McClain v. Lufkin Industries, Inc.

• Decision Date: 29 February 2008
• Docket Number: No. 05-41417.,05-41417.
• Citation: 519 F.3d 264
• Parties: Sylvester McCLAIN, on his own behalf and on behalf of a class of similarly situated persons; Buford Thomas, on his own behalf and on behalf of a class of similarly situated persons; Patrick Ross, on his own behalf and on behalf of a class of similarly situated persons; Mary Thomas, on her own behalf and on behalf of a class of similarly situated persons; Eddie K. Mask, on his own behalf and on behalf of a class of similarly situated persons; Leroy Garner, on his own behalf and on behalf of a class of similarly situated persons; Sherry Calloway Swint, on her own behalf and on behalf of a class of similarly situated persons; Walter Butler, on his own behalf and on behalf of a class of similarly situated persons; also known as A; Florine Thompson, on her own behalf and on behalf of a class of similarly situated persons; Clarence Owens, on his own behalf and on behalf of a class of similarly situated persons; also known as C; Clifford R. Duirden, on his own behalf and on behalf of a class of similarly situated persons; Earl Potts, on his own behalf and on behalf of a class of similarly situated persons; Roald Mark, on his own behalf and on behalf of a class of similarly situated persons, Plaintiffs-Appellants-Cross Appellees, v. LUFKIN INDUSTRIES, INC., Defendant-Appellee-Cross Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

519 F.3d 264

Sylvester McCLAIN, on his own behalf and on behalf of a class of similarly situated persons; Buford Thomas, on his own behalf and on behalf of a class of similarly situated persons; Patrick Ross, on his own behalf and on behalf of a class of similarly situated persons; Mary Thomas, on her own behalf and on behalf of a class of similarly situated persons; Eddie K. Mask, on his own behalf and on behalf of a class of similarly situated persons; Leroy Garner, on his own behalf and on behalf of a class of similarly situated persons; Sherry Calloway Swint, on her own behalf and on behalf of a class of similarly situated persons; Walter Butler, on his own behalf and on behalf of a class of similarly situated persons; also known as A; Florine Thompson, on her own behalf and on behalf of a class of similarly situated persons; Clarence Owens, on his own behalf and on behalf of a class of similarly situated persons; also known as C; Clifford R. Duirden, on his own behalf and on behalf of a class of similarly situated persons; Earl Potts, on his own behalf and on behalf of a class of similarly situated persons; Roald Mark, on his own behalf and on behalf of a class of similarly situated persons, Plaintiffs-Appellants-Cross Appellees, v. LUFKIN INDUSTRIES, INC., Defendant-Appellee-Cross Appellant.

No. 05-41417.

United States Court of Appeals, Fifth Circuit.

February 29, 2008.

Teresa F. Demchak, Morris J. Baller (argued), Goldstein, Demchak, Baller, Borgen & Dardarian, Oakland, CA, Timothy Borne Garrigan, Stuckey, Garrigan & Castetter, Nacogdoches, TX, for Plaintiffs-Appellants-Cross-Appellees.

Douglas E. Hamel (argued), Christopher Velle Bacon, Vinson & Elkins, Houston, TX, for Lufkin Industries, Inc.

Appeals from the United States District Court for the Eastern District of Texas.

Before JONES, Chief Judge, and HIGGINBOTHAM and CLEMENT, Circuit Judges.

EDITH H. JONES, Chief Judge:

In this complex Title VII class action against Lufkin Industries, Inc. ("Lufkin"), African-American plaintiffs allege that Lufkin's practice of delegating subjective decision-making authority to its managers with respect to initial assignments and promotions disparately affected them. After a bench trial, the district court issued a judgment in favor of the employees. After sifting through numerous issues, we reach results that are unfortunately inconclusive of the litigation. We affirm in part, reverse in part, and vacate and remand in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

Lufkin, a large manufacturing corporation located in Lufkin, Texas, is divided into four production divisions: Foundry, Trailer, Oil Field, and Power Transmission. The company employs approximately 1,500 hourly and salaried workers, and the hourly workers have been unionized for many years.

Only two of the representative plaintiffs in this class action filed EEOC complaints. Sylvester McClain ("McClain"), the named plaintiff, began working in Lufkin's Trailer division in 1972. In January 1995, he complained to the EEOC that his supervisor, Arden Jinkins ("Jinkins"), had discriminated against him based on his race. Among other things, McClain complained that Jinkins tried to have him demoted. Buford Thomas ("Thomas"), a Lufkin employee since 1979, filed his EEOC charge in February 1997, a year after he was allegedly constructively discharged. Thomas complained of being denied promotional and training opportunities because of his race while working in the Power Transmission and Oil Field divisions. The EEOC issued right-to-sue letters on both charges.

McClain and Thomas sued Lufkin for employment discrimination in violation of Title VII and 42 U.S.C. § 1981. The plaintiffs asserted that systematic racial discrimination pervades Lufkin's initial job assignments, training, promotions, and compensation. The district court certified the plaintiffs' disparate-impact claims as a class action involving 700 current and former Lufkin employees. The class was described as:

All Black persons employed for any period of time by defendant Lufkin Industries on or after March 6, 1994, to date, whose compensation, remuneration, benefits, job assignments, promotional opportunities, career advancements and other terms and conditions of employment have been, may have been, or may become, adversely affected by defendant Lufkin Industries' past or present systems of administering hiring, wages, salaries, job assignments, training, evaluations, promotions, demotions, terminations, layoffs, recalls, and rehires.

McClain v. Lufkin Indus., Inc., 187 F.R.D. 267, 277-78 (E.D.Tex.1999). The court, however, declined to certify a disparate treatment class. Two claims went to trial: (1) discrimination against blacks in Lufkin's assignment of newly hired employees; and (2) racially discriminatory promotion practices that rested on largely subjective decision-making criteria carried out by a largely white supervisory corps.

Protracted pretrial proceedings in this case included two class certification hearings, two interlocutory appeals to this court, and a two-year mediation effort. When the case finally went to bench trial, the court strictly limited each party to twenty hours for the presentation of its case. Ultimately, the district court found that Lufkin's practice of delegating subjective decision-making authority to its white managers with respect to initial assignments and promotions resulted in a disparate impact on black employees in violation of Title VII. The court awarded the plaintiffs over $3.4 million in back pay, as well as attorneys' fees and injunctive relief. Both parties appeal.

II. DISCUSSION

Lufkin contends that the named plaintiffs failed to exhaust EEOC administrative remedies and lack standing to represent the class. Lufkin also contends that the district court erred in finding that Lufkin's promotion practices are subjective and incapable of separation for analysis and that they had a statistically significant disparate impact on black employees. Lufkin challenges the court's calculation of the back pay award according to a class-wide formula. Finally, Lufkin asserts that the cumulative effect of various errors, including the limited presentation of evidence, requires us to vacate the judgment.

For their part, the plaintiffs argue that the district court erred in refusing to certify a disparate treatment class, in failing to award appropriate injunctive relief, and in reducing their attorneys' fees. We turn first to Lufkin's contentions.

A. Lufkin's Arguments

1. Failure to Exhaust EEOC Remedies

As a threshold matter, Lufkin argues that the district court should have dismissed the plaintiffs' initial-assignment and promotion claims for failure to exhaust administrative remedies and for lack of standing to represent a broadly defined class. Failure to exhaust is not a procedural "gotcha" issue. It is a mainstay of proper enforcement of Title VII remedies. Lufkin contends that McClain and Thomas complained to the EEOC about their individual disparate treatment by the company, but not about their hiring nor about any neutral employment practices on which a disparate-impact case depends. The scope of their administrative claims governs the scope of the class claims. Vuyanich v. Republic Nat'l Bank, 723 F.2d 1195, 1201 (5th Cir.1984); Evans v. U.S. Pipe & Foundry Co., 696 F.2d 925, 929 (11th Cir.1983). Consequently, Lufkin asserts, the EEOC was never presented with disparate-impact class claims concerning Lufkin's hiring and promotional practices and the administrative process was circumvented.

The district court ruled that plaintiffs had exhausted their administrative remedies via McClain's January 1995 letter to the EEOC. See 29 C.F.R. § 1601.12(b); Fellows v. Universal Rests., Inc., 701 F.2d 447, 451 (5th Cir.1983). The court also held that a contemporary administrative proceeding pertaining to Lufkin by the Office of Federal Contract Compliance Programs ("OFCCP") sufficiently fulfilled the purposes of exhaustion. This court reviews de novo the district court's conclusion concerning exhaustion. See Pacheco v. Mineta, 448 F.3d 783, 788 (5th Cir.), cert. denied, ___ U.S. ___, 127 S.Ct. 299, 166 L.Ed.2d 154 (2006).

Title VII requires employees to exhaust their administrative remedies before seeking judicial relief. Id. Private sector employees must satisfy this requirement by filing an administrative charge with the EEOC. Id. at 788 n. 6. The charge enables the EEOC to investigate and, if appropriate, negotiate a resolution with an employer. Only after administrative efforts terminate may the employee sue the employer in federal court.

Courts should not condone lawsuits that exceed the scope of EEOC exhaustion, because doing so would thwart the administrative process and peremptorily substitute litigation for conciliation. Nevertheless, competing policies underlie judicial interpretation of the exhaustion requirement. See id. at 788-89. On one hand, the scope of an EEOC charge should be liberally construed for litigation purposes because Title VII "was designed to protect the many who are unlettered and unschooled in the nuances of literary draftsmanship." Sanchez v. Standard Brands, Inc., 431 F.2d 455, 465 (5th Cir. 1970). On the other hand, the "primary purpose of Title VII is to trigger the investigatory and conciliatory procedures of the EEOC, in [an] attempt to achieve non-judicial resolution of employment discrimination claims." Pacheco, 448 F.3d at 788-89. To reconcile these policies, this court construes an EEOC complaint broadly but in terms of the administrative EEOC investigation that "can reasonably be expected to grow out of the charge of discrimination." Sanchez, 431 F.2d at 466. We use a "fact-intensive analysis" of the administrative charge that looks beyond the four corners of the document to its substance. Id. In sum, a Title VII lawsuit may include allegations "like or related to allegation[s] contained in the [EEOC] charge and...