519 U.S. 202 (1997), 95-259, Walters v. Metropolitan Ed. Enterprises, Inc.

• Citation: 519 U.S. 202, 117 S.Ct. 660, 136 L.Ed.2d 644
• Party Name: WALTERS v. METROPOLITAN EDUCATIONAL ENTERPRISES, INC., et al.
• Case Date: January 14, 1997
• Court: U.S. Supreme Court

Page 202

519 U.S. 202 (1997)

117 S.Ct. 660, 136 L.Ed.2d 644

WALTERS

v.

METROPOLITAN EDUCATIONAL ENTERPRISES, INC., et al.

Case No. 95-259

United States Supreme Court

January 14, 1997^[*]

Argued November 6, 1996

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT.

Syllabus

In 1990, petitioner Walters was fired by respondent Metropolitan Educational Enterprises, Inc., soon after she filed an employment discrimination charge against it under Title VII of the Civil Rights Act of 1964. Petitioner Equal Employment Opportunity Commission (EEOC) sued Metropolitan, alleging that the firing violated Title VII's antiretaliation provision. After Walters intervened, Metropolitan filed a motion to dismiss for lack of subject-matter jurisdiction, claiming that it was not an "employer" covered by Title VII because, at the time of the alleged retaliation, it was not "a person . . . who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year." 42 U.S.C. § 2000e(b). The parties have stipulated that Metropolitan failed to satisfy the 15-employee threshold in 1989; that, during most of 1990, it had between 15 and 17 employees on its payroll on each working day; and that, during 1990, there were only nine weeks in which it was actually compensating 15 or more employees on each working day. The District Court dismissed the case, relying on Circuit precedent to the effect that employees may be counted for § 2000e(b) purposes only on days on which they actually performed work or were being compensated despite their absence. The Seventh Circuit affirmed.

Held:

The ultimate touchstone under § 2000e(b) is whether an employer has employment relationships with 15 or more individuals for each working day in 20 or more weeks during the year in question. Pp. 205-212.

(a) The "payroll method"—which looks to whether the employer has an employment relationship with the employee on the day in question, as is most readily demonstrated by the individual's appearance on the employer's payroll—represents the fair reading of the statutory language. That method embodies the ordinary, contemporary, common meaning of "has [an] employe[e]." While the phrase "for each working

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day" suggests the possibility of a test based on whether an employee is actually at work on a given day, such a test would be impossible to administer and reflects an improbable reading of the statute. The method advocated by Metropolitan, which focuses on whether an employer is compensating the employee on the day in question, is not a plausible reading of the statutory criterion of whether the employer "has" the employee. Pp. 206-208.

(b) The payroll approach does not render superfluous the statutory qualification "for each working day." Without this phrase, one would not be sure whether to count part-week employees toward the statutory minimum. Nor is it dispositive that the payroll method produces some strange consequences with regard to Title VII's coverage, since Metropolitan's approach produces unique peculiarities of its own. The latter approach would also turn the coverage determination into an incredibly complex and expensive factual inquiry, whereas, under the payroll method, all one needs to know about a given employee for a given year is whether he started or ended employment during that year and, if so, when. He is counted as an employee for each working day after arrival and before departure. Pp. 208-211.

(c) Under the payroll method, Metropolitan was an "employer" for purposes of petitioners' retaliatory-discharge claim. Pp. 211-212.

60 F.3d 1225, reversed and remanded.

Constantine John Gekas argued the cause for petitioner in No. 95-259. With him on the briefs was Adrianne S. Harvitt. Deputy Solicitor General Waxman argued the cause for petitioner in No. 95-779. On the briefs were Solicitor General Days, Acting Solicitor General Dellinger, Assistant Attorney General Patrick, Deputy Solicitor General Bender, Beth S. Brinkmann, C. Gregory Stewart, Gwendolyn Young Reams, Carolyn L. Wheeler, and C. Gregory Stewart.

Patrick J. Falahee, Jr., argued the cause and filed a brief for respondents in both cases.^{[- ]}

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Justice Scalia delivered the opinion of the Court.

Title VII of the Civil Rights Act of 1964 applies to any employer who "has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year." 78 Stat. 253, as amended, 42 U.S.C. § 2000e(b). These cases present the question whether an employer "has" an employee on any working day on which the employer maintains an employment relationship with the employee, or only on working days on which the employee is actually receiving compensation from the employer.

I

Petitioner Darlene Walters was employed by respondent Metropolitan Educational Enterprises, Inc., a retail distributor of encyclopedias, dictionaries, and other educational materials. In 1990, she filed a charge with the Equal Employment Opportunity Commission (EEOC), claiming that Metropolitan had discriminated against her on account of her sex in failing to promote her to the position of credit manager. Soon after that, Metropolitan fired her.

On April 7, 1993, petitioner EEOC filed suit against Metropolitan and its owner, respondent Leonard Bieber (hereinafter collectively Metropolitan), alleging that the firing constituted unlawful retaliation. Walters intervened in the suit. Metropolitan filed a motion to dismiss for lack of subject-matter jurisdiction, claiming that the company did not pass the 15-employee threshold for coverage under Title VII.

Page 205

The District Court granted Metropolitan's motion to dismiss, 864 F.Supp. 71 (ND Ill. 1994), relying on Zimmerman v. North American Signal Co., 704 F.2d 347, 354 (CA7 1983), which affirmed a District Court's decision to count employees toward the 15-employee threshold only on days on which they actually performed work or were being compensated despite their absence. On appeal from the District Court's judgment, the Court of Appeals reaffirmed Zimmerman. 60 F.3d 1225 (CA7 1995). We granted certiorari. 516 U.S. 1171 (1996).

II

Petitioners' suit rests on Title VII's antiretaliation provision, 42 U.S.C. § 2000e-3(a), which makes it unlawful for an employer to discriminate against any of its employees for filing complaints of discrimination. Metropolitan was subject to Title VII, however, only if, at the time of the alleged retaliation, it met the statutory definition of "employer," to wit: "a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year." § 2000e(b).

Metropolitan's "working days" are Monday through Friday, and the "current" and "preceding" calendar years for purposes of the retaliatory-discharge claim are 1990 and 1989. The parties have stipulated that Metropolitan failed to satisfy the 15-employee threshold in 1989. During most of 1990, Metropolitan had between 15 and 17 employees on its payroll on each working day; but in only nine weeks of the year was it actually compensating 15 or more employees on each working day (including paid leave as compensation). The difference resulted from the fact that Metropolitan had two part-time hourly employees who ordinarily skipped one working day each week.^[*]

Page 206

A

The parties agree that, on any particular day, all of the individuals with whom an employer has an employment relationship are "employees" of that employer. See 42 U.S.C. § 2000e(f) (defining "employee" to mean "an individual employed by an employer"). Thus, individuals who are not receiving compensation from their employer on the day in question nonetheless qualify as "employees" on that day for purposes of § 2000e(b)'s definition of "employer." Respondents contend, however, and the Seventh Circuit held here, that an employer "has" an employee for a particular working day within the meaning of § 2000e(b) only when he is actually compensating the individual on that day. This position has also been adopted by the Eighth Circuit. See EEOC v. Garden & Associates, Ltd., 956 F.2d 842, 843 (1992).

Petitioners contend that the test for when an employer "has" an employee is no different from the test for when an individual is an employee: whether the employer has an employment relationship with the individual on the day in question. This test is generally called the "payroll method," since the employment relationship is most readily...