on legal precedent. As our opening brief shows, there
is ample authority for the contrary proposition that enforcement
actions brought by EEOC and other federal enforcement agencies are
not barred by judgments in parallel private litigation. See EEOC
Brief at 18-23 (citing cases); see also Ameritech Benefit Plan
Committee v. CWA, 220 F.3d 814, 821 (7th Cir. 2000) (judgment in
parallel private action would not preclude EEOC enforcement action
although rulings on issues of law may have stare decisis effect).
Second, despite its assertion that the cases we cited can be
distinguished on the ground that they involved a settlement or
consent decree, Pemco points to nothing in those cases that
suggests they would have come out differently had the private
litigation gone to trial. Nor would such a distinction make sense.
As noted above, the cases stand for the proposition that there is
no privity between private litigants and federal enforcement
agencies like EEOC because private litigants do not share the
agencies' interest in law enforcement. Privity has to do with the
nature of the relationship between parties to successive lawsuits.
The basis for the judgment in the prior action whether it is
based on a settlement, a jury verdict, or something else has no
logical connection to privity.
Rather than addressing privity, Pemco's argument actually goes
to a different prerequisite for preclusion the need for a final
judgment on the merits. See, e.g., Montana v. United States, 440
U.S. 147, 153 (1979). The company would have this Court hold that
different preclusion principles apply to jury verdicts than to
settlements. As our opening brief points out, however, both this
Court and the Supreme Court have held that the preclusive effect of
a judgment does not vary depending on whether it is based on a
settlement as occurred in Huttig Sash & Door, 511 F.2d at 455,
and Herman, 140 F.3d at 1417, for example or a judicial
determination. EEOC Brief at 22 n.4 (citing Citibank v. Data Lease
Fin. Corp., 904 F.2d 1498, 1501-02 (11th Cir. 1990); Lawlor v.
National Screen Serv. Corp., 349 U.S. 322, 327 (1955)). Thus,
Pemco's attempt to distinguish the cases we cited fails.
Third, we never argued that the "public interest was not
served in Thomas," whatever that means. Rather, we argued that, as
a federal enforcement agency, EEOC is not bound by judgments in
private litigation it did not control and to which it was not a
party. As for the public interest, we relied on the Supreme Court
for the proposition that EEOC's suit is separate from the claims of
private plaintiffs, that Title VII unambiguously authorizes EEOC to
"determine when it is in the public interest to sue to vindicate
federal law," and that "it is [EEOC's] province not that of the
court" or the defendant "to determine whether public resources
should be committed" to the recovery of relief for a particular
claim of discrimination. EEOC Brief at 19-21 (citing General
Telephone, 446 U.S. at 325-26, and quoting Waffle House, 534 U.S.
at 291-92).
Pemco asserts that dicta in Waffle House "debunk[s]" EEOC's
"implication that it is settled law that it cannot be barred by res
judicata from asserting claims," pointing to the statement that
"[i]t 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." Pemco Brief at 14 n.7
(quoting 534 U.S. at 297). The quoted statement in Waffle House
follows the Court's citation to appellate decisions holding that
persons who had previously litigated, settled or otherwise resolved
their private claims could not obtain individual relief in an EEOC
enforcement action. Like Huttig Sash & Door, 511 F.2d at 454-55,
the cases cited by the Court hold that an EEOC suit may proceed for
injunctive relief and individual relief for persons who have not
privately resolved their claims. Accordingly, the "open question"
alluded to in Waffle House does not go to EEOC's authority to
proceed with this action, but only to the relief that may be
obtained. As we noted in our opening brief (EEOC Brief at 23 n.5),
questions regarding the scope of relief available in this action
need not be resolved on this appeal.
In a separate but related point, Pemco argues, without
reference to privity or other preclusion principles, that allowing
EEOC to "relitigate issues thoroughly addressed and decided in
Thomas would undermine the public's confidence in the finality of
jury verdicts in civil litigation" and violate the Seventh
Amendment. See Pemco Brief at 12; 29-31. Insofar as the company
implies that the Seventh Amendment precludes relitigation of issues
decided by a jury even without regard to privity, it is plainly
wrong. The Seventh Amendment was designed to preserve the basic
institution of the jury trial as it existed at common law. See
Parklane Hosiery Co. v. Shore, 439 U.S. 322, 333-37 (1979). At
common law, as now, successive juries could decide even the same
issue in suits involving separate parties. Cf. id. at 330 n.14
(citing example of mass tort defendant that litigates successive
cases brought by different plaintiffs). Thus, what this Court
described as the "fundamental premise of preclusion law" (In re
Birmingham Reverse Discrim. Employment Litig., 833 F.2d 1492, 1498
(11th Cir. 1988)) that a judgment binds only parties and their
privies applies equally to judgments based on jury verdict. See,
e.g., Freeman v. Lester Coggins Trucking, 771 F.2d 860, 861-63 (5th
Cir. 1985) (although plaintiff's own claim was barred, his claims
in representative capacity for wife and children in wrongful death
action were not precluded by jury finding of no negligence in prior
suit against same defendants where plaintiff had sued individually
for his own injuries from same accident); Humphreys v. Tann, 487
F.2d 666, 671 (6th Cir. 1973) (rejecting argument that concerns
about "federal courts' crowded dockets" and "proper utilization of
judicial time" obviated requirement for privity and holding that,
despite consolidated discovery, one plane crash victim's estate was
not bound by the jury verdict in an earlier suit brought by another
victim's estate). See also Parklane Hosiery, 439 U.S. at 327 n.7
(noting constitutional basis for privity requirement). The fact
that some Thomas plaintiffs went to trial, therefore, does not
relieve Pemco of its obligation to establish that there was privity
between EEOC and the Thomas plaintiffs. See In re Piper Aircraft
Corp., 244 F.3d 1289, 1296 (11th Cir. 2001) (party asserting res
judicata bears burden of showing preclusion was appropriate).
To the extent the Seventh Amendment is implicated by this
case, it is EEOC's right that is lost by the decision barring the
agency from pursuing this enforcement action. Because the district
court, at Pemco's urging, refused to consolidate this suit with
Thomas for trial purposes, EEOC has had no opportunity to try its
case to a jury in the first instance.
2. We noted in our opening brief that a non-party who had a
"laboring oar," i.e., substantially controlled, the litigation of
a lawsuit may be bound by the judgment in that suit even if its
legal relationship with the parties to that suit would not
otherwise establish privity. See EEOC Brief at 23-25 (citing
Montana v. United States, 440 U.S. at 154-56). We also noted that,
in the absence of actual control of the prior litigation, this
Court requires, at a minimum, that there be "an express or implied
legal relationship in which parties to the first suit are
accountable to non-parties who file a suit raising identical
issues." Id. at 27-29 (citing, e.g., Pollard v. Cockrell, 578 F.2d
1002, 1008 (5th Cir. 1978), cited with approval in Mann v. City of
Albany, Ga., 883 F.2d 999, 1004 (11th Cir. 1989)). We argued that
EEOC did not have a sufficient "laboring oar" in the Thomas
litigation since it did not control the filing of that suit,
discovery or any aspect of the trial and post-trial decision-
making. Nor, we argued, was there an "express or implied legal
relationship" between EEOC and the Thomas plaintiffs such that it
can reasonably be said that they were proper agents for EEOC. See
EEOC Brief at 23-29.
In responding to this argument, Pemco does not contend that
there was privity between EEOC and the Thomas under this Court's
legal standard, which Pemco considers "rigid." Pemco Brief at 16.
Rather, Pemco argues that a finding of privity is appropriate
because, in its view, the Thomas plaintiffs "adequately represented
the EEOC's interests" and EEOC "assisted" in the prosecution of the
Thomas case. Id. at 18-23. As factual support, the company
opines that counsel for the Thomas plaintiffs did a good job trying
their case. The company adds, without citation to the record, that
EEOC participated in 20 depositions; EEOC's suit was mediated
together with Thomas; counsel for EEOC was "constantly present" at
the Thomas trial and "constantly conferred" with counsel for Thomas
both before and during the trial, and EEOC would use "the very same
evidence" to prove its claim. See, e.g., id. at 18, 20-21; see
also id. at 6-7.
Pemco's version of the facts, even if true, would not suffice
to support a finding of privity. As noted above, even if the
issues in this case and Thomas were the same (which they are not),
this Court requires, at a minimum, an "express or implied legal
relationship by which parties to the first suit are accountable to
non-parties who file a subsequent suit" (Pollard, 578 F.2d at
1008). Pemco does not contend that any such relationship existed
between EEOC and the Thomas plaintiffs. EEOC participated in
discovery because the court ordered "joint discovery" in the two
cases. R.7 (order). EEOC participated in mediation because the
two cases were mediated together; Pemco sought a "global
resolution" and refused to mediate in Thomas unless EEOC also
agreed to mediate the claims in its suit. R.20-21 (Transcript of
4/2/2002 Hearing on EEOC's motion to modify mediation order at 13-
15) (filed May 19, 2003). Nothing in the record indicates that
EEOC attended every hearing in Thomas or was "constantly present"
and "conferred constantly" with Thomas counsel during the trial.
On the contrary, the only evidence is that an EEOC attorney was
present for approximately half the trial, observing from the public
seating area. R.53, Ex.A ¶¶ 5-6; accord R.60 (decision at 3)
(EEOC counsel attended trial "with some frequency" as "an alert and
interested observer").
Citing Thomas counsel's time sheets, Pemco argues that EEOC
and counsel for Thomas were in contact 26 times, including four
"strategy" sessions, while Thomas was pending (Pemco Brief at 6 &
n.4, 21(citing R.51, Ex.A)). However, Pemco points to no authority
suggesting that this is significant. On the contrary, courts have
held that preclusion is inappropriate even where parties and non-
parties share the same attorney. See, e.g., South Central Bell
Tel. Co. v. Alabama, 526 U.S. 160, 168 (1999); Benson & Ford v.
Wanda Petroleum Co., 833 F.2d 1172, 1174-75 (5th Cir. 1987).
Here, some substantial interaction was to be expected since
both EEOC and the Thomas plaintiffs had brought suit against Pemco
for racial harassment, and the two suits were consolidated for
discovery purposes. The time sheets list only one contact between
EEOC and counsel for the Thomas plaintiffs after discovery in
Thomas ended and the court denied the second consolidation motion
– a 30-minute telephone conversation on March 25, 2002, regarding
EEOC's motion to modify the order to mediate. See R.51 (Ex.A).
Although Pemco suggests that this Court's standard is
unnecessarily "rigid," it is in line with case law from the Supreme
Court and other circuits. See, e.g., South Central Bell, 526 U.S.
at 167-68 (preclusion is improper inter alia where original
plaintiffs did not understand their suit to be on behalf of non-
parties, judgment did not purport to bind non-parties and court in
original suit made no special efforts to protect later plaintiffs'
interests); Richards v. Jefferson County, Ala., 517 U.S. 793, 801-
02 (1996) (same); Tice v. American Airlines, 162 F.3d 966, 971 (7th
Cir. 1999) ("general question" is "whether the earlier parties were
in some sense proper agents for the later parties").
Ignoring South Central Bell, Pemco argues that Richards can be
distinguished because, unlike EEOC, the plaintiffs in Richards were
unaware of the earlier suit and counsel in the two cases never
conferred. Pemco Brief at 23. The Alabama Supreme Court made
similar distinctions in South Central Bell, reasoning that
plaintiffs there, unlike those in Richards, not only knew about the
earlier case but had agreed to stay their case pending the outcome
in the earlier one, and one lawyer even represented plaintiffs in
both cases. See 526 U.S. at 168. The Supreme Court found these
distinctions unpersuasive, however, and held that the case was
controlled by Richards. See id. The distinctions advanced by
Pemco in this case are similarly unpersuasive.
Although Pemco states that EEOC can be bound by the Thomas
judgment if it "assisted in the prosecution" of that case (Pemco
Brief at 17-18, 22 (citing Montana, 440 U.S. at 154)), the
government can be bound only where it had a "laboring oar" in the
earlier litigation. See Drummond v. United States, 324 U.S. 316,
318 (1945); cf. Lovejoy v. Murray, 70 U.S. 1, *18-*19, 3 Wall. 1
(1865) (persons not having the right to "adduce testimony, . . .
cross-examine witnesses adduced on the other side" and "appeal from
the judgment" are "strangers to the cause"); Restatement (Second)
of Judgments § 39 & comment c (participation must be substantial).
The Montana Court found a "sufficient 'laboring oar'" where the
government required the private complaint to be filed, reviewed and
approved the complaint, paid the attorneys fees and costs in the
private suit, directed the appeal, appeared and submitted an amicus
brief, and directed the filing and abandonment of an appeal to the
Supreme Court. Montana, 440 U.S. at 155; see also id. at 154
(citing cases). Even if something less than such complete
manipulation would suffice, the alleged facts here do not support
preclusion under this theory. Pemco itself describes EEOC as
"rid[ing] the coattails of the Thomas plaintiffs" with respect to
discovery. Pemco Brief at 6; see also R.53 (Ex.A ¶¶ 2-4)(counsel
for Pemco and the Thomas plaintiffs typically negotiated discovery
schedules and other such matters without consulting EEOC). More
importantly, because the district court, at Pemco's urging, denied
EEOC's motions to consolidate for trial, EEOC did not have the
right to adduce testimony, to cross-examine witnesses called by
Pemco or to appeal the judgment.
In short, Pemco's brief provides no basis for finding that
EEOC was in privity with the Thomas plaintiffs such that EEOC may
properly be bound by the judgment in that case. Since privity is
necessary for both res judicata and collateral estoppel, the
judgment must be reversed.
3. Because there was no privity between EEOC and the Thomas
plaintiffs, EEOC would not be precluded from proceeding with this
action even if the claims were the same as the claims in Thomas.
However, as we argued in our opening brief, the fact that the
claims in this suit are different from and substantially broader
than – the claims litigated in Thomas provides an additional reason
why the suit is not precluded. EEOC Brief at 34-37. Without
squarely addressing the arguments in our brief, Pemco repeatedly
asserts throughout its brief that the Thomas jury already
determined precisely the same issue that is central to EEOC's case,
and, if this case goes to trial, EEOC will use exactly the same
evidence to prove its case as was proffered by the Thomas
plaintiffs. See, e.g., Pemco Brief at 5, 8, 11-13, 18-40.
These assertions are directly contrary to the position Pemco
took in the district court in opposing EEOC's efforts to have its
case consolidated with Thomas. Ironically, Pemco's statements in
the district court provide a succinct response to the position it
now advocates. In opposing EEOC's second motion to consolidate,
Pemco argued that the claims in this case and in Thomas are not the
same, stating:
The claims [in the two cases] are not the same and the
evidence is not the same. . . . The [Thomas] case
consists of thirty-one (31) individual cases filed
together. Each of the 31 Plaintiff's cases . . . must
stand on its own merits. EEOC's case is obviously much
broader in that it does not allege that any particular
employee has been subjected to a hostile environment.
Instead, it alleges class-wide discrimination and opens
the door to evidence that would be potentially wholly
inadmissible in the [Thomas] case.

R.16 (Opposition to 2d Consolidation Motion ("2d Opp.") at 3-4).
For similar reasons, the company's repeated assertion that
EEOC will rely on the same evidence as was proffered in Thomas is
also disingenuous. In opposing consolidation, Pemco stated that
because "EEOC's case is obviously much broader," counsel for EEOC
and the Thomas plaintiffs would likely rely on different evidence,
reasoning:
[E]vidence that an employee that is not a [Thomas
plaintiff] had a slur directed against him or her would
be admissible in the instant action but likely would not
be admissible in [Thomas] unless a [Thomas] plaintiff
worked alongside that employee and overheard the comment.
Proof that others have experienced objectionable conduct
is the heart of [EEOC's] case whereas it could be totally
irrelevant (not to mention objectionable and prejudicial)
in [Thomas].
R.16 (2d Opp. 3).
Without acknowledging the inconsistency between its present
position and the position it took with respect to consolidation,
Pemco stresses that EEOC's second consolidation motion states that
the same witnesses and documentation would be relevant in both
cases. See, e.g., Pemco Brief at 5. That is true. Since this
suit was filed after Thomas, EEOC, in order to avoid delaying the
proceedings, offered to forego further discovery and rely on
existing evidence if the court would agree to try its case and
Thomas together. See R.15 (EEOC's 2d Consolidation Motion at 6).
Once consolidation was denied, however, both EEOC and Pemco resumed
discovery in this case. See, e.g., R.52 (order extending discovery
until 12/31/02); R.16 (2d Opp. at 2-3) (opposing consolidation on
ground that Pemco could not try EEOC's case without additional
discovery). The idea that EEOC would still restrict itself to the
evidence presented at the Thomas trial is wishful thinking on the
company's part.
Pemco's assertion that the jury verdicts in Thomas resolved the
same issue presented in this case is erroneous. The central issue
in this suit is whether the company maintained a racially hostile
work environment affecting African-American employees throughout the
1990s. See, e.g., EEOC Brief at 36-37. In contrast, the Thomas
jury presumably with Pemco's blessing was asked to and did
determine only whether each of the 22 Thomas plaintiffs who went to
trial was subjected to a hostile or abusive work environment because
of race (EEOC's Motion for Judicial Notice, Ex.B (6/26-28/2002 Trial
Transcript at 19, 39-43). Furthermore, although testimony about
earlier events was admitted as "background evidence," the jury was
instructed that liability could be based only on incidents that
occurred after December 8, 1997 (Trial Transcript at 19). A jury
in EEOC's case need not and would not be asked to decide that narrow
question. Pemco's stated concern that allowing EEOC's enforcement
action to proceed would undermine public confidence in jury verdicts
is, therefore, unfounded. See Pemco Brief at 12. That would happen
only if the public was misinformed about what the Thomas jury
actually found.
4. Pemco's remaining arguments are unavailing. In a variant
of its "same claim" argument, the company argues, without citation
to the record or relevant case law, that EEOC is collaterally
estopped from showing the existence of a racially hostile work
environment throughout the 1990s, because the Thomas jury found that
no such environment existed. Pemco Brief at 33-37. As our opening
brief pointed out (EEOC Brief at 31-32), collateral estoppel applies
only to facts or issues that were actually decided and necessary to
the judgment in that case, and the party to be estopped must also
have had a full and fair opportunity to litigate its claim. See,
e.g., Montana, 400 U.S. at 153-54. These elements are not present
here. First, as noted above, because EEOC was not a party or privy
in the Thomas suit, it clearly did not have a full and fair
opportunity to litigate its claim and, so, cannot be precluded from
proceeding with its claims. Furthermore, the Thomas jury was not
asked to and did not "actually decide" whether a hostile work
environment existed at Pemco even during the limited time frame it
was allowed to consider. Trial Transcript at 39-43.
A similar flaw undermines the company's argument that, even if
the jury decided only that the 22 Thomas plaintiffs were not
subjected to a hostile or abusive work environment based on race,
EEOC is nevertheless bound by that finding and, given the finding,
will be unable to prove that a violation occurred. Pemco Brief at
25-28. Because EEOC was not in privity with the Thomas plaintiffs,
EEOC may proceed with its case even if a verdict in its favor would
be factually inconsistent with the Thomas verdicts. Furthermore,
because the Thomas jury was permitted to base its liability findings
on incidents occurring during only a fragment of the time period
covered in EEOC's suit, it is neither "illogical" nor "nonsensical"
(id. at 26) to think that a jury could find that none of those 22
plaintiffs was subjected to a hostile work environment during that
brief time frame and still find that a racially hostile work
environment existed throughout the 1990s.
Finally, Pemco chastises EEOC for failing to inform the Court
that, the company asserts, there are "over 100" declarations from
African-American employees at Pemco, "wherein those employees
declared they had not been subjected to a hostile work environment."
Pemco Brief at 32. The lack of any citation for these alleged
declarations is no mere oversight. If they exist, these
declarations are not in the record in this case and, despite the
obvious concerns about employer coercion, Pemco does not suggest
that EEOC (or even Thomas) attorneys were present when (and if) they
were obtained. Cf. EEOC v. Mitsubishi Motor Mfg. of America, 960
F. Supp. 164, 167 (N.D. Ill. 1997) (noting that, since EEOC has "a
legitimate interest in communicating legal advice and information"
to persons covered by its suits, employer may discuss past acts of
sexual harassment with potential claimants only in depositions, with
counsel present). In any event, any such declarations would, at
most, be evidence to put to the jury; they would not support a
summary judgment on the merits, let alone a dismissal on preclusion
grounds. Cf. EEOC v. Hernando Bank, 724 F.2d 1188, 1196 (5th Cir.
1984) (discussing such affidavits in EEOC suit under Equal Pay Act);
EEOC v. Johnson & Higgins, 91 F.3d 1529, 1535-36 (2d Cir. 1996)
(EEOC's ADEA enforcement action on behalf of past, current and
future directors may proceed even though every former director
signed affidavit waiving private right to sue under ADEA). And even
assuming Pemco, as it asserts, persuaded 100 of its African-American
employees, outside the presence of counsel, to disavow any interest
in "hav[ing] a day in court" for alleged discrimination, it is
undisputed that there are still at least 64 other employees (see
Pemco Brief at 4-5) more than enough to warrant EEOC's proceeding
with its suit who are covered by EEOC's suit but were not parties
to Thomas and apparently are interested in "hav[ing] a day in
court."
5. Pemco argues that judicial economy would be served by
affirmance of the district court's decision. Pemco Brief at 38-40.
This statement is true only if considerations of fairness are put
to one side. A court faced with two suits by unrelated parties
raising similar claims would expend fewer judicial resources by
permitting the smaller suit to proceed and then barring the larger
on preclusion grounds. Fundamental fairness does not permit that
approach, however, unless the standards governing res judicata
and/or collateral estoppel have been met. See, e.g., Parklane
Hosiery, 439 U.S. at 327 n.7. Here, they have not. As we suggested
in our opening brief, whatever wounds the company would suffer if
this enforcement action is permitted to proceed are, in essence,
self-inflicted. If the company had wanted to avoid a second trial,
it should have gone along with EEOC's repeated efforts to try this
case in tandem with Thomas. Having persuaded the district court
that the cases were too different to be tried together, Pemco cannot
now claim that EEOC's enforcement action is barred because the cases
are too similar to be tried separately.
CONCLUSION
For the foregoing reasons, the Commission asks this Court to
reverse the judgment and remand the case to the district court for
further proceedings.
Respectfully submitted,

ERIC S. DREIBAND
General Counsel

CAROLYN L. WHEELER
Acting Associate General Counsel

VINCENT J. BLACKWOOD
Assistant General Counsel

________________________________
BARBARA L. SLOAN
Attorney

EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
Office of the General Counsel
1801 L Street, N.W.
Washington, D.C. 20507
(202) 663-4721

CERTIFICATE OF COMPLIANCE
In accordance with Federal Rule of Appellate Procedure 32, I
certify that this brief was prepared with Courier New (monospaced)
typeface, 12-point font, and contains 6038 words, from the
Introduction through the Conclusion, as determined by the Word
Perfect 9 word counting program.

____________________________
Barbara L. Sloan
CERTIFICATE OF SERVICE
I hereby certify that one copy of the foregoing Reply Brief of
the Equal Employment Opportunity Commission was sent this 4th day
of September, 2003, by express mail, postage prepaid, to:

Stephen E. Brown
Jeffrey A. Lee
MAYNARD, COOPER & GALE PC
AmSouth Harbert Plaza, Suite 2400
1901 Sixth Avenue, North
Birmingham, AL 35203-2618

_____________________________
Barbara L. Sloan

Los Angeles Employment Lawyers and Attorneys Resource: EEOC v. Sundance Rehab. Corp., 6th Cir.

2008-06-07T13:44:00.001-07:00

EEOC v. Sundance Rehab. Corp., 6th Cir.
Proof brief as appellant
May 17, 2005

No. 04-4178

IN THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,

Plaintiff-Appellee,

SUNDANCE REHABILITATION CORPORATION,

Defendant-Appellant.
______________________________________________________

On Appeal from the United States District Court for the
Northern District of Ohio, Eastern Division
Docket No. 01-1867
Hon. Lesley Wells
______________________________________________________

PROOF BRIEF OF APPELLEE
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
______________________________________________________

ERIC S. DREIBAND U.S. EQUAL EMPLOYMENT
General Counsel OPPORTUNITY COMMISSION
Office of General Counsel
VINCENT J. BLACKWOOD 1801 L Street, N.W., Room 7020
Acting Associate General Counsel Washington, D.C. 20507
(202) 663-4571
LORRAINE C. DAVIS daniel.vail@eeoc.gov
Assistant General Counsel

DANIEL T. VAIL
Attorney

CORPORATE DISCLOSURE STATEMENT
As an agency of the United States government, the EEOC is exempt
from filing
a corporate affiliate/financial interest disclosure statement. See 6
Cir. R. 26.1(a).

TABLE OF CONTENTS
Page

FACT SHEET FOR TITLE VII APPEALS . . . . . . . . . . . . . . . iv

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . .v

STATEMENT IN SUPPORT OF ORAL ARGUMENT. . . . . . . . . . . . . .1

STATEMENT ON JURISDICTION. . . . . . . . . . . . . . . . . . . .2

STATEMENT OF THE ISSUES. . . . . . . . . . . . . . . . . . . . .2

STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . .3

A. The Nature of the Case and the Course of Proceedings .3

B. Statement of Facts . . . . . . . . . . . . . . . . . .4

C. The District Court's Decision. . . . . . . . . . . . .9

SUMMARY OF ARGUMENT. . . . . . . . . . . . . . . . . . . . . . 12

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

A. Standard of Review . . . . . . . . . . . . . . . . . 16

B. The District Court Correctly Held that SunDance
Violated the Anti-Retaliation Rules in the EPA,
Title VII, the ADEA, and the ADA . . . . . . . . . . 17

C. The District Court Appropriately Exercised Its Broad
Discretion to Award Relief Required to Eliminate the
Effects of Illegal Retaliation . . . . . . . . . . . 48

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . 54

CERTIFICATION OF COMPLIANCE WITH RULE 32(a). . . . . . . . . . 55

ADDENDA. . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1

Appellee's Designation of Contents of Joint Appendix. . .A-2

Complete Text of Statutory Anti-Retaliation Rules . . . .A-6

EEOC's Enforcement Guidance on Non-Waivable Employee
Rights . . . . . . . . . . . . . . . . . . . . . . . . . A-7

CERTIFICATE OF SERVICE

UNITED STATES COURT OF APPEALS, SIXTH CIRCUIT
FACT SHEET FOR TITLE VII APPEALS

6th Cir. R. 28(c) requires that counsel for the appellant and for
the appellee file a one-page fact sheet in all Title VII appeals.
The fact sheet should be the same size as the pages in the brief.
It should be placed in the briefs of the parties immediately
following the table of contents and preceding the statement of
issues presented for review. Use this form, 6CA-56.

Case Name and Number: EEOC v. SunDance Rehabilitation Corp.
04-4178 (6th Cir.); 01-1867 (N.D. Ohio)

Person Reporting: Daniel Travis Vail, Counsel for Appellee EEOC

1. Date EEOC complaint filed: Apr. 20, 1999

2. Was any compromise reached by the state civil rights agency?:
No. By EEOC?: No.

3. Date EEOC right to sue letter issued: Sept. 30, 1999

4. Date present action filed: August 1, 2001

5. Have all filings been timely?: Yes

If not, are any "tolling" arguments available?: N/A
If so, describe: N/A

6. Nature of claims of discrimination and date(s) of
occurrence:

The EEOC alleges that SunDance violated the anti-retaliation
provision of Title VII (and other federal employment
discrimination laws) by conditioning the provision of
severance benefits on the waiver of the right to file an EEOC
charge and participate in EEOC proceedings, and by otherwise
using a "Separation Agreement, General Release and Covenant
Not to Sue." These unlawful employment practices have been
occurring since at least March 5, 1999.

7. Disposition Below:

The district court (Hon. Lesley Wells, presiding) granted the
EEOC's motion for summary judgment on July 26, 2004, and
issued appropriate affirmative and injunctive relief.

TABLE OF AUTHORITIES

Page
Cases

Abbott v. Crown Motor Co., Inc.,
348 F.3d 537 (6th Cir. 2003). . . . . . . . . . . . . . . 18

Albemarle Paper Co. v. Moody,
422 U.S. 405 (1975) . . . . . . . . . . . . . . . . . .49-50

American Airlines, Inc. v. Cardoza-Rodriguez,
133 F.3d 111 (1st Cir. 1998). . . . . . . . . . . 36, 43, 45

Bachelder v. America West Airlines, Inc.,
259 F.3d 1112 (9th Cir. 2001) . . . . . . . . . . . . . . 32

Barnes v. City of Cincinnati,
401 F.3d 729 (6th Cir. 2005). . . . . . . . . . . . . . . 17

Brown v. City of Tuscon,
336 F.3d 1181 (9th Cir. 2003) . . . . . . . . . . . . . . 34

Cal. Acrylic Indus., Inc. v. NLRB,
150 F.3d 1095 (9th Cir. 1998) . . . . . . . . . . . . . . 31

Callicotte v. Carlucci,
698 F. Supp. 944 (D.D.C. 1988). . . . . . . . . . . . . . 43

Celotex Corp. v. Catrett,
477 U.S. 317 (1986) . . . . . . . . . . . . . . . . . . . 17

Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc.,
467 U.S. 837 (1984) . . . . . . . . . . . . . . . . . . . 36

Clark v. United Parcel Service, Inc.,
400 F.3d 341 (6th Cir. 2005). . . . . . . . . . . . . . . 16

Conn. v. Teal,
457 U.S. 440 (1982) . . . . . . . . . . . . . . . . . .37-38

Dayton Newspapers, Inc. v. NLRB,
402 F.3d 651 (6th Cir. 2005). . . . . . . . . . . . . .31-32

EEOC v. Astra, Inc.,
94 F.3d 738 (1st Cir. 1996) . . . . . . . . . . . 44, 47, 51

EEOC v. Bd. of Governors of State Coll. & Univ.,
957 F.2d 424 (7th Cir. 1992). . . . . . .9, 13-15, 21-30, 48

EEOC v. Cosmair, Inc., L'Oreal Hair Care Div.,
821 F.2d 1085 (5th Cir. 1987) . . . . . . . . 43, 45, 47, 50

EEOC v. Frank's Nursery & Crafts, Inc.,
177 F.3d 448 (6th Cir. 1999). . . . . . . . . 39, 40, 42, 50

EEOC v. Joe's Stone Crab,
220 F.3d 1263 (11th Cir. 2000). . . . . . . . . . . . . . 38

EEOC v. Johnson & Higgins, Inc.,
91 F.3d 1529 (2d Cir. 1996) . . . . . . . . . . . . . . . 42

EEOC v. Ohio Edison Co.,
7 F.3d 541 (6th Cir. 1993) . . . . . . .19, 21, 29, 38-39

EEOC v. Romeo Cmty. Sch.,
976 F.2d 985 (6th Cir. 1992). . . . . . . . . . . . . .18-19

EEOC v. Seafarers Int'l Union,
394 F.3d 197 (4th Cir. 2005). . . . . . . . . . . . . . . 36

EEOC v. Shell Oil Co.,
466 U.S. 54 (1984). . . . . . . . . . . . . . . . . . .40-41

EEOC v. U.S. Steel Corp.,
671 F. Supp. 351 (W.D. Pa. 1987). . . .21-22, 24, 29, 39, 42

EEOC v. Waffle House,
534 U.S. 279 (2002) . . . . . . . . . . . . . . . . . .41-42

EEOC v. Wilson Metal Casket Co.,
24 F.3d 836 (6th Cir. 1994) . . . . . . . . . . . . . . . 50

Everson v. Mich. Dep't of Corr.,
391 F.3d 737 (6th Cir. 2004). . . . . . . . . . . . . . . 38

Faris v. Williams WPC-I, Inc.,
332 F.3d 316 (5th Cir. 2003). . . . . . . . . . . . . . . 43

Frank v. United Air Lines, Inc.,
216 F.3d 845 (9th Cir. 2000). . . . . . . . . . . . . . . 38

Franks v. Bowman Transp. Co., Inc.,
424 U.S. 747 (1976) . . . . . . . . . . . . . . . . . . . 50

Gen. Tel. Co. of N.W., Inc. v. EEOC,
446 U.S. 318 (1980) . . . . . . . . . . . . . . . . . . . 40

Gilmer v. Interstate/Johnson Lane Corp.,
500 U.S. 20 (1991) . . . . . . . . . . . . . . . . . . . 42

Hazen Paper Co. v. Biggins,
507 U.S. 604 (1993) . . . . . . . . . . . . . . . . . . . 37

Healey v. Southwood Psychiatric Hosp.,
78 F.3d 128 (3d Cir. 1996). . . . . . . . . . . . . . . . 38

Hishon v. King & Spalding,
467 U.S. 69 (1984) . . . . . . . . . . . . . . . . . 14, 25

Howlett v. Holiday Inns, Inc.,
120 F.3d 598 (6th Cir. 1997). . . . . . . . . . . . . . . 48

Int'l Union, UAW v. Johnson Controls,
499 U.S. 187 (1991) . . . . . . . . . . . . . . . . . . . 37

Johnson v. Univ. of Cincinnati,
215 F.3d 561 (6th Cir. 2000). . . . . . . . . . . . . . . 19

Kralman v. Ill. Dep't of Veterans' Affairs,
23 F.3d 150 (7th Cir. 1994) . . . . . . . . . . . . . . . 36

Lorance v. AT&T Techs., Inc.,
490 U.S. 900 (1989) . . . . . . . . . . . . . . . . . . . 37

Lovejoy-Wilson v. NOCO Motor Fuel, Inc.,
263 F.3d 208 (2d Cir. 2001) . . . . . . . . . . . . . 27, 35

McCall v. U.S. Postal Service,
839 F.2d 664 (Fed. Cir. 1988) . . . . . . . . . . . . . . 43

McKnight v. General Motors Corp.,
908 F.2d 104 (7th Cir. 1990). . . . . . . . . . . . . . . 29

Meritor Sav. Bank FSB v. Vinson,
477 U.S. 57 (1986). . . . . . . . . . . . . . . . . . . . 21

Mich. Prot. & Advocacy Serv., Inc. v. Babin,
18 F.3d 337(6th Cir. 1994). . . . . . . . . . . . . . . . 34

Minadeo v. ICI Paints,
398 F.3d 751 (6th Cir. 2005). . . . . . . . . . . . . . . 16

Mondzelewski v. Pathmark Stores, Inc.,
162 F.3d 778 (3d Cir. 1998) . . . . . . . . . . . . . . . 35

NLRB v. Coca-Cola Co. Foods Div.,
670 F.2d 84 (7th Cir. 1982) . . . . . . . . . . . . . . . 32

NLRB v. Gissel Packing Co.,
395 U.S. 575 (1969) . . . . . . . . . . . . . . . . . . . 32

Nev. Dep't of Human Res. v. Hibbs,
538 U.S. 721 (2003) . . . . . . . . . . . . . . . . . 15, 37

Nguyen v. Cleveland,
229 F.3d 559 (6th Cir. 2000). . . . . . . . . . . . . 15, 38

Northcross v. Bd. of Educ. of Memphis City Schs.,
412 U.S. 427 (1973) . . . . . . . . . . . . . . . . . . . 33

Occidental Life Ins. Co. of Cal. v. EEOC,
432 U.S. 355 (1977) . . . . . . . . . . . . . . . . . . . 40

Robinson v. Shell Oil Co.,
519 U.S. 337 (1997) . . . . . . . . . . . . . 12, 19, 29, 38

Smith v. City of Salem,
378 F.3d 566 (6th Cir. 2004). . . . . . . . . . . . . . . 27

Tasty Baking Co. v. NLRB,
254 F.3d 114 (D.C. Cir. 2001) . . . . . . . . . . . . .31-32

Town of Newton v. Rumery,
480 U.S. 386 (1987) . . . . . . . . . . . . . . . . . . . 47

Walborn v. Erie County Care Facility,
150 F.3d 584 (6th Cir. 1998). . . . . . . . . . . . . . . 27

Wastak v. Lehigh Valley Health Network,
342 F.3d 281 (3d Cir. 2003) . . . . . . . . . 10, 36, 43, 52

Weigel v. Baptist Hosp. of E. Tenn.,
302 F.3d 367 (6th Cir. 2002). . . . . . . . . . . . . . . 27

White v. Burlington N. & Santa Fe Railway Co.,
364 F.3d 789 (6th Cir. 2004). . . . . . . . . . . . . . . 27

Statutes

Equal Pay Act of 1963,
29 U.S.C. § 206(d). . . . . . . . . . . . . . . . . . passim

Title VII of the Civil Rights Act of 1964,
42 U.S.C. §§ 2000e et seq.. . . . . . . . . . . . . . passim

Age Discrimination in Employment Act of 1967,
29 U.S.C. §§ 621 et seq.. . . . . . . . . . . . . . . passim

Americans with Disabilities Act of 1990,
42 U.S.C. §§ 12101 et seq.. . . . . . . . . . . . . . passim

TABLE OF AUTHORITIES (con't)
Page

28 U.S.C. § 1291 . . . . . . . . . . . . . . . . . . . . . . . .2

28 U.S.C. § 1331 . . . . . . . . . . . . . . . . . . . . . . . .2

28 U.S.C. § 1337 . . . . . . . . . . . . . . . . . . . . . . . .2

28 U.S.C. § 1343 . . . . . . . . . . . . . . . . . . . . . . . .2

28 U.S.C. § 1345 . . . . . . . . . . . . . . . . . . . . . . . .2

29 U.S.C. § 158(a)(1). . . . . . . . . . . . . . . . . . . . . 31

29 U.S.C. § 211. . . . . . . . . . . . . . . . . . . . . . . . 41

29 U.S.C. § 215(a)(3). . . . . . . . . . . . . . . . . . . . . 18

29 U.S.C. § 216(b) . . . . . . . . . . . . . . . . . . . . . . 49

29 U.S.C. § 623(d) . . . . . . . . . . . . . . . . . . . . . . 18

29 U.S.C. § 626(a) . . . . . . . . . . . . . . . . . . . . . . 41

29 U.S.C. § 626(b) . . . . . . . . . . . . . . . . . . . . 49, 53

29 U.S.C. § 626(c) . . . . . . . . . . . . . . . . . . . . . . 53

29 U.S.C. § 626(d) . . . . . . . . . . . . . . . . . . . . . . 53

29 U.S.C. § 626(f)(4). . . . . . . . . . . . . . . .14, 18, 35-36

29 U.S.C. § 628. . . . . . . . . . . . . . . . . . . . . . . . 36

29 U.S.C. § 2615(a)(1) . . . . . . . . . . . . . . . . . . . . 32

42 U.S.C. § 3617 . . . . . . . . . . . . . . . . . . . . . . . 33

42 U.S.C. § 2000e-3(a) . . . . . . . . . . . . . . . . . . . . 18

42 U.S.C. § 2000e-5(b) . . . . . . . . . . . . . . . . . . 41, 53

42 U.S.C. § 2000e-5(f)(1). . . . . . . . . . . . . . . . . . . 53

42 U.S.C. § 2000e-5(g)(1). . . . . . . . . . . . . . . . . . . 49

42 U.S.C. § 12117(a) . . . . . . . . . . . . . . . . . 41, 49, 53

42 U.S.C. § 12203(a) . . . . . . . . . . . . . . . . . . . . . 18

42 U.S.C. § 12203(b) . . . . . . . . . . . . . . . 15, 18, 31, 34

42 U.S.C. § 12203(c) . . . . . . . . . . . . . . . . . . . . . 49

Legislative History

H.R. Rep. No. 485(II), 101st Cong., 2d Sess. 138 (1990),
reprinted in 1990 U.S.C.C.A.N. 303. . . . . . . . . . . . 33

Regulations

24 C.F.R. § 100.400. . . . . . . . . . . . . . . . . . . . . . 33

29 C.F.R. § 1622(k). . . . . . . . . . . . . . . . . . . . . . 36

29 C.F.R. § 1625.22(i)(2). . . . . . . . . . . . . . . . . . . 52

29 C.F.R. § 1625.22(i)(3). . . . . . . . . . . . . . . . . . . 36

29 C.F.R. § 1625.23(b) . . . . . . . . . . . . . . . . . . . . 52

TABLE OF AUTHORITIES (con't)
Page

29 C.F.R. § 1626.15(b) . . . . . . . . . . . . . . . . . . . . 53

29 C.F.R. § 1630.12(b) . . . . . . . . . . . . . . . . . . . . 31

Rules

Fed. R. App. P. 4(a)(1)(B) . . . . . . . . . . . . . . . . . . .2

Fed. R. App. P. 32(a)(5) . . . . . . . . . . . . . . . . . . . 55

Fed. R. App. P. 32(a)(6) . . . . . . . . . . . . . . . . . . . 55

Fed. R. App. P. 32(a)(7)(B). . . . . . . . . . . . . . . . . . 55

Fed. R. App. P. 32(a)(7)(B)(iii) . . . . . . . . . . . . . . . 55

Fed. R. App. P. 34(a)(2)(C). . . . . . . . . . . . . . . . . . .1

Fed. R. Civ. P. 56(c). . . . . . . . . . . . . . . . . . . . . 17

6 Cir. R. 26.1(a). . . . . . . . . . . . . . . . . . . . . . . .i

6 Cir. R. 28(c). . . . . . . . . . . . . . . . . . . . . . . . iv

6 Cir. R. 28(d). . . . . . . . . . . . . . . . . . . . . . . .A-3

6 Cir. R. 30(f). . . . . . . . . . . . . . . . . . . . . . . .A-4

6 Cir. R. 34(a). . . . . . . . . . . . . . . . . . . . . . . . .1

6 Cir. R. 34(j)(2)(C). . . . . . . . . . . . . . . . . . . . . .1

TABLE OF AUTHORITIES (con't)
Page

Administrative Guidance

EEOC Compl. Man., Section 8: Retaliation (1998),
(available at http://www.eeoc.gov/policy/docs/retal.html) . .18-20

EEOC Notice 915.001: EEOC Enforcement Guidance on
Non-Waivable Rights under EEOC Enforced Statutes (1997),
(available at http://www.eeoc.gov/policy/docs/waiver.html)
. . . . . . . . . . . . . . . . . . . . . . . . . . . 20-21, 41-42

Miscellaneous

B. Lindemann & P. Grossman, Employment Discrimination
Law (3d ed. 1996) . . . . . . . . . . . . . . . . . . . . . . 41

STATEMENT IN SUPPORT OF ORAL ARGUMENT

This appeal requires this Court to interpret and apply the anti-retaliation
provisions of the four principal federal employment discrimination
laws – the Equal
Pay Act of 1963 (the "EPA"), 29 U.S.C. § 206(d), Title VII of the
Civil Rights Act
of 1964 ("Title VII"), 42 U.S.C. §§ 2000e et seq., the Age Discrimination in
Employment Act of 1967 (the "ADEA"), 29 U.S.C. §§ 621 et seq., and the Americans
with Disabilities Act of 1990 (the "ADA"), 42 U.S.C. §§ 12101 et seq.
This appeal
requires this Court to decide whether an employer retaliates in
violation of these laws
if the employer refuses to pay its employees severance benefits unless
the employees
agree to waive their right to file a charge with the EEOC and/or to
participate in
EEOC proceedings. This appeal also requires this Court to decide
whether the district
court appropriately exercised its broad discretion to award equitable
relief necessary
to eradicate the effects of illegal discrimination. Due to the
importance of these
issues, plaintiff-appellee Equal Employment Opportunity Commission believes oral
argument would significantly aid this Court's decisional process. See
Fed. R. App.
P. 34(a)(2)(C); 6 Cir. R. 34(j)(2)(C). The EEOC thus asks this Court
to grant oral
argument in this matter. See 6 Cir. R. 34(a).

STATEMENT ON JURISDICTION

The EEOC filed this lawsuit against SunDance Rehabilitation Corporation
under the four main federal employment discrimination laws. (R.1<1>,
Complaint pgs.1-
3, Apx<2>.__.) The district court thus had jurisdiction over the
EEOC's suit under 28
U.S.C. §§ 1331, 1337, 1343, and 1345. The district court entered
final judgment in
favor of the EEOC on July 26, 2004. (R.44, Judgment Entry Order, Apx.__.)
SunDance filed a timely notice of appeal on September 23, 2004.
(R.46, Notice of
Appeal, Apx.__.) See Fed. R. App. P. 4(a)(1)(B). This Court has appellate
jurisdiction under 28 U.S.C. § 1291.

STATEMENT OF THE ISSUES

• Whether the district court correctly ruled that portions of SunDance's
severance agreement violate the anti-retaliation provisions of
the EPA, Title
VII, the ADEA, and the ADA.
• Whether the district court's order should be affirmed as an
appropriate exercise
of the district court's discretion to award equitable relief
required to remedy
illegal discrimination.

STATEMENT OF THE CASE

A. The Nature of the Case and the Course of Proceedings
The EEOC filed this lawsuit on August 1, 2001, alleging that SunDance's use
of a "Severance Agreement and General Release" – conditioning severance benefits
on the waiver of the right to engage in statutorily-protected EEOC-related
administrative activity – violated the anti-retaliation provisions of
the four principal
federal employment discrimination laws. (R.1, Complaint, Apx.___.)
According to
the Commission's Complaint, "[s]ince at least March 5, 1999, Defendant SunDance
has engaged in continuing unlawful employment practices at its North Olmstead,
Ohio, facility" including "retaliating against individuals affected by
its [severance
agreement] . . . because of their right to file a charge with the EEOC
or participate in
an EEOC investigation or proceeding." (R.1, Complaint pgs.4, 5, 6 ¶¶
11, 14, 16, 18,
Apx. .) Accordingly, the EEOC sought an order providing injunctive and
affirmative relief, including (1) reforming the relevant severance agreement to
expressly permit employees to file charges with the EEOC and participate in EEOC
investigations or proceedings without losing their severance pay; (2)
paying charging
party Elizabeth Salsbury and similarly situated individuals severance
pay; and (3)
instituting further measures to remove barriers to employees who wish
to file a charge
with the EEOC or participate in an EEOC investigation or proceeding. (R.1,
Complaint pg.6 Prayer for Relief ¶ D, Apx. ). The EEOC also sought an order
requiring SunDance to deliver a corrective notice to former employees
and tolling all
limitations periods for filing charges or claims. (R.1, Complaint
pg.6 Prayer for
Relief ¶ D, Apx. .)
Both sides moved for summary judgment. (R.24, SunDance's Motion for SJ);
(R.33, EEOC's Cross Motion for SJ.) A Magistrate Judge recommended that the
EEOC's motion for summary judgment be denied and that SunDance's motion for
summary judgment be granted. (R.39, Magistrate Judge's Report and
Recommendation ("R&R", Apx. .) The EEOC filed objections to the Magistrate
Judge's R&R. (R.41, EEOC's Objections to R&R, Apx. .) On July 26, 2004, the
district court rejected the Magistrate Judge's R&R, denied SunDance's motion for
summary judgment, and granted the EEOC's motion for summary judgment. (R.43,
Memorandum of Opinion and Order Denying SunDance's Motion for SJ and
Granting EEOC's Motion for SJ (the "O&"O), Apx. .) The district court
simultaneously entered judgment for the EEOC. (R.44, Judgment Entry
Order, Apx.
.) SunDance then appealed. (R.46, Notice of Appeal, Apx. .)

B. Statement of Facts
SunDance is a Connecticut corporation doing business in at least 35 states,
including Ohio. (R.7, Answer pg.2 ¶ 4). In and around the beginning of 1999,
SunDance terminated a multitude of employees as part of a company-wide
reduction-
in-force ("RIF"). (R.24, McNett Aff. pg.1 ¶ 2, Apx. ); (R.25, Smith Decl.
Docs.321-23, Apx. ); (R.25, Salsbury Decl. Ex.A-1 Doc.87, Apx. .)
SunDance offered severance benefits to all employees terminated
in the RIF.
(R.25, Smith Decl. Doc.321, Apx. .) However, SunDance's severance policy
explicitly states that SunDance's offer of severance does not apply to
employees who
"[h]ave not signed an approved Separation Agreement and General Release" (the
"Release") (R.25, Smith Decl. Doc.321, Apx. ); (R.25, Smith Decl.
Doc.322, Apx.
.) The Release included the following language:

Severance Pay: . . . . Releasor promises . . . not to make any statements
or take any actions that would reflect negatively upon [SunDance].
Failure of the Releasor to comply with this agreement will result in the
immediate repayment by Releasor of the total severance amount to
[SunDance].

General Release: In consideration of the payment made to Releasor by
[SunDance], Releasor . . . does hereby voluntarily and knowingly
release [SunDance] . . . from any and all claims . . . arising before the
execution of this Release . . . . This . . . includes but is not
limited to any
claims which Releasor may have . . . under federal or state law
prohibiting employment discrimination . . . including without limitation
[Title VII and the ADA] . . . . Releasor . . . expressly agrees
that she will
not . . . pursue any proceeding, action, complaint, claim, charge, or
grievance against [SunDance] . . . in any administrative, judicial or
other forum whatsoever . . . .

Return of Severance Pay: . . . [If] this Agreement [is] violated, Releasor
agrees that [SunDance] shall have the right to . . . injunctive relief and
damages . . . including the right to the return of the entire amount of the
consideration paid by [SunDance] under this Agreement, plus any other
damages proven, including reasonable attorneys' fees and costs.
Releasor further expressly agrees that if any portion of this Agreement
and the Release incorporated herein is ruled to be unenforceable as the
result of a challenge brought by the Releasor to the Agreement's or
release's validity, then Releasor shall return to the Company the entire
amount of consideration paid hereunder. . . .

Confidentiality: Releasor agrees to hold strictly in confidence the
terms, amount, and fact of this Release. Releasor will not disclose any
such information, orally or in writing, to anyone else . . . .

(R.25, Salsbury Decl. Ex.A-1 Docs.90-93, Apx. (emphasis added).)
Elizabeth Salsbury, who worked in SunDance's North Olmstead, Ohio office
as a speech-language pathologist, was discharged on March 1, 1999, in
conjunction
with SunDance's company-wide RIF. (R.24, McNett Aff. pg.1 ¶ 3, Apx.
); (R.25,
Salsbury Decl. pgs.1-2 ¶¶ 1, 2, Apx. ); (R.25, Salsbury Decl.
Ex.A-1 Doc.87, Apx.
.) Under SunDance's severance policy, Salsbury was entitled to 80 hours of
severance pay. (R.25, Salsbury Decl. Ex.A-1 Doc.87, Apx. ); (R.25,
Smith Decl.
Doc.323, Apx. .) SunDance required Salsbury to sign the Release to get this
benefit. (R.25, Salsbury Decl. pg.2 ¶ 3, Apx. ); (R.25, Salsbury
Decl. Ex.A-1
Doc.87, Apx. (". . . [Y]ou will receive 80 hours of severance pay
. . . after you sign
a Separation Agreement and General release . . .")); (R.25, Salsbury
Decl. Ex.A-1
Doc.88, Apx. ); (R.25, Salsbury Decl. Ex.A-1 Doc.90, Apx. .)
Salsbury believed that SunDance discriminated against her on the
basis of her
sex by denying her a promotion in 1998 and then including her in the
RIF in 1999.
(R.25, Salsbury Decl. pg.2 ¶ 5, Apx. ); (R.25, Salsbury Decl.
Ex.A-2 Charge of
Discrimination, Apx. .) She thus wanted to file a charge of sex
discrimination
against SunDance with the EEOC. (R.25, Salsbury Decl. pg.2 ¶ 5, Apx.
.) Because
the Release would prohibit Salsbury from reporting this alleged
discrimination to the
EEOC – and would subject her to a suit by SunDance to reclaim the severance
benefits and for lawyers' fees and costs if she did file an EEOC
charge – Salsbury
believed she could not sign the Release. (R.25, Salsbury Decl. pg.2
¶¶ 5, 6, Apx. .)
Salsbury inquired of SunDance's Human Resources department whether she
could strike out the part of the Release prohibiting her from filing a
charge with the
EEOC. (R.25, Salsbury Decl. pg.2 ¶ 7, Apx. .) A SunDance representative
informed Salsbury she could not alter the agreement, and told her that most
terminated employees simply signed the Release to get their severance payment.
(R.25, Salsbury Decl. pgs.2-3 ¶ 7, Apx. .) Salsbury decided not to
sign. (R.25,
Salsbury Decl. pg.3 ¶ 8, Apx. .) Instead, on April 20, 1999, she
filed a charge of
sex discrimination with the EEOC challenging SunDance's failure to
promote her and
its decision to discharge her. (Id.); (R.25, Salsbury Decl. Ex.A-2 Charge of
Discrimination, Apx. .) Salsbury's charge also stated:

I was . . . asked to sign a separation agreement, general release and
covenant not to sue agreement in order to get a lump sum payment of 80
hours. I did not sign this release because I believe it violates the Laws
administered by the EEOC.

(R.25, Salsbury Decl. Ex.A-2 Charge of Discrimination, Apx. .)

In a Determination Letter dated September 30, 1999, the Commission found
that there was not reasonable cause to believe that SunDance had
refused to promote
and/or had terminated Salsbury because of her sex. (R.24, McNett Aff. Ex.A-3
Doc.12, Apx. .) However, the EEOC did find that the Release "may produce a
chilling effect, thereby undermining the Commission's ability to
enforce the ADEA,
Title VII, the EPA and the ADA," and that parts of the Release "may
intimidate or
have the effect of intimidating employees and create disincentives for them to
cooperate with EEOC in safeguarding the public interest." (R.24,
McNett Aff. Ex.A-
3 Doc.13, Apx. .) The EEOC thus concluded there was reasonable
cause to believe
that by asking Salsbury to sign the Release, SunDance violated the
anti-retaliation
provisions of the EPA, Title VII, the ADEA, and the ADA. (Id.)

C. The District Court's Decision
In its decision granting the EEOC's motion for summary judgment,
the district
court noted that the EEOC "is responsible for bringing actions for the
public good,
such as the one in this case, on behalf of a group of people subject
to a retaliatory
policy." (R.43, O&O pg.22, Apx. .) The district court recognized
that "the thrust
of the EEOC's argument is that the SunDance Separation Agreement is facially
retaliatory" – that is, that it is a per se violation of the
anti-retaliation provisions of
the EPA, Title VII, the ADEA, and the ADA. (R.43, O&O pgs.8, 10, 11,
12, 17, 18,
23, Apx. .) The district court then explained that the gist of
this "facial retaliation
claim is that even before either party takes any action (engaging in
protected activity
or adverse employment action), the policy by its terms authorizes the
employer to
take adverse employment action once an employee does engage in some protected
activity." (R.43, O&O pg.17 n.8, Apx. .)
Here, the district court pointed out, the Release allows SunDance to seek
injunctive relief and damages – including the return of the severance
payment – if
signing employees violate the terms of the Release by filing a charge
with the EEOC.
(R.43, O&O pg.18, Apx. .) The district court concluded, relying
primarily on EEOC
v. Board of Governors of State Colleges & Universities, 957 F.2d 424
(7th Cir. 1992),
that this was a classic case of a per se retaliatory employment
practice. (R.43, O&O
pg.19, Apx. .) According to the district court, "when an employer
requires an
employee as part of a separation agreement to give up her right to
file a charge with
the EEOC in exchange for severance benefits, the employer violates the anti-
retaliation provisions of the laws enforced by the EEOC." (R.43, O&O
pg.20, Apx.
.) The District Court held that "the provision of the SunDance Separation
Agreement conditioning severance payments on an employee agreeing not to file a
charge with the EEOC is facially retaliatory in violation of the ADA, ADEA, EPA,
and Title VII.<4>" (R.43, O&O pgs.19, 20 Apx. .)
Accordingly, the district court ordered relief for Salsbury and
other "similarly
situated" individuals. The relief the district court ordered was
essentially the same
as the relief the EEOC requested in its Complaint. The district court
ordered that
SunDance:
• is "permanently enjoined from engaging in the institution, maintenance
and/or management of the portion of the April 1999 SunDance
Separation Agreement, or any other similar plan, requiring all
employees and former employees to waive their right to file a charge
with the EEOC or participate in an EEOC investigation or proceeding"
(R.43, O&O pg.23, Apx. ); (R.44, Judgment Entry Order pg.1, Apx.
);
• is "permanently enjoined from retaliating because of an employee or
former employee's right to file a charge with the EEOC or
participate in
an EEOC investigation or proceeding" (R.43, O&O pg.23, Apx. );
(R.44, Judgment Entry Order pg.2, Apx. );
• must "institute and carry out policies, practices and programs which
provide equal employment opportunities for employees who wish to file
charges with the EEOC or participate in an EEOC investigation or
proceeding" (R.43, O&O pg.23-24, Apx. ); (R.44, Judgment Entry
Order pg.2, Apx. );
• must "make whole [Salsbury] and other similarly situated employees"
and "reform the April 1999 SunDance Separation Agreement to
expressly permit all employees and former employees to file charges
with the EEOC and participate in EEOC investigations or proceedings
without losing their severance pay" (R.43, O&O pg.24, Apx.
); (R.44,
Judgment Entry Order pg.2, Apx. );
• must "pay to [Salsbury] and other similarly situated employees any and
all withheld severance pay with prejudgment interest" (R.43, O&O
pg.24, Apx. ); (R.44, Judgment Entry Order pg.2, Apx. ); and
• must "deliver a corrective notice with a reformed [Release]
to [Salsbury]
and similarly situated employees." (R.43, O&O pg.24, Apx.
); (R.44,
Judgment Entry Order pg.2, Apx. .)
The District Court further ordered that "[a]ll limitations
periods for filing a
charge or claim are tolled and will run anew from the date of actual
delivery of the
reformed notice." (R.43, O&O pg.24, Apx. ); (R.44, Judgment Entry
Order pg.2,
Apx. .) The District Court also ordered SunDance to pay the EEOC's
costs. (R.43,
O&O pg.24, Apx. ); (R.44, Judgment Entry Order pg.3, Apx. .)

SUMMARY OF ARGUMENT

The district court correctly concluded that SunDance's Release
constitutes a
per se violation of the anti-retaliation rules found in all four
federal employment
discrimination laws. The primary purpose for these anti-retaliation rules is to
preserve, for victims of and witnesses to discrimination, "unfettered access to
statutory remedial mechanisms." Robinson v. Shell Oil Co., 519 U.S.
337 (1997).
These anti-retaliation provisions thus prohibit employers from taking
adverse actions
against employees or former employees who oppose unlawful discrimination or
participate in EEOC proceedings (e.g., file an EEOC charge or testify in an EEOC
investigation). The district court correctly ruled that the Release
in this case, like the
practice at issue in EEOC v. Board of Governors of State Colleges &
Universities,
957 F.2d 424 (7th Cir. 1992), embodies an employer policy which
conditions benefits
on the waiver of the right to engage in these statutorily-protected
activities, and as
such is per se retaliatory and constitutes a facial violation of all
four federal anti-
discrimination laws.
On its face, SunDance's Release is a preemptive strike against
future protected
activity. By design, it seeks to prevent discharged employees from ever filing
charges with the EEOC and participating in any EEOC proceeding. Under the
Release, SunDance refuses to pay severance benefits unless and until putative
recipients relinquish their right to oppose unlawful employment practices and
participate in administrative anti-discrimination proceedings (e.g.,
by filing charges
of discrimination with the EEOC). Under the Release, SunDance threatens
retribution – in the form of a lawsuit for return of severance and
additional damages,
attorneys' fees, and costs – should a signatory subsequently engage in
such protected
activity. SunDance is thus using the Release – the fear of economic
retaliation – to
chill discharged employees from reporting to the United States
government alleged
violations of the federal civil rights employment laws.
It is clear from the statutory language of the anti-retaliation
clauses, the
legislative purposes underlying these rules, and case law that this
type of preemptive
retaliatory policy is illegal. The only Circuit decision to address
this issue, the
Seventh Circuit's opinion in Board of Governors, held as much. SunDance's
attempts to distinguish Board of Governors are unconvincing. SunDance
argues, for
example, that Board of Governors is inapposite because it dealt with a
"bargain for
employment benefit – the right to file a grievance pursuant to a
collective bargaining
agreement." Yet the Supreme Court made clear in Hishon v. King & Spalding, 467
U.S. 69, 75 (1984), that the fact that SunDance was under no obligation to pay
severance at all does not free it to do so on a discriminatory basis.
SunDance also
claims that Board of Governors was a classic "retaliation" case – not
what SunDance
calls a "pretaliation" case. This misreads Board of Governors. The
Seventh Circuit
there clearly was concerned with the very existence of a retaliatory
policy – not just
with how the policy was actually implemented in any particular case. Board of
Governors ruled that a policy that preemptively permits prospective punishment
violates, on its face, the anti-retaliation laws. The Release
contains such a policy.
SunDance is grasping at straws in arguing that the district court
erred because
the statutes make no mention of and do not define "per se" retaliation
or "facial"
violations. The plain text of the ADEA (at 29 U.S.C. § 626(f)(4)) and
the ADA (at
42 U.S.C. § 12203(b)) makes it illegal for employers to use a waiver
like the Release
to interfere with or threaten an employee's exercise or enjoyment of statutorily
protected rights, such as the right to file a charge and participate in EEOC
proceedings. SunDance ignores this statutory language. In insisting
that the statutes
must specifically provide for "per se" or "facial" retaliation,
SunDance also reads the
other anti-retaliation rules far too restrictively. Indeed, the word
"retaliation" does
not appear in the statutes, either. Moreover, the familiar concept of "facial"
discrimination is well established in fair employment jurisprudence.
See, e.g., Nev.
Dep't of Human Res. v. Hibbs, 538 U.S. 721, 732 (2003); Nguyen v. Cleveland, 229
F.3d 559, 563 (6th Cir. 2000). These terms embody a descriptive tool
helpful in the
identification of discriminatory conduct. The fact that these words
are not explicitly
referenced in statutory provisions is immaterial.
In short, given the plain language of the anti-retaliation
statutes, the legislative
purposes and public policy underlying these rules (the critical need
to ensure that
employees remain free to report unlawful employment practices to law enforcement
agencies), and the sound reasoning from Board of Governors, this Court
should find
that provisions of the Release here are illegal. It should therefore
affirm the district
court's grant of summary judgment.
This Court should also find that the district court's relief
order was not an
abuse of discretion. District courts have broad latitude to fashion appropriate
equitable relief to remedy discrimination. SunDance contends that
Salsbury waived
her right to file any lawsuit against SunDance, and that the district
court exceeded the
scope of its authority by tolling the statute of limitations for
"claims." However, the
district court never decided whether the Release constituted a valid
waiver of the right
to file all lawsuits against SunDance (only that the non-retaliatory
part of the Release
was enforceable to the extent permitted by law). That was never an
issue in this case
and can always be raised by SunDance later in a more appropriate forum – as a
defense to any signatory-initiated lawsuit. This Court should therefore decline
SunDance's invitation to reverse this part of the district court's
relief order tolling the
statute of limitations for "claims," and should instead affirm the
relief order in its
entirety.

ARGUMENT

A. Standard of Review

This Court reviews a district court's grant of a motion for
summary judgment
de novo. Clark v. United Parcel Serv., Inc., 400 F.3d 341, 347 (6th
Cir. 2005). In
conducting this review, this Court applies the same summary judgment
standard the
district court used. Minadeo v. ICI Paints, 398 F.3d 751, 756 (6th Cir. 2005).
Summary judgment is proper if the pleadings, depositions, answers to
interrogatories,
and affidavits (if any) show that there is no genuine issue as to any
material fact and
that the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(c);
see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
This Court reviews awards of injunctive relief in discrimination claims for
abuse of discretion. Barnes v. City of Cincinnati, 401 F.3d 729, 738
(6th Cir. 2005).

B. The District Court Correctly Held that SunDance Violated the
Anti-Retaliation Rules in the EPA, Title VII, the ADEA, and the ADA

The district court ruled that SunDance's Release on its face
violates the anti-
retaliation provisions of the EPA, Title VII, the ADEA, and the ADA.
In its opening
brief, SunDance argues that the EEOC is pushing a "novel theory" here – that the
EEOC is seeking "to secure the judicial creation of a new species of employment
discrimination for which there is no basis in existing federal employment
discrimination statutes." SunDance Brief at 5, 7, 10; see also Amici
Brief at 7.
Contrary to SunDance's claims, there is nothing new or novel about the
EEOC's legal
theory. More importantly, there is ample statutory and judicial
support for the district
court's ruling that portions of SunDance's Release constitute a
facially retaliatory
employment policy and are per se violations of the anti-retaliation
provisions of all
four employment discrimination statutes. Accordingly, the district
court's decision
invalidating parts of the Release should be affirmed.
The EPA, Title VII, the ADEA, and the ADA all prohibit employers from
retaliating against an employee or former employee for engaging in protected
activity<5>. Such protected activity includes filing a charge,
testifying, assisting, or
participating in any manner in any EEOC investigation, proceeding, or
hearing under
one of the four principal employment discrimination statutes
("participation"). See
29 U.S.C. § 215(a)(3) (EPA); 42 U.S.C. § 2000e-3(a) (Title VII); 29 U.S.C.
§§ 623(d), 626(f)(4) (ADEA); 42 U.S.C. §§ 12203(a), (b) (ADA); see
also Abbott v.
Crown Motor Co., Inc., 348 F.3d 537, 542-43 (6th Cir. 2003) (analyzing the
protections for "participation"); EEOC Compl. Man., Section 8:
Retaliation at 8-1
§ 8-I(A) (1998) (available at http://www.eeoc.gov/policy/docs/retal.html) ("EEOC
Compl. Man.") (same). Protected activity also includes opposing a practice made
unlawful under these laws ("opposition"). See 29 U.S.C. § 215(a)(3)
(EPA)<6>; 42
U.S.C. § 2000e-3(a) (Title VII); 29 U.S.C. §§ 623(d), 626(f)(4)
(ADEA); 42 U.S.C.
§§ 12203(a), (b); see also Johnson v. Univ. of Cincinnati, 215 F.3d
561, 579-80 (6th
Cir. 2000) (discussing the protections for "opposition") (same); EEOC
Compl. Man.
at 8-1 § 8-I(A) (same).
In Robinson v. Shell Oil Co., 519 U.S. 337 (1997), the Supreme Court
explained that a "primary purpose" for these anti-retaliation protections is
"[m]aintaining unfettered access to statutory remedial mechanisms."
Id. at 346.
Similarly, this Court, in EEOC v. Ohio Edison Co., 7 F.3d 541 (6th Cir. 1993),
recognized that in enacting these provisions, "Congress unmistakably intended to
ensure that no person would be deterred from exercising his rights under
[employment discrimination laws] by the threat of discriminatory
retaliation." Id. at
543. According to this Court, the rationale for the anti-retaliation
rules is to prevent
"fear of economic retaliation from inducing employees quietly to
accept [unlawful]
conditions" – and to ensure that "all persons with information about
unfair labor
practices [remain] completely free from coercion against reporting
them." Id. at 544,
545 (internal citations and quotations omitted). As the EEOC's
compliance manual
explains:
Voluntary compliance with and effective enforcement of the anti-
discrimination statutes depend in large part on the initiative of
individuals to oppose employment practices that they reasonably believe
to be unlawful, and to file charges of discrimination. If retaliation for
such activities were permitted to go unremedied, it would have a chilling
effect upon the willingness of individuals to speak out against
employment discrimination or to participate in the EEOC's
administrative process or other employment discrimination proceedings.

EEOC Compl. Man. at 8-1 – 8-2 § 8-I(A).
Given this reasoning, the EEOC has long taken the position that employer
policies that purport to restrict the protected activity of employees or former
employees are a per se violation of the anti-retaliation rules found
in all four principal
federal employment discrimination laws. According to the EEOC's 1997 guidance
on this issue:
Some employers attempt to limit an individual's right to file a charge or
participate in an EEOC proceeding by requiring him or her to sign an
agreement in which s/he relinquishes these statutory rights . . . .
Notwithstanding the format or context of the agreement in which such
language might appear . . . [a]greements extracting such promises from
employees . . . amount to separate and discrete violations of the anti-
retaliation provisions of the civil rights statutes . . . .
Agreements that
attempt to bar individuals from filing a charge or assisting in a
Commission investigation run afoul of the anti-retaliation provisions
because they impose a penalty upon those who are entitled to engage in
protected activity under one or more of the statutes enforced by the
Commission. By their very existence, such agreements have a chilling
effect on the willingness and ability of individuals to come forward with
information that may be of critical import to the Commission as it seeks
to advance the public interest in the elimination of unlawful
employment discrimination.

EEOC Notice 915.001: EEOC Enforcement Guidance on Non-Waivable Employee
Rights under EEOC Enforced Statutes at §§ II, III(B) (1997) (available at
http://www.eeoc.gov/policy/docs/waiver.html) ("EEOC's Enforcement Guidance")
(emphasis added)<7>.
The only Circuit court squarely to address this issue recognizes
the illegality
of such preemptive retaliation. In EEOC v. Board of Governors of
State Colleges &
Universities, 957 F.2d 424 (7th Cir. 1992), a collective bargaining
agreement denied
the right to grievance proceedings to any employee who also sought
redress for the
relevant wrong in a different forum – such as by filing an EEOC
charge. The EEOC
argued that this agreement, on its face, violated the ADEA's
anti-retaliation clause.
The Seventh Circuit agreed, reasoning that this policy allowed the
employer to take
an adverse action (terminating or withholding grievance proceedings) precisely
because an employee engaged in protected activity (filing a charge). Such an
anticipatory policy, the Seventh Circuit ruled, was facially
retaliatory and thus
violated the ADEA's anti-retaliation clause. Id. at 431; see also
EEOC v. U.S. Steel
Corp., 671 F. Supp. 351, 358-59 (W.D. Pa. 1987), rev'd on other
grounds, 921 F.2d
489 (3d. Cir. 1990) (similarly finding that a policy premising the provision of
enhanced retirement benefits on an employee's waiver of the right to
file an EEOC
charge and to participate in an EEOC proceeding is a per se violation
of the ADEA's
anti-retaliation rule; stating that "[t]he mere possibility that this
[condition] would
deter individuals from participating in any ADEA claims is sufficient
to render it
violative of [the ADEA's anti-retaliation clause] and public policy").
The district court in this case correctly found that the Seventh Circuit's
reasoning was persuasive and wholly applicable here, and that SunDance's Release
is the same sort of retaliatory employment policy invalidated by Board
of Governors.
The Release is a preemptive strike against participation in the
charge-filing process
and other law enforcement efforts designed to combat unlawful
discrimination. On
its face, it seeks to chill discharged employees from filing EEOC
charges and from
testifying, assisting, or participating in any manner in any EEOC-related
investigation, proceeding, or hearing. The Release prohibits – on
pain of suit for
return of severance, damages, attorneys' fees, and costs – (1) "mak[ing] any
statements or tak[ing] any actions that would reflect negatively upon
[SunDance]";
(2) "pursu[ing] any proceeding, action, complaint, claim, charge, or
grievance against
[SunDance] in any administrative, judicial or other forum" with
respect to "any acts
or events . . . in the course of Releasor's dealings with [SunDance]"; and (3)
disclosing "to anyone" anything about the "terms, amount, and fact" of
the Release.
SunDance thus effectively uses the fear of economic retaliation to coerce
former employees into relinquishing their statutorily-protected rights
to report and
assist in the investigation of unlawful employment practices.
SunDance refuses to
provide a substantial economic benefit (to which all discharged employees are
otherwise entitled) unless discharged employees sign away their right to file an
EEOC charge and participate in EEOC proceedings. SunDance also threatens
economic retribution against signatories who do engage in protected
opposition or
participation. For this reason, the district court correctly
concluded that the contested
portions of SunDance's Release are per se retaliatory and unenforceable. (R.43,
O&O pg.20, Apx. ("Board of Governors makes clear that a policy
conditioning an
employment benefit on an employee's agreement not to file an EEOC charge
constitutes facial retaliation" and "this [c]ourt [therefore] holds
that the provision of
the SunDance Separation Agreement conditioning severance payments on an
employee agreeing not to file a charge with the EEOC is facially retaliatory in
violation of the ADA, ADEA, EPA, and Title VII").
SunDance asserts that the EEOC is pursuing a "new statutorily unsupportable
retaliation theory," and that there can be no such thing as per se
retaliation or a
facially retaliatory employment policy. SunDance Brief at 5, 7, 8;
see also Amici
Brief at 7, 13, 14. SunDance criticizes what it calls "pretaliation"
– "retaliation that
occurs even before the exercise of protected employee conduct." Id.;
see also Amici
Brief at 7, 14, 15. SunDance claims Board of Governors is inapposite. And
SunDance contends that "if Congress had intended to proscribe [this] form of
unlawful employment practice, it would have done so . . . ." Id. at
12. SunDance is
wrong on all counts.
Contrary to SunDance's contentions, there is nothing new or novel about the
EEOC's legal theory here. In 1992 in Board of Governors, the Seventh Circuit
explicitly adopted the EEOC's approach and ruled that an employment policy can
indeed be per se retaliatory; see also U.S. Steel Corp., 671 F. Supp. at 358-59
(holding the same as far back as 1987). Moreover, SunDance's attempt
to distinguish
Board of Governors is unconvincing.
SunDance alleges that Board of Governors is different because it "addresses
a bargained for employment benefit – the right to file a grievance
pursuant to the
employee's collective bargaining agreement." SunDance Brief at 18. Here by
contrast, SunDance claims, "[s]everance pay was not an earned, accrued
or legally-
required benefit of employment, but rather a voluntary offering that
was entirely
conditional upon her assenting to the Separation Agreement." Id.; see
also Amici
Brief at 8, 16, 18. SunDance thus seems to be saying that because
SunDance did not
have to offer Salsbury severance in the first place, it could premise
the provision of
this payment on any illegal condition it wanted to impose.
The Supreme Court has explicitly rejected this view. In Hishon v. King &
Spalding, 467 U.S. 69 (1984), the Supreme Court held that "[a] benefit
that is part
and parcel of the employment relationship may not be doled out in a
discriminatory
fashion, even if the employer would be free . . . not to provide the
benefit at all." Id.
at 75. In Board of Governors itself, the Seventh Circuit applied this
Hishon rule and
stated that even though the defendant "would be free not to provide grievance
proceedings, the [ADEA's anti-retaliation rule] prohibits the employer from
providing grievance proceedings only if an employee refrains from
participating in
activity that is protected under the ADEA." Board of Governors, 957
F.2d at 430.
Thus, it is clearly established that even though SunDance did not have to offer
severance benefits to Salsbury or anyone else, once it decided to provide these
payments to all employees terminated in the RIF (i.e., once this
benefit became "part
and parcel of the employment relationship [albeit one that was
ending]"), SunDance
was bound to distribute this benefit in a non-retaliatory manner.
SunDance's attempt
to distinguish Board of Governors on this basis is thus unpersuasive
and unavailing.
The district court here specifically and appropriately found as much.
(R.43, O&O
pg.19, Apx. (noting that "SunDance ignores the portion of the
Board of Governors
opinion specifically recognizing that . . .the employer . . . could
not administer the
benefit in a discriminatory way" and providing that even though
"SunDance did not
have to offer its terminated employees severance packages, once it
decided to do so,
it could not do so in a retaliatory manner"). The district court's
conclusion on this
point should be affirmed.
SunDance also attempts to distinguish Board of Governors by noting that in
that case, "the retaliation contemplated by the statute (there the
ADEA) actually
materialized." SunDance Brief at 18. According to SunDance, Board of Governors
found that the defendant had violated the ADEA's anti-retaliation provision only
because an employee actually filed a charge and the defendant then actually
terminated grievance proceedings. Id. at 18-19. That is, SunDance
alleges, "Board
of Governors [was] a retaliation case – rather than a 'pretaliation'
case" – and it thus
"offers no support at all to the EEOC's position or the District
Court's decision"
finding facial retaliation. Id. at 19; see also Amici Brief at 7, 12,
14, 15. SunDance
mischaracterizes Board of Governors<8>.

Even a cursory reading of Board of Governors reveals that the
Seventh Circuit
was concerned with the very existence of a retaliatory policy – not
merely with how
or whether the policy was actually implemented in any specific
instance. See Board
of Governors, 957 F.2d at 427 (emphasis added) (noting it was resolving a
"retaliatory policy case[]"); id. at 429 (emphasis added) (stating
"this case . . .
concerns a discriminatory policy"); id. at 430 (emphasis added) (reviewing "the
policy's legality"); id. (emphasis added) (analyzing whether the
relevant provision
of the "collective bargaining agreement is a retaliatory policy"). The Board of
Governors court examined whether the policy in question had a potential and
prospective chilling effect. See id. at 427 n.2 (emphasis added)
(subjecting the
questionable collective bargaining provision to "judicial scrutiny" in
part because
"the Board has not modified the policy to exclude future ADEA
claimants"); id. at
430 (emphasis added) (expressing concern because the challenged policy
"authorizes
the Board to take an adverse employment action (termination of the in-house
grievance proceeding) for the sole reason that the employee has
engaged in protected
activity (filing an ADEA claim)"); id. at 431 (emphasis added)
(scrutinizing whether
employee rights "would be . . . effectively stifled" and whether
employees "would
lose their right to grievance proceedings because they had filed ADEA
claims"). The
Seventh Circuit plainly held (and repeatedly emphasized throughout its
opinion) that
any such policy that preemptively permits prospective punishment – without more
– – violates, on its face, the anti-retaliation laws. See id. at 429
(". . . a retaliatory
policy constitutes a per se violation of [the ADEA's anti-retaliation
clause]"); id. at
430 (". . . the Board adopted a policy which impermissibly discriminates against
employees who file ADEA complaints"); id. (". . . if [the collective
bargaining clause]
authorized the Board to terminate grievance proceedings if and only if
an employee
filed an ADEA claim with the EEOC, that policy would be clearly discriminatory
under [the ADEA's anti-retaliation rule]"); see also U.S. Steel Corp.,
671 F. Supp. at
358-59 (emphasis added) (similarly invalidating an employment policy
conditioning
enhanced retirement benefits on a prospective waiver of statutory
rights because,
under this policy, an "individual might be deterred" and the policy
"has the potential
of deterring" protected opposition or participation; ruling that the
"mere possibility
that this [policy] would deter individuals from participating in any
ADEA claims"
rendered it invalid under the ADEA's anti-retaliation rule)<9>.
The district court in this case accurately interpreted and applied Board of
Governors. The district court pointed out, appropriately, that the
holding in Board
of Governors "is not based on the adverse action actually taken by the
employer."
(R.43, O&O pgs.19-20, Apx. .) Rather, the district court
recognized, "the court
held the policy was, on its face, impermissibly retaliatory." (R.43,
O&O pg.20, Apx.
.) SunDance ignores this important aspect of the Board of Governors
decision and
thus criticizes the district court for relying on that case.
SunDance also criticizes the district court for concluding that parts of
SunDance's Release are "facially retaliatory" even though this term is
"not defined
nor even mentioned in the applicable statutes." SunDance Brief at 13, 14-15.
SunDance suggests that the anti-retaliation clauses are devoid of any
"per se" policy
language, and that Congress would have explicitly provided for the terms "facial
retaliation" in the relevant statutory texts if it had intended to
prohibit such an
employment practice. Id. at 12. SunDance argues that the district
court's ruling is
therefore "contrary to well-settled maxims of statutory
interpretation, and should be
vacated, as it has no textual basis." Id. This is simply not true.
The text of the
relevant statutes themselves – as well as an abundance of decisional
law – compel a
different conclusion.
The ADA expressly provides that "[i]t shall be unlawful to
coerce, intimidate,
threaten, or interfere with any individual in the exercise or
enjoyment of, or on
account of his or her having exercised or enjoyed, or on account of
his or her having
aided or encouraged any other individual in the exercise or enjoyment
of, any right
granted or protected [under the ADA]." 42 U.S.C. § 12203(b) (emphasis
added); see
also 29 C.F.R. § 1630.12(b) (same). This sweeping statute, on its
face, makes it
illegal for SunDance to "coerce," "intimidate," "threaten" or
"interfere" – in the past,
currently, or prospectively – with respect to an employee's right to
oppose unlawful
practices or participate in statutory proceedings. By its plain
terms, this provision
manifests an intent to protect individuals from threatening or
coercive conduct that
might tend to interfere with the exercise of rights established under the ADA.
Notably, this ADA provision parallels the "interference"
provisions in other
federal statutes. For example, the National Labor Relations Act
("NLRA") contains
a provision making it unlawful for an employer "to interfere with,
restrain, or coerce
employees in the exercise of the rights guaranteed by [the Act]." 29 U.S.C.
§ 158(a)(1). This provision has been consistently interpreted as
applying to any
conduct that "tends to chill an employee's freedom to exercise his
[statutory] rights."
Cal. Acrylic Indus., Inc. v. NLRB, 150 F.3d 1095, 1099 (9th Cir.
1998). This Court
has held that this "interference" provision is violated if the
employer's action, when
viewed from the employee's point of view, has "a reasonable tendency
to coerce."
Dayton Newspapers, Inc. v. NLRB, 402 F.3d 651, 659 (6th Cir. 2005);
see also Tasty
Baking Co. v. NLRB, 254 F.3d 114, 124 (D.C. Cir. 2001) (employer's statement
violates the NLRA's "interference" provision if "considering the totality of the
circumstances, the statement has a reasonable tendency to coerce or
interfere with
[statutory] rights"). In particular, the provision reaches mere
threats to take adverse
actions against employees for the exercise of their statutory rights. Dayton
Newspapers, 402 F.3d at 659 ("[Threatening employees with . . . adverse
consequences . . . are well-established violations"); see also Tasty
Baking Co., 254
F.3d at 124-25 (threats to take reprisals against employees who
participated in union
activities); NLRB v. Gissel Packing Co., 395 U.S. 575, 616-20 (1969)
(threat to shut
down plant if employees form a union); NLRB v. Coca-Cola Co. Foods
Div., 670 F.2d
84, 85-86 (7th Cir. 1982) (threat to "come after" employee if he discussed his
grievance with other employees). Likewise, the Family and Medical Leave Act
("FMLA") contains a provision making it unlawful for an employer to
"interfere with,
restrain, or deny the exercise of or the attempt to exercise, any
right provided" by the
Act. 29 U.S.C. § 2615(a)(1). That provision has also been read to
apply to conduct
that "'tends to chill' an employee's willingness to exercise" statutory rights.
Bachelder v. America West Airlines, Inc., 259 F.3d 1112, 1124 (9th Cir. 2001).
Given the similarity in the language of the "interference"
provisions of these
statutes and the language of the ADA's "interference" provision, there
is every reason
to believe that Congress intended the same broad protection to apply under the
ADA's "interference" provision. See generally Northcross v. Bd. of Educ. of
Memphis City Schs., 412 U.S. 427, 428 (1973) (similarity of statutory
language is
strong indication that statutes should be interpreted in the same
manner). Indeed, the
ADA's legislative history indicates that Congress was well aware of the existing
standards under similar "interference" provisions and intended the
"interference"
provision to be applied in accordance with those standards. The issue
is explicitly
addressed in a Committee Report, which states that the "interference" provision
should be interpreted in accordance with the regulatory interpretation
"given by the
Department of Housing and Urban Development to a similar provision in the Fair
Housing Act." H.R. Rep. No. 485(II), 101st Cong., 2d Sess. 138
(1990), reprinted in
1990 U.S.C.C.A.N. 303, 421. Like the ADA, the Fair Housing Act ("FHA") makes
it unlawful "to coerce, intimidate, threaten, or interfere with any
person in the
exercise or enjoyment of, or on account of his having exercised or
enjoyed, . . . any
right granted or protected by [the Act]." 42 U.S.C. § 3617. The implementing
regulation referenced in the Committee Report defines unlawful conduct under the
FHA provision to include such things as "[t]hreatening an employee or agent with
dismissal or an adverse employment action," "[i]ntimidating or threatening any
person," and "[c]oercing a person, either orally or in writing, or by
other means." 24
C.F.R. § 100.400. This regulation, interpreting the almost identical
language of the
FHA's "interference" provision, reaches a broad range of threatening or coercive
conduct. The regulation comports with the broad interpretation that
this Court has
given to the FHA's "interference" provision. See, e.g., Mich. Prot. &
Advocacy Serv.,
Inc. v. Babin, 18 F.3d 337, 347 (6th Cir. 1994) (internal quotations
omitted) (holding
that the FHA's "interference" provision "has been broadly applied to reach all
practices which have the effect of interfering with the exercise of
rights under the
federal fair housing laws"). It is clear from the text and history of
the ADA that
Congress intended the ADA's "interference" provision to be similarly
broad in scope.
This Release obviously contravenes this ADA provision. It strong-arms
employees facing impending discharge into signing away their right to engage in
opposition and participation by offering a conditional substantial monetary
inducement at a time of certain economic hardship, and then promises
retribution if
signatories subsequently pursue protected activity. It also empowers
SunDance to
sue employees for a return of severance, damages, attorneys' fees, and
costs if a
signatory files an EEOC charge or participates in an EEOC proceeding.
By its very
terms, then – by explicit design – the Release "coerces,"
"intimidates," "threatens,"
and "interferes" with the exercise and enjoyment of employees'
protected statutory
rights. The Release is thus illegal under the plain language of the
ADA. See Brown
v. City of Tuscon, 336 F.3d 1181, 1193 (9th Cir. 2003) (providing that
42 U.S.C. §
12203(b) "clearly prohibits" an employer "from threatening an individual with
transfer, demotion, forced retirement unless the individual foregoes a
statutorily
protected [right]"); Lovejoy-Wilson v. NOCO Motor Fuel, Inc., 263 F.3d
208, 222-23
(2d Cir. 2001) (recognizing a potential cause of action under this ADA
anti-retaliation
rule if an employer threatens an employee for asking for a reasonable
accommodation); cf. Mondzelewski v. Pathmark Stores, Inc., 162 F.3d 778, 788-89
(3d Cir. 1998) (noting that this particular ADA provision "arguably sweeps more
broadly" than other relevant anti-retaliation clauses).
Similarly, the ADEA specifically provides that "[n]o waiver agreement may
affect the Commission's rights and responsibilities to enforce [the
ADEA]" and "[n]o
waiver may be used to justify interfering with the protected right of
an employee to
file a charge or participate in an investigation or proceeding conducted by the
Commission." 29 U.S.C. § 626(f)(4). The Commission's ADEA regulations
implementing this provision state that "[n]o waiver agreement may include any
provision imposing any condition precedent, any penalty, or any other limitation
adversely affecting any individual's right to . . . [f]ile a charge or
complaint,
including a challenge to the validity of the waiver agreement, with
EEOC, or . . .
[p]articipate in any investigation or proceeding conducted by EEOC." 29 C.F.R.
§ 1625.22(i)(3)<10>. SunDance's Release clearly violates these rules
by imposing a
condition precedent/penalty/limitation on protected rights (by
withholding severance
payment until the employee does sign, and by punishing signatories who
subsequently engage in protected activity by requiring them to return the entire
amount of the severance benefit and risk being sued for additional
damages, fees, and
costs). These rules should invalidate SunDance's retaliatory policy.
Cf. Wastak v.
Lehigh Valley Health Network, 342 F.3d 281, 290 (3d Cir. 2003)
(suggesting that this
"statutory language [i.e., 29 C.F.R. § 626(f)(4)] can be read to mean
. . . that any
attempt by an employer to enforce a contractual provision prohibiting
an employee
from filing a charge or participating in an EEOC investigation would
be ineffectual");
American Airlines, Inc. v. Cardoza-Rodriguez, 133 F.3d 111, 118 n.7
(1st Cir. 1998)
(indicating that waivers that do not comport with 29 U.S.C. § 626(f)(4) are
"deficient").
SunDance essentially ignores this ADEA and ADA statutory text.
In addition,
in insisting the relevant anti-retaliation rules must specifically
provide for "per se"
or "facial" retaliation, SunDance reads these protective provisions far too
restrictively. Courts routinely find that particular employment
policies are "facially"
discriminatory, notwithstanding that these descriptive terms do not
appear in the
relevant employment discrimination statutes. Indeed, the word
"retaliation" itself
does not appear in the EPA, Title VII, the ADEA, or the ADA. SunDance's
reasoning would create the absurd result that all four of these statutes permit
"retaliation." The case law – including Supreme Court jurisprudence –
is replete with
examples that demonstrate the fallacy of SunDance's reasoning. See,
e.g., Nev. Dep't
of Human Res. v. Hibbs, 538 U.S. 721, 732 (2003) (recognizing that "laws and
policies" can be "facially discriminatory"); Hazen Paper Co. v.
Biggins, 507 U.S.
604, 610 (1993) (explaining that employers will be liable for
discrimination if they
"relied upon a formal, facially discriminatory policy requiring
adverse treatment of
employees"); Int'l Union, UAW v. Johnson Controls, 499 U.S. 187, 198 (1991)
(holding that an employer's policy was "facially discriminatory");
Lorance v. AT&T
Techs., Inc., 490 U.S. 900, 912 (1989), superseded by statute on other
grounds (also
clearly recognizing "facially discriminatory" policies as actionable);
Conn. v. Teal,
457 U.S. 440, 455 (1982) (criticizing the application of a "facially
discriminatory"
policy); Everson v. Mich. Dep't of Corr., 391 F.3d 737, 747 (6th Cir.
2004) (noting
the defendant "concedes it has adopted a facially discriminatory
plan"); Nguyen v.
Cleveland, 229 F.3d 559, 563 (6th Cir. 2000) (explaining that "a facially
discriminatory employment policy . . . is direct evidence of
discriminatory intent");
EEOC v. Joe's Stone Crab, 220 F.3d 1263, 1282 (11th Cir. 2000) (finding hiring
practices to be "facially discriminatory"); Frank v. United Air Lines,
Inc., 216 F.3d
845, 854 (9th Cir. 2000) (concluding that an airline's weight policy
was "facially
discriminatory"); Healey v. Southwood Psychiatric Hosp., 78 F.3d 128,
131 (3d Cir.
1996) (holding that staffing practices were "facially
discriminatory"). Finding that
an employment practice is "facially discriminatory" and/or "per se
discrimination"
is clearly a routine analytical approach courts use to identify
actionable conduct.
Thus absence of the words "facially discriminatory" – or, in this case, "per se
retaliation" – in the relevant statutes is immaterial.
Given their critical role in "[m]aintaining unfettered access to statutory
remedial mechanisms," Robinson, 519 U.S. at 346, all prohibitions on illegal
retaliation must be construed to effectuate their remedial purpose.
As this Court in
Ohio Edison Co. ruled, "the antiretaliation provision of an employment
statute should
not be construed narrowly if it defeats the purpose of the statute."
Ohio Edison Co.,
7 F.3d at 545; see also id. at 544 (noting that "the majority of
courts, including the
Supreme Court, have been willing to construe Title VII and companion provisions
under the [EPA] and the [ADEA] broadly in order not to frustrate the
purpose of these
Acts"). Indeed, this Court pointed out:
Courts have routinely adopted interpretations of retaliation provisions
in employment statutes that might be viewed as outside the literal terms
of the statute in order to effectuate Congress's clear purpose in
proscribing retaliatory activity. Contrary to defendant's assertions,
courts have frequently applied the retaliation provisions of employment
statutes to matters not expressly covered by the literal terms of these
statutes where the policy behind the statute supports a non-exclusive
reading of the statutory language.

Id. at 545.
The rationale behind the anti-retaliation provisions –
safeguarding the public
interest by ensuring that individuals remain free to report suspected
discrimination
to the EEOC without fear of retribution – would certainly support
applying these anti-
retaliation rules to invalidate the offensive parts of the Release in
this case. Indeed,
given the critical public interest at stake, courts have routinely
concluded that waiver
provisions like the ones challenged here are void as against public
policy. See, e.g.,
U.S. Steel Corp., 671 F. Supp. at 358-59 (ruling that a policy
conditioning enhanced
retirement benefits on waivers of the right to file charges or
participate in EEOC
proceedings is per se retaliatory and violates public policy); accord
EEOC v. Frank's
Nursery & Crafts, Inc., 177 F.3d 448, 456 (6th Cir. 1999) ("[A]n
individual may not
contract away her right to file a charge with the EEOC, as such
contracts are void as
against public policy.").
The EEOC "is guided by the overriding public interest in equal employment
opportunity . . . asserted through direct Federal enforcement." Gen.
Tel. Co. of N.W.,
Inc. v. EEOC, 446 U.S. 318, 326 (1980). The primary way in which the EEOC
vindicates the public interest is by identifying and investigating
allegations of
discrimination, and then conciliating and litigating (if necessary) to
correct unlawful
employment practices. See Occidental Life Ins. Co. of Cal. v. EEOC,
432 U.S. 355,
368 (1977) (the EEOC "is a federal administrative agency charged with the
responsibility of investigating claims of employment discrimination and settling
disputes, if possible, in an informal, noncoercive fashion").
Charges, which notify the EEOC of potential discrimination, are
critical to the
EEOC's work. See EEOC v. Shell Oil Co., 466 U.S. 54, 68 (1984) (noting that the
very function of a charge "is to place the EEOC on notice that someone
. . . believes
that an employer has violated the [law]"). Accordingly, the EEOC's 1997
Enforcement Guidance provides that:
A strong public policy also prohibits interference with the right to file
a charge with EEOC . . . . This notice to the EEOC serves to trigger law
enforcement proceedings by the EEOC that include an investigation and,
if there is a finding of discrimination, may include conciliation and
litigation. Thus, every charge filed with the EEOC carries two potential
claims for relief: the charging party's claim for relief, and the EEOC's
claim to vindicate the public interest in preventing employment
discrimination.

EEOC's Enforcement Guidance at § III(A) (internal quotations and citations
omitted).
Similarly, EEOC investigations are central to the accomplishment of the
EEOC's mission, as well. Cf. Shell Oil Co., 466 U.S. at 69 (noting
"it is crucial that
the Commission's ability to investigate . . . discrimination not be
impaired"); EEOC
v. Waffle House, 534 U.S. 279, 296 n.11 (2002) (stating "[w]e have
generally been
reluctant to approve rules that may jeopardize the EEOC's ability to
investigate . . .
cases"). Thus, the EEOC's Enforcement Guidance also concludes that:
A strong public policy prohibits interference with governmental law
enforcement activities. Agreements that prevent employees from
cooperating with EEOC during enforcement proceedings interfere with
enforcement activities because they deprive the Commission of
important testimony and evidence needed to determine whether a
violation has occurred. Furthermore, insofar as such agreements make
it more difficult for the Commission to prosecute past violations, an
atmosphere is created that tends to foster future violations of the law
. . . .

EEOC's Enforcement Guidance at § III(A) (internal quotations and
citations omitted)<11>.

Recognizing this, numerous other courts (in addition to this
Court, in Frank's
Nursery & Crafts) have concluded that waivers of the right to file
EEOC charges or
to participate in EEOC proceedings are void as against public policy.
See, e.g.,
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991)
(noting that even
if an individual agreed to submit an employment discrimination claim
to arbitration,
the individual "will still be free to file a charge with the EEOC" –
acknowledging the
important public interest implicated in charge filing); EEOC v.
Johnson & Higgins,
Inc., 91 F.3d 1529, 1536 (2d Cir. 1996) (stating that the EEOC's
"authority cannot
be altered by a waiver of the rights of a private party"); U.S. Steel
Corp., 671 F. Supp.
at 358-59 (such waivers violate public policy).
Most notably, in EEOC v. Cosmair, Inc., L'Oreal Hair Care
Division, 821 F.2d
1085 (5th Cir. 1987), an employee signed a broad release in exchange
for severance
benefits. The waiver did not explicitly forbid the employee from
filing a charge with
the EEOC. Nevertheless, when the employee did file a charge, the
employer stopped
paying the severance it had agreed to pay the employee under the
waiver. The Fifth
Circuit pointed out that the purpose of a charge is to inform the EEOC
of possible
discrimination, and thus found that "[a]llowing the filing of charges
to be obstructed
by enforcing a waiver of the right to file a charge could impede EEOC
enforcement
of the civil rights laws." Id. at 1089-90. According to the Cosmair court, "an
employer and an employee cannot agree to deny to the EEOC the
information it needs
to advance [the] public interest." Id. at 1090. Therefore, the Fifth
Circuit ruled, a
"waiver of the right to file a charge is void as against public
policy." Id.; see also
Wastak, 342 F.3d at 291-92 (analyzing and adopting Cosmair's reasoning on this
public policy point); Faris v. Williams WPC-I, Inc., 332 F.3d 316, 321
(5th Cir. 2003)
(citing Cosmair and also indicating that any waiver of the right to file an EEOC
charge is void as against public policy); American Airlines, Inc., v. Cardoza-
Rodriguez, 133 F.3d 111, 118 n.7 (1st Cir. 1998) (same); McCall v.
U.S. Postal Serv.,
839 F.2d 664, 666 n.* (Fed. Cir. 1988) (same); Callicotte v. Carlucci,
698 F. Supp.
944, 946-47 (D.D.C. 1988) (same).
Similarly, in EEOC v. Astra, Inc., 94 F.3d 738 (1st Cir. 1996),
an employer
entered into settlement agreements which (among other things) barred
the employees
from filing EEOC charges, assisting others who filed charges, and discussing the
incidents giving rise to the settlement (and/or disclosing the terms
of the settlement
itself) with anyone. The EEOC attempted to investigate charges of
sexual harassment
against the company and encountered resistance and reluctance from various
employees/witnesses who had entered into these settlement agreements. On these
facts, the First Circuit concluded that "clearly, if victims of or witnesses to
[employment discrimination] are unable to approach the EEOC or even to
answer its
questions, the investigatory powers that Congress conferred would be sharply
curtailed and the efficacy of investigations would be severely
hampered." Id. at 744.
Therefore, "any agreement that materially interferes with
communication between an
employee and the Commission sows the seeds of harm to the public
interest." Id. An
"employee's right to communicate with the EEOC must be protected not
to safeguard
the settling employee's entitlement to recompense but instead to
safeguard the public
interest." Id. at n.5. This "is not a right that an employer can
purchase from an
employee, nor is it a right that an employee can sell to her
employer." Id. In short,
any "waiver of the right to assist the EEOC offends public policy under both the
ADEA and Title VII." Id.; see also id. at 745 (ruling that
"non-assistance covenants
which prohibit communication with the EEOC are void as against public policy");
American Airlines, 133 F.3d at 118 n.7 (citing Astra and indicating the same).
Here, the Release at issue unquestionably interferes with the EEOC's
enforcement efforts. It is expressly aimed at preventing signatories
from filing
charges (which the employer in Cosmair wanted to do) or sharing
information about
SunDance's employment practices with the EEOC (as the company in Astra
attempted). These Release provisions choke the free flow of information between
potential victims of (or witnesses to) discrimination and the EEOC.
These offensive
portions of the Release thus violate public policy.
Surprisingly, SunDance has essentially admitted as much. See
SunDance Brief
at 20 (acknowledging that, under the reasoning in Cosmair, any waiver
of the right
to file a charge is void as against public policy). By contrast, the
amici argue the
Release is a good thing. They praise the wisdom of charge-filing
bans, assert that
these retaliatory releases are good for business, and strongly suggest
the more rights
employees want to relinquish, the better. See Amici Brief at 3-4,
21-22 (calling for
"employer closure" and greater "comprehensiveness of releases" and
admitting that
employers specifically want to preclude employees from bringing claims in the
administrative forum). The amici indicate that the district court's
decision and the
EEOC's position here "run[] counter to a strong federal policy – the
policy favoring
voluntary resolution of employment-related disputes." Amici Brief at
9. The amici
even assert this is best for the EEOC. Id. at 10, 23 (advocating that
charge-filing bans
"afford a means of satisfactorily resolving potential disputes that
otherwise could
clog the courts and administrative agencies, including the EEOC"). And they
conclude that if this Court does not allow employers to bar protected activity,
employers will simply stop offering severance packages and settlements
altogether.
Id. at 10, 23 ("Employers are less likely to offer such agreements,
however . . . if the
agreements cannot lawfully provide closure against the possibility
that the signers
will file EEOC charges"). Indeed, the amici even assert (quite
ironically, given the
facts of this case), that the "ultimate victims" of the district
court's decision "will be
individual employees who . . . will not be offered the option to gain
substantial
financial benefits when their jobs are terminated." Id. at 23.
In sum, the amici's position amounts to this: Unless employers
are allowed to
continue violating (what several circuits, including this Court, have
said is) the law,
they will begin to treat even less favorably the very employees those laws were
designed to protect. Unless this Court renounces the EEOC's long-held view that
charge-filing bans are bad for the public interest – and unless
companies can get
"closure" through more comprehensive releases – the public interest –
and the EEOC
itself – will suffer. The EEOC fails to see how a court could or why
a court should
conclude that enforcing a policy or private agreement which deprives a law
enforcement agency of information essential to its law enforcement
mission is in the
best interests of the law enforcement agency itself. (Would a court
enforce a private
agreement under which a former employee promises his former employer – in
exchange for consideration – never to divulge to the FBI or the SEC information
about potential white collar crimes witnessed in the course of
employment? Put more
starkly, would a court enforce a similar agreement precluding an employee from
reporting a more violent workplace crime (such as an assault or even
rape) to the
local authorities?) The amici's "policy" reasons for reversing the
district court's
decision do not withstand scrutiny. See Town of Newton v. Rumery, 480 U.S. 386,
392 (1987) (footnote omitted) (explaining that "a promise is
unenforceable if the
interest in its enforcement is outweighed in the circumstances by a
public policy
harmed by enforcement of the agreement"); Cosmair, 821 F.2d at 1091 ("The public
interest in private dispute settlement" is simply "outweighed by the
public interest in
EEOC enforcement"); Astra, 94 F.3d at 744-45 ("Thus, weighing the significant
public interest in encouraging communication with the EEOC against the minimal
adverse impact that opening the channels of communication would have on
settlement, we agree wholeheartedly with the lower court that non-assistance
covenants which prohibit communication with the EEOC are void as against public
policy."); cf. Howlett v. Holiday Inns, Inc., 120 F.3d 598, 602-03
(6th Cir. 1997)
(noting that because writing releases complying with employment discrimination
laws "should not be difficult for an employer" the employer "can hardly complain
about the inequity of losing the benefit of its bargain" when it fails
to do so).
Given the compelling public policy underlying the
anti-retaliation rules, it is
irrelevant (contrary to SunDance's claims) that the anti-retaliation
rules do not
contain the words "per se retaliation" or "facially retaliatory." As
the district court
recognized, the EEOC's legal theory – and the district court's conclusion that
SunDance's Release is facially, per se retaliatory – effectuates the
legislative purpose
of the anti-retaliation rules, comports with this Court's liberal
approach to construing
these clauses, and is consistent with the only other Circuit court
case on this issue.
Accordingly, this Court should follow the Seventh Circuit's Board of
Governors lead,
reject SunDance's overly-restrictive reading of the anti-retaliation
laws, and affirm
the district court's finding that the Release is a per se violation of
the anti-retaliation
rules.

C. The District Court Appropriately Exercised Its Broad Discretion to Award
Relief Required to Eliminate the Effects of Illegal Retaliation

SunDance argues that even if portions of its Release are invalid and
unenforceable, the district court abused its discretion in its
injunctive relief.
SunDance Brief at 8, 9. SunDance asserts that because the district
court invalidated
only the parts of the Release that are retaliatory (i.e., that
preclude signatories from
filing EEOC charges or participating in EEOC proceedings), the
district court's order
tolling limitations periods for filing any claim is untenable.
SunDance Brief at 25.
According to SunDance, "[t]olling the limitations period for claims
that admittedly
have been waived is entirely illogical." Id. at 26. We disagree<12>.
Courts have extremely broad authority to fashion appropriate
equitable relief
for violations of anti-discrimination laws. See, e.g., 29 U.S.C. §
216(b) (EPA); 42
U.S.C. § 2000e-5(g)(1) (Title VII); 29 U.S.C. § 626(b) (ADEA); 42 U.S.C.
§§ 12117(a), 12203(c) (ADA). The Supreme Court, in Albemarle Paper Co. v.
Moody, 422 U.S. 405 (1975), explained that:
It is . . . the purpose of [federal employment discrimination law] to make
persons whole for injuries suffered on account of unlawful employment
discrimination. This is shown by the very fact that Congress took care
to arm the courts with full equitable powers. . . . [In fact]
the (district)
court has not merely the power but the duty to render a decree which
will so far as possible eliminate the discriminatory effects of the past as
well as bar like discrimination in the future.

Id. at 418-20 (internal citations and quotations omitted); see also
Franks v. Bowman
Transp. Co., Inc., 424 U.S. 747, 763-64 (1976) ("To effectuate this 'make whole'
objective, Congress . . . vested broad equitable discretion in the
federal courts to
'order such affirmative action as may be appropriate, which may
include . . . any other
equitable relief as the court deems appropriate.'").
Similarly, as this Court pointed out in Frank's Nursery & Crafts:
. . . [U]pon a finding of any intentional employment discrimination, a
district court possesses broad discretion to craft an injunction that will
ensure the employer's compliance with the law . . . . Thus, the EEOC
may obtain such general injunctive relief, under the equitable discretion
of the district court, even where the EEOC only identifies one or a mere
handful of aggrieved employees . . . . Indeed, the EEOC may seek
injunctive relief to correct discrimination uncovered during its
investigation of the charge of just one individual . . . . The EEOC may
obtain a permanent injunction even where it does not allege a pattern or
policy of discrimination. . . .

177 F.3d at 467-68 (citations omitted); see also EEOC v. Wilson Metal
Casket Co.,
24 F.3d 836, 842 (6th Cir. 1994) (stating that "[t]he proper scope of
an injunction is
to enjoin conduct which has been found to have been pursued or is related to the
proven unlawful conduct"); cf. Cosmair, 821 F.2d at 1091 (rejecting an
employer's
challenge to a district court's preliminary injunction prohibiting the
employer –
company-wide – from terminating severance payments to former employees who
filed EEOC charges; concluding that the evidence in the case "revealed a company
policy of terminating payments to employees who filed charges," and that a
"company-wide injunction was [thus] not an abuse of discretion.");
Astra, 94 F.3d at
745 (finding that a district court had not "misused its discretion in
enjoining the
utilization of settlement provisions that prohibit employees from
assisting the EEOC
in investigating charges of discrimination").
Here, the EEOC asked for relief on behalf of Salsbury and
"similarly situated"
SunDance employees affected by SunDance's company-wide retaliatory policy. The
district court accepted EEOC's prayer for relief as an appropriate
remedy for the
violations at issue. In the EEOC's view, this relief order was
carefully tailored to
make Salsbury and similarly situated employees whole and to remedy SunDance's
illegal practices. On these facts, it was not an abuse of the
district court's discretion
to order the relief that it did.
This is true with respect to tolling the statute of limitations
on "claims," as
well. SunDance seems to be asking this Court to preclude signatories
from filing any
"claims" in court because it apparently believes all signatories have
waived the right
to bring such "claims" by signing the Release. Salsbury and others
may very well
have done so. However, contrary to SunDance's argument, this precise
issue (e.g.,
whether signatories did in fact knowingly and voluntarily waive their
right to file any
lawsuit against SunDance) was never raised in this case. The district
court found
merely that the offensive provisions of the Release could properly be
severed from
the rest of the Release, which would remain enforceable to the extent
permitted by
law. (R.43, O&O pg.21, Apx. ) (". . . [T]he Court must consider
whether the entire
Separation Agreement is unenforceable or merely the portion precluding employees
from filing a charge.").) The district court did not definitively
decide – because no
party has yet asked it to – whether the Release is a valid and knowing
waiver of all
claims. This is simply an open question best left answered by another
court another
day.
In any event, signatories are still free to challenge the
validity of the Release
itself. See, e.g., 29 C.F.R. § 1625.23(b) ("No ADEA waiver agreement,
covenant not
to sue, or other equivalent arrangement may impose any condition precedent, any
penalty, or any other limitation adversely affecting any individual's
right to challenge
the agreement.")<13> Nothing in the district court's relief order
enlarges this pre-
existing right (i.e., the relief order provision to which SunDance
objects would only
enable subsequently-filed lawsuits to be treated as timely – not necessarily
meritorious). If and when a signatory does file a lawsuit, SunDance
is free to raise
its Release as an affirmative defense. In addition, the statute of
limitations on claims
related to charges now deemed timely under the district court's relief
order has not
even begun to run. The statute of limitations on claims under Title
VII, the ADEA,
and the ADA begins to run only after a "notice of right to sue" has
been issued, an
event which has not occurred with respect to any potential charge encompassed by
the district court's order. See 42 U.S.C. §§ 2000e-5(b), (f)(1)
(Title VII); 42 U.S.C.
§ 12117(a) (ADA); 29 U.S.C. §§ 626(b), (c), (d); 29 C.F.R. § 1626.15(b) (ADEA).
Accordingly, the district court's order has not expanded the statutory
protections of
charging parties beyond those they already possess by virtue of their
ability to file
charges (a part of the relief order SunDance does not challenge). Therefore,
SunDance has not been harmed by the district court's relief provision
tolling the
statute of limitations for "claims" related to such charges. This Court should
conclude that the district court acted well within its considerable
equitable discretion
in fashioning this provision, and affirm the district court's relief
order in its entirety.

CONCLUSION
For all the reasons discussed above, the EEOC respectfully
requests that this
Court affirm the district court's grant of summary judgment in favor
of the EEOC and
the district court's relief order.

Respectfully submitted,
___________________________
DANIEL T. VAIL
Attorney

ERIC S. DREIBAND
General Counsel

VINCENT J. BLACKWOOD
Acting Associate General Counsel

LORRAINE C. DAVIS
Assistant General Counsel

U.S. EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
Office of General Counsel
1801 L Street, N.W., Room 7020
Washington, D.C. 20507
(202) 663-4571
daniel.vail@eeoc.gov

CERTIFICATE OF COMPLIANCE WITH RULE 32(a)

1. I certify that this brief complies with the type-volume
limitation set forth in
Fed. R. App. P. 32(a)(7)(B) because this brief contains 12,775 words,
excluding the parts of the brief exempted by Fed. R. App. P.
32(a)(7)(B)(iii).
2. I certify that this brief complies with the typeface requirements
of Fed. R. App.
P. 32(a)(5) and the type style requirements of Fed. R. App. P.
32(a)(6) because
this brief has been prepared in a proportionally spaced typeface using
WordPerfect 9 in 14-Point Font in Times New Roman Style.

____________________________
DANIEL T. VAIL
Attorney
U.S. EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
Office of General Counsel
1801 L Street, N.W., Room 7020
Washington, D.C. 20507
(202) 663-4571
daniel.vail@eeoc.gov

May 17, 2005

ADDENDA

Appellee's Designation of Contents of Joint Appendix . . . . .A-2

Complete Text of Statutory Anti-Retaliation Rules. . . . . . .A-6

EEOC's Enforcement Guidance on Non-Waivable Employee Rights. .A-7

APPELLEE'S DESIGNATION OF CONTENTS OF JOINT APPENDIX

+------------------------------------------------------------------------+
| Record Entry | Description | Date |
| | | |
| | | Filed |
|--------------+--------------------------------------------+------------|
| | Current District Court Docket Sheet | |
|--------------+--------------------------------------------+------------|
| R.1 | Complaint | 08/01/2001 |
|--------------+--------------------------------------------+------------|
| R.24 | SunDance's Motion for SJ, with Exhibit: | 11/22/2002 |
| | | |
| R.24 | * Exhibit A - Affidavit of Margaret McNett | 11/22/2002 |
| | pgs. 1-2; Ex.A-3 (Docs. 12-13) | |
|--------------+--------------------------------------------+------------|
| R.25 | EEOC's Opposition to SunDance's Motion for | 12/20/2002 |
| | SJ, with Attachments: | |
| | | |
| R.25 | * Declaration of Elizabeth S. Salsbury | 12/20/2002 |
| | pgs. 1-4; Ex.A-1 (Docs. 87, 88, 90-93); | |
| | Ex.A-2 (Charge of Discrimination; Signed | |
| | Release) | |
| | | |
| R.25 | *Declaration of Susan L. Smith | 12/20/2002 |
| | pgs. 1-2; Docs. 321-323 | |
|--------------+--------------------------------------------+------------|
| R.39 | Magistrate Judge's Report and | 07/31/2003 |
| | Recommendation | |
|--------------+--------------------------------------------+------------|
| R.41 | EEOC's Objections to Magistrate Judge's | 08/18/2003 |
| | R&R | |
|--------------+--------------------------------------------+------------|
| R.42 | SunDance's Response to EEOC's Objections | 8/28/2003 |
|--------------+--------------------------------------------+------------|
| R.43 | Memorandum of Opinion and Order Granting | 07/26/2004 |
| | EEOC's Motion for SJ and Denying | |
| | SunDance's Motion for SJ | |
|--------------+--------------------------------------------+------------|
| R.44 | Judgment Entry Order | 07/26/2004 |
|--------------+--------------------------------------------+------------|
| R.46 | Notice of Appeal | 09/23/2004 |
+------------------------------------------------------------------------+

I certify, pursuant to 6 Cir. R. 30(f), that all documents
designated above to be
included in the joint appendix were properly made a part of the record.

DATED: May 17, 2005

COMPLETE TEXT OF STATUTORY ANTI-RETALIATION RULES

+------------------------------------------------------------------------+
| Statute | Language | Citation |
|-----------+---------------------------------------+--------------------|
| EPA | "It shall be unlawful for any person | 29 U.S.C. |
| | to discharge or in any other manner | § 215(a)(3) |
| | discriminate against any employee | |
| | because such employee has filed any | |
| | complaint or instituted or caused to | |
| | be instituted any proceeding under or | |
| | related to [the EPA] or is about to | |
| | testify in any proceeding . . . ." | |
|-----------+---------------------------------------+--------------------|
| Title VII | "It shall be an unlawful employment | 42 U.S.C. § |
| | practice for an employer to | 2000e-3(a) |
| | discriminate against any of his | |
| | employees or applicants for | |
| | employment . . . because he has | |
| | opposed any practice made an unlawful | |
| | employment practice by [Title VII], | |
| | or because he has made a charge, | |
| | testified, assisted, or participated | |
| | in any manner in an investigation, | |
| | proceeding, or hearing under [Title | |
| | VII]." | |
|-----------+---------------------------------------+--------------------|
| ADEA | "It shall be unlawful for an employer | 29 U.S.C. § 623(d) |
| | to discriminate against any of his | |
| | employees or applicants for | |
| | employment . . . because such | |
| | individual . . . has opposed any | |
| | practice made unlawful by [the ADEA], | |
| | or because such individual . . . has | |
| | made a charge, testified, assisted, | |
| | or participated in any manner in an | |
| | investigation, proceeding, or | |
| | litigation under [the ADEA]." | |
| | | |
| | "No waiver agreement may affect the | 29 U.S.C. |
| | Commission's rights and | § 626(f)(4) |
| | responsibilities to enforce [the | |
| | ADEA]. No waiver may be used to | |
| | justify interfering with the | |
| | protected right of an employee to | |
| | file a charge or participate in an | |
| | investigation or proceeding conducted | |
| | by the Commission." | |
|-----------+---------------------------------------+--------------------|
| ADA | "No person shall discriminate against | 42 U.S.C. § |
| | any individual because such | 12203(a) |
| | individual has opposed any act or | |
| | practice made unlawful by [the ADA] | |
| | or because such individual made a | |
| | charge, testified, assisted, or | |
| | participated in any manner in an | |
| | investigation, proceeding, or hearing | |
| | under [the ADA]." | |
| | | |
| | "It shall be unlawful to coerce, | 42 U.S.C. § |
| | intimidate, threaten, or interfere | 12203(b) |
| | with any individual in the exercise | |
| | or enjoyment of, or on account of his | |
| | or her having exercised or enjoyed, | |
| | or on account of his or her having | |
| | aided or encouraged any other | |
| | individual in the exercise or | |
| | enjoyment of, any right granted or | |
| | protected by [the ADA]." | |
+------------------------------------------------------------------------+

EEOC'S ENFORCEMENT GUIDANCE
ON NON-WAIVABLE EMPLOYEE RIGHTS

CERTIFICATE OF SERVICE

I hereby certify that on this 17th day of May, 2005 I served
copies of this proof
brief, via First Class U.S. Mail, postage prepaid, to:

Leonard Green
Clerk
United States Court of Appeals for the Sixth Circuit
100 East Fifth Street
Room 532
Potter Stewart U.S. Courthouse
Cincinnati, OH 45202-3988

Dean E. Westman
Thomas Evan Green
Kastner Westman & Wilkins, LLC
3480 West Market Street, Suite 300
Akron, OH 44333

Ann Elizabeth Reesman
McGuiness Norris & Williams, LLP
Suite 1200
1015 Fifteenth Street, N.W.
Washington, D.C. 20005

Stephen A. Bokat, Robin S. Conrad, Robert J. Costagliola
National Chamber Litigation Center, Inc.
1615 H Street, N.W.
Washington, D.C. 20062

__________________________________
DANIEL T. VAIL

DATED: May 17, 2005

***********************************************
<NOTES>

<1> All references to "R." are to the corresponding Docket Entry on the
district court's docket sheet

<2> All references to "Apx." are to the applicable page in the Joint Appendix.

<3> ter the EEOC informed Salsbury the Release was illegal, Salsbury decided
to sign to get the severance pay. (R.25, Salsbury Decl. pg.3 ¶ 9, Apx. .)
By the time Salsbury signed the Release on March 7, 2000, SunDance had gone
into bankruptcy proceedings. Salsbury still has not received severance pay.
(R.25, Salsbury Decl. pgs.3-4 ¶ 11, Apx. ); (R.25, Salsbury Decl. pg.3 ¶ 10,
Apx. ); (R.25, Salsbury Decl. Ex.A-2 Signed Release, Apx. .)

<4> The District Court also concluded that the remaining portions of the
Release were valid and enforceable (citing Wastak v. Lehigh Valley Health
Network, 342 F.3d 281 (3d Cir. 2003) and Sixth Circuit cases holding that
knowing and voluntary waivers of the right to file a discrimination lawsuit
can be upheld). (R.43, O&O pgs.21-22, Apx. .) This aspect of the district
court's opinion is not at issue on this appeal.

<5> See 29 U.S.C. § 215(a)(3) (EPA); 42 U.S.C. § 2000e-3(a) (Title VII);
29 U.S.C. §§ 623(d), 626(f)(4) (ADEA); 42 U.S.C. §§ 12203(a), (b) (ADA).
The complete text of these statutory anti-retaliations rules can be found
in the addendum to this brief. See A-6, infra.

<6> While the text of the EPA anti-retaliation rule does not specifically
provide protection for "opposition," courts have recognized that the statute
prohibits retaliation based on opposition to unlawful employment practices.
See, e.g., EEOC v. Romeo Cmty. Sch., 976 F.2d 985, 989-90 (6th Cir. 1992)
(finding that an employee who had complained to her employer that the employer
was "breaking some sort of law" by paying her less than her male counterparts
had "effectively set forth a claim of retaliation" under the EPA).

<7> As the Supreme Court and this Court have acknowledged, EEOC guidances such
as this one "'constitute a body of experience and informed judgment to which
courts and litigants may properly resort for guidance.'" Ohio Edison Co., 364
F.3d at 812 (quoting Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 65 (1986)).

<8> SunDance claims that the EEOC must, but cannot, prove its case under the
more traditional retaliation framework. SunDance Brief at 21-25; see also
Amici Brief at 11-16. Under this framework, a plaintiff can establish a prima
facie case of retaliation by showing (1) an employee engaged in protected
activity; (2) the employer knew about this protected activity; (3) the employer
subsequently took an adverse action against the employee; and (4) there is a
causal connection between the protected activity and the adverse action.
Smith v. City of Salem, 378 F.3d 566, 570 (6th Cir. 2004) (Title VII); Weigel
v. Baptist Hosp. of E. Tenn., 302 F.3d 367, 381 (6th Cir. 2002) (ADEA); Walborn
v. Erie County Care Facility, 150 F.3d 584, 588-89 (6th Cir. 1998) (ADA).
Contrary to SunDance's claims, assuming this Court decides the EEOC must meet
the elements of this analysis, the EEOC can easily do so. Salsbury contacted
SunDance's human resources department specifically to see if she could strike
the retaliatory portions of the Release prohibiting her from filing a charge
with the EEOC because she believed these provisions violated the employment
discrimination statutes. When SunDance told her she could not alter the
Release in any way, she refused to sign it. This is quintessential protected
"opposition" activity. SunDance clearly knew about this protected activity,
too (i.e., it does not contest that its own human resources department told
Salsbury she could not alter the Release, and SunDance obviously knew she
failed to sign it). SunDance then took an adverse action against Salsbury
for rejecting the illegal Release – SunDance refused to pay her severance
benefits. The withholding of such a substantial monetary benefit is without
question an adverse action. Cf. White v. Burlington N. & Santa Fe Railway
Co., 364 F.3d 789, 802 (6th Cir. 2004) (recognizing that "taking away an
employee's paycheck" is actionable) (citing Lovejoy-Wilson v. NOCO Motor Fuel,
Inc., 263 F.3d 208, 223-24 (2d Cir. 2001) (finding that a suspension without
pay for even one week was an adverse action – and even though the employee was
even later reimbursed for the lost wages)). Finally, SunDance refused to pay
Salsbury severance precisely because she opposed the retaliatory Release.
There is no dispute about that. There is thus clearly a causal nexus between
Salsbury's protected activity and SunDance's subsequent adverse actions.
SunDance has articulated no other non-discriminatory reason for its
actions here.

<9> This conclusion – that a policy preapproving retaliation for future
protected opposition or participation is a per se violation – is consistent
with case law suggesting that the mere threat of retaliation, without more, is
actionable. See Robinson, 519 U.S. at 346 (emphasis added) (where the Supreme
Court expressed concern over "allowing the threat of postemployment retaliation
to deter victims of discrimination from complaining to the EEOC"); Ohio Edison
Co., 7 F.3d at 543 (emphasis added) (where this Court explained that "Congress
unmistakably intended to ensure that no person would be deterred from
exercising
his rights . . . by the threat of discriminatory retaliation"); McKnight v.
General Motors Corp., 908 F.2d 104, 111 (7th Cir. 1990), superseded by statute
on other grounds (emphasis added) (noting that "[r]etaliation or a threat of
retaliation is a common method of deterrence").

<10> These regulations are entitled to deference under Chevron, U.S.A.,
Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
See, e.g., EEOC v. Seafarers Int'l Union, 394 F.3d 197, 200-01 (4th Cir.
2005); Kralman v. Ill. Dep't of Veterans' Affairs, 23 F.3d 150, 155 (7th
Cir. 1994); cf. 29 U.S.C. § 628 (providing that the EEOC "may issue such
rules and regulations as it may consider necessary or appropriate for
carrying out this chapter"); 29 C.F.R. § 1622(k) ("The regulations in this
section are legislative regulations issued pursuant to [29 U.S.C. § 628]
of the ADEA and Title II of [the Older Workers Benefit Protection Act].").

<11> Indeed, under Title VII and the ADA, the EEOC may only investigate
discrimination after a charge has been filed. See 42 U.S.C. § 2000e-5(b)
(stating that "[w]henever a charge is filed by or on behalf of a person
claiming to be aggrieved, or by a member of the Commission," the Commission
shall investigate); 42 U.S.C. § 12117(a) (adopting Title VII procedures
under the ADA); see also Shell Oil, 466 U.S. at 64 ("the EEOC's investigative
authority is tied to charges filed with the Commission; unlike other federal
agencies that possess plenary authority to demand to see records relevant
to matters within their jurisdiction, the EEOC is entitled to access only
to evidence 'relevant to the charge under investigation'") (citation and
footnote omitted). In contrast to Title VII and the ADA, the EEOC's
investigative authority under the ADEA and EPA is not tied to the filing
of a charge. See 29 U.S.C. § 626(a) (under ADEA, stating that the Commission
"shall have the power to make investigations"); 29 U.S.C. § 211 (under EPA,
stating that the Commission may "investigate and gather data"). Nevertheless,
the filing of charges by aggrieved individuals is the primary means through
which the EEOC learns of possible discrimination under these statutes as
well. See, e.g., B. Lindemann & P. Grossman, Employment Discrimination
Law at 523 (3d ed. 1996) ("Although the government can initiate investigations
sua sponte, most [EPA] investigations are conducted in response to complaints
lodged by employees.").

<12> Although SunDance's brief quotes the part of the relief order tolling
statutes of limitation for charges as well as claims, SunDance makes no
argument that the district court's order tolling the statute of limitations for
charges, specifically, is an abuse of discretion.

<13> In Wastak, the Third Circuit reviewed a very similar ADEA regulation, 29
C.F.R. § 1625.22(i)(2), and concluded that if a waiver contains language
promising to punish a signatory for challenging the validity of the waiver, the
entire waiver may very well be invalid. See Wastak, 342 F.3d at 293 n.6 ("The
presence of such a prohibition in a waiver agreement [i.e., penalizing
signatories for challenging the waiver] subject to this regulation could
certainly lead a court to find, under proper circumstances, that the waiver
[was not] . . . 'knowing and voluntary,' and, therefore, invalid.") The Release
at issue in this case has exactly the type of language the Third Circuit found
problematic in Wastak. (See R.25, Salsbury Decl. Ex.A-1 Docs.90-93, Apx. )
("Releasor further expressly agrees that if any portion of this Agreement and
the Release incorporated herein is ruled to be unenforceable as the result of a
challenge brought by the Releasor to the Agreement's or release's validity,
then Releasor shall return to the Company the entire amount of consideration
paid hereunder. . . .").)

Los Angeles Employment Lawyers and Attorneys Resource: Hohider v. UPS

2008-06-07T13:43:00.001-07:00

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

MARK HOHIDER and ROBERT DIPAOLO, )
On Behalf of Themselves and All Others )
Similarly Situated, )
)
Plaintiffs, ) Civil Action No. 04-0363
)
v. ) Judge Joy Flowers Conti
)
UNITED PARCEL SERVICE, INC., and )
DOES 1-100, )
)
Defendants. )

BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
AS AMICUS CURIAE IN SUPPORT OF PLAINTIFF HOHIDER AND IN OPPOSITION
TO UPS'S MOTION FOR SUMMARY JUDGMENT AS TO CLASS CLAIMS

STATEMENT OF FACTS

UPS hired Mark Hohider in October 1986 to work as a part-time
Loader/Unloader in its
facility in New Stanton, Pennsylvania, located in the Laurel Mountain
District. R.1 (Complaint),
p. 7, ¶16.<1> In 1994, Hohider began working as a regular temporary
driver, assigned to cover
absences, overflow work, and vacations. R.72 (Appendix to Hohider
Response), p. 23. Hohider
was injured on the job in August 1999, when the UPS package car he was
driving was rear-
ended. Id. As a consequence of the accident, Hohider sustained a
herniated disc that has
substantially restricted his ability to lift, walk, and sit. Id., pp. 12-13.
Hohider went on medical leave from UPS to recover from his
accident-related injuries.
R.1, p. 7, ¶16. Beginning in October 2000, "and continuously
thereafter," Hohider requested to
return to work in a position "consistent with his permanent physical
restrictions," identified in
the "limited medical release" provided by "a UPS-selected physician."
Id. On January 4, 2001,
UPS responded to Hohider's "request for a job-related accommodation."
R. 72, p. 30. Having
"carefully evaluated" Hohider's request, and "based upon the medical
information" provided,
UPS reached a "preliminary determination that [Hohider] may be
eligible for a reasonable
accommodation pursuant to the [ADA]." Id. Hohider met with UPS on
January 16, 2001 and
completed an "Accommodation Checklist." See id., pp. 13, 31. On
February 6, 2001, however,
UPS informed Hohider that "after carefully reviewing your situation,
we are aware of no
available position at UPS at this time for which you are qualified and
capable of performing the
essential job functions with or without reasonable accommodation."
Id., p. 31. UPS invited
Hohider to contact UPS "[i]f your condition or abilities change in the
future . . . or you become
aware of an open position that you believe you are capable of
performing . . . so that we may re-
evaluate your situation." Id.
On March 20, 2001, Hohider filed a timely charge with the
Pennsylvania Human
Relations Commission (PHRC), which was "dual filed with the EEOC." R.
55 (UPS Concise
Statement of Facts), pp. 2-3. Hohider alleged UPS had violated
Pennsylvania's statutory
prohibition against disability-based employment discrimination by
"refusing to return [him] to
the active workforce," even though he had "informed UPS of positions
[he] could perform the
essential functions of with a reasonable accommodation." Id., p. 3.
Soon after filing his charge, Hohider engaged an attorney to
represent him. While his
charge was pending before the PHRC, Hohider's counsel informed the
state agency that UPS had
not responded to his client's efforts to provide updated medical
information, id., p. 32; denied
Hohider the opportunity, provided under the collective bargaining
agreement, to bump a less
senior worker holding a job that met his medical restrictions, id., p.
34; and continually refused to
return him to work in positions he had identified "which are within
his restrictions, as indicated
by UPS's doctor's signature." Id., p. 35. Counsel further notified
the PHRC "that the EEOC
recently entered a consent decree with UPS in Phoenix, regarding its
policy of requiring a 'full
release' before an injured worker could return to work," and that "Mr.
Hohider contends this
policy is still in place in and around the Pittsburgh area." Id., p.
36. Counsel enclosed a copy of
the consent decree, along with "a statement from another disabled UPS
employee, Bob DiPaolo,
indicating that UPS refused to permit him to take a job for which he
had won a bid." Id.
Counsel identified DiPaolo as "a witness to this policy and practice
of discrimination and
retaliation" by UPS, and provided his contact information so the PHRC
could interview him. Id.
On August 13, 2002, the PHRC issued a finding of no probable
cause and dismissed
Hohider's charge. Id., pp. 10-14. The PHRC found Hohider's herniated
disc is a physical
impairment that "does substantially limit one or more major life
activities," citing medical
testimony that Hohider is "substantially restricted in his lifting,
walking, and sitting." Id., pp. 12-
13. The PHRC further found that Hohider could no longer perform, with
or without reasonable
accommodation, the essential functions of the driver position he
occupied when he was injured.
Id., pp. 13-14. Under Pennsylvania law, the PHRC stated, an employer
"is not obligated . . . to
provide [a disabled employee] with an alternative position as an
accommodation." Id., p. 14.
Because Hohider was no longer able to perform the driver position he
last held at UPS, the
PHRC concluded that he does not "meet[] the legal definition of a
disabled person under" state
law, and UPS therefore was not "required to engage in the interactive
process of finding an
accommodation."<2> Id.
On September 5, 2002, Hohider timely requested that the EEOC
conduct a "substantial
weight review" of the PHRC's no cause finding. Id., p. 56; see 29
C.F.R. § 1601.21(e). Hohider
submitted an affidavit, executed October 19, 2002, to supplement the
allegations contained in his
original charge. Id., pp. 57-58. Hohider's affidavit recounted UPS's
continuing refusal to return
him to work, pursuant to a "well-known company policy that UPS will
not allow an injured or
disabled employee to return to work until he submits a full release,"
and gave specific examples
from his own experience that illustrated "the company's policy of
nonaccommodation." Id.
Counsel's accompanying letter stated that "[w]ith rare exceptions, in
the Greater Pittsburgh
metro area, UPS continues to enforce the same de facto policy of
requiring a 'full release' before
it will return an injured employee to work," and that this "de facto
policy" was the subject of the
EEOC's enforcement action and consent decree in Arizona. Id., p. 59.
Counsel enclosed a copy
of that consent decree, and asserted that "[s]uch a policy is one of
non-accommodation of an
individual with a disability and is, per se, a violation of the ADA." Id.
Counsel also alerted the Commission to a previous administrative
charge against UPS,
alleging "the same unlawful policy of non-accommodation," filed in
1996 by an employee who
"was similarly told he had to provide a 'full release' before any
reinstatement would even be
considered," and advised that DiPaolo, another employee at the UPS
facility where Hohider
worked, had "recently filed a nearly identical Charge." Id., p.60.
In closing, counsel offered to
"provide the names of additional potential" claimants, and requested
the EEOC to "investigate,
issue a cause finding, consolidate the cases, and file suit on behalf
of Mr. Hohider and the class
of workers subject to this illegal corporate policy." Id., p. 61.
In subsequent correspondence, Hohider's attorney provided
additional information and
evidence supporting the allegation that UPS in practice requires a
full or 100% unrestricted
medical release before allowing an employee to return to work from
medical leave. Id., pp. 64-
69. Included among these materials were the questionnaires,
affidavit, and formal charge that
DiPaolo filed with the EEOC. Id., pp. 74-89, 92-94. In his initial
questionnaire, dated July 2001,
DiPaolo alleged that "UPS has a policy of non-accomadition [sic] with
people with disabilities
which continues in effect to this day." Id., p. 75. DiPaolo stated
in a subsequent questionnaire
that he was not allowed to return to work due to the "UPS attitude and
policy" that "you cannot
not [sic] return to do your original job or any job unless you are
released to full duty without any
restrictions." Id., p. 80. In a portion of his affidavit entitled
"Class Harm," DiPaolo stated his
belief "that [UPS's] policy of full medical releases is discriminatory
against disabled employees
as a group and that [UPS does] not even attempt to enter into the
interactive process with
employees with disabilities because of this policy." Id., p. 93.
In January 2003, the EEOC sent UPS a Request for Information in
connection with
DiPaolo's charge, id., pp. 97-101, asking the company to "[p]rovide
the names, job titles, and
departments of all employees who were similarly situated with the CP
and describe their
treatment in comparable situations." Id., p.100. Among "other
relevant information to be
considered in the investigation of [DiPaolo's] charge," the EEOC
requested UPS to "[s]tate,
describe and explain your policy, practice and procedure of requiring
100% full-releases of
employees" and to "[n]ame each and every person related to the New
Stanton facility who has
been denied reinstatement similar to that of [CP]." Id.
On February 28, 2003, Hohider's attorney wrote to counsel for UPS
to complain "that
UPS continues to adhere to its policies of nonaccommodation, and of
refusal to engage in the
interactive process." Id., p. 21A. The letter cautioned that unless
UPS decided to "abandon its
unlawful policies . . . it seems inevitable that another class action
lawsuit will be required to
convince UPS to treat Mr. Hohider, and others, with the same respect
and the opportunities to
work as those enjoyed by persons without disabilities, and advised UPS
that Hohider's "case file
is currently under review by the EEOC." Id., p. 21B. The EEOC
received the PHRC's case file
on Hohider's complaint in early June 2003. Id., p. 73.
On July 18, 2003, the EEOC issued substantially identical letters
of determination to
Hohider and DiPaolo, finding in each case that "the evidence obtained
during the investigation
establishes a violation of the [ADA]." Id., pp. 15-18. The EEOC
determined that "[e]mployees
having a limited prospect of recovery are not eligible to participate"
in UPS's light duty program,
"which eliminates all persons who qualify under the ADA," and that UPS
"has a 100% full
medical release practice, which . . . is a per se violation of the
ADA." Id., pp. 15, 17. On
September 4, 2003, the EEOC proposed a conciliation agreement to
resolve both charges. Id.,
pp. 20-21. In addition to seeking reinstatement and make-whole relief
for Hohider and DiPaolo,
the EEOC proposed that UPS would agree to the following "general
provisions": "immediately
re-negotiate the light duty program so that it is not rehabilitative
in nature and includes any
person who is qualified under the ADA"; "eliminate [its] practice of
requiring 100% full medical
releases"; "implement a policy regarding reasonable accommodation
which clearly demonstrates
that [UPS] will enter into the interactive process in the future";
ensure "that all [its] policies and
practices do not discriminate against any person identified as
disabled or violates [sic] provisions
of the ADA"; and notify "all employees" of these "changes" in policy. Id.
On September 24, 2003, UPS refused the EEOC's offer to conciliate
Hohider's charge.
Id., pp. 22-29. UPS asserted that "Hohider has not at any relevant
time been substantially limited
in any major life activity," and "decline[d] the EEOC's request for
conciliation as it pertains to
any monetary or other relief to Hohider." Id., p. 23. UPS further
maintained that the EEOC was
"mistaken" in its determination "(i) that UPS 'has a 100% full medical
release practice' and (ii)
that UPS's light duty program excludes 'person[s] who [are]
qualif[ied] under the ADA.'" Id.
Quoting extensively from UPS's Management Guide and ADA Compliance
Manual, id., pp. 25-
26, the company insisted that its "policies regarding accommodations
under the ADA are
compliant with the law and there is no basis for suggesting that UPS
maintains a policy that
violates the ADA." Id., p. 27. UPS argued that the finding of a
"'100% full medical release
practice' . . . is untrue, as demonstrated by the proceedings in
another matter before the EEOC
involving the same UPS district, the Laurel Mountain District, where
Hohider worked." Id.
(citing Michelle D. Miller v. United Parcel Service, Inc., EEOC Charge
No. 172-A11076). While
the EEOC found no probable cause that UPS had discriminated against
the charging party in that
case, the agency "raised this purported return to work policy" because
during "'the course of the
investigation, two [UPS] employees described a return to work policy
in a manner that conflicts
with UPS policy and with the [ADA].'" Id. (quoting Conciliation
Agreement between EEOC
and UPS). The EEOC had credited UPS's explanation, in that case, that
"the two UPS employees
who were handling UPS's response to the charge . . . had misstated
UPS's policy," and agreed
with UPS's proposal to provide "training" to those two employees and
issue a general notice
about the company's ADA Compliance Program "to all managers and
supervisors in the Laurel
Mountain District." Id., pp. 27-28.
The EEOC informed Hohider on December 10, 2003, that conciliation
efforts had failed
and issued a Notice of Right to Sue. R.1, Ex. A. Hohider and
DiPaolo, "individually and on
behalf of all others similarly situated," timely filed a "class
complaint" on March 10, 2004. R.1,
p. 1, ¶1. The complaint asserts that UPS engages in systemic
discrimination in violation of the
ADA by maintaining a de facto practice of requiring employees to
provide a full or 100%
medical release, without restrictions, before permitting them to
return to duty following a
medical leave of absence. Id., pp. 1-2, ¶ 2. UPS has moved for
summary judgment against
Hohider's class claims "on the ground that he failed to assert such
claims in his administrative
complaint." R. 52 (UPS Motion for S.J. on Class Claims), p. 1.

ARGUMENT

Summary judgment should be denied because Hohider's class claims of
systemic discrimination are within the scope of the EEOC's investigation,
determination, and conciliation of his charge.

Under the ADA, a class claim of systemic discrimination may be
asserted by a claimant
when the administrative investigation of his timely charge revealed
evidence of a policy or
practice of discrimination, regardless of whether his charge alleged
class-wide discrimination.
The charge filing requirement, established in Title VII and expressly
incorporated into the ADA,
see 42 U.S.C. § 12117(a), serves "to initiate the statutory scheme for
remedying discrimination."
Hicks v. ABT Associates, Inc., 572 F.2d 960, 963 (3d Cir. 1978). Upon
receiving a charge, the
EEOC "shall serve a notice of the charge (including the date, place,
and circumstances of the
alleged unlawful employment practice) on the employer . . . and shall
make an investigation
thereof," 42 U.S.C. § 2000e-5(b), "to determine whether there is
reasonable cause to believe that
the charge is true." Hicks, 572 F.2d at 963. If the investigation
leads to a cause finding, "the
Commission shall endeavor to eliminate any such alleged unlawful
employment practice by
informal methods of conference, conciliation, and persuasion." 42
U.S.C. § 2000e-5(b). "If no
reasonable cause is found, or if reconciliation attempts prove futile
within a certain time, the
charging party is issued a notice of his right to bring a civil
action." Hicks, 572 F.2d at 963. A
private litigant may seek judicial redress under Title VII or the ADA
only after receiving a right
to sue notice from the EEOC. 42 U.S.C. § 2000e-5(f)(1).
The "effect of the [charge] filing requirement," the Third
Circuit has discerned, "is
essentially to permit the EEOC to use informal, non-judicial means of
reconciling the differences
between the charging party and an employer." Hicks, 572 F.2d at 963,
966 ("the purpose of the
filing requirement is to allow the EEOC to settle a complaint
informally"); see also Antol v.
Perry, 82 F.3d 1291, 1296 (3d Cir. 1996) ("The purpose of requiring
exhaustion is to afford the
EEOC the opportunity to settle disputes through conference,
conciliation, and persuasion,
avoiding unnecessary action in court."). Other courts have reached
the same conclusion. See,
e.g., Gregory v. Georgia Dept. of Human Resources, 355 F.3d 1277, 1279
(11th Cir. 2004) ("The
purpose of [Title VII's] exhaustion requirement 'is that the [EEOC]
should have the first
opportunity to investigate the alleged discriminatory practices to
permit it to perform its role in
obtaining voluntary compliance and promoting conciliation efforts.'")
(citations omitted);
Babrocky v. Jewel Food Co., 773 F.2d 857, 863 (7th Cir. 1985) ("Timely
filing affords the EEOC
'an opportunity to settle disputes through conference, conciliation,
and persuasion before the
aggrieved party [is] permitted to file a lawsuit.'") (quoting
Alexander v. Gardner-Denver Co.,
415 U.S. 36, 44 (1974)); Medina v. Reinhardt, 686 F.2d 997, 1013 (D.C.
Cir. 1982) ("The
'principal functions of the EEOC filing requirement' are to enable
'the EEOC to provide the
alleged wrongdoer with notice and to permit possible conciliation.'")
(citation omitted).
"Once a charge of some sort is filed with the EEOC," the Third
Circuit has held, "the
scope of a resulting private civil action in the district court is
'defined by the scope of the EEOC
investigation which can reasonably be expected to grow out of the
charge of discrimination . . .'"
Hicks, 572 F.2d at 966 (citation omitted). "This standard," the Court
decided, "is a fair
compromise of the interests expressed in Title VII in informal
settlement as a preferred method
of conflict resolution and the employee's right to a judicial forum
once the Commission has
finished processing a charge." Id. So long as a reasonable
investigation of the charge would
have disclosed the discriminatory practices alleged in the civil
complaint, the filing requirement
has served its statutory purpose of affording the EEOC a fair
opportunity to seek "[c]ooperation
and voluntary compliance" before permitting judicial recourse. See
Gardner-Denver, 415 U.S. at
44. Because "a technical reading" of the administrative filing
requirements "would be
'particularly inappropriate in a statutory scheme in which laymen,
unassisted by trained lawyers,
initiate the process,'" the Third Circuit's approach fully comports
with the Supreme Court's
"guiding principle for construing the provisions of Title VII." Zipes
v. Trans World Airlines,
455 U.S. 385, 397 (1982) (citation omitted); see Hicks, 572 F.2d at
965 ("[W]e keep in mind that
charges are most often drafted by one who is not well versed in the
art of legal description.
Accordingly, the scope of the original charge should be liberally
construed."); see also Babrocky,
773 F.2d at 865-66 ("An exact correspondence between the words of the
EEOC charge and the
judicial complaint" is not required.); Sanchez v. Standard Brands,
Inc., 431 F.2d 455, 465 (5th
Cir. 1970) ("the specific words of the charge of discrimination need
not presage with literary
exactitude the judicial pleadings which may follow").
Other circuits have approved a similar analysis to determine if a
litigant's judicial claims
are fairly encompassed within the allegations of his administrative
charge. See Gregory, 355 F.3d
at 1280 ("In light of the purpose of the EEOC exhaustion requirement,
we have held that a
plaintiff's judicial complaint is limited by the scope of the EEOC
investigation which can
reasonably be expected to grow out of the charge of discrimination.");
Paige v. California, 102
F.3d 1035, 1041-42 (9th Cir. 1996) ("The district court here had
jurisdiction over the plaintiffs'
claim of class discrimination in promotion if that claim fell within
the scope of the EEOC's
actual investigation or an EEOC investigation which [could] reasonably
be expected to grow out
of the charge of discrimination.") (citation omitted); Schnellbaecher
v. Baskin Clothing Co., 887
F.2d 124, 128 (7th Cir. 1989) ("[I]t is not the scope of the actual
[EEOC] investigation pursued
that determines what [judicial] complaint may be filed, but what EEOC
investigation could
reasonably be expected to grow from the original [administrative
charge]."); Fellows v.
Universal Restaurants, 701 F.2d 447, 450-51 (5th Cir. 1983) ("a cause
of action for Title VII
employment discrimination may be based, not only upon the specific
complaints made by the
employee's initial EEOC charge, but also upon any kind of
discrimination like or related to the
charge's allegations, limited only by the scope of the EEOC
investigation that could reasonably
be expected to grow out of the initial charges of discrimination").
The scope of a reasonable EEOC investigation, moreover, depends
not only on the
contents of the charge itself, but also on any supporting
documentation and other materials
generated during the administrative process, including the EEOC's
determination. See, e.g.,
Clark v. Kraft Foods, Inc., 18 F.3d 1278, 1280 (5th Cir. 1994)
(plaintiff's disparate treatment
claim, while not specifically alleged in charge, "was advanced before
the EEOC . . . because the
EEOC investigation of that claim was a reasonable consequence of
Clark's EEOC complaint and
supporting documentation"); Fellows, 701 F.2d at 448 (EEOC's request
for information relating
to applicants and employees other than plaintiff, and letter from
plaintiff's counsel advising
defendant that "a class action lawsuit would be filed" if settlement
could not be reached during
administrative process, supported conclusion that plaintiff's class
claims of sex discrimination
were within scope of discrimination alleged in charge). Thus, "an
inquiry into the scope of the
charge always entails an inquiry beyond the face of the complaint . .
. and may require evidence
of the breadth of the EEOC investigation that followed the filing of
the charge to determine
whether the charge was adequate to support all of the allegations
advanced in the complaint."
Babrocky, 773 F.2d at 863.
There is no question that Hohider's class claims – alleging that
UPS's practice of
requiring employees on medical leave to provide a full/100% medical
release to return to work
discriminates against a class of similarly situated individuals with
disabilities in violation of the
ADA – fall within the scope of the EEOC's reasonable investigation of
his charge. In his
original charge, filed pro se, Hohider alleged that UPS "refused to
reinstate [him] to the active
workforce because of [his] . . . disability," although "[UPS's] doctor
indicated that [he] could
return to work in a limited capacity" and he had "informed [UPS] of
positions that [he] could
perform . . . with a reasonable accommodation." R.55, p. 3.
Throughout the course of
administrative proceedings, Hohider supplemented his charge by
providing additional
information and materials to the PHRC and the EEOC. Through counsel,
Hohider informed the
PHRC of UPS's continuing refusal to reinstate him to jobs meeting his
medical restrictions, or to
make good faith efforts to identify and provide him with a reasonable
accommodation; provided
a copy of the 2001 consent decree entered to resolve the EEOC's claim
that the Desert Mountain
District of "UPS maintained a policy and practice of requiring
employees to provide a full
release without restrictions before returning to work after a medical
leave of absence"; and
furnished contact information for DiPaolo, another UPS employee who
allegedly experienced
"this policy and practice of discrimination and retaliation" by UPS.
See R. 72, pp. 32-36.
Upon Hohider's request for substantial review, the EEOC received
his PHRC case file,
id. p. 73, and the following additional information and materials:
Hohider's supplemental
affidavit, recounting UPS's continuing refusal to return him to work,
pursuant to a "well-known
company policy that UPS will not allow an injured or disabled employee
to return to work until
he submits a full release," id., pp. 57-58; notice of a prior charge
filed against UPS in 1996,
alleging "the same unlawful policy of nonaccommodation" against an
employee who "was
similarly told he had to provide a 'full release' before any
reinstatement would even be
considered," id., p. 60; and copies of DiPaolo's EEOC charge,
questionnaires, and affidavit, id.,
pp. 74-89, 92-94, in which he expressly alleged that UPS's "policy of
full medical releases is
discriminatory against disabled employees as a group and that [UPS
does] not even attempt to
enter into the interactive process with employees with disabilities
because of this policy." Id., p.
93. The EEOC's review of these materials led to its determination
that UPS maintains "a 100%
full medical release practice, which . . . is a per se violation of
the ADA," and discriminated
against Hohider, pursuant to this practice, by rejecting him for a
vacant position which met his
medical restrictions. Id., pp. 15-16. The EEOC's "investigation of a
particular claim," as
reflected in its charge determination, "creates a strong inference
that such a claim was presented"
in the administrative process, and is therefore properly within the
scope of a subsequent judicial
complaint. Clark, 18 F.3d at 1280 (EEOC's determination, which
treated charging party's
"gender-based harassment claim . . . as distinct from claims of sexual
harassment or retaliation,"
supported reversing summary judgment against claims of sex-based
disparate treatment).
UPS received actual notice, moreover, that the administrative
review of Hohider's charge
could lead to litigation claiming systemic discrimination against a
class of similarly situated
employees. In a letter dated February 2003, Hohider's attorney
notified UPS that the "case file is
currently under review by the EEOC," and warned that if "UPS continues
to adhere to its policies
of non-accommodation, and of refusal to engage in the interactive
process . . . it seems inevitable
that another class action lawsuit will be required to convince UPS to
treat Mr. Hohider, and
others, with the same respect and the opportunities to work as those
enjoyed by persons without
disabilities." R. 72, pp. 21A-21B. During this same period, while
Hohider's charge was pending
before the EEOC, UPS knew that DiPaolo, in his EEOC charge, similarly
alleged that the
company "has refused to allow me to return to work without a full
medical release from my
doctor" and "ignored" the statutory requirement that the company
engage in an "interactive
process" to determine a "reasonable accommodation." Id., p. 96. The
Request for Information in
connection with DiPaolo's charge, id., pp. 97-101, notified UPS in
January 2003 that the EEOC
was investigating whether the company maintained a "policy, practice
and procedure of requiring
100% full-releases of employees," and whether UPS had applied this
policy or practice to other
"employees who were similarly situated with the [charging party]."
Id., p. 100. Finally, the
EEOC's simultaneous letters of determination on Hohider's and
DiPaolo's charges, along with
the joint conciliation proposal, informed UPS that the investigation
had revealed "a 100% full
medical release practice, which . . . is a per se violation of the
ADA," id., pp. 15, 17, and
afforded UPS with an opportunity to eliminate the alleged
discriminatory practices and resolve
the charging parties' claims outside the judicial system. Id., pp. 20-21.
In seeking dismissal of Hohider's class claims, UPS urges the
district court to focus
exclusively on the facial contents of his "administrative complaint,"
which contains no allegation
of class-wide discrimination, and to ignore entirely the record of
administrative proceedings on
his charge, including the EEOC's investigation, determination, and
conciliation proposal. See R.
52, pp. 1-5. Although the Third Circuit has squarely held that "the
scope of a resulting private
civil action in the district court is 'defined by the scope of the
EEOC investigation which can
reasonably be expected to grow out of the charge of discrimination,'"
Hicks, 572 F.2d at 966
(citation omitted), UPS argues that rule does not govern whether
Hohider's class claims are
within the scope of his charge. Instead, UPS urges the court to
follow a line of cases in which a
claimant who never filed a charge (or whose charge was not timely)
files or joins a civil action as
a party plaintiff, and relies on the timely charge(s) filed by one or
more other claimants to satisfy
the charge-filing prerequisites. See, e.g., Lockhart v. Westinghouse
Credit Corp., 879 F.2d 43,
52-53 (3d Cir. 1989), overruled on other grounds by Hazen Paper v.
Biggins, 507 U.S. 604
(1993); Lusardi v. Lechner, 855 F.2d 1062, 1077 (3d Cir. 1988); Kloos
v. Carter-Day Co., 799
F.2d 397, 400 (8th Cir. 1986) (cited at R. 52, pp. 5-8); see also
Anderson v. Montgomery Ward,
852 F.2d 1008, 1016 (7th Cir. 1988); DeMedina v. Reinhardt, 686 F.2d
997, 1012-13 (D.C. Cir.
1982); Crawford v. United States Steel Corp., 660 F.2d 663, 665-66
(5th Cir. 1981); Bean v.
Crocker National Bank, 600 F.2d 754, 759-60 (9th Cir. 1979). Courts
have crafted the "piggy-
backing" or "single filing" rule to decide whether a claimant who did
not file a timely charge can
rely on a charge filed by someone else to satisfy the administrative
prerequisites to suit, and
have used different tests, either alone or in combination, for
determining whether
an administrative charge suffices to permit piggybacking by a
subsequent plaintiff.
The broadest test requires only that the claims of the
administrative claimant and
the subsequent plaintiff arise out of the same circumstances and
occur within the
same general time frame. . . . A somewhat narrower test requires that the
administrative claim give notice that the discrimination is
"class-wide," i.e., that it
alleges discrimination against a class of which the subsequent
plaintiff is a
member. . . . A still narrower test requires that the
administrative claim not only
allege discrimination against a class but also allege that the
claimant purports to
represent the class or others similarly situated.

Tolliver v. Xerox Corp., 918 F.2d 1052, 1057-58 (2d Cir. 1990)
(citations omitted). UPS
borrows the rule applied by the Third Circuit in these piggybacking
cases, see, e.g., Lockhart,
879 F.2d at 52-53; Lusardi, 855 F.2d at 1077, and asserts that because
Hohider did not expressly
allege class-wide discrimination in his charge, or formally amend his
charge to include such an
allegation, his class claims must be dismissed. R. 52, p. 15.
Plainly, the single filing rule does not apply here, since
Hohider filed an administrative
charge, which was the subject of extensive administrative proceedings,
including an
investigation, cause determination, and conciliation proposal by the
EEOC. The Supreme Court
has long recognized that a private Title VII litigant who has met the
charge-filing requirements
may seek "full relief" to be "'awarded on a class basis . . . without
exhaustion of administrative
procedures by unnamed class members.'" United Airlines, Inc. v.
McDonald, 432 U.S. 385, 389
n.6 (1977) (quoting Albemarle Paper Co. v. Moody, 422 U.S. 405, 414
n.8 (1975)); Franks v.
Bowman Transportation, 424 U.S. 747, 771 (1976) (reversing denial of
seniority relief for
unnamed class members who had not filed administrative charges).
Because Hohider satisfied
the administrative charge-filing prerequisites to bring suit under the
ADA, "the scope of . . . [his]
private civil action in the district court is defined by the scope of
the EEOC investigation which
can reasonably be expected to grow out of the charge of
discrimination." Hicks, 572 F.2d at 966
(internal quotation marks omitted).
Both the Ninth Circuit in Paige, 102 F.3d at 1041-42, and the
Fifth Circuit in Fellows,
701 F.2d at 460-51, have adopted the "scope of a reasonable
investigation" standard established
in Hicks to determine whether class claims asserted in litigation fall
within the scope of the
named plaintiff's administrative charge. This case does not present
the situation the single filing
rule was designed to address, i.e., whether an individual who never
filed a timely charge can
nevertheless file or intervene in a discrimination suit as a party
plaintiff to seek relief for himself
(and potentially for others). This Court should therefore reject
UPS's reliance on the standard
developed in the piggybacking context, and instead follow the analysis
adopted by the Third
Circuit in Hicks to determine whether Hohider's class claims exceed
the scope of his charge.
No court of appeals has used any variation of the single
filing/piggybacking test to
determine whether a plaintiff who filed a timely charge may assert
claims on behalf of unnamed
class members in subsequent litigation. Several district courts in
the Third Circuit, however,
have applied precedent developed in the context of the single filing
rule to dismiss class claims
of discrimination brought by plaintiffs who did not expressly allege
class-wide discrimination in
their charges. See, e.g., Hoffman v. R.I. Enterprises, 50 F. Supp. 2d
393, 399 (M.D. Pa. 1999);
Jackson v. Merck & Co., No. 99-CV-3069, 1999 WL 962522, at *5 (E.D.
Pa. Oct. 21, 1999);
Kresefsky v. Panasonic Communications & Sys. Co., 169 F.R.D. 54, 60-61
(D.N.J. 1996). UPS
relies heavily on these cases in seeking summary judgment on Hohider's
class claims. See R.54,
pp. 9-14. In the EEOC's view, these decisions are incorrect to the
extent they apply the single
filing rule, rather than the scope of the charge analysis, to decide
whether class claims advanced
by a plaintiff who filed a timely charge are within the scope of the
administrative proceedings on
his charge. Also, each of the cases is factually distinguishable from
Hohider's, because all of
these plaintiffs relied solely on the allegations of their
administrative charges to support their
assertion of class claims and argued (unsuccessfully) that a
reasonable EEOC investigation
would have encompassed class-wide discrimination. In none of these
three cases did the charges
filed by plaintiffs lead to an actual EEOC investigation that revealed
evidence of systemic
discrimination, let alone a finding that the employer maintained a
practice or policy that was a
"per se violation" of federal anti-discrimination law. See R. 72, pp. 15, 17.
UPS also argues that the Seventh Circuit's decision in
Schnellbaecher supports dismissal
of Hohider's class claims. See R. 54 (Mem. in Support of UPS Motion
for S.J. on Class Claims),
pp. 7-8. UPS's reliance on Schnellbaecher is misplaced, because the
Court in that case approved
a standard which, if applied here, would dictate denial of summary
judgment on Hohider's class
claims. In articulating the proper analysis to determine whether two
plaintiffs who had timely
filed sex discrimination charges could litigate those claims on behalf
of a class of female
employees, the Court in Schnellbaecher favorably cited both Fellows
and Hicks, and did not
apply the single filing rule or cite precedent developed in that
context. See 887 F.2d at 127. The
Seventh Circuit recognized that discrimination claims advanced in
litigation are cognizable so
long as they "are like or reasonably related to the allegations of the
charge and growing out of
such allegations," and this analysis may require an "inquiry . . .
into what EEOC investigation
could reasonably be expected to grow from the original complaint." Id.
(internal quotation marks
omitted). Because "both the EEOC charge and the ensuing investigation
were insufficient to put
the defendants on notice of any intention of the plaintiffs to make
allegations of class-wide
discrimination in their complaint," the Court held, "the district
judge was correct in dismissing
the charges of class-wide discrimination." Id. at 127-28 (emphasis
added). Significantly, the
Court distinguished Fellows by noting, "[m]ost importantly," that the
defendant in that case "had
received a letter from the plaintiff's attorney shortly after her
charge was filed, stating that if a
settlement could not be reached, a class action lawsuit would be
filed," and "thereafter refused to
answer the EEOC's questions concerning its other employees." Id.
In this case, Hohider's counsel sent UPS a similar letter in
February 2003, see R. 72, pp.
21A-21B, shortly after the EEOC notified UPS, through its Request for
Information in
connection with DiPaolo's charge, that the agency was investigating
whether the company
maintained a "policy, practice and procedure of requiring 100%
full-releases of employees," and
whether UPS had applied this policy or practice to other "employees
who were similarly situated
with the CP." Id., p. 100. The EEOC's determination that UPS
maintains "a 100% full medical
release practice, which . . . is a per se violation of the ADA," id.,
pp. 15, 17, and its proposal that
UPS eliminate that practice and inform all employees of the change in
policy, id., pp. 20-21,
further demonstrate beyond dispute that the "ensuing investigation" of
Hohider's charge put
UPS on notice that the administrative process could give rise to
subsequent litigation asserting
class claims of discrimination against similarly situated individuals
who were denied reasonable
accommodation pursuant to this practice. See Schnellbaecher, 887 F.2d at 128.
UPS concedes that Hohider's "class action claims would
potentially be viable" had he
formally amended his charge to include specific allegations of
class-wide discrimination. R. 54,
p. 15; see 29 C.F.R. § 1601.12(b) ("A charge may be amended . . . to
clarify and amplify
allegations made therein. Such amendments and amendments alleging
additional acts which
constitute unlawful employment practices related to or growing out of
the subject matter of the
original charge will relate back to the date the charge was first
received."). Yet a formal
amendment would have served no purpose that was not effectively
accomplished through
Hohider's supplemental affidavit and other communications from counsel
during the
administrative proceedings. When UPS initially refused to provide an
accommodation that
would enable Hohider to get back to work, he had no reason to suspect
that the company's failure
to engage in good faith efforts to accommodate his medical
restrictions was part of a de facto
100% release practice. As UPS pointed out in rejecting the EEOC's
conciliation proposal (and
convinced the EEOC during the investigation of an earlier charge), a
100% release requirement is
contrary to the company's official policies. See R. 72, pp. 25-27.
It was only after Hohider
(acting without counsel) filed his initial intake questionnaire and
charge that it became clear to
him (and his attorney) that UPS's treatment of him was pursuant to an
unwritten company
practice of systemic discrimination against employees with
disabilities. Hohider and his counsel
furnished information and materials to both the PHRC and the EEOC to
support his allegations
of class-wide discrimination, and these allegations were communicated
directly to UPS by
Hohider's attorney while his charge was pending, and subsequently
confirmed by the EEOC's
cause determination and conciliation proposal.
In sum, the rigidly formalistic approach urged by UPS – requiring
an express allegation
of class-wide discrimination on the face of a charge to support a
class claim of systemic
discrimination – would impose impracticable requirements on often
unrepresented individuals
who file charges of discrimination; encourage unnecessary
administrative filings that would
further encumber an overburdened charge-processing system; and impede
litigants from serving
the "private attorney general" function Congress deemed necessary to
achieve maximum
enforcement of the nation's anti-discrimination laws, see Albemarle
Paper Co. v. Moody, 422
U.S. 405, 415 (1975); Alexander v. Gardner-Denver Co., 415 U.S. 36, 45
(1974) ("Congress
gave private individuals a significant role in the enforcement process
of Title VII . . . [which]
vindicates the important congressional policy against discriminatory
employment practices.").

CONCLUSION

For the foregoing reasons, the EEOC respectfully urges this Court
to deny UPS's motion
for summary judgment on Hohider's class claims.

Respectfully submitted,

ERIC S. DREIBAND
General Counsel

CAROLYN L. WHEELER
Assistant General Counsel

___________________________
DORI K. BERNSTEIN
Attorney

EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
Office of General Counsel
1801 L Street, N.W., Room 7046
Washington, D.C. 20507
(202) 663-4734

CERTIFICATE OF SERVICE

I hereby certify that one copy of this brief was mailed, first
class, postage prepaid, on

this 11th day of March, to the following:

Christian Bagin David R. Scott
Bruce Bagin Scott + Scott, LLC
Wienand & Bagin P.O. Box 192
312 Boulevard of the Allies, Suite 600 108 Norwich Avenue
Pittsburgh, Pennsylvania 15222-1923 Colchester, Connecticut 06415

Anita M. Laing Kimberly M. Skaggs
Arthur Shingler, III Judy B. Goldstein
Donald A. Broggi The Equal Justice Foundation
Scott + Scott, LLC 88 East Broad Street, Suite 1590
401 B Street, Suite 307 Columbus, Ohio 43115
San Diego, California 92101

David J. McAllister
Perry A. Napolitano
Joseph E. Culleiton
Abigail D. Flynn-Kozara
REED SMITH LLP
435 Sixth Avenue
Pittsburgh, Pennsylvania 15219-1886

_________________________
Dori K. Bernstein
Attorney

EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
Office of General Counsel
1801 L Street, N.W., Room 7046
Washington, D.C. 20507
(202) 663-4734

**************************************************************************
<<FOOTNOTES>>

<1> Record ("R.") references correspond to numbered entries on this Court's
docket sheet.

<2> In contrast to Pennsylvania law, as interpreted by the PHRC, the ADA
expressly defines "reasonable accommodation" to include "reassignment
to a vacant
position." 42 U.S.C. § 12111(9)(B); see also 29 C.F.R. Pt. 1630 App.
§ 1630.2(o)
(discussing reasonable accommodation, including reassignment). Thus,
an individual
with a disability who, with or without reasonable accommodation, can no longer
perform the essential functions of his current (or former) job, can
demonstrate he
is a "qualified" individual with a disability, 42 U.S.C. § 12111(8),
and therefore
within the ADA's coverage, if he is able to perform the essential
functions of a
vacant position, with or without reasonable accommodation. Because
"[t]he practices
prohibited by the [Pennsylvania] law" are not "comparable in scope to
the practices
prohibited by federal law," the PHRC's determination of Hohider's charge is not
entitled to the "substantial weight" the EEOC ordinarily accords to
the findings of
a state fair employment practice (FEP) agency. See 29 C.F.R. §
1601.21(e)(2)(ii).

Los Angeles Employment Lawyers and Attorneys Resource: Parilla v. IAP

2008-06-07T13:42:00.001-07:00

No. 03-2009
_________________________________________

IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________________________________

VIRGEN PARILLA,

Plaintiff-Appellee/Cross-Appellant,

IAP WORLDWIDE SERVICES VI, INC.,
IAP WORLDWIDE SERVICES, INC.,
GENE LUDLOW and ROY VARNER,

Defendants-Appellants/Cross-Appellees.
______________________________________________

On Appeal from the United States District Court
for the District Court of the Virgin Islands
Case No. 02-CV-00112
______________________________________________

Brief of the U.S. Equal Employment Opportunity Commission
as Amicus Curiae Supporting Plaintiff-Appellee/Cross-Appellant
______________________________________________

JAMES L. LEE U.S. EQUAL EMPLOYMENT
Deputy General Counsel OPPORTUNITY COMMISSION
Office of General Counsel
CAROLYN L. WHEELER 1801 L Street, NW, Room 7030
Acting Associate General Counsel Washington, DC 20507
(202) 663-4724
ANNE NOEL OCCHIALINO
Attorney

TABLE OF CONTENTS

Table of Authorities . . . . . . . . . . . . . . . . . . . . .iii

Statement of Interest. . . . . . . . . . . . . . . . . . . . . .1

Statement of the Issue . . . . . . . . . . . . . . . . . . . . .2

Statement of the Case. . . . . . . . . . . . . . . . . . . . . .3

A. Nature of the Case and Court of Proceedings . . . . .3

B. Statement of Facts . . . . . . . . . . . . . . . . . .3

C. District Court Decision . . . . . . . . . . . . . . .5

Summary of Argument. . . . . . . . . . . . . . . . . . . . . . .7

Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

THE PROVISION PROHIBITING THE RESOLUTION OF CLAIMS
BEFORE AN ADMINISTRATIVE AGENCY IS UNENFORCEABLE
AS A MATTER OF PUBLIC POLICY BECAUSE IT INTERFERES
WITH THE COMMISSION'S INDEPENDENT STATUTORY
AUTHORITY TO ENFORCE TITLE VII AND OTHER CIVIL
RIGHTS STATUTES.

A. Because the provision could be interpreted as prohibiting
the filing of a charge of discrimination or assisting in an
EEOC investigation, it potentially interferes with the
Commission's law enforcement mission.. . . . . . . . 11

B. The prohibition on resolving claims before an administrative
agency violates public policy because it interferes with the
Commission's statutory obligation to seek compliance through
conciliation and litigation. . . . . . . . . . . . . 17

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Certificate of Compliance. . . . . . . . . . . . . . . . . . . 22

Certificate of Service . . . . . . . . . . . . . . . . . . . . 23
TABLE OF AUTHORITIES

Cases

EEOC v. Astra USA, Inc., 94 F.3d 738 (1st Cir. 1996) . . . 15, 16

EEOC v. Cosmair, Inc. L'Oreal Hair Care Div.,
821 F.2d 1085 (5th Cir. 1987) . .. . . . . . 11, 13, 14, 15

EEOC v. Shell Oil Co., 466 U.S. 54 (1984) . . . . . . 12, 13, 14

EEOC v. Waffle House, Inc. . . . . . . . . . . . . . . .8, 18, 19

General Tel. Co. v. EEOC, 446 U.S. 318 (1980) .. . . . 14, 18, 19

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) 8, 14

Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983)11

Occidental Life Ins. v. EEOC, 432 U.S. 355 (1977) . . . . . . 12

Plaskett v. Bechtel Int'l, Inc., 243 F. Supp. 2d 334 (D.V.I. 2003)5, 6, 7, 8

Town of Newton v. Rumery, 480 U.S. 386 (1987) . . . . . . . . 10

Statutes and Regulations

29 U.S.C. § 216(c) . . . . . . . . . . . . . . . . . . . . . . 18

29 U.S.C. § 217 . . . . . . . . . . . . . . . . . . . . . . . 18

29 U.S.C. § 626(a)(1). . . . . . . . . . . . . . . . . . . . . 13

29 U.S.C. § 626(b) . . . . . . . . . . . . . . . . . . . . . . 17

29 U.S.C. § 626(f)(4). . . . . . . . . . . . . . . . . . . 15, 16

29 C.F.R. § 1620.30(a) . . . . . . . . . . . . . . . . . . . . 13

29 C.F.R. § 1620.30(b) . . . . . . . . . . . . . . . . . . . . 13

42 U.S.C. § 12117(a) . . . . . . . . . . . . . . . . . . . 12, 17

42 U.S.C. § 2000e et seq. . . . . . . . . . . . . . . . . . . .1

42 U.S.C § 2000e-5(b) . . . . . . . . . . . . . . . . 10, 12, 17

42 U.S.C. § 2000e-5(f)(1) . . . . . . . . . . . . . . . . 10, 17

Miscellaneous

B. Lindemann & P. Grossman,
Employment Discrimination Law (3rd ed. 1996) . . . . . . . . . .
. . . . . . . . . . . . 13

EEOC Compliance Manual Notice 915.002, "EEOC Enforcement
Guidance on non-waivable employee rights under [ ] (EEOC)
enforced statutes," (April 10, 1997),
www.eeoc.gov/docs/waiver.html, . . 16
No. 03-2009
_________________________________________

IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________________________________

VIRGEN PARILLA,

Plaintiff-Appellee/Cross-Appellant,

IAP WORLDWIDE SERVICES VI, INC.,
IAP WORLDWIDE SERVICES, INC.,
GENE LUDLOW and ROY VARNER,

Defendants-Appellants/Cross-Appellees.

______________________________________________

On Appeal from the United States District Court
for the District Court of the Virgin Islands
______________________________________________

Brief of the U.S. Equal Employment Opportunity Commission
as Amicus Curiae Supporting Plaintiff-Appellee/Cross-Appellant
______________________________________________

STATEMENT OF INTEREST
The United States Equal Employment Opportunity Commission is charged
with enforcing Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§
2000e et seq.
("Title VII") and other civil rights statutes. To carry out its
enforcement mission,
the Commission relies on employees' charges of discrimination to alert the
Commission to potential violations of the statute. Under Title VII, and other
statutes, the filing of a charge of discrimination triggers the
Commission's obligation
to investigate the charge and, if appropriate, to conciliate it. If
conciliation is
unsuccessful, the Commission may choose to enforce compliance by filing a civil
action against the employer.
The district court's decision in this case raises an important
issue concerning
the enforceability of arbitration agreements prohibiting employees
from resolving
claims before administrative agencies, which would include the Commission.
Because of the importance of this issue to the Commission's enforcement mission,
the Commission offers its views to the Court as a United States agency under
Federal Rules of Appellate Procedure 29(a).
STATEMENT OF THE ISSUE
Whether the district court erred in finding that a provision of
an arbitration
agreement prohibiting an employee from resolving claims before an administrative
agency is enforceable where enforcement would interfere with the Commission's
independent statutory authority to vindicate the public interest under
Title VII and
other civil rights statutes.
STATEMENT OF THE CASE
A. Nature of the Case and Course of Proceedings
On August 21, 2002, Plaintiff-Appellee/Cross-Appellant Virgen Parilla filed
this lawsuit against Defendants-Appellants/Cross-Appellees IAP Worldwide
Services VI, Inc., IAP Worldwide Services, Inc., Gene Ludlow, and Roy Varner
("IAP") under Title VII and Virgin Island law alleging, among other
things, that she
had been sexually harassed and terminated in retaliation for
complaining about the
harassment. A29-34 (compl.); A2 (docket). On September 16, 2003, IAP filed a
Motion to Compel Arbitration. A35 (motion). In a Memorandum Opinion and
separate Order, the district court denied the motion. A6 (memo.); A4
(order). On
April 2, 2003, IAP Defendants filed a notice of appeal. A3 (docket). On May 6,
2003, Parilla also filed a notice of appeal from the district court's
order, which is
styled case No. 03-2308.
B. Statement of Facts
On June 6, 2000, IAP Worldwide Service VI, Inc. ("IAP VI") hired Parilla as
an administrative assistant. A6 (Slip op. at 1). Upon being hired,
Parilla entered
into an Hourly Employment Agreement ("Agreement") with IAP VI that states in
relevant part, "[a]ny controversy or claim arising out of or relating
in any way to . . .
Employee's employment with Employer, or to the suspension or termination of
Employee's employment with Employer . . . shall be resolved by
arbitration and not
in a court or before an administrative agency." A44, ¶ 16 (Agreement). The
Agreement further provides that "[a]rbitrable matters include, but are
not limited to .
. . claims for wrongful or retaliatory discharge or wrongful treatment
under . . .
Federal law, including, . . . the Civil Rights Acts . . . , Title VII, the Equal
Employment Opportunity Act, the Equal Pay Act . . . the Age Discrimination in
Employment Act, the Americans with Disabilities Act . . . [and] claims for
employment discrimination under . . . Federal law." A44-45, ¶ 17 (Agreement).
The Agreement also states that the parties will pay their own
attorney's fees
regardless of the outcome of the arbitration, that the arbitrator may
order the losing
party to pay the entire cost of the arbitration, that the arbitrator
cannot come from
the Virgin Islands or Puerto Rico, that IAP must be notified of any claim within
thirty days, and, through incorporation of the American Arbitration Association
rules, that the names of the parties will be kept confidential unless
a party expressly
permitts its name to be made public. A45-45B.
In approximately July 2002, IAP terminated Parilla's employment. A31, ¶¶
19-20 (compl.). On August 21, 2002, Parilla filed suit against IAP.
A28 (compl.);
A2 (docket).
C. District Court Decision
On March 26, 2003, the district court issued a short opinion and order
denying IAP's motion to compel arbitration. A6 (memo.); A4 (order). The court
concluded that the Agreement was in all material respects identical to another
arbitration agreement at issue in Plaskett v. Bechtel Int'l, Inc., 243
F. Supp. 2d 334
(D.V.I. 2003). A7 (slip op. at 2). The court went on to state that
for the reasons
set forth in Plaskett, the motion to compel arbitration would be
denied. Id. The
district court's only substantive discussion concerned its rejection of IAP's
argument that the court should reconsider its holding in Plaskett that
the waiver of
attorney's fees is unconscionable under Title VII. A8 (slip op. at
3). Thus, the
court's decision in this case rests on the reasoning of Plaskett.
In Plaskett, the court concluded that the arbitration provisions
at issue in the
plaintiff's Hourly Employment Agreement contained multiple unconscionable terms
that permeated the arbitration provisions and could not be severed from them,
although the court concluded that the rest of the agreement (not relating to the
arbitration provisions) was enforceable. See Plaskett, 243 F. Supp.
2d at 340-46.
The court began its analysis by concluding that the parties formed an
agreement to
arbitrate. Id. at 338. The court went on to apply general contract
principles of
territorial law to determine whether the arbitration agreement at issue was
enforceable, which, the court stated, depended on whether the agreement was
unconscionable. See id. at 339.
The court concluded that three provisions of the agreement were
unconscionable: 1) the provision requiring each party to bear its own attorney's
fees, which the court found to be unconscionable since awards of attorney's fees
should ordinarily be made to prevailing parties under Title VII
(although not under
Virgin Island law); 2) the provision requiring the employee to notify
the employer of
any claim within thirty days; and 3) the provision, incorporated by
reference to the
American Arbitration Association Rules, that the names of the parties to any
arbitration award be kept confidential unless a party expressly
permitted its name to
be made public. See id. at 340-43.
The Plaskett court determined, however, that the provision stating, "'[a]ny
controversy or claim . . . shall be resolved by arbitration and not .
. . before an
administrative agency'" was not unconscionable. Id. at 343-44. In the court's
view, the provision simply barred either party from seeking "a judgment by an
administrative agency." Id. at 343. Since the EEOC brings suit in
its own name,
not that of an employee, the court reasoned that "the EEOC does not have the
authority to enter any judgment resolving any controversy or claim between the
parties." Id. at 344. Because the plaintiff could not "waive a right
that he has never
had," the court determined that this provision was not unconscionable. Id.
Finally, the court concluded that the unconscionable terms permeated the
arbitration provisions, making severance of the offending terms
inappropriate. See
id. at 345. Therefore, the court denied the defendant's motion to
compel arbitration,
although it enforced the remainder of the Hourly Employment Agreement. For the
same reasons, the court in this case denied IAP's motion to compel
arbitration but
enforced the remainder of the Agreement.
SUMMARY OF ARGUMENT
If it reaches the issue, this Court should find that the district
court erred in
concluding that the provision of the arbitration agreement prohibiting
Parilla from
resolving any claims before an administrative agency is enforceable.
Enforcement
of the provision would substantially interfere with the Commission's independent
statutory authority to vindicate the public interest by enforcing
Title VII and other
civil rights employment statutes. Therefore, this Court should
conclude that the
provision violates public policy and, consequently, is unenforceable.
Although Parilla filed a charge of discrimination, the
prohibition on resolving
claims before an administrative agency could be interpreted as
prohibiting her from
doing so. Since the Commission's authority to investigate
discrimination under Title
VII and the Americans with Disabilities Act ("ADA") is derived solely from the
filing of a charge, and because the vast majority of charges are filed
by employees,
enforcement of provisions such as this one could potentially deprive the
Commission of the opportunity to learn of alleged Title VII and ADA
violations and
could also impede the Commission's opportunity to investigate
potential violations
of the Equal Pay Act ("EPA") and the Age Discrimination in Employment Act
("ADEA"). Because a charge not only informs the Commission of alleged
discrimination against the employee filing the charge but may also alert the
Commission to other unlawful discrimination by the employer, enforcement of the
provision could also impact the Commission's ability to learn of systemic
discrimination.
Enforcement of the provision would also directly conflict with Congress's
mandate that the Commission seek compliance through conciliation and litigation
where the Commission's investigation has led it to believe that a
statutory violation
has occurred. In Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.
20, 28 (1991),
the Supreme Court held that ADEA claims are arbitrable but stated that
arbitration
agreements would not prevent the Commission from seeking class-wide or equitable
relief. More recently, in EEOC v. Waffle House, Inc. 534 U.S. 279 (2002), the
Court held that even where an employee has signed a pre-employment arbitration
agreement, the Commission may seek victim-specific relief for that employee.
Thus, enforcement of the Agreement's prohibition on resolving claims before an
administrative agency contravenes Supreme Court precedent affirming that
employees' agreements to arbitrate their claims does not vitiate the
Commission's
statutory authority to vindicate the public interest by resolving employment
discrimination claims.
ARGUMENT
THE PROVISION PROHIBITING THE RESOLUTION OF CLAIMS
BEFORE AN ADMINISTRATIVE AGENCY IS UNENFORCEABLE AS A
MATTER OF PUBLIC POLICY BECAUSE IT INTERFERES WITH THE
COMMISSION'S INDEPENDENT STATUTORY AUTHORITY TO
ENFORCE TITLE VII AND OTHER CIVIL RIGHTS STATUTES.

The district court erred in concluding that the provision of the Agreement
prohibiting any claims from being resolved before an administrative agency is
enforceable. The court reached this erroneous conclusion by reasoning that "the
EEOC does not have the authority to enter any judgment resolving any controversy
or claim between the parties" and therefore that Parilla "cannot waive
a right that
[s]he has never had." Plaskett, 243 F. Supp. 2d at 344. This
reasoning reflects a
fundamental misunderstanding about the Commission's statutory authority and
utilizes an overly restrictive definition of "resolve." The
Commission may "resolve"
a charge of discrimination in several ways. First, the Commission may resolve a
charge when it fulfills its statutory mandate "to eliminate any . . .
alleged unlawful
employment practice by informal methods of conference, conciliation, and
persuasion." 42 U.S.C. § 2000e-5(b). Second, although the Commission does not
represent charging parties, the Commission may sue on behalf of a charging party
and thereby resolve a charge of discrimination through litigation or
settlement. See
42 U.S.C. § 2000e-5(f)(1). Third, upon agreement of the parties and
even before an
investigation begins, the Commission may resolve a charge through mediation.
Thus, although the Commission does not enter judgments resolving discrimination
charges, the Commission may secure resolution of discrimination charges through
conciliation and litigation, making the Agreement's prohibition on resolving
complaints before an administrative agency unenforceable.
"The relevant principle is well established: a promise is
unenforceable if the
interest in its enforcement is outweighed in the circumstances by a
public policy
harmed by enforcement of the agreement." Town of Newton v. Rumery, 480 U.S.
386, 392 (1987) (footnote omitted); see also Restatement (Second) of Contracts §
208 cmt. a (stating that the policy against unconscionable contracts
"overlaps with
rules which render particular . . . terms unenforceable on grounds of
public policy").
Here, the interest served by enforcing the provision prohibiting the
resolution of
claims before an administrative agency is the encouragement of private
settlement of
employment disputes, which is in keeping with the "liberal federal
policy favoring
arbitration agreements" manifested in the Federal Arbitration Act.
Moses H. Cone
Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). For the reasons
discussed below, however, that interest "is outweighed by the public interest in
EEOC enforcement of the ADEA," EEOC v. Cosmair, Inc., L'Oreal Hair Care Div.,
821 F.2d 1085, 1090 (5th Cir. 1987), as well as EEOC enforcement of
Title VII, the
ADA, and the EPA. Therefore, the provision is unenforceable as a matter of law.
A. Because the provision could be interpreted as prohibiting
the filing of a
charge of discrimination or assisting in an EEOC investigation, it
potentially interferes with the Commission's law enforcement mission.

Although Parilla filed a charge of discrimination in this case,
the prohibition
on resolving claims before an administrative agency could be
interpreted as having
prohibited her from doing so and as prohibiting her from assisting in
a Commission
investigation. Such a prohibition would clearly violate public policy
by undermining
employees' statutory right to file charges and the Commission's independent
statutory authority to investigate them.
"[U]nder the procedural structure created by the 1972 amendments [to Title
VII], the EEOC does not function simply as a vehicle for conducting
litigation on
behalf of private parties; it is a federal administrative agency
charged with the
responsibility of investigating claims of employment discrimination and settling
disputes, if possible, in an informal, noncoercive fashion."
Occidential Life Ins. v.
EEOC, 432 U.S. 355, 368 (1977). Under Title VII and the ADA, the EEOC only
has jurisdiction to investigate discrimination where a charge has been
filed. See 42
U.S.C. § 2000e-5(b) (stating that "[w]henever a charge is filed by or
on behalf of a
person claiming to be aggrieved, or by a member of the Commission," the
Commission shall investigate); 42 U.S.C. § 12117(a) (adopting Title
VII procedures
under the ADA); see also EEOC v. Shell Oil Co., 466 U.S. 54, 64 (1984) ("the
EEOC's investigative authority is tied to charges filed with the
Commission; unlike
other federal agencies that possess plenary authority to demand to see records
relevant to matters within their jurisdiction, the EEOC is entitled to
access only to
evidence 'relevant to the charge under investigation'") (citation and footnote
omitted). By far, the vast majority of charges filed under these
statutes are filed by
aggrieved employees.
In contrast to Title VII and the ADA, the EEOC's investigative authority
under the ADEA and EPA is not tied to the filing of a charge. See 29 U.S.C. §
626(a) (under ADEA, stating that the Commission "shall have the power to make
investigations"); 29 C.F.R. § 1620.30(a)(1) (stating that under EPA
the Commission
may "investigate and gather data"). Nevertheless, the filing of
charges by aggrieved
individuals is the primary means through which the EEOC learns of possible
discrimination under these statutes as well. See, e.g., B. Lindemann & P.
Grossman, Employment Discrimination Law at 523 (3rd ed. 1996) ("Although the
government can initiate investigations sua sponte, most [EPA] investigations are
conducted in response to complaints lodged by employees.").
Thus, in contrast to "a complaint initiating a lawsuit," the
"function of a Title
VII charge . . . is to place the EEOC on notice that someone (either a
party claiming
to be aggrieved or a Commissioner) believes that an employer has
violated the title."
Shell Oil, 466 U.S. at 68. Significantly, a charge is not restricted to merely
notifying the Commission that the charging party may have been unlawfully
discriminated against. Instead, a charge "also may identify other
unlawful company
actions." Cosmair, 821 F.2d at 1090. This is true because a charging party can
allege that other co-workers have also been victims of discriminatory
actions and
because "[a]ny violations that the EEOC ascertains in the course of a
reasonable
investigation of the charging party's complaint are actionable."
General Tel. Co. v.
EEOC, 446 U.S. 318, 331 (1980) (citation omitted). Thus, prohibitions in
arbitration agreements on the filing of charges impermissibly impedes the
Commission's ability to learn not just about individual acts of
discrimination against
a charging party but also to learn about about systemic
discrimination. See Shell
Oil, 466 U.S. at 69 ("it is crucial that the Commission's ability to investigate
charges of systemic discrimination not be impaired").
The Supreme Court has recognized the statutory right of employees to file
charges, even when employees have agreed to arbitrate their claims against an
employer. In Gilmer v. Interstate/Johnson Lane Corp. the Court held
that an ADEA
claim may be subject to arbitration but stated that "[a]n individual
ADEA claimant
subject to an arbitration agreement will still be free to file a
charge with the EEOC,
even though the claimant is not able to institute a private judicial
action." Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991) (emphasis
added). Thus, the
Court in Gilmer implicitly acknowledged that the filing of charges serves an
important public interest that survives an employee's agreement to arbitrate an
employment dispute.
The Fifth Circuit has reached the same result in an ADEA case involving the
enforceability of a waiver of the right to file a charge. See
Cosmair, 821 F.2d at
1090. In Cosmair the Fifth Circuit held that "an employer and employee cannot
agree to deny to the EEOC the information it needs to advance th[e]
public interest.
A waiver of the right to file a charge is void as against public
policy." Cosmair, 821
F.2d at 1090; cf. EEOC v. Astra USA, Inc., 94 F.3d 738, 745-47 (1st
Cir. 1996) (in
preliminary injunction action under Title VII where EEOC was already
investigating
three charges of discrimination against employer, holding that no
significant risk of
irreparable harm existed where settlement agreement prohibited employees from
filing charges).
Congress reaffirmed the strong public policy against interfering with the
EEOC's enforcement efforts when it enacted the Older Workers Benefit Protection
Action of 1990 ("OWBPA"). This act states in part that "[n]o waiver agreement
may affect the Commission's rights and responsibilities to enforce
this chapter" and
that no waiver may "justify interfering with the protected right of an
employee to file
a charge." 29 U.S.C. § 626(f)(4). Although the OWBPA concerns waivers, the
public policy principles underlying Congress' explicit affirmation of employees'
right to file a charge and the Commission's right and responsibility
to enforce the
ADEA – regardless of any waiver they may have signed – are the same as those at
stake in pre-employment arbitration agreements. Therefore, to the
extent that the
Agreement in this case may be read to prohibit the filing of a charge of
discrimination, it is clearly unenforceable as a matter of public policy.
Similarly, to the extent that the Agreement's prohibition on
resolving claims
before an administrative agency can be construed as a prohibiting Parilla from
assisting the Commission in its investigation, the provision is
unenforceable. See,
e.g., 29 U.S.C. § 626(f)(4) (stating that no waiver of ADEA claim may "justify
interfering with the protected right of an employee to . . . participate in an
investigation or proceeding conducted by the Commission"); Astra, 94
F.3d 738. In
Astra, the EEOC sought a preliminary injunction under Title VII to prevent the
employer from enforcing provisions of settlement agreements
prohibiting employees
from assisting the EEOC in its investigations. Astra, 94 F.3d at
740-41. The court
held that "non-assistance covenants which prohibit communication with the EEOC
are void as against public policy." Id. at 745. In reaching its
conclusion, the court
stated that "if victims of or witnesses to sexual harassment are
unable to approach
the EEOC or even to answer its questions, the investigatory powers that Congress
conferred would be sharply curtailed and the efficacy of investigations would be
severely hampered." Id. at 744. Noting that the Commission acts not
just on behalf
of private parties but also to vindicate the public interest, the
court further stated,
"any agreement that materially interferes with communication between an employee
and the Commission sows the seeds of harm to the public." Id.
(citation omitted);
see also EEOC Compliance Manual Notice 915.002, "EEOC Enforcement
Guidance on non-waivable employee rights under [ ] (EEOC) enforced statutes,"
(April 10, 1997), www.eeoc.gov/docs/waiver.html, ("An employer may not interfere
with the protected right of an employee to file a charge, testify,
assist, or participate
in any manner in an investigation, hearing, or proceeding under Title
VII," the ADA,
the ADEA, or the EPA).
B. The prohibition on resolving claims before an administrative agency
violates public policy because it interferes with the Commission's
statutory obligation to seek compliance through conciliation and
litigation.

On its face, the Agreement's prohibition on resolving claims before an
administrative agency precludes the Commission from resolving
Parilla's Title VII
claim through conciliation or litigation. This provision runs afoul
of Congress'
mandate, as expressed in Title VII, the ADA, and the ADEA, that the Commission
seek voluntary compliance through conciliation and, when necessary, through
litigation. See 42 U.S.C. §§ 2000e-5(b) (under Title VII, stating that if the
Commission determines "that there is reasonable cause to believe that
the charge is
true, the Commission shall" attempt conciliation), 2000e-5(f)(1) (if
conciliation is
unsuccessful, "the Commission may bring a civil action"); 42 U.S.C. § 12117(a)
(under ADA, adopting the "powers, remedies, and procedures" of 42 U.S.C §
2000e-5); 29 U.S.C. § 626(b) (under ADEA, stating that Commission must attempt
conciliation before instituting any action). See also 29 C.F.R. § 1620.30(a)(6)
(stating that under the EPA, the Commission may initiate and conduct
litigation).
Therefore, the provision violates public policy and is unenforceable.
The 1972 amendments to Title VII authorized the Commission to bring suit
against private employers. "In so doing, Congress sought to implement
the public
interest as well as to bring about more effective enforcement of
private rights."
General Tel., 446 U.S. at 325-26. The amendments did not, however, transfer to
the Commission all responsibility for enforcing private rights. See id. at 326.
Instead, individuals are also able to bring their own actions to
enforce Title VII.
See id. "These private-action rights suggest that the EEOC is not
merely a proxy
for the victims of discrimination." Id. Thus, while the Commission may seek
victim-specific relief, the Commission "is guided by 'the overriding
public interest
in equal employment opportunity . . . asserted through direct Federal
enforcement.'"
Id. (quoting 118 Cong. Rec. 4941 (1972)). Therefore, "[w]hen the EEOC acts,
albeit at the behest of and for the benefit of specific individuals,
it acts also to
vindicate the public interest." Id. (footnote omitted); see also
Waffle House, 534
U.S. at 296 (stating that when the EEOC decides to bring an enforcement action,
"the agency may be seeking to vindicate a public interest, not simply
provide make-
whole relief for the employee, even when it pursues entirely
victim-specific relief").
Pre-employment arbitration agreements entered into by employees and
employers do not vitiate the Commission's authority – and, indeed, its statutory
obligation – to vindicate the public interest by enforcing Title VII
and other statutes
through conciliation and litigation. See Waffle House, 534 U.S. 279;
Gilmer, 500
U.S. 20. As discussed supra, in Gilmer the Supreme Court held that ADEA claims
may be subject to arbitration. Gilmer, 500 U.S. at 35. In rejecting
the argument
that arbitration does not adequately further the purposes of the ADEA because
arbitration does not allow for equitable relief and class actions, the
Supreme Court
stated, "it should be remembered that arbitration agreements will not
preclude the
EEOC from bringing actions seeking class-wide and equitable relief."
Gilmer, 500
U.S. at 32 (emphasis in original).
More recently, in EEOC v. Waffle House the Supreme Court held that the
EEOC may seek not only class-wide and equitable relief where an employee has
signed a pre-employment arbitration agreement, but that the Commission may also
seek victim-specific relief. See Waffle House, 534 U.S. 279. In reaching that
conclusion, the Court stated that "[t]here is no language in the
statutes or in either"
Occidental Life or General Telephone "suggesting that the existence of an
arbitration agreement between private parties materially changes the EEOC's
statutory function or the remedies that are otherwise available."
Waffle House, 534
U.S at 288. When weighing the policy goals of the FAA against the language of
Title VII and the arbitration agreement the plaintiff had signed, the
Court further
stated:
No one asserts that the EEOC is a party to the contract, or
that it agreed to arbitrate its claims. It goes without
saying that a contract cannot bind a nonparty.
Accordingly, the proarbitration policy goals of the FAA
do not require the agency to relinquish its statutory
authority if it has not agreed to do so.

Id. at 294. Thus, in this case, the IAP Agreement's prohibition on
resolving claims
before an administrative agency contravenes the teachings of Waffle
House in that
the Supreme Court has expressly held that the EEOC may pursue victim-specific
relief even where an employee has signed an arbitration agreement.
In short, the Agreement's prohibition on resolving claims before an
administrative agency prevents the remedial principles of Title VII
and other civil
rights statutes from being effectuated by interfering with the Commission's
independent statutory authority to serve the public interest by
resolving complaints
of unlawful employment discrimination. CONCLUSION
The provision of the Agreement between Parilla and IAP VI that
prohibits the
resolution of claims before an administrative agency directly contravenes the
statutory framework and principles of Title VII and the other civil
rights statutes
enforced by the Commission by interfering with the Commission's statutory
authority – and obligation – to vindicate the public interest by
eradicating unlawful
employment discrimination. Therefore, the provision violates public
policy and is
unenforceable as a matter of law.

Respectfully submitted,
JAMES L. LEE
Deputy General Counsel

CAROLYN L. WHEELER
Acting Associate General Counsel

__________________________
ANNE NOEL OCCHIALINO
Attorney
U.S. EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
1801 L Street, NW, Room 7030
Washington, DC 20507
(202) 663-4724

CERTIFICATE OF COMPLIANCE
I certify that this brief complies with the type-volume
limitation set forth in
Fed. R. App. P. 32(a)(7)(B). This brief contains 4,380 words.

____________________________
ANNE NOEL OCCHIALINO
August 7, 2003 CERTIFICATE OF SERVICE
I certify that on August 7, 2003, I served two copies of this
brief by mailing
them overnight mail to the following:

K. Glenda Cameron, Esq.
LAW OFFICES OF LEE J. ROHN
1101 King St., Ste. 2
St. Croix, Virgin Islands 00820
Attorney for Plaintiff-Appellant

Francis J. D'Eramo, Esq.
NICHOLAS NEWMAN LOGAN & E'ERAMO, P.C.
1131 King St.
Christiansted, St. Croix
U.S. Virgin Islands
00820-4971
Attorney for Defendant-Appellee

____________________________
Anne Noel Occhialino
Attorney
U.S. EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
Office of General Counsel
1801 L Street, NW, Room 7030
Washington, DC 20507
(202) 663-4724

Los Angeles Employment Lawyers and Attorneys Resource: EEOC v. Heartway Corp., 10th Cir.

2008-06-07T13:41:00.001-07:00

EEOC v. Heartway Corp., 10th Cir.
Brief as appellant
June 10, 2005

ORAL ARGUMENT REQUESTED

Case Nos. 05-7011 & 05-7016
__________________________________________________________

IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
__________________________________________________________

EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,

Plaintiff-Appellant/Cross-Appellee,

HEARTWAY CORPORATION
d/b/a York Manor Nursing Center,

Defendant-Appellee/Cross-Appellant.
________________________________________________________

On Appeal from the United States District Court
For the Eastern District of Oklahoma, No. 03-534-WH,
The Honorable Ronald A. White, Presiding
_________________________________________________________

OPENING BRIEF OF THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION AS APPELLANT
_________________________________________________________

ERIC S. DREIBAND JOSEPH A. SEINER
General Counsel Attorney
U.S. EQUAL EMPLOYMENT
VINCENT J. BLACKWOOD OPPORTUNITY COMMISSION
Acting Associate General Counsel Office of General Counsel
1801 L Street, N.W., Room 7018
CAROLYN L. WHEELER Washington, D.C. 20507
Assistant General Counsel (202) 663-4772

FOUR ATTACHMENTS TO BRIEF; THREE IN WRITING ONLY; ONE
ATTACHMENT SUBMITTED BOTH DIGITALLY AND IN WRITING

TABLE OF CONTENTS

Page

TABLE OF CONTENTS .................................................. i

TABLE OF AUTHORITIES ............................................... iii

PRIOR OR RELATED APPEALS ........................................... vi

STATEMENT OF JURISDICTION .......................................... 1

STATEMENT OF THE ISSUE ............................................ 2

STATEMENT OF THE CASE .............................................. 2

STATEMENT OF THE FACTS ............................................. 4

DECISION BELOW...................................................... 7

STANDARD OF REVIEW ................................................. 8

SUMMARY OF ARGUMENT ................................................ 9

ARGUMENT ........................................................... 11

THE DISTRICT COURT ERRED IN FAILING TO GIVE
A PUNITIVE DAMAGE INSTRUCTION TO THE JURY...................... 11

A. The Company Knew that its Actions were in
Violation of the ADA................................. 14

B. Heartway Should be Held Liable for Townsend's
Actions.............................................. 18

C. Heartway Has Not Satisfied Its Burden of Showing
that the Company Acted in Good Faith................. 21

CONCLUSION ......................................................... 26

STATEMENT REGARDING ORAL ARGUMENT................................... 26

CERTIFICATE OF COMPLIANCE

ADDENDUM

EEOC v. Wal-Mart Stores, Inc., 35 Fed.Appx. 543,
2002 WL 1003133, No. 00-16887 at *3
(9th Cir. May 16, 2002) (unpublished) (submitted digitally)

Plaintiff's Proposed Jury Instructions and Verdict Form
(filed July 8, 2004) (submitted in writing only)

Trial Transcript on Punitive Damage Issue (pp. 270-71, 274-79)
(submitted in writing only)

December 10, 2004 District Court Order (submitted in
writing only)

CERTIFICATE OF SERVICE

CERTIFICATE OF DIGITAL SUBMISSION

TABLE OF AUTHORITIES

FEDERAL CASES

Anderson v. G.D.C., Inc.,
281 F.3d 452 (4th Cir. 2002)....................................... 19

Bell, Boyd & Lloyd v. Tapy,
896 F.2d 1101 (7th Cir. 1990)...................................... 26

Bruso v. United Airlines, Inc.,
239 F.3d 848 (7th Cir. 2001).................................... 17, 22

Cadena v. The Pacesetter Corp.,
224 F.3d 1203 (10th Cir. 2000).................................. 23-24

Che v. Mass. Bay Transport Authority,
342 F.3d 3 (1st Cir. 2003)...................................... 16-17

Cooper Indus. v. Leatherman Tool Group,
532 U.S. 424 (2001)................................................. 12

Davey v. Lockheed Martin Corp.,
301 F.3d 1204 (10th Cir. 2002).............................. 14, 21, 23

Deffenbaugh-Williams v. Wal-Mart Stores, Inc.,
188 F.3d 278 (5th Cir. 1999)................................ 19, 22, 24

Dilley v. Supervalu, Inc.,
296 F.3d 958 (10th Cir. 2002)................................... 8, 14

EEOC v. Wal-Mart Stores, Inc., 35 Fed.Appx. 543,
2002 WL 1003133, No. 00-16887 (9th Cir. May 16, 2002)
(unpublished)......................................................... 24

EEOC v. Wal-Mart Stores, Inc.,
187 F.3d 1241 (10th Cir. 1999)....................... 12-14, 17, 19-21

Faragher v. Boca Raton,
524 U.S. 775, 802 n.3, 806 (1998)................................ 22

Gloria v. Valley Grain Products,
72 F.3d 497 (5th Cir. 1996)...................................... 25

Gore v. BMW,
517 U.S. 559 (1996).............................................. 12

Hardeman v. City of Albuquerque,
377 F.3d 1106 (10th Cir. 2004)................................... 8

Hertzberg v. SRAM Corp.,
261 F.3d 651 (7th Cir. 2001)..................................... 24

Knowlton v. Teltrust Phones, Inc.,
189 F.3d 1177, 1187-88 (10th Cir. 1999) ........................ 25

Kolstad v. American Dental Association,
527 U.S. 526 (1999)............................................ passim

Lowery v. Circuit City Stores, Inc.,
206 F.3d 431 (4th Cir. 2000)..................................... 23

MacGregor v. Mallinckrodt, Inc.,
373 F.3d 923 (8th Cir. 2004)..................................... 22

Medlock v. Ortho Biotech, Inc.,
164 F.3d 545 (10th Cir. 1999).................................... 9

Ogden v. Wax Works, Inc.,
214 F.3d 999 (8th Cir. 2000)..................................... 23

Passantino v. Johnson & Johnson Consumer Products, Inc.,
212 F.3d 493 (9th Cir. 2000)...................................... 22

Praseuth v. Rubbermaid, Inc.,
406 F.3d 1245 (10th Cir. 2005) ............................... 8, 14

Robertson Oil Co., Inc. v. Phillips Petroleum Co.,
930 F.2d 1342 (8th Cir. 1991).................................... 25

Smith v. Ingersoll-Rand Co.,
214 F.3d 1235 (10th Cir. 2000)................................... 9

Smith v. Wade,
461 U.S. 30 (1983) .............................................. 17

State Farm Mutual Automobile Insurance Company v. Campbell,
538 U.S. 408 (2003).............................................. 12

Wheeler v. John Deere Co.,
986 F.2d 413 (10th Cir. 1993).................................... 25

Zimmermann v. Associates First Capital Corp.,
251 F.3d 376 (2d Cir. 2001)................................... 17, 22

FEDERAL STATUTES

28 U.S.C. §§ 451, 1291, 1331, 1337, 1343, and 1345 ................ 1, 2

28 U.S.C.A. § 1961(a)................................................. 25

42 U.S.C. § 1981a.................................................. 11, 13

The Americans with Disabilities Act, 42 U.S.C. §§ 12101 et seq..... passim

OTHER AUTHORITY

Restatement (Second) of Agency....................................... 18

Restatement (Second) of Torts........................................ 19

1 L. Schlueter & K. Redden,
Punitive Damages, § 4.4(B)(2)(a) ............................ 18-19

Tenth Circuit Rule 36.3 ............................................. 24

PRIOR OR RELATED APPEALS

PRIOR APPEALS
There are no prior appeals.

RELATED APPEALS
There are no related appeals.

Case Nos. 05-7011 & 05-7016
__________________________________________________________

IN THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
__________________________________________________________

EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,

Plaintiff-Appellant/Cross-Appellee,

HEARTWAY CORPORATION
d/b/a York Manor Nursing Center,

Defendant-Appellee/Cross-Appellant.
________________________________________________________

On Appeal from the United States District Court
For the Eastern District of Oklahoma, No. 03-534-WH,
The Honorable Ronald A. White, Presiding
_________________________________________________________

OPENING BRIEF OF THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION AS APPELLANT
_________________________________________________________

STATEMENT OF JURISDICTION

The district court had jurisdiction over this case pursuant to 28 U.S.C.
§§ 451, 1331, 1337, 1343, and 1345. This action was authorized and instituted
pursuant to the Americans with Disabilities Act (ADA), 42 U.S.C. §§
12101 et seq.
The district court's final judgment entered on December 11, 2004 (Joint Appendix
of the Equal Employment Opportunity Commission and Heartway Corporation
("JA") at 79-83) constitutes a final decision that this Court has
jurisdiction to
review pursuant to 28 U.S.C. § 1291. Plaintiff-Appellant Equal Employment
Opportunity Commission ("EEOC" or "Commission") filed a timely notice of
appeal on February 7, 2005. JA at 84. The defendant filed a timely
cross-appeal
on February 18, 2005. JA at 86.
STATEMENT OF THE ISSUE
Whether the district court erred in failing to instruct the jury
on punitive
damages where there was sufficient evidence at trial that the defendant
terminated Edwards because of her Hepatitis C with the knowledge that it
was violating federal law.

The EEOC raised this issue below in its proposed jury instructions, and it
was addressed orally at the close of the Commission's case. JA at 28,
330, 334-39
(The Plaintiff's Proposed Jury Instructions and Verdict Form at 6;
Trial Transcript
(Tr.) at 270, 274-79).

STATEMENT OF THE CASE

On September 29, 2003, the Commission filed this lawsuit against Heartway
Corporation d/b/a York Manor Nursing Center (Heartway) in the U.S. District
Court for the Eastern District of Oklahoma alleging that the company
violated the
ADA when it terminated Janet Edwards because of a perceived
disability. JA at 17
(Complaint). The case was tried to a jury on August 16 and 17, 2004. The jury
returned a verdict in favor of the Commission and awarded Edwards $30,000.00 in
back pay and $20,000.00 in compensatory damages. JA at 63-64 (Verdict Form).
The district court declined to give the jury an instruction on punitive damages,
however, maintaining that the evidence was insufficient to support such an
instruction in light of Supreme Court precedent. JA at 334-39 (Tr. at
274-79). On
October 19, 2004, the district court entered judgment for the EEOC.
JA at 65-76.
The court awarded the $20,000 given by the jury but reduced the amount of back
pay to $1,240.00, maintaining that the record did not support the
jury's award. Id.
The court also declined to award any interest on the judgment, stating that
"[i]nsufficient evidence exists to justify" such an award. JA at 73 n.8.
On October 29, 2004, the Commission moved to amend the judgment. On
November 2, 2004, Heartway moved for judgment notwithstanding the verdict,
maintaining that the Commission had failed to show that Heartway regarded
Edwards as being disabled. On November 29, 2004, the court denied the
defendant's JNOV motion, and on December 10, 2004, the court also denied the
Commission's motion to amend the judgment (entered on December 11, 2004). JA
at 78-83. The Commission filed a timely notice of appeal on February
7, 2005. JA
at 84. On February 18, 2005, Heartway filed a timely cross-appeal. JA at 86.

STATEMENT OF THE FACTS

Janet Edwards was diagnosed with Hepatitis C. JA at 94-96 (Tr. at 26-28).
By January, 2001, after completing twenty-four weeks of treatment, Edwards'
condition improved and there was no longer a detectable virus in her
blood. JA at
96-97 (Tr. at 28-29). Based on her successful response, Edwards' physician
prescribed an additional twenty-four weeks of treatment. JA at 97-98
(Tr. at 29-
30). Edwards continued to respond to this treatment, and on July 9, 2001, there
was still no detectable Hepatitis C virus in Edwards' blood. JA at
102 (Tr. at 34).
Edwards testified that her Hepatitis C was in remission. JA at
127-28, 157 (Tr. at
59-60, 89).
On August 13, 2001, Edwards applied for a position at the York Manor
Nursing Center in Muskogee, Oklahoma (Heartway). JA at 125, 128 (Tr. at 57,
60). As part of the application process, Edwards completed a physical
requirements questionnaire which asked "[i]n order that we may protect our
residents from disease, please indicate if you are under a doctor's
care or taking
medications now." JA at 128-29, 356 (Tr. at 60-61, EEOC's Trial Ex. 8).
Edwards checked "no" in response to this question and testified that she was not
taking any medication at that time or under a doctor's care. JA at 129-130, 356
(Tr. at 61-62, EEOC's Trial Ex. 8). Edwards was offered a position as a dietary
aide at Heartway on August 15, 2001. JA at 132 (Tr. at 64). After
working in this
job, Edwards was eventually moved to the cook's position. JA at 133
(Tr. at 65).
As a cook, Edwards prepared food for the residents and employees. Id. While
working at Heartway, Edwards was never reprimanded or written up and on one
occasion was voted employee of the month. JA at 134 (Tr. at 66).
While employed at Heartway, Edwards had a conversation with the director
of nursing, Theresa Rains, in which Edwards revealed that she had been diagnosed
with Hepatitis C. JA at 134-35 (Tr. at 66-67). Two days later,
Edwards received a
call from Rains informing her that she would need a doctor's note
before she could
return to work. JA at 136 (Tr. at 68). Edwards' doctor testified
that there would be
no problem with her working around residents in a nursing home or in preparing
food. JA at 106-07 (Tr. at 38-39). Her physician saw no danger that she would
transmit Hepatitis C to others. Id. He testified that "[i]t was my
opinion she could
return to work without restrictions, that she could resume her
employment duties at
that time." Id.
Thus, on April 4, 2002, Edwards' physician prepared a letter
releasing her to
return to work, which was sent to Edwards. JA at 106-07, 137, 354-55
(Tr. at 38-
39, 69, EEOC Trial Ex. 7). After Edwards received the letter, she
also received a
call from her supervisor at the kitchen, who fired her. JA at 138 (Tr. at 70).
Edwards' employment was officially terminated by Mitchell Townsend, the facility
administrator, on April 5, 2002. JA at 126 (Tr. at 58). Edwards and her sister
(another Heartway employee) met with Townsend. JA at 138-39 (Tr. at 70-71).
Edwards asked if she could have her job back, to which Townsend replied "you
having Hepatitis C, you will not work in our kitchen." JA at 139 (Tr.
at 71). When
Edwards asked if she was being terminated because of her medical condition,
Townsend replied that he was firing her because she "falsified
information" on her
application. Id. Edwards' sister asked if they could see her
application, to which
Townsend responded by opening his door and stating "[y]ou're dismissed." JA at
139-40 (Tr. at 71-72). Rains later responded to Edwards' application for
unemployment benefits by indicating that "Edwards failed to give the facility
adequate information regarding her health status of having a communicable
disease." JA at 269-70, 359 (Tr. at 201-02, EEOC Trial Ex. 27).
Edwards filed a timely charge of discrimination on June 13, 2002, alleging
that Heartway had terminated her employment in violation of the ADA. JA at 126,
357 (Tr. at 58, EEOC Trial Ex. 13). During an investigation of the charge, the
EEOC investigator discussed Edwards' employment with Townsend. JA at 226,
358 (Tr. at 158, EEOC Trial Ex. 19). Townsend asked the investigator
if the call
was "about the Hepatitis C case," to which the investigator responded
that it was.
JA at 226 (Tr. at 158). Townsend then asked "[w]ould you like to eat some food
with her blood on it?" Id. Townsend further stated that "[i]f the
clients found out
about the employee having Hepatitis C, they would have a mass exodus." JA at
226-27, 255 (Tr. at 158-59, 187). And, at trial, Townsend conceded
that based on
training he had received in prior jobs he was aware in April, 2002
that it was illegal
to terminate an employee because that individual had been diagnosed with
Hepatitis C. JA at 253 (Tr. at 185).

DECISION BELOW
On August 17, 2004, at the close of the EEOC's case, the district
court held
a hearing on whether a punitive damage instruction should be given to
the jury. JA
at 330, 334-39 (Tr. at 270, 274-79). The EEOC had submitted a proposed jury
instruction setting forth the relevant standard for awarding punitive
damages and
citing the Supreme Court's decision in Kolstad v. American Dental Association,
527 U.S. 526 (1999). JA at 28 (Plaintiff's Proposed Jury Instructions
and Verdict
Form at 6).
In refusing to give the instruction, the district court saw "no
basis under the
trilogy of Supreme Court cases I have mentioned or under the ADA or under the
evidence to send the issue of punitive damages to the jury." JA at
338 (Tr. at 278).
In support of its decision, the court cited to three Supreme Court
decisions that all
arose outside the employment context and addressed the constitutionality of
punitive damage awards. Id. The district court did not address the
standards for a
punitive damage award in an employment discrimination case that are set forth in
Kolstad, thereby disregarding the Commission's citation to this case in its
proposed jury instruction.

STANDARD OF REVIEW

The district court's decision that there was insufficient
evidence to instruct
the jury on a punitive damage award is reviewed by this Court de novo. See
Praseuth v. Rubbermaid, Inc., 406 F.3d 1245, 1254 (10th Cir. 2005) ("Whether
sufficient evidence exists to support punitive damages in an ADA case is a
question of law which is reviewed de novo."); Dilley v. Supervalu,
Inc., 296 F.3d
958, 966 (10th Cir. 2002) ("[Plaintiff] asserts that he was entitled to a jury
determination of his punitive damages claim. . . . Whether sufficient evidence
exists to support punitive damages is a question of law reviewed de novo.")
(quotation omitted); Hardeman v. City of Albuquerque, 377 F.3d 1106, 1120 (10th
Cir. 2004) ("The district court's determination of whether sufficient evidence
exists to support punitive damages is a question of law that we review de novo")
(quotation omitted). This Court should therefore "consider [the] jury
instructions
in their entirety, applying de novo review to determine whether the
jury was misled
on the applicable law." Smith v. Ingersoll-Rand Co., 214 F.3d 1235, 1250 (10th
Cir. 2000). See also Medlock v. Ortho Biotech, Inc., 164 F.3d 545,
552 (10th Cir.
1999) ("To determine whether the jury was adequately instructed on the
applicable
law, we review the instructions in their entirety de novo to determine
whether the
jury was misled in any way.").

SUMMARY OF ARGUMENT

The district court erred in not instructing the jury on punitive damages
where it submitted to the jury the issues of whether Edwards was a covered
individual under the ADA and whether the company terminated her because of her
Hepatitis C, and there was sufficient evidence at trial that the
company took that
action with the knowledge that it was violating federal law. In
failing to provide
this instruction, the district court cited to three Supreme Court
decisions that all
arose outside the employment context and addressed the constitutionality of
punitive damage awards. These decisions are inapposite to this case.
The district
court ignored the most relevant Supreme Court decision, Kolstad v. American
Dental Association, 527 U.S. 526 (1999), which established the standards for
punitive damage awards in employment discrimination cases. Under Kolstad and
its progeny, the jury should have been permitted to consider a punitive damage
award if: (1) Townsend, the facility administrator, knew that it was
a violation of
the ADA to terminate an employee because that individual had Hepatitis C; (2)
Townsend's actions can be imputed to the company; and (3) there is a question of
fact whether Heartway acted in good faith. The EEOC's evidence meets these
requirements.
Townsend testified that he knew at the time of Edwards' termination that it
was a violation of the ADA to fire an employee because that employee had
Hepatitis C. The jury concluded that Townsend terminated Edwards because of
her perceived disability. Thus, the jury believed that Townsend disregarded his
knowledge of the ADA when he terminated Edwards. Townsend also
demonstrated that he recklessly disregarded Edwards' ADA rights when he asked
an EEOC investigator whether he would "like to eat some food with her blood on
it" and noted that there would be a "mass exodus" if the customers knew that
Edwards had Hepatitis C. Townsend's actions should be imputed to the company
under the principles of agency because Townsend was the administrator of the
entire York Manor Nursing Center, made sure that the facility was making money,
oversaw all budget issues, and had the authority to terminate an employee.
Moreover, the company has the burden of showing that it acted in good
faith if it is
to avoid liability for punitive damages, and the evidence presented at
trial does not
satisfy that burden. The district court therefore erred in failing to
give the jury a
punitive damage instruction, and this case should be remanded for a new trial on
this issue.

ARGUMENT

THE DISTRICT COURT ERRED IN FAILING TO GIVE A PUNITIVE
DAMAGE INSTRUCTION TO THE JURY

The Civil Rights Act of 1991 provides that a covered individual such as
Edwards who proves intentional discrimination in violation of the ADA may
recover compensatory and punitive damages in addition to equitable
relief. See 42
U.S.C. § 1981a(a)-(b). The statute provides that punitive damages may
be awarded
"if the [plaintiff] demonstrates that the [defendant] engaged in a
discriminatory
practice . . . with malice or with reckless indifference to the
federally protected
rights of an aggrieved individual." 42 U.S.C. § 1981a(b)(1).
The district court's decision to refuse to instruct the jury on punitive
damages fails to address either this statutory standard or the relevant Supreme
Court or Tenth Circuit case law. In refusing to give this
instruction, the district
court saw "no basis under the trilogy of Supreme Court cases I have mentioned or
under the ADA or under the evidence to send the issue of punitive damages to the
jury." JA at 338 (Tr. at 278). In support of its decision, the court
cited to three
Supreme Court cases – none of which arise in the employment context or set forth
the standard of punitive damages for a victim of employment discrimination.
Rather, these cases all address the constitutionality of punitive
damage awards.
See Cooper Indus. v. Leatherman Tool Group, 532 U.S. 424 (2001) (addressing
standard of review to be applied when considering the
constitutionality of punitive
damage award of 4.5 million dollars where jury awarded other damages of only
fifty thousand dollars on plaintiff's false advertising, unfair competition and
"passing off" claims); Gore v. BMW, 517 U.S. 559 (1996) (two million dollar
punitive damage award violated Due Process Clause where jury awarded other
damages of only four thousand dollars to automobile purchaser to compensate for
undisclosed damage to vehicle); State Farm Mut. Auto. Ins. Co. v. Campbell, 538
U.S. 408 (2003) ($145 million dollar punitive damage award violated Due Process
Clause where insureds were awarded one million dollars in compensatory damages
in claim brought for bad-faith failure to settle, fraud, and
intentional infliction of
emotional distress).
In reaching its decision, the district court failed even to
address Kolstad v.
American Dental Association, 527 U.S. 526 (1999), the seminal Supreme Court
decision on this issue that was cited in the Commission's proposed jury
instructions. JA at 334-39 (Tr. at 274-79). See EEOC v. Wal-Mart Stores, Inc.,
187 F.3d 1241, 1246 (10th Cir. 1999) ("[w]e thus apply the Kolstad
standard to the
facts before us to determine whether there was sufficient evidence to justify an
award of punitive damages against" the defendant). In Kolstad, the
Supreme Court
set forth the standard for punitive damages in cases arising under
Title VII.<1> The
Court in Kolstad held that liability for punitive damages turns on the
defendant's
state of mind, not on the nature of the defendant's discriminatory conduct. 527
U.S. at 535. All that a plaintiff need prove to be eligible for
punitive damages, the
Court held, is that the employer "discriminate[d] in the face of a
perceived risk that
its actions [would] violate federal law." Id. at 536. In meeting
this threshold, the
"plaintiff must impute liability" to the employer. Id. at 539-40.
Additionally, the
Court carved out a defense for employers where they "engage in good
faith efforts
to comply with Title VII." Id. at 544.
Interpreting Kolstad, this Court has succinctly set forth a
three-step analysis
for determining when punitive damages are appropriate:
First, the plaintiff must establish that the employer acted with knowledge
that its actions violated federal law. . . . If able to do so, the
plaintiff must
then demonstrate that the . . . employee who discriminated against the
plaintiff is a managerial agent who acted within the scope of employment. .
. . The Court in Kolstad also provided employers with a defense to punitive
damages. The Court stated that even if the plaintiff establishes that the
employer's managerial employees recklessly disregarded
federally-protected rights while acting within the scope of employment,
punitive damages will not be awarded if the employer shows that it engaged
in good faith efforts to comply with Title VII.

Davey v. Lockheed Martin Corp., 301 F.3d 1204, 1208-09 (10th Cir. 2002); see
also Praseuth, 406 F.3d at 1254 ("To satisfy this standard [for
punitive damages],
the employer must engage in prohibited conduct with knowledge that it may be
acting in violation of federal law, not mere awareness that it is engaging in
discrimination"); Wal-Mart, 187 F.3d at 1245-49 (setting forth intent,
agency, and
good faith factors from Kolstad); Dilley v. Supervalu, Inc., 296 F.3d
958, 966-67
(10th Cir. 2002) (discussing intent requirement of Kolstad). Applying
this analysis
to the facts of this case makes clear that the district court should
have instructed the
jury on punitive damages.

A. The Company Knew that its Actions were in Violation of the ADA

In this case, the record is replete with evidence that the
company knew that
by terminating Edwards on the basis of her perceived disability, it
was violating
federal law. Townsend, the administrator of the nursing center,
testified that he
terminated Edwards. JA at 252 (Tr. at 184). Townsend further acknowledged that
in prior jobs he had received some training on the ADA, was aware that it is
against the law to fire someone because of her disability, and
believed that it was
unlawful to terminate an employee because of her diagnosis with Hepatitis C. JA
at 253 (Tr. at 185). Specifically, Townsend testified:
Q. And you were aware, based on your training that you received, that it
was against the law to fire someone because they had a disability; is that
right?

A. That's right.

Q. And you knew, based on your training about the Americans with
Disabilities Act, in April of 2002, that it was against the law simply
because someone had been diagnosed with Hepatitis C; right?

A. Correct.

JA at 253 (Tr. at 185). The jury concluded that Townsend terminated Edwards
because of her perceived disability. Thus, the jury believed that Townsend
disregarded his understanding of federal disability law when he decided to
terminate Edwards.
Townsend further demonstrated reckless disregard for Edwards' rights in his
comments to Edwards and an EEOC investigator:
• When Edwards asked if she could return to the York facility,
Townsend replied "you having Hepatitis C, you will not work in our
kitchen." JA at 139 (Tr. at 71).

• When an EEOC investigator contacted Townsend about the matter,
Townsend asked "[w]ould you like to eat some food with her blood on
it?" JA at 226-27 (Tr. at 158-59).

• Townsend further told the EEOC Investigator that "[i]f the clients
found out about the employee having Hepatitis C, they would have a
mass exodus." JA at 226-27, 255 (Tr. at 158-59, 187).
This evidence clearly supports the jury's finding that Townsend terminated
Edwards because of her disability – an illegal action that Townsend
knew violated
federal law. Since Heartway (through Townsend) was admittedly aware that it was
illegal to terminate an employee on the basis of her disability, proof that the
company engaged in such intentional discrimination was sufficient to establish
Edwards' eligibility for punitive damages, unless the company offered evidence
that it reasonably believed the conduct was legal, or was justifiably
unclear about
whether the conduct was legal or not. Kolstad, 527 U.S. at 536-37. Heartway
offered no such evidence here.
In reversing a district court's refusal to give a punitive damage
instruction in
a Title VII case, the First Circuit recently emphasized the importance
of leaving the
punitive damage issue for the jury where intentional discrimination is present:
The [Supreme] Court has described situations where an employer may
intend to discriminate, but does not intend to violate the law. [Citing
Kolstad]. These include situations when the employer is unaware of the
federal law prohibiting discrimination, when the employer believes he
can lawfully discriminate, when the underlying theory of discrimination
is novel or poorly recognized, or when the employer believes its
discrimination falls within a statutory exception. See id. None of these
situations, or others like them, are present in this case. Nor do we see
any other compelling reason why a jury should be prevented from
exercising its "discretionary moral judgment" as to punitive damages in
this case.
Che v. Mass. Bay Transp. Auth., 342 F.3d 31, 42 (1st Cir. 2003), citing Smith v.
Wade, 461 U.S. 30, 52 (1983). For the same reasons, there is no basis for
preventing the jury from considering the punitive damage issue in this
case, where
the facility administrator conceded that he had knowledge in April, 2002, that
terminating an employee because of Hepatitis C would violate the ADA. JA at 253
(Tr. at 185). See Wal-Mart, 187 F.3d at 1246 ("reasonable jury could have
concluded that [defendant] intentionally discriminated against
[plaintiff] in the face
of a perceived risk that its action would violate federal law" where manager who
was responsible for employee's improper suspension "testified that he
was familiar
with the accommodation requirements of the ADA and its prohibition against
discrimination and retaliation in the workplace"); Bruso v. United
Airlines, Inc.,
239 F.3d 848, 858 (7th Cir. 2001) ("A plaintiff may satisfy this
[first] 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");
Zimmermann v. Assocs. First Capital Corp., 251 F.3d 376, 385 (2d Cir. 2001)
("[W]e agree with [the district court] that [the manager's] acknowledgment of
training in 'equal opportunity' permits an inference of the requisite
mental state.").

B. Heartway Should Be Held Liable for Townsend's Actions
In Kolstad, the Supreme Court clarified when, under the rules of agency, an
employer is liable for punitive damages based on the malice or reckless
indifference of one of its agents. Kolstad, 527 U.S. at 540-45. In
clarifying this
standard, the Court applied the general common law of agency, using the
Restatement (Second) of Agency as its "starting point." Id. at 542.
In particular,
the Court focused on section 217 C(c) of the Restatement (Second) of Agency,
which (as one of four circumstances where "an agent's misconduct may be
imputed to the principal for purposes of awarding punitive damages") allows for
"liability for punitive awards where an employee serving in a 'managerial
capacity' committed the wrong while 'acting in the scope of
employment.'" Id. at
542-43 (quoting Restatement (Second) of Agency § 217 C(c)).
In analyzing § 217 C(c), the Supreme Court defined the meaning of the term
"managerial capacity." Id. at 543. The Court explained that, although no
satisfactory definition of the term was available, courts assessing whether an
employee met the definition should make a fact-intensive inquiry,
reviewing "'the
type of authority that the employer has given to the employee, [and]
the amount of
discretion that the employee has in what is done and how it is
accomplished.'" Id.
(quoting 1 L. Schlueter & K. Redden, Punitive Damages, § 4.4(B)(2)(a),
p. 181 (3d
ed. 1995)). The Court noted that the examples provided in the Restatement
(Second) of Torts § 909 suggested that an employee must be "important," but
rejected the notion that the employee must be "the employer's 'top management,
officers or directors,' to be acting 'in a managerial capacity.'" 527
U.S. at 543
(quoting 1 L. Schlueter & K. Redden, Punitive Damages, § 4.4(B)(2)(a), p. 181).
In this case, Townsend's willful termination of Edwards should be imputed
to the company under the agency principles set forth in Kolstad and
applied by this
Court. See Wal-Mart, 187 F.3d at 1247 ("Under the common law, one means by
which a plaintiff can prevail in a vicarious liability claim against
an employer is to
establish that the employer's agent committed a wrong while (1) serving in a
managerial capacity; and (2) acting in the scope of employment.") (citation and
quotation omitted); see also Anderson v. G.D.C., Inc., 281 F.3d 452,
461 (4th Cir.
2002) (holding that general manager/dispatcher was "unquestionably a managerial
employee [for purposes of imputing liability under Kolstad]. The
evidence at trial
established that he possessed authority to hire and fire drivers and
to impose lesser
forms of discipline, including docking a driver's wages."); Deffenbaugh-Williams
v. Wal-Mart Stores, Inc., 188 F.3d 278, 285 (5th Cir. 1999)
("sufficient evidence to
survive JMOL exists that [district manager] was a requisite
'managerial agent'" for
purposes of imputing liability under Kolstad).
Here, Townsend, as the administrator of the entire York Manor Nursing
Center, made sure that the facility was making money, oversaw all budget issues,
and had obvious authority over Edwards' employment. JA at 252-54 (Tr. at 184-
86). Indeed, Townsend is the individual who decided to discharge
Edwards. JA at
252, 263 (Tr. at 184, 195). In Wal-Mart, this Court held that an
assistant manager
who had "independent authority to suspend her subordinates" and could "make
hiring and firing recommendations" was a manager "for purposes of vicarious
liability." Wal-Mart, 187 F.3d at 1247 (emphasis added). Thus, there can be no
question that Townsend's authority as facility administrator was sufficient for
purposes of vicarious liability. Townsend was acting as an agent of the company
within the scope of his employment when he terminated Edwards, and the
company should not escape liability for his actions.
Where there is sufficient evidence for a reasonable jury to conclude that
defendant's conduct constituted intentional discrimination and showed malice or
reckless disregard for plaintiff's federally protected rights, the
district court should
instruct the jury on punitive damages. See generally Kolstad, 527
U.S. at 534-546
(establishing standard for punitive damages and stating that the
"employer must at
least discriminate in the face of a perceived risk that its actions
will violate federal
law to be liable in punitive damages"); Wal-Mart, 187 F.3d at 1244-48 (applying
analysis set forth in Kolstad and concluding that two managers engaged in
"recklessly indifferent intentional discrimination against [plaintiff]
so as to warrant
an award of punitive damages"); Kolstad, 527 U.S. at 551 ("so long as
a Title VII
plaintiff proffers sufficient evidence from which a jury could conclude that an
employer acted willfully, judges have no place making their own value judgments
regarding whether the conduct was 'egregious' or otherwise presents an
inappropriate candidate for punitive damages; the issue must go to the jury.")
(Stevens, J., concurring and dissenting). The district court erred in
not submitting
the issue here.

C. Heartway Has Not Satisfied Its Burden of Showing that the Company
Acted in Good Faith.

In Kolstad, the Supreme Court held that an employer could avoid vicarious
liability for punitive damages by showing good-faith efforts to comply
with Title
VII because, "[w]here an employer has undertaken such good faith
efforts . . . it
demonstrates that it never acted in reckless disregard of federally
protected rights."
527 U.S. at 544 (quotation and internal brackets omitted). This Court
has not taken
a position on whether it is the employer's burden to establish the good-faith
defense, but it has acknowledged that numerous other appellate courts have taken
this approach. See Davey v. Lockheed Martin Corp., 301 F.3d 1204, 1209 n.4
(10th Cir. 2002). Because the Supreme Court in Kolstad based its
rationale for the
good faith defense on the same agency principles it had discussed in creating an
affirmative defense to liability for supervisors in the sexual harassment of
employees,<2> the lower courts have appropriately treated the punitive damage
limitation as an affirmative defense where the employer has the burden of
establishing that it acted in good faith to comply with the statute.
See MacGregor
v. Mallinckrodt, Inc., 373 F.3d 923, 931 (8th Cir. 2004) ("A
corporation may avoid
punitive damages by showing that it made good faith efforts to comply with Title
VII after the discriminatory conduct."); Zimmermann v. Assocs. First Capital
Corp., 251 F.3d 376, 385 (2d Cir. 2001) (the Kolstad defense "requires an
employer to establish both that it had an antidiscrimination policy
and made good
faith effort to enforce it"); Bruso v. United Airlines, 239 F.3d 848,
858 (7th Cir.
2001) ("the employer may avoid liability for punitive damages if it
can show that it
engaged in good faith efforts to implement an antidiscrimination policy");
Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 516 (9th
Cir. 2000) ("Kolstad extends the [affirmative defense] by allowing defendants to
assert it in response to punitive damages claims, even in cases
involving tangible
employment action"); Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 188 F.3d
278, 286 (5th Cir. 1999) (the evidence elicited by defendant "does not
suffice to
establish, as a matter of law, [defendant's] good faith in requiring
its managers to
obey Title VII"); see also Ogden v. Wax Works, Inc., 214 F.3d 999,
1009 (8th Cir.
2000) (describing good faith defense as an exception to vicarious
liability); Lowery
v. Circuit City Stores, Inc., 206 F.3d 431-446 (4th Cir. 2000) (same).
Based on the evidence at trial, the district court could not
properly conclude
that Heartway satisfied its burden of establishing the good-faith
defense as a matter
of law, and thus the issue should have gone to the jury. The company
presented no
evidence at trial that it enforced an anti-discrimination policy or attempted to
educate its employees regarding disability discrimination in any way.
See Davey,
301 F.3d at 1209 ("at a minimum, an employer must at least adopt
anti-discrimination policies and make a good faith effort to educate
its employees
about these policies and [the statute's] prohibitions"); Cadena v. The
Pacesetter
Corp., 224 F.3d 1203, 1210 (10th Cir. 2000) ("Kolstad itself suggests that the
good-faith-compliance standard requires the employer to make good
faith efforts to
enforce an antidiscrimination policy") (quotation omitted) (emphasis
in original).
Indeed, Theresa Rains, the director of nursing at the York Manor
nursing facility,
testified that she had never received ADA training while employed by Heartway.
See JA at 268 (Tr. at 200). Because a reasonable jury could conclude under the
controlling Kolstad standard that Heartway had not made good faith efforts to
comply with the ADA when it terminated Edwards because of her hepatitis C, a
jury should have been permitted to decide the factual issue of whether
Heartway is
entitled to this defense. See Cadena, 224 F.3d at 1210 ("Because sufficient
evidence was presented on which a jury could have found [defendant] did not
make good faith efforts to comply with Title VII, this court will not
enter judgment
as a matter of law in favor of [defendant] on the question of punitive
damages");
Deffenbaugh-Williams, 188 F.3d at 286 ("the evidence of [defendant's]
antidiscrimination good faith was certainly not so overwhelming that reasonable
jurors could not conclude otherwise"); Hertzberg v. SRAM Corp., 261 F.3d 651,
664 (7th Cir. 2001) ("Given the constant nature of the harassment and
[defendant's] lack of managerial response to the problem, we believe a jury was
entitled to conclude that [defendant] did not make good faith efforts
to implement
its sexual harassment policy").
The case should therefore be remanded to the district court for a
new trial on
punitive damages. See, e.g., EEOC v. Wal-Mart Stores, Inc., 35 Fed.Appx. 543,
2002 WL 1003133, No. 00-16887 at *3 (9th Cir. May 16, 2002) (unpublished)<3>
(attached) (remanding for separate trial on punitive damage issue and
stating that
"the EEOC is entitled to present the finding of facts implicit in the
first jury's
finding that Wal-Mart intentionally discriminated against [plaintiff]
on the basis of
her pregnancy. . . . [the defendant] is prohibited from making any argument or
eliciting any testimony that would contradict any of these findings"); Robertson
Oil Co., Inc. v. Phillips Petroleum Co., 930 F.2d 1342, 1344-45 (8th Cir. 1991)
(discussing district court's handling of punitive damage trial on
remand). See also
Knowlton v. Teltrust Phones, Inc., 189 F.3d 1177, 1187-88 (10th Cir. 1999)
(remanding "for the specific purpose of submitting to a jury the issue
of punitive
damages" where "the district court erred when it ruled that there was
no evidence
from which a jury could make a reasonable inference that [the defendant] acted
recklessly and with disregard for [plaintiff's] federally protected
civil rights").
This Court's order should also instruct that on remand any award should include
postjudgment interest <4>.

CONCLUSION

The district court erred by not instructing the jury on punitive
damages. The
evidence at trial clearly demonstrated that the administrator of the Heartway
facility knew that by terminating Edwards because of her Hepatitis C, he was
violating the ADA. The administrator's actions should be imputed to
the company.
The company has the burden of showing that it acted in good faith if
it is to avoid
liability for punitive damages, and the evidence presented at trial
does not satisfy
that burden. This case should therefore be remanded for a new trial on punitive
damages.

STATEMENT IN SUPPORT OF REQUEST FOR ORAL ARGUMENT

The Commission believes that oral argument would materially assist this
Court in resolving the complex legal and factual issues presented by this
employment discrimination case. In addition, the question of when a punitive
damage instruction can be submitted to the jury is important to the Commission's
statutory obligation of enforcing the ADA. The Commission therefore believes

that a discussion of this and related issues at oral argument would be
beneficial to
the Court.

Respectfully submitted,

ERIC S. DREIBAND
General Counsel

VINCENT J. BLACKWOOD
Acting Associate General Counsel

CAROLYN L. WHEELER
Assistant General Counsel

____________________________
JOSEPH A. SEINER
Attorney
Illinois State Bar No. 6257474

U.S. EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION
Office of General Counsel
1801 L Street, N.W., Room 7018
Washington, D.C. 20507
(202) 663-4772
joseph.seiner@eeoc.gov

CERTIFICATE OF COMPLIANCE

I certify that this brief complies with the type-volume
limitation set forth in
F.R.A.P. 32(a)(7)(B). This brief contains 6129 words. See Fed. R. App. P.
32(a)(7)(B)(i). The brief was prepared using the WordPerfect 9
processing system,
in 14-point proportionally spaced type for text and 14-point type for
footnotes. See
Fed R. App. P. 32(a)(5).

_____________________
Joseph A. Seiner

June 10, 2005

ADDENDUM

(c) 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
35 Fed.Appx. 543, 2002 WL 1003133 (9th Cir.(Ariz.))
(Cite as: 35 Fed.Appx. 543, 2002 WL 1003133 (9th Cir.(Ariz.)))
<KeyCite History>

Briefs and Other Related Documents

This case was not selected for publication in the
Federal Reporter.

Please use FIND to look at the applicable circuit
court rule before citing this opinion. (FIND CTA9
Rule 36-3.)

United States Court of Appeals,
Ninth Circuit.
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION, Plaintiff--Appellant,
v.
WAL-MART STORES, INC, a Delaware
corporation, Defendant--Appellee.
No. 00-16887.
D.C. No. CV-94-00465-WDB.

Argued and Submitted Feb. 13, 2002.
Decided May 16, 2002.

Equal Employment Opportunity Commission
(EEOC) brought Title VII action alleging that
employer discriminated against job applicant on basis
of pregnancy. Following jury verdict for EEOC on
liability issue, EEOC appealed district court's refusal
to instruct jury on punitive damages issue. The Court
of Appeals, 156 F.3d 989, reversed and remanded
for punitive damages trial. After jury rendered
verdict for employer on punitive damages issue, the
United States District Court for the District of
Arizona, William D. Browning, J., entered judgment
for employer, and EEOC appealed. The Court of
Appeals held that: (1) evidence that employer
attempted to cover-up its discriminatory conduct
towards pregnant employee was admissible during
punitive damages trial in Title VII pregnancy
discrimination case; (2) district court's abuse of
discretion in excluding such evidence was prejudicial
and warranted remand for new punitive damages
trial; (3) district court abused its discretion when it
allowed employer's managers to testify during trial
to their version of events surrounding pregnant
employee's application for employment; (4) on
remand for new punitive damages trial, EEOC was
entitled to present to jury, and have jury instructed
on, the finding of facts that were implicit in first
jury's finding that employer intentionally
discriminated against employee on basis of her
pregnancy, and employer was. The EEOC appealed
to this court. On September 24, 1998, we held that
the EEOC had presented sufficient evidence of Wal-
Mart's malice or reckless indifference to support an
award of punitive damages and therefo prohibited
from making any argument or eliciting any testimony
that would contradict any of those findings; and (5)
EEOC could present evidence on remand during
punitive damages trial of any cover-up conducted by
employer after employee's application was rejected.

Reversed and remanded.

West Headnotes

[1] Civil Rights k1542
78k1542
(Formerly 78k381)
Evidence that employer attempted to cover-up its
discriminatory conduct towards pregnant employee
was admissible during punitive damages trial in Title
VII pregnancy discrimination case; such evidence
was relevant to determination of whether punitive
damages were warranted, under Title VII, for
employer's pregnancy discrimination, and to the
question of whether employer had good-faith
defense. Civil Rights Act of 1964, § 701 et seq., 42
U.S.C.A. § 2000e et seq.

[2] Federal Courts k901.1
170Bk901.1
District court's abuse of discretion in excluding
evidence, during punitive damages trial in Title VII
pregnancy discrimination case, that employer
attempted to cover-up its discriminatory conduct
towards pregnant employee, was prejudicial, and
warranted remand for new punitive damages trial;
evidence would have made a difference on issue of
punitive damages and would have directly
contradicted employer's evidence of good faith
defense. Civil Rights Act of 1964, § 701 et seq., 42
U.S.C.A. § 2000e et seq.

[3] Civil Rights k1542
78k1542
(Formerly 78k389)
District court abused its discretion when it allowed
employer's managers to testify, at punitive damages
trial in Title VII pregnancy discrimination action, to
their version of events surrounding pregnant
employee's application for employment, since jury,
in finding that employer was liable for intentional
discrimination against employee during liability
phase of case, necessarily rejected employer's
version of events. Civil Rights Act of 1964, § 701 et
seq., 42 U.S.C.A. § 2000e et seq.

[4] Federal Courts k951.1
170Bk951.1
On remand for punitive damages trial in Title VII
pregnancy discrimination action, Equal Employment
Opportunity Commission (EEOC) was entitled to
present to jury, and have jury instructed on, the
finding of facts that were implicit in first jury's
finding that employer intentionally discriminated
against employee on basis of her pregnancy, and
employer was prohibited from making any argument
or eliciting any testimony that would contradict any
of those findings. Civil Rights Act of 1964, § 701 et
seq., 42 U.S.C.A. § 2000e et seq.

[5] Civil Rights k1542
78k1542
(Formerly 78k381)
Equal Employment Opportunity Commission
(EEOC) could present evidence on remand, during
punitive damages trial in Title VII pregnancy
discrimination action, of any cover-up conducted by
employer after pregnant employee's application was
rejected. Civil Rights Act of 1964, § 701 et seq., 42
U.S.C.A. § 2000e et seq.
*544 Appeal from the United States District Court
for the District of Arizona, William D. Browning,
District Judge, Presiding.

Before REINHARDT, FISHER, Circuit Judges, and
MOLLOY, [FN*] District Judge.

FN* The Honorable Donald Molloy, Chief
United States District Judge for the District
of Montana, sitting by designation.

MEMORANDUM [FN**]

FN** This disposition is not appropriate for
publication and may not be cited to or by
the courts of this circuit except as may be
provided by Ninth Circuit Rule 36-3.

**1 In 1992, the Equal Employment Opportunity
Commission ("EEOC") sued the defendant, Wal-
Mart Stores, Inc. ("Wal-Mart"), alleging that it
wrongfully discriminated against Jamey Stern in
violation of Title VII of the Civil Rights Act of
1964, 42 U.S.C. § 2000e et seq., when it refused to
rehire her on the basis of her pregnancy. A jury
subsequently found that Wal-Mart intentionally
discriminated against Stern and awarded her
approximately $1700 in back pay and interest. The
district court, however, ruled that the EEOC failed
to present sufficient evidence to support an award of
punitive damages and therefore refused to submit the
issue of punitive damages to the jury re remanded for
the district court to conduct a trial solely on the issue
of punitive damages. See EEOC v. Wal-Mart
Stores, Inc., 156 F.3d 989, 992-93 (9th Cir.1998)
[hereinafter EEOC I ].

In February 1999, the first punitive damages trial
ended with a deadlocked jury and the district court
declared a mistrial. Before the second punitive
damages trial began, the Supreme Court issued its
opinion in Kolstad v. American Dental Assoc., 527
U.S. 526, 119 S.Ct. 2118, 144 L.Ed.2d 494 (1999).
The Court held that in order to hold an employer
liable for *545 punitive damages, the plaintiff must
demonstrate that the employer discriminated "in the
face of a perceived risk that its actions will violate
federal law." Id. at 536, 119 S.Ct. 2118. The
Court also held that a claim for punitive damages
could be defeated by a showing that the managerial
agents' discriminatory acts were "contrary to the
employer's good-faith efforts to comply with Title
VII." Id. at 545, 119 S.Ct. 2118 (internal quotation
omitted). Following that decision, the parties
conducted discovery based on the issues raised by
Kolstad and then proceeded to trial.

The second punitive damages trial began on May
23, 2000. Prior to trial, the district court ruled that
the EEOC was prohibited from presenting any
evidence of Wal-Mart's alleged "cover-up" of its
discriminatory acts--that is, the district court
excluded all evidence related to events after Wal-
Mart made its decision not to hire Stern in 1991.
On May 25, 2000, the jury deadlocked and the
district court again declared a mistrial.

The third punitive damages trial commenced on
August 2, 2000. Despite the earlier jury verdict that
Wal-Mart intentionally discriminated against Stern,
and over the EEOC's objection, the district court
allowed Wal-Mart's personnel manager and assistant
manager to testify about their version of their
interview with Stern and their treatment of Stern's
application for employment. Additionally, evidence
about Wal-Mart's cover-up was again excluded by
the district court. At the conclusion of the evidence,
the jury found for Wal-Mart. The EEOC again
appealed to this court.

**2 [1] On appeal, the EEOC first contends that the
district court erred in excluding all evidence on
matters that were "after the critical events" and
"post-1991"--namely, all evidence of Wal-Mart's
attempts to cover-up its discriminatory acts in
refusing to hire Stern on the basis of her pregnancy.
We agree. The following are examples of the
excluded evidence:
. During the EEOC investigation in 1992--
approximately one year after Stern's application
for employment was rejected--Wal-Mart claimed
that Stern was not hired because she indicated on
her job application that due to her pregnancy, she
could only work limited hours. However, Stern
never made such a request on her application or
elsewhere.
. At the very first trial on the claim of intentional
discrimination, an assistant manager of Wal-Mart
testified that she conducted a face-to-face interview
with Stern and filled out a corresponding
"Interview Comment Sheet." Wal-Mart was unable
to produce this comment sheet, although it had this
sheet for every one of the other fifty applicants
interviewed approximately at the same time.

It is self-evident that this evidence is highly
probative for a determination of punitive damages.
In EEOC I, we explicitly stated that "the evidence
regarding the attempts by Wal-Mart managers to
cover up their discriminatory conduct supports the
EEOC's claim of reckless indifference to Stern's
federally protected rights." EEOC I, 156 F.3d at
993. There is no question that the evidence of Wal-
Mart's attempts to cover-up its discriminatory
conduct after 1991 is relevant to a determination of
punitive damages and to the question of whether
Wal-Mart has a good-faith defense. See Passantino
v. Johnson & Johnson Consumer Products, Inc., 212
F.3d 493, 516 (9th Cir.2000) (stating that relevant
evidence sufficient for allowing award of punitive
damages included fact that "the jury could have
found that defense witnesses lied ... about their *546
actions, as part of a continuing effort to cover up
their campaign against her").

[2] Wal-Mart argues that the exclusion of this cover-
up evidence was harmless because the jury heard
similar evidence. It is incorrect. [FN1] Although
the jury was informed that a previous jury found
Wal-Mart guilty of intentional discrimination, the
jury also heard two Wal-Mart employees testify to
their version of the events surrounding Stern's
application. The EEOC was not able to introduce
any direct or specific evidence that Wal-Mart
employees lied. This evidence would have made a
difference, and its exclusion was prejudicial. [FN2]
We said as much in EEOC I and it is unfortunate that
we have to say it again here. [FN3] So we will state
it as plainly as possible: the district court abused its
discretion in excluding this evidence and upon retrial
this evidence must be allowed.

FN1. Wal-Mart also argues that the EEOC
waived its right to object to the exclusion of
this evidence because it failed to object at
trial. Again, it is incorrect. The EEOC
objected to the exclusion of this evidence
after the district court ruled prior to trial
that the body of such evidence was
excluded. The EEOC did not need to
renew its objection or make a new offer of
proof later at trial. See Heyne v. Caruso,
69 F.3d 1475, 1481 (9th Cir.1995);
Fed.R.Evid. 103(a)(2).

FN2. We also reject Wal-Mart's argument
that the jury could have found that Wal-
Mart presented a satisfactory good-faith
defense. The verdict form simply stated
that the jury found in favor of Wal-Mart.
There is no evidence that the jury's verdict
was on the basis of accepting Wal-Mart's
good-faith defense. Moreover, the
wrongfully excluded cover-up evidence
directly contradicts evidence of Wal-Mart's
alleged good-faith. Therefore, we cannot
uphold the jury verdict on any supposed
acceptance of Wal-Mart's defense.

FN3. In EEOC I, we stated:
In sum, the jury was presented with
evidence that an assistant manager at Wal-
Mart's Green Valley store intentionally
discriminated against Stern based on her
pregnancy and that the assistant manager
and other Wal-Mart officials attempted to
cover up their discriminatory conduct.
Under these circumstances, we hold that the
district court, as a matter of law, should
have allowed the jury to determine whether
punitive damages were warranted.
EEOC I, 156 F.3d at 993.

[3] The EEOC also argues that the district court
erred in allowing Wal-Mart managers to testify to
their version of the events surrounding Stern's
application for employment. The EEOC is correct.
When the first jury found that Wal-Mart intentionally
discriminated against Stern, the jury necessarily
rejected Wal-Mart's version of the events and
credited the EEOC's. For example, it is highly
likely that the jury credited the EEOC's evidence that
Wal-Mart lied when stating that Stern requested
limited hours, as there was no evidence that Stern
made such a request. Therefore, the district court
abused its discretion when it allowed Wal-Mart
employees to testify to their version of events--a
version which directly contradicts the first jury's
finding of intentional discrimination. [FN4] See Los
Angeles Police Protective League v. Gates, 995 F.2d
1469, 1473 (9th Cir.1993).

FN4. We reject Wal-Mart's argument that
the EEOC waived any objection to this
error because it did not object at trial. The
EEOC did object to the relevance of the
evidence Wal-Mart presented on this issue.
This objection is sufficient to preserve this
issue on appeal.

**3 In sum, we reverse the jury's verdict and
remand for trial. The district court abused its
discretion by excluding the cover-up evidence.
Additionally, it abused its discretion when it allowed
Wal-Mart employees to testify to their version of the
events surrounding Stern's application for
employment.

*547 [4][5] In light of the fact that the forthcoming
trial will be the fourth trial on the issue of punitive
damages, we state a few guidelines to the district
court. First, the EEOC is entitled to present the
finding of facts implicit in the first jury's finding that
Wal-Mart intentionally discriminated against Stern
on the basis of her pregnancy. See Robertson Oil
Co. v. Phillips Petroleum Co., 930 F.2d 1342, 1344-
45 (8th Cir.1991). To that end, it may present the
EEOC's Proposed Statement of Established Facts or
a similar document to the jury. The factual findings
of which the jury are to be informed include, among
others, the following:
1. Wal-Mart intentionally discriminated against
Stern.
2. Wal-Mart refused to hire Stern because of her
pregnancy and not for any other reason.
3. Stern at no time expressed doubts about her
desire or ability to perform the job.
4. Stern did not withdraw her employment
application at any time.
5. Wal-Mart fabricated the story that Stern
withdrew her application.
6. Wal-Mart fabricated the story that Stern
expressed doubts about her desire or ability to
perform the job.
7. Wal-Mart fabricated the story that Stern
requested limited hours on her job application.
Wal-Mart is prohibited from making any argument
or eliciting any testimony that would contradict any
of these findings. Moreover, the EEOC is entitled
to have the jury instructed on any of these findings
(or others that, based on the arguments that may be
made to the district court on remand, the court finds
were necessarily found by the first jury). Second,
the EEOC may present evidence of any cover-up
conducted by Wal-Mart after Stern's application was
rejected. With these mandates, we remand for a
fourth, and, we hope, final, punitive damages trial.

REVERSED AND REMANDED.

35 Fed.Appx. 543, 2002 WL 1003133 (9th
Cir.(Ariz.))

Briefs and Other Related Documents (Back to top)

. 2001 WL 34097626 (Appellate Brief) Reply Brief
of the Equal Employment Opportunity Commission
(Jun. 12, 2001)

. 2001 WL 34097627 (Appellate Brief) Brief of
Appellee, Wal-Mart Stores, Inc. (May. 23, 2001)

. 00-16997 (Docket)
(Oct. 24, 2000)

. 2000 WL 33985662 (Appellate Brief) Brief of the
Equal Employment Opportunity Commission as
Plaintiff-Appellant (2000)

END OF DOCUMENT

CERTIFICATE OF SERVICE

I, Joseph A. Seiner, hereby certify that on the 10th day of
June, 2005, I caused
copies of the attached Opening Brief of the Equal Employment Opportunity
Commission as Appellant to be sent via first class U.S. mail to:

JEFFREY C. TASKER NEAL TOMLINS
KANE, RUSSELL, RONALD E. GOINS
COLEMAN & LOGAN, P.C. TOMLINS AND GOINS
3700 Thanksgiving Tower Utica Plaza Building
1601 Elm Street 2100 South Utica, Suite 300
Dallas, Texas 75201 Tulsa, Oklahoma 74114

ATTORNEYS FOR DEFENDANT

AND

Clerk of Court
U.S. Court of Appeals for the 10th Circuit
1823 Stout Street
Byron White U.S. Courthouse
Denver, CO 80257
(sent original and seven copies of brief)

______________________
JOSEPH A. SEINER
Attorney
Illinois State Bar No. 6257474
Equal Employment
Opportunity Commission
Office of General Counsel
1801 L Street, N.W., Room 7018
Washington, D.C. 20507
(202) 663-4772
joseph.seiner@eeoc.gov

Certificate of Digital Submission

I, Joseph A. Seiner, hereby certify that:

1. All required privacy redactions have been made (NONE);

2. On June 10, 2005, I will send an email containing the attached
brief in digital
form to the Tenth Circuit clerk's office at
esubmission@ca10.uscourts.gov, and to
counsel for the defendant. The document submitted in digital form
will be an exact
copy of the written document filed with the Court, but for the signature which
appears in accordance with the Amended Emergency Order governing digital
filings in the 10th Circuit Court of Appeals (Amended Emergency Order).
Additionally, in accordance with the Amended Emergency Order and my
discussions with a court clerk (Carol), three documents in the addendum (not
available in digital format) and all of the documents in the joint appendix (not
available in digital format) are being submitted in writing only.

3. The digital submissions have been scanned for viruses by the EEOC's virus
scanning software, and, according to this program, are free of
viruses. The EEOC
utilizes Symantec AntiVirus Corporate Edition. The software was most recently
updated in June, 2005.

_______________________
JOSEPH A. SEINER
Attorney
Illinois State Bar No. 6257474
U.S. EEOC
Office of General Counsel
1801 L Street, N.W., Room 7018
Washington, D.C. 20507
(202) 663-4772
joseph.seiner@eeoc.gov

June 10, 2005

************************

<NOTES>

<1> The damages provision in the statute itself, 42 U.S.C. § 1981a, explicitly
applies to both Title VII and the ADA. The Supreme Court implicitly
acknowledged
that its analysis of the punitive damages standard would also apply
to ADA claims,
Kolstad, 527 U.S. at 529, 534, and this Court has explicitly so held.
See EEOC v.
Wal-Mart Stores, Inc., 187 F.3d 1241, 1245 n.2 (10th Cir. 1999) ("The punitive
damages analysis is the same for Title VII and ADA claims").

<2> Kolstad, 472 U.S. at 545-46 (citing and discussing Faragher v. Boca Raton,
524 U.S. 775, 802 n.3, 806 (1998)).

<3> An unpublished decision may be cited to this Court where "it has persuasive
value with respect to a material issue that has not been addressed in
a published
opinion" and "it would assist the court in its disposition." 10th
Cir. R. 36.3.
The EEOC believes that this case satisfies these criteria.

<4> The district court declined to award any interest on the judgment,
stating that
"[i]nsufficient evidence exists to justify" such an award. JA at 73 n.8. This
language is ambiguous as to whether it is referring to prejudgment or
postjudgment
interest. While a district court may have very limited discretion to deny
prejudgment interest, postjudgment interest is mandatory. See 28
U.S.C. § 1961(a)
("Interest shall be allowed on any money judgment in a civil case
recovered in a
district court") (emphasis added); Wheeler v. John Deere Co., 986 F.2d 413, 415
(10th Cir. 1993) (discussing mandatory nature of statute as it relates
to interest
on damage awards); Gloria v. Valley Grain Products, 72 F.3d 497, 500
(5th Cir. 1996)
("we agree that prejudgment interest 'should' normally be included" in
a backpay
award). Though we presume that the district court's statement is
limited only to
prejudgment interest, this Court's instructions should clarify this
issue. To the
extent that the district court intended to restrict the recovery of
postjudgment
interest, it erred as a matter of law. See, e.g., Bell, Boyd & Lloyd
v. Tapy, 896
F.2d 1101, 1104 (7th Cir. 1990) ("section 1961(a) allows the judge no
discretion
to deny the interest authorized by that section") (emphasis added).