RECENT DEVELOPMENTS IN THE LAW
OF EMPLOYMENT DISCRIMINATION

Joe R. Whatley Jr.
Andrew C. Allen
Whatley Drake & Kallas LLC
2001 Park Place North
Suite 1000
Birmingham, Alabama 35203

Introduction. We will attempt to describe what we believe to be the most important recent developments in the law of employment discrimination.

At the outset, we must concede that we are plaintiffs' lawyers. We are dedicated to representing employees whom we believe to be victims of employment discrimination. We believe that we are the kind of lawyers whom Congress intended to encourage to represent employees in employment discrimination claims. As we will discuss, we believe that some recent decisions are being misapplied. The unfortunate result is that a number of District Judges and some Courts of Appeals are rendering decisions, which are discouraging many plaintiffs' attorneys from accepting all but the rare employment discrimination claim. As a practical matter, employment discrimination claims must be handled on a contingency fee basis. Most potential clients have been terminated, and they do not have assets or income that will allow them to take on the excellent defense lawyers in the employment discrimination bar on anything other than a contingency fee basis. Therefore, plaintiffs' lawyers must carefully consider potential clients to determine whether they have claims that are economically viable. In the present environment, the unfortunate answer to this inquiry is that many people who are likely victims of illegal employment discrimination claims do not have cases that plaintiffs' lawyers can afford to accept.

As we will discuss below, defendants are now routinely relying upon subjective defenses that are difficult to attack under the accepted legal analysis for considering employment discrimination claims. In what we believe to be a misapplication of a recent decisions from the Supreme Court and from the Eleventh Circuit, District Courts are giving credence to the subjective reasons and granting summary judgments for defendants. We will attempt to place these decisions in their proper context.

Before turning to those decisions, however, we will discuss the recent reemergence of employment discrimination class actions and developments in that area of the law.

Class Actions. In recent years there has been a resurgence of class litigation and settlements in the employment discrimination area. Starting with the Texaco settlement and continuing through the recent settlement in the Coca-Cola case, there have been numerous employment discrimination class actions filed and settled. Many of those settlements have occurred in retail chain operations, especially grocery stores, including Publix, Winn Dixie, and other companies. Any retail chain operation that does not have a posting and bidding procedure that gives African Americans and females notice of higher level openings and the opportunity to compete for them will be subject to possible claims of systemic discrimination.

At the same time that there have been a growing number of class suits and settlements, a tension between the expanded remedies allowed by the 1991 Amendments and the requirements of Rule 23 has developed. Prior to the 1991 Amendments, Title VII class actions were routinely handled as Rule 23(b)(2) cases with all relief, including back pay, treated as equitable. In 1991, Congress permitted the award of compensatory and punitive damages under Title VII. The availability of such damages raises the issue of Rule 23(b)(3) with the requirements of superiority and predominance, neither of which is present in Rule 23(b)(2).

In Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998), the Fifth Circuit panel decision used broad language to describe the problems with certifying Title VII class actions after the 1991 Amendments. Many defendants have attempted to read the decision as saying that no class may be certified under Title VII. However, the panel decision must be read in light of the order denying rehearing, which provided that the decision should be read as holding that the district court did not abuse its discretion by deciding that consolidation as opposed to class certification was the appropriate case management tool in that instance, and that the Court was not ruling that the some issues could have been certified by the district court.

Some courts have read Allison as essentially prohibiting class certification of Title VII claims. E.g., Miller v. Hygrade Food Products Corporation, __ F.Supp.2d ___ (E.D. Pa. January 29, 2001); Adams v. Henderson, 197 F.R.D. 162 (D.Md. 2000); Robinson v. Sears, Roebuck & Co., 111 F.Supp.2d 1101, 1126-27 (E.D.Ark. 2000); Ramirez v. DeCoster, 194 F.R.D. 348, 352 (D.Me. 2000); Faulk v. Home Oil Co., 184 F.R.D. 645, 661, 663 (M.D.Ala. 1999).

The Eleventh Circuit has not yet applied Allison to employment discrimination cases. In Rutstein v. Avis Rent-A-Car, 211 F.3d 1228 (11th Cir. 2000), the Eleventh Circuit applied Allison outside of the employment discrimination context. The Court went to some length to distinguish traditional employment discrimination cases and to say that it was not prohibiting employment discrimination class actions. See also, Murray v. Auslander, ___ F.3d ___, 2001 WL 245716 (11th Cir. March 13, 2001), looking to Allison for guidance on the issue of what damages are incidental to equitable relief, outside the employment discrimination context. It is difficult to square the Allison line of cases with the 1991 Civil Rights Act. As Judge Reed recognized in Miller, "one of the clear purposes of the 1991 Act was 'to provide appropriate remedies for intentional discrimination and unlawful harassment in the workplace.' 42 U.S.C. § 1981 Historical and Statutory Notes section entitled Purposes of the 1991 Amendments". Yet, in these cases courts have used the 1991 Act as an excuse to limit the class-wide remedies available under Title VII.

One way to address the concerns raised in Allison is to exclude claims for compensatory and punitive damages from the claims that are to be certified and instead to request that only claims for equitable relief, including back pay be certified. Allison could be read as creating problems for such a certification. However, Rule 23(c)(4)(A) explicitly authorizes certification of only certain issues. Thus, the whole case does not have to be certified. Under Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867 (1984), only those issues which were actually the subject of the class case are res judicata against the absent class members. Therefore, Rule 23(c)(4)(A) permits this kind of certification of some but not all claims, a provision which should eliminate any "claim-splitting" argument that defendants might make.

In addition, the Fifth Circuit has recently affirmed class certification in Bertulli v. Independent Association of Continental Pilots, ___ F.3d ___, 2001 WL 121841 (5th Cir. February 13, 2001), even though the calculation of damages would require some individualized determinations.

Plaintiffs' attorneys should be aware of any time limitations that courts impose for filing class certification motions. Some Judges in the Northern District of Alabama require that class certification motions be filed within a certain time period. In the well-publicized Adams Mark litigation, the Magistrate Judge denied class certification solely because the plaintiffs' attorney had failed to file a timely motion for class certification and had not presented any justification for the delay.

Individual Cases. The major developments within the past year for individual employment discrimination cases came in Reeves v. Sanderson Plumbing Products, Inc., 120 S.Ct. 2097 (2000), and Chapman v. A1 Transport, ___ F.3d ___, 2000 WL 1459447 (11th Cir. en banc 2000).

It is elementary that a plaintiff in an employment discrimination case may establish a prima facie case of discrimination (1) through direct evidence of discriminatory intent, Alpin v. Sears, Roebuck & Co., 940 F.2d 1497, 1501 (11th Cir. 1991), (2) by offering statistical proof of a pattern and practice of discrimination, Carter v. City of Miami, 870 F.2d 578, 581 (11th Cir. 1989), or (3) by offering circumstantial evidence as articulated by the Supreme Court in McDonald Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 668 (1973).

Within the past year, the most important developments with respect to individual claims have been in Reeves v. Sanderson Plumbing Products, Inc., 120 S.Ct. 2097 (2000), and Chapman v. AI Transport, 180 F.3d 1244, 2000 WL 1459447 (11th Cir. en banc October 2, 2000).

Both decisions apply the McDonnell Douglas method of analyzing the evidence in a disparate treatment case. That method was described in detail in Chapman.

[3][4][5] This Court, as well as other federal courts of appeals, uses the framework established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), to evaluate ADEA claims that are based upon circumstantial evidence of discrimination. See Reeves, 120 S.Ct. at 2105 (noting widespread use of the McDonnell Douglas framework in DEA cases and assuming its applicability); Combs v. Plantation Patterns, 106 F.3d 1519, 1527-28 (11th Cir.1997). Under that framework, the plaintiff must first establish a prima facie case of discrimination. See Combs, 106 F.3d at 1527-28 (citations omitted). One method a plaintiff can use to establish a prima facie case for an ADEA violation is by showing that he (1) was a member of the protected age group, (2) was subjected to adverse employment action, (3) was qualified to do the job, and (4) was replaced by or otherwise lost a position to a younger individual. See Benson v. Tocco, Inc., 113 F.3d 1203, 1207-08 (11th Cir.1997).

Establishment of the prima facie case in effect creates a presumption that the employer unlawfully discriminated against the employee. If the trier of fact believes the plaintiff's evidence, and if the employer is silent in the face of the presumption, the court must enter judgment for the plaintiff because no issue of fact remains in the case.

*8 Combs, 106 F.3d at 1528 (quoting Burdine, 450 U.S. at 254, 101 S.Ct. at 1094 (footnote omitted)).

[6][7] If a plaintiff establishes a prima facie case of discrimination, the defendant employer must articulate a legitimate, nondiscriminatory reason for the challenged employment action. See id. However, the employer's burden is merely one of production; it "need not persuade the court that it was actually motivated by the proffered reasons. It is sufficient if the defendant's evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff." Id. at 1528 (quoting Burdine, 450 U.S. at 254-55, 101 S.Ct. at 1094 (citation and footnote omitted)).

[8][9][10][11] If the defendant articulates one or more such reasons, the presumption of discrimination is eliminated and "the plaintiff has the opportunity to come forward with evidence, including the previously produced evidence establishing the prima facie case, sufficient to permit a reasonable factfinder to conclude that the reasons given by the employer were not the real reasons for the adverse employment decision." Id. (citations omitted). If the plaintiff does not proffer sufficient evidence to create a genuine issue of material fact regarding whether each of the defendant employer's articulated reasons is pretextual, the employer is entitled to summary judgment on the plaintiff's claim. See id. at 1529 (holding that there must be "sufficient evidence to demonstrate the existence of a genuine issue of fact as to the truth of each of the employer's proffered reasons for its challenged action"). [FN11]

In Reeves, the Court "granted certiorari . . . to resolve a conflict among the Courts of Appeals as to whether a plaintiff's prima facie case of discrimination (as defined in McDonnell Douglas . . .), combined with sufficient evidence for a reasonable factfinder to reject the employer's nondiscriminatory explanation for its decision, is adequate to sustain a finding of liability for intentional discrimination." 120 S.Ct. at 2104. In the decision written by Justice O'Connor, the Court somewhat modified the issue it was deciding: "Specifically, we must resolve whether a defendant is entitled to judgment as a matter of law when the plaintiff's case consists exclusively of a prima facie case of discrimination and sufficient evidence for the trier of fact to disbelieve the defendant's legitimate, nondiscriminatory explanation for its action. We must also decide whether the employer was entitled to judgment as a matter of law under the particular circumstances here." 120 S.Ct. at 2103. The Court held that the judgment as a matter of law for the defendant must be reversed and that the jury verdict in favor of the plaintiff should be reinstated.

The plaintiff had obtained a favorable jury verdict in an employment discrimination case, and the district court denied a motion for judgment as a matter of law or alternatively for a new trial. There was no dispute as to whether the plaintiff had made out a prima facie case. The Fifth Circuit also recognized that the plaintiff "'very well may' have offered sufficient evidence for 'a reasonable jury [to] have found that [respondent's] explanation for its employment decision was pretextual.'" 120 S.Ct at 2104. The Court clearly ruled that the Fifth Circuit had misread its decision in St. Mary's Honor Center v. Hicks, 509 U.S. 502 (1993). In Hicks, the Court had ruled that if a plaintiff presents a prima facie case and sufficient evidence that the employer's explanation is not believable, then the factfinder may infer intentional discrimination.

While the Supreme Court reversed a decision for the defendant employer, and its opinion must be read as being largely a victory for plaintiffs, the Court did not quite establish a bright-line test that a prima facie case and evidence of pretext will always be sufficient to sustain a jury verdict in favor of the plaintiff. "This is not to say that such a showing by the plaintiff will always be adequate to sustain a jury's finding of liability." 120 S.Ct. at 2109. Instead, the Court established what may be characterized as an almost always adequate test.

Plaintiffs' attorneys had a few months to enjoy the Reeves victory in the Supreme Court before the en banc Eleventh Circuit decided Chapman, affirming summary judgment for the defendant. The first lesson of Chapman is that plaintiffs must make an adequate record in opposing summary judgment in the district court. In the en banc appeal, the Lawyers Committee for Civil Rights under Law made an excellent presentation, with the auspicious cast of Lawrence Ashe, Nancy Rafuse, William Hill, and Rick Seymour representing the plaintiff. Unfortunately, they had a very limited district court summary judgment record. The plaintiff had presented very little in opposition to the defendant's summary judgment motion. The district court had granted summary judgment on the plaintiff's ADEA claim and allowed the ADA claim to go to trial before a jury. After a jury verdict in favor of the defendant, the plaintiff moved to reconsider the summary judgment on the ADEA claim and asked that the district court consider the record developed at trial. The district court refused to do so. The Court of Appeals held that the district court did not abuse its discretion in refusing to consider the trial record. In deciding the substantive legal issues, the Court of Appeals therefore considered only the very limited evidence that the plaintiff offered in opposition to summary judgment.

On a procedural level, the Court laid to rest the argument that we as plaintiffs' lawyers have often made that is, that summary judgment is not generally a proper vehicle in employment discrimination cases. Rule 56 applies to employment discrimination cases in the same way that it applies to other cases. The proper way to consider a summary judgment motion in an employment discrimination case is that the procedural issues are no different than any other case where the question of intent is involved. In Hicks and Reeves, the Supreme Court held that a jury may infer intent. Nevertheless, plaintiffs are clearly wrong after Chapman to argue that employment discrimination cases present a special category for purposes of summary judgment.

Substantively, the Court addressed two issues with respect to the employer's explanations for its employment action and the plaintiff's burden in proving pretext. One of the employer's explanations was objective and the other was subjective. The objective reason was that the plaintiff had changed employers a number of times in a specified short period of time. The subjective reason was that the plaintiff gave a poor interview.

With respect to the objective reason, the plaintiff could not challenge its truth. The Court recognized that job changes by an applicant a number of times in a short period of time is a legitimate reason for an employer to refuse to select that applicant. Therefore, the plaintiff was left with showing younger comparators who had likewise changed jobs frequently. The first problem with that argument was that the plaintiff did not make it in the district court. Moreover, the evidence showed that the comparator did not change jobs as frequently as the plaintiff. There are several lessons for plaintiffs' lawyers. First, make appropriate arguments in the district court so that they are not waived. Second, if the truth of the proffered explanation cannot be contested, then develop the factual record with respect to one or more comparators.

The Court also recognized that an employer may rely upon a subjective nondiscriminatory reason for an employment decision, within limits. The reason must be clear and specific. "A subjective reason is a legally sufficient, legitimate reason if the defendant articulates a clear and reasonably specific factual basis upon which it based its subjective opinion." In other words, the Eleventh Circuit will not accept a subjective rationale if the defendant does not present an underlying factual basis for it. Even a subjective rationale must be "capable of objective evaluation." Quoting Connor v. Fort Gordon Bus Co., 761 F.2d 1495, 1500 (11th Cir. 1985). The employer offered objective bases for the subjective reasons for not hiring the plaintiff, "but Chapman never refuted those objective reasons." After Chapman a number of defendants seem to be relying upon the subjective reason of a poor interview. When defendant relies upon such a reason, it is important that the plaintiff offer evidence that undermines the defendant's objective bases for the subjective rationale. In the case of an interview, the plaintiff must offer evidence that he or she gave a good interview with specific examples. In summary, Chapman was a case with a very limited summary judgment record, and the en banc opinion relies heavily on the plaintiff's failure to make an adequate summary judgment record. The issue of comparator was also important in the ADA case of Maynard v. Pneumatic Products Corp., ___ F.3d ___, 2000 LEXIS 29623 (11th Cir. 2000). There, the plaintiff lost "because [h]e failed to demonstrate that his ability to walk is substantially limited as compared to the average person in the general population's ability to walk." The plaintiff's lawyer probably reasonably thought that any court would know the average person's ability to walk, but this case, like Chapman, demonstrates the importance of making a record on every essential element of a claim.

Limitations Periods. In 2000 the Eleventh Circuit decided several decisions related to limitations periods and the timeliness of claims. In Stewart v. Booker T. Washington Insurance Co., 232 F.3d 844 (11th Cir. 2000), the Court held that a statement that an employee's job may be in danger does not trigger the limitations period. "Quite simply, the 180-day charge filing period does not run until the plaintiff is told that she is actually being terminated, not that she might be terminated if future contingencies occur."

In Santini v. Cleveland Clinic of Florida, 232 F.3d 823 (11th Cir. 2000), the Court held that a second EEOC notice does not toll the limitations period because the plaintiff knew of the first notice.

Retaliation. To avoid summary judgment, a plaintiff must establish a prima facie case of retaliation. A prima facie cause of retaliation requires a showing of three elements: first, the plaintiff engaged in statutorily protected conduct; second, the plaintiff suffered an adverse employment action; and finally, the adverse action was causally related to the protected expression. See, Stewart v. Happy Herman's Cheshire Bridge, Inc., 117 F.3d 1278, 1287 (citing Goldsmith v. City of Atmore, 96 F.2d 1155, 1163 (11th Cir. 1993)).

To prove a causal connection, the Eleventh Circuit Court of Appeals requires a plaintiff only to demonstrate "'that the protected activity in the adverse action were not wholly unrelated.'" Fairly v. Nationwide Mut. Ins. Co., 197 F.3d 1322, 1337 (11th Cir. 1999) (quoting Clover v. Total System Services, 176 F.3d 1346, 1454 (11th Cir. 1999) (emphasis added)). This Circuit has further held that a plaintiff satisfies this element if he provides sufficient evidence that the decision-maker became aware of the protected conduct and that there was close temporal proximity between this awareness and the adverse employment action. Id.