Equal Emp't Opportunity Comm'n v. Serv. Temps Inc.

Decision Date26 April 2012
Docket NumberNo. 11–10262.,11–10262.
PartiesEQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff–Appellee, v. SERVICE TEMPS INCORPORATED, doing business as Smith Personnel Solutions, Defendant–Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

OPINION TEXT STARTS HERE

Christine Jiyeun Back (argued), Gwendolyn Young Reams, U.S. EEOC, OGC–AS, Washington, DC, for PlaintiffAppellee.

Todd Howard Tinker (argued), Law Office of Todd H. Tinker, P.C., Addison, TX, Elizabeth Gabrielle Bloch, Brown McCarroll, L.L.P., Austin, TX, for DefendantAppellant.

Appeal from the United States District Court for the Northern District of Texas.

Before HIGGINBOTHAM, SMITH and HIGGINSON, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

A Texas jury found that a corporate staffing company violated the Americans with Disabilities Act when it refused to let a deaf woman apply for a warehouse job, awarding her back pay, compensatory, and punitive damages. Entering judgment on the verdict, the judge added injunctive relief. On appeal, the company raises five categories of issues, ranging from jurisdiction to jury instructions. We affirm.

I.

Looking for work in June 2006, Jacquelyn Moncada came across an online posting that Smith Personnel (Smith), a staffing company that hires employees for corporate clients, was seeking a stock clerk to package cosmetics for its client Tuesday Morning.

Deaf from birth, Moncada arranged for a sign language interpreter to meet her at the job site to translate as she applied for the position. Carl Ray, an account manager for Smith, met Moncada at the job site and told her she could not apply for the position because she is deaf, that the warehouse environment would be too dangerous for her. Moncada attempted to explain that she had had no trouble communicating while working in warehouses in the past, but Ray persisted, advising her that she could not apply.

Moncada filed a charge with the Equal Employment Opportunity Commission (EEOC) on July 13, 2006. Smith responded, denying wrongdoing and stating its willingness to “assist Ms. Moncada in her job search, assuming that we can in fact communicate.” After investigating, the EEOC determined that Smith had violated the Americans with Disabilities Act of 1990 (“ADA”) by turning Moncada away at the job site. It issued a Notice of Determination on December 18, 2007.

The same day, the EEOC proposed that Smith pay $65,000 to settle all claims for back pay, compensatory, and other damages. Smith countered with a $5,000 proposal and reiterated its offer to help Moncada find work. Without informing Moncada of Smith's offer, the EEOC countered, seeking $16,000 in back pay and $39,000 for all other damages. Smith rejected the EEOC's second proposal and conditioned further conciliation on the EEOC's presentation of “calculations and justifications for the amount sought.” The EEOC sent Smith and Moncada a Notice of Conciliation Failure on February 22, 2008. Voluntary mediation among the parties in April 2009 also proved unsuccessful.

The EEOC filed suit on September 3, 2008, alleging that Smith's refusal to hire Moncada violated the ADA and that [a]ll conditions precedent to the institution of this lawsuit have been fulfilled.” In its answer, Smith generically denied “that all conditions precedent have been fulfilled.” The district court set March 1, 2009, as the deadline for amending the pleadings.

In discovery, the EEOC stated that it was seeking up to the statutory cap under the ADA for compensatory and punitive damages. It also disclosed evidence that Moncada had sought other work after Smith had refused to hire her. The EEOC admitted that it had not informed Moncada of Smith's August 2006 offer to help her find a job, if they [could] in fact communicate.”

More than three months after the pleadings deadline, Smith filed its first motion for leave to amend its answer to add failure to conciliate as a defense, pointing to the EEOC's failure to inform Moncada of its offer. The court denied the motion without prejudice for not addressing the appropriate legal standard. Smith filed a second motion for leave to amend its answer on August 3, 2009. The court also denied that motion, holding that Smith had failed to demonstrate good cause for the delay in amending its answer, as required under Fed.R.Civ.P. 16(b)(4).

The EEOC moved for partial summary judgment on November 3, 2009, arguing that it had met all conditions precedent to suit, including conciliation. Smith then filed a motion for summary judgment arguing that the EEOC had failed to conciliate in good faith, requiring dismissal of the action. The district court granted the EEOC's motion, holding that Smith could not assert failure to conciliate as a defense because it had not specifically included it in its answer, as required by Fed.R.Civ.P. 9(c). Smith moved for reconsideration, arguing that conciliation is not a condition precedent. The court denied it.

Smith also moved for partial summary judgment on the ground that the EEOC had failed to provide “a computation of each category of damages,” as required by Fed.R.Civ.P. 26(a)(1)(A)(iii).1 Smith asserted that, as a result of the EEOC's alleged failure, the EEOC should be precluded under Fed.R.Civ.P. 37(c)2 from using information on damages at trial, and that therefore the action for damages should be dismissed. The district court construed Smith's motion as a motion in limine and granted it, declaring that the EEOC could not state a specific amount of damages during the trial without court approval.3

In the week preceding trial in September 2010, the district court distributed a copy of the jury charge it planned to use and invited counsel to make objections. Smith objected that the charge did not sufficiently articulate the “heightened showing” required for punitive damages or the subjective component of recklessness; Smith also asked the court to remove an instruction on corporate agency. Ultimately, the district court delivered the following instruction on punitive damages:

In order for Smith to be liable for punitive damages, the EEOC must prove that the agent of Smith of whose conduct EEOC complains (1) was employed in a position of managerial capacity, (2) acted within the scope of employment, and (3) acted with malice or reckless indifference to Moncada's right not to be discriminated against based on disability.

Smith moved for judgment as a matter of law at the end of the EEOC's case and also at the close of its case, which the court denied. Smith renewed the motion after judgment was entered, raising for the first time that the EEOC had failed to establish that Ray had acted with malice or reckless indifference. Because Smith had not raised the malice issue in its Rule 50(a) motion during trial, the court considered it waived and denied the motion.

After the three-day trial, the jury found that Smith had violated the ADA by refusing to hire Moncada based on her disability, awarding $14,400 in back pay, $20,000 in compensatory damages for emotional pain and suffering, and $150,000 in punitive damages. The EEOC then moved for injunctive relief. Smith moved to dismiss based on lack of subject matter jurisdiction and, separately, for a new trial or a remittitur. The court granted the EEOC's motion for injunctive relief and denied Smith's motion to dismiss for lack of jurisdiction, but it conditioned its denial of Smith's motion for a new trial on the EEOC's acceptance of a remittitur that would reduce the punitive damages award to $68,800. The EEOC accepted. The court entered its amended judgment on January 11, 2011, which included the injunctive relief the EEOC sought. As injunctive relief, the district court required that Smith (1) refrain from discriminating against disabled employees, (2) provide employees with, and publicly post, a notice explaining the ADA's protections, (3) provide one hour of ADA training to managers, and (4) notify the EEOC when an employee complains of disability discrimination.

Smith timely appealed.

II.

Smith contends that the district court lacked subject matter jurisdiction, a determination we review de novo,4 because there was no evidence that Smith was engaged in an industry affecting interstate commerce. Specifically, Smith challenges (1) the district court's conclusion that the ADA's requirement that an employer be “engaged in an industry affecting commerce”5 is not jurisdictional and (2) the evidentiary basis for the district court's conclusion that Smith was in fact engaged in an industry affecting interstate commerce.

The district court held, and the EEOC urges, that the ADA's “affecting commerce” requirement is a substantive rather than a jurisdictional requirement. We decline to resolve that question of law in this case, which presents ample alternative grounds for affirming the district court's conclusion on subject matter jurisdiction.6 Whether or not the “affecting commerce” requirement is jurisdictional, this case satisfies it.

A stipulation in the joint pretrial order informs the “affecting commerce” analysis. Factual stipulations are binding on parties, having ‘the effect of withdrawing a fact from issue and dispensing wholly with the need for proof of the fact.’7 Stipulations alone cannot confer jurisdiction, but they can form the factual basis for jurisdiction, 8 as one does here. In the joint pretrial order, the parties agreed that Smith had advertised the stock clerk position to which Moncada applied on the Texas Workforce Commission's “Work in Texas” website. That site provides resources for individuals, both Texans and out-of-staters, who seek work in Texas. Smith's advertising on an open website with the potential, or even intent, to draw residents of other states to Texas in search of employment is enough to clear the “very low” bar that defines economic activity affecting interstate commerce.9

The district court properly determined that it had...

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