Serapion v. Martinez

• Decision Date: 05 May 1997
• Docket Number: No. 96-2251,96-2251
• Citation: 119 F.3d 982
• Parties: 74 Fair Empl.Prac.Cas. (BNA) 601, 71 Empl. Prac. Dec. P 44,887 Margarita SERAPION, Plaintiff, Appellant, v. Fred H. MARTINEZ, et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 982

119 F.3d 982

74 Fair Empl.Prac.Cas. (BNA) 601,

71 Empl. Prac. Dec. P 44,887

Margarita SERAPION, Plaintiff, Appellant, v. Fred H. MARTINEZ, et al., Defendants, Appellees.

No. 96-2251.

United States Court of Appeals First Circuit.

Heard May 5, 1997.

Decided July 18, 1997.

Judith Berkan, San Juan, PR, with whom Mary Jo Mendez and Rosalinda Pesquera were on brief, for appellant.

Graciela J. Belaval, Hato Rey, PR, with whom Alvaro R. Calderon, Jr. and Martnez, Odell & Calabria were on brief, for appellees.

Before SELYA, Circuit Judge, COFFIN and CYR, Senior Circuit Judges.

SELYA, Circuit Judge.

This appeal requires us to explore a gray area in the emerging jurisprudence of Title VII, 42 U.S.C. §§ 2000e to 2000e-17 (1994). Having completed that task, we conclude that while Title VII's employment-related shelter might in certain circumstances extend to a person who is a partner in a law firm, plaintiff-appellant Margarita Serapin, a partner in the now-disbanded law firm of Martnez, Odell, Calabria & Sierra (the Firm), is not entitled to such shelter here. Consequently, we affirm the lower court's entry of summary judgment in the defendants' favor.

In explaining our rationale, we take a slightly unorthodox course. We begin with the facts, then shift to a discussion of the statutory scheme, and then resume our historical account by describing the course of the litigation. In succession, we thereafter rehearse the summary judgment standard, limn the doctrinal parameters of the requisite Title VII inquiry, address the merits, iron out a procedural wrinkle, and at long last conclude.

I. THE FACTUAL PREDICATE

Serapin earned a distinguished reputation as a certified public accountant before deciding to switch careers. After graduating from the University of Puerto Rico Law School with honors in 1982, she joined the San Juan law firm of Colorado, Martnez, Odell, Calabria & Sierra as an associate. She left in 1983 for a stint in government service but returned in 1985. In the interim, Colorado had departed and the partnership had been reconstituted. Approximately one year later, the appellant was admitted into the Firm as a "junior" partner (sometimes termed a "non-proprietary" partner). While this status did not give her any equity position, it did give her some profit distribution units (PDUs) ¹ and enabled her to participate in meetings of the Board of Partners (a body which comprised all the partners, senior and junior--in the aggregate, roughly half the Firm's lawyers--and which had the ultimate responsibility for management and policymaking).

In 1990, Serapin became what is variously described as a "senior" or "proprietary" partner. Theretofore the Firm's four name partners (all males) were the only other proprietary partners. They enjoyed equality among themselves in respect to compensation, PDUs, benefits, and equity, and they promised Serapin that she would be elevated to an equal partnership in three years. In the meantime, her status as a proprietary partner brought about several changes in her working conditions: she received a 4% equity interest in the Firm (ceded 1% by each name partner); she assumed pro rata liability for the Firm's debts, losses, and other obligations; and she became a voting member of the Executive Committee (a five-member group which was responsible for the Firm's day-to-day management). When the appellant became a proprietary partner, the Firm increased her allocation of PDUs to 75 units. Concomitantly, she began reaping a correspondingly larger share of the Firm's profits. Under the terms of the 1990 agreement, her allotment of PDUs (and, therefore, her share of the profits) was to continue to rise in increments until the end of 1992 when Serapin would achieve full parity with the four name partners.

Despite these emoluments, Serapin was not on an equal footing with the name partners. Each of them had a greater equity interest (24% apiece) and a more munificent compensation package (roughly one-third higher than hers in 1990, although the gap gradually closed). The difference in compensation was largely, if not entirely, a function of the disparate allocation of PDUs. Still, although her allotment of PDUs was less than that of the name partners, it was nonetheless significantly greater than that of even the most well-endowed junior partner.

Serapin alleges that three of her partners (Fred H. Martnez, Lawrence Odell, and Jose Luis Calabria) never intended that a woman would achieve parity. These partners, she says, connived to prevent her from reaping the fruits of her bargain, eventually demanding that she sign an agreement which would have significantly diminished her authority within the Firm. When Serapin stood her ground, the trio caused the Firm to dissolve in 1992 (shortly before the expiration of the three-year phase-in period) and simultaneously forged a new partnership called "Martnez, Odell & Calabria." The nascent firm included the three men, as well as most of the Firm's other lawyers. The founders did not invite either Serapin or Sierra (the remaining proprietary partner) to join.

II. THE STATUTORY SCHEME

We pause at this juncture to sketch the legal landscape. Title VII is one of the brightest stars in the firmament of this nation's antidiscrimination laws. Generally speaking, it bars certain employment-related actions undertaken on the basis of impermissible criteria (such as gender). See, e.g., Smith v. F.W. Morse & Co., 76 F.3d 413, 420 (1st Cir.1996). In relevant part, Title VII provides:

It shall be an unlawful employment practice for an employer--

(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin.

42 U.S.C. § 2000e-2(a)(1).

The Firm is plainly an employer for Title VII purposes. After all, an employer is defined by statute as "a person engaged in an industry affecting commerce," and the statute makes clear that "a person" in this context can include a partnership. Id. at § 2000e(a)-(b). The rub is whether Serapin is an employee.

Although the language we have quoted speaks of "any individual," courts long ago concluded that Title VII is directed at, and only protects, employees and potential employees. See, e.g., Vera-Lozano v. International Broad., 50 F.3d 67, 69 (1st Cir.1995); Broussard v. L.H. Bossier, Inc., 789 F.2d 1158, 1159 (5th Cir.1986); see generally Keyes v. Secretary of the Navy, 853 F.2d 1016, 1026 (1st Cir.1988) (noting that "Title VII does not presume to obliterate all manner of inequity"). We know, moreover, that a single individual in a single occupational setting cannot be both an employer and an employee for purposes of Title VII. See, e.g., Devine v. Stone, Leyton & Gershman, P.C., 100 F.3d 78, 80-81 (8th Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 1694, 137 L.Ed.2d 821 (1997); EEOC v. Dowd & Dowd, Ltd., 736 F.2d 1177, 1178 (7th Cir.1984); Johnson v. Cooper, Deans & Cargill, 884 F.Supp. 43, 44 (D.N.H.1994). Even so, the parameters of the term "employee" have proven elusive. Title VII defines an employee only as "an individual employed by an employer," 42 U.S.C. § 2000e(f), a turn of phrase which chases its own tail. See Broussard, 789 F.2d at 1160; see also Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323, 112 S.Ct. 1344, 1348, 117 L.Ed.2d 581 (1992) (terming nearly identical language in the ERISA statute, 29 U.S.C. § 1002(6), "completely circular").

Given the unhelpful nature of the supplied definition, we are compelled to look for assistance in other federal antidiscrimination statutes that contain similar definitions of "employee," such as the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634 (1994), the Employee Retirement and Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461 (1994), and the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219 (1994). We regard Title VII, ADEA, ERISA, and FLSA as standing in pari passu and endorse the practice of treating judicial precedents interpreting one such statute as instructive in decisions involving another. See, e.g., Oscar Mayer & Co. v. Evans, 441 U.S. 750, 756, 99 S.Ct. 2066, 2071-72, 60 L.Ed.2d 609 (1979); Lorillard v. Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 872, 55 L.Ed.2d 40 (1978); Wheeler v. Hurdman, 825 F.2d 257, 263 (10th Cir.1987); Hyland v. New Haven Radiology Assocs., 794 F.2d 793, 796 (2d Cir.1986).

Of course, we are not remitted solely to statutory parallels. There is a developing jurisprudence under Title VII. In it, we detect precedential value not only in cases which actually involve partnerships, but also in decisions which have determined the status of individuals by analogy to a partnership paradigm (even though the individuals involved were principals of entities other than partnerships). See, e.g., Devine, 100 F.3d at 80-81; Fountain v. Metcalf, Zima & Co., 925 F.2d 1398, 1399-1401 (11th Cir.1991). We do not, however, hitch our wagon to cases deciding whether a particular individual is an employee as opposed to an independent contractor. That distinction is between those who are part of an employer's business and those who are running their own businesses, and the factors central to that inquiry are inapposite here. See Wheeler, 825 F.2d at 271-72.

There are also a few cases which deal directly with whether a partner in a professional practice should be regarded as an employee for the purpose of Title VII (and, therefore, entitled to its safeguards). The seminal case is Burke v. Friedman, 556 F.2d 867, 869-70 (7th Cir.1977), in which the court held that partners in an accounting firm were not employees vis-a-vis Title VII. This interpretation received a modicum of support in Hishon v. King & Spalding, 467 U.S. 69, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). Although the Hishon Court answered a...