E.E.O.C. v. Metropolitan Educational Enterprises, Inc.

Decision Date18 July 1995
Docket Number94-3592,Nos. 94-3334,s. 94-3334
Citation60 F.3d 1225
Parties68 Fair Empl.Prac.Cas. (BNA) 499, 66 Empl. Prac. Dec. P 43,619, 64 USLW 2071 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, and Darlene Walters, Intervening Plaintiff-Appellant, v. METROPOLITAN EDUCATIONAL ENTERPRISES, INCORPORATED, and Leonard Bieber, Defendants-Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

Dori K. Bernstein (argued), E.E.O.C., Office of Gen. Counsel, Washington, DC, Sharon A. Seeley, John C. Hendrickson, Gregory M. Gochanour, E.E.O.C., Chicago, IL, for E.E.O.C.

Patrick J. Falahee, Jr. (argued), Law Offices of Patrick J. Falahee, Chicago, IL, for Metropolitan Educational Enterprises, Inc., Leonard Bieber.

Constantine J. Gekas (argued), Adrianne S. Harvitt, Harvitt & Gekas, Chicago, IL, for Darlene Walters.

Before CUMMINGS, EASTERBROOK and RIPPLE, Circuit Judges.

CUMMINGS, Circuit Judge.

This case presents the question whether, by virtue of recent legislative developments or a closer look at old ones, this Court should overrule its decision in Zimmerman v. North American Signal Co., 704 F.2d 347 (7th Cir.1983). In that case, we defined "employer" in the context of the Age Discrimination in Employment Act ("ADEA"), a construction since extended to other anti-discrimination legislation including Title VII. The Equal Employment Opportunity Commission ("EEOC") urges us to adopt a more expansive definition. Intervening plaintiff Darlene Walters joins in this plea for the simple reason that our Zimmerman definition forecloses her Title VII retaliatory discharge claim against the defendants, her former employer and the company's president. We are not persuaded that subsequent events dictate overruling Zimmerman, however, and therefore reject the EEOC's and Walters' invitation to do so.

BACKGROUND

The EEOC sued Metropolitan under Sec. 704(a) of Title VII (42 U.S.C. Sec. 2000e-3(a)) in 1993, alleging that Metropolitan had fired Walters three years earlier in retaliation for her filing of a gender discrimination charge. Walters subsequently intervened as plaintiff. Metropolitan moved to dismiss the suit for lack of subject matter jurisdiction, alleging Under Title VII, an employer is "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." 42 U.S.C. Sec. 2000e(b). The statute does not explicitly prescribe a method of counting employees to verify whether the requisite minimum of 15 is reached, but two have emerged from case law. One, endorsed by the EEOC and adopted by a number of courts, is the "payroll method." It looks at the number of employees maintained on an employer's payroll within a given week: if this number is at least 15 for at least 20 calendar weeks the jurisdictional minimum is satisfied, regardless of whether or not every employee on the payroll shows up for work every day of the calendar week.

                that the company was not an "employer" under Title VII, and the parties proceeded to discovery on that question.  In August 1994, after analyzing the parties' stipulations regarding Metropolitan's payroll records, the district court granted defendants' motion to dismiss on the ground that Metropolitan did not qualify as an employer under Title VII and there was accordingly no federal jurisdiction. 1  864 F.Supp. 71, 73 (N.D.Ill.1994)
                

The alternative method counts all salaried employees toward the minimum, but takes a different approach toward hourly or part-time workers. Such workers are considered employees only on days when they are physically present at work or are on paid leave. The jurisdictional minimum of employees must be at the workplace or on paid leave for each day of the work week, or the week will not be counted.

In Zimmerman, the Seventh Circuit endorsed this counting system and rejected the payroll approach. 2 The panel in that case examined the statutory language of the ADEA and focused on its provision (like Title VII's) that an employer must have the requisite number of employees "for each working day of a week before that week can be counted toward the jurisdictional minimum." Id. at 353-354. Seeing no way to reconcile the phrase "for each working day" with the payroll method, the panel held that the correct method excluded hourly paid workers on days when they were neither working nor on paid leave. Id. To conclude otherwise, the Zimmerman panel held, would render the words "for each working day" superfluous and would be contrary to the "explicit definitional restriction chosen by Congress." Id. 3 The panel also noted that had Congress wanted to define the jurisdictional minimum in terms of the number of employees on the payroll each week, it could certainly have done so. Id.

ANALYSIS

The EEOC and Walters aim a fusillade of arguments at Zimmerman. Primarily they In considering these arguments, we bear in mind that compelling reasons are required to overturn Circuit precedent. "Stare decisis is of fundamental importance to the rule of law," Hilton v. South Carolina Public Railways Comm'n, 502 U.S. 197, 202, 112 S.Ct. 560, 563, 116 L.Ed.2d 560 (1991), and has even greater force when the precedent in question involves a statutory construction. See Patterson v. McLean Credit Union, 491 U.S. 164, 172, 109 S.Ct. 2363, 2370, 105 L.Ed.2d 132 (1989).

                contend that in enacting the Family and Medical Leave Act ("FMLA"), Congress endorsed the payroll method over the Zimmerman alternative in a manner that counsels deference from this Court.  They also point to other case law and the EEOC's own guidelines which are contrary to the holding in Zimmerman.   Finally, they submit that the payroll approach comports better with public policy considerations
                

We also note that this Court based Zimmerman on a reading of the statute's plain text that we continue to endorse. As the Zimmerman panel noted, the phrase "for each working day" must be given some meaning within the context of the statute, and the most natural interpretation of that phrase looks to the number of employees physically at work on each day of the week. Plaintiffs suggest an alternative interpretation that looks to situations when an employee joins or exits the payroll mid-week; this seems a highly unlikely reading of the statute, particularly since instances where employees begin work on Wednesdays or depart on Thursdays are unlikely to occur with sufficient frequency to merit inclusion in a federal anti-discrimination statute.

While agreeing that the statute could have been worded more clearly, we believe that the Zimmerman court's interpretation of its plain text has stood the test of time and a new set of appellate eyes. Generally, a judicial construction of the plain language of the statute ends the matter conclusively: the law is clear that when a court can glean the meaning of a statute from its text, it should look no further. United States v. Hudspeth, 42 F.3d 1015, 1022 (7th Cir.1994), certiorari denied, --- U.S. ----, 115 S.Ct. 2252, 132 L.Ed.2d 260 (1995).

Notwithstanding this fact, plaintiffs contend that the recent passage of the FMLA, with a definition of "employer" that closely tracks those in the ADEA and in Title VII, is reason enough for us to re-examine Zimmerman 's holding. 4 The Senate Report for the FMLA endorses the payroll approach to identifying employers:

The quoted language parallels language used in Title VII of the Civil Rights Act of 1964 and is intended to receive the same interpretation. As most courts and the EEOC have interpreted this language, "employs * * * employees for each working day" is intended to mean "employ" in the sense of maintain on the payroll. It is not necessary that every employee actually perform work on each working day to be considered for this purpose.

S.Rep. No. 3, 103d Cong., 1st Sess. 21-22 (1993), U.S.Code Cong. & Admin.News 1993, pp. 3, 24. Such congressional commentary, unfortunately for plaintiffs, has little effect on our view of Title VII. First, the Congress that passed the FMLA has no special sanction to interpret the actions of a previous Congress. "The interpretation given by one Congress (or a committee or Member thereof) to an earlier statute is of little assistance in discerning the meaning of that statute." Pub. Employees Retirement Sys. of Ohio v. Betts, 492 U.S. 158, 168, 109 S.Ct. 2854, 2862, 106 L.Ed.2d 134 (1989).

Second, although plaintiffs designate the adoption of the FMLA as a "significant development of the law on the proper interpretation of the statutory definition of 'employer' contained in Title VII," Pl.Br. at 13, this purported legal milestone occurred not within the text of the statute, but within legislative history, which has no force of law. As the District of Columbia Circuit recently The Supreme Court has explicitly rejected the notion that judicial interpretation of a statute owes deference to language in a legislative report. In Pierce v. Underwood, the Court held that where there was an "almost uniform appellate interpretation" of legislation, re-enactment of the same statutory language would be presumed to re-enact that "settled judicial interpretation" regardless of a legislative report to the contrary. 487 U.S. 552, 567, 108 S.Ct. 2541, 2551, 101 L.Ed.2d 490 (1988). While further action taken by Congress can justify the abandonment of statutory precedent, see Patterson v. McLean Credit Union, 491 U.S. 164, 173, 109 S.Ct. 2363, 2370-71, 105 L.Ed.2d 132, legislative history is not akin to legislative action. See Pierce, 487 U.S. at 567-568, 108 S.Ct. at 2551-52.

observed, "A congressional report, even a conference report, is not legislation ... and it does not change the law." In re North, 50 F.3d 42, 46 (D.C.Cir.1995); see also Davel v. Sullivan, 902 F.2d 559, 562 (7th Cir.1990) ("The words of the statute, not the words of the legislative history,...

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