Bonilla v. Oakland Scavenger Co.
| Decision Date | 17 February 1983 |
| Docket Number | No. 81-4522,81-4522 |
| Citation | 697 F.2d 1297 |
| Parties | 30 Fair Empl.Prac.Cas. 225, 31 Fair Empl.Prac.Cas. 50, 30 Empl. Prac. Dec. P 33,128 Joaquin Moreles BONILLA, Armando Cardenas, Enrique Cardenas, Heliodoro Cardenas, Benjamin Ceja, Jose Guzman, Jose Lopez, Luis Magallon, Octavio Marquez, Raul Mendez, Gilberto Palafox, Joel Pinedo, Felix R. Sanchez, Jesus Sanchez, Curtis Stredic, individually and on behalf of all others similarly situated, Plaintiffs in Intervention, v. OAKLAND SCAVENGER COMPANY, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 70, Defendants. Perfecto MARTINEZ, et al., Plaintiffs, v. OAKLAND SCAVENGER COMPANY, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 70, Defendants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
B.V. Yturbide, Gunheim & Yturbide, San Francisco, Cal., for plaintiffs in intervention.
Stephen A. McKae, Moore, Sizoo & Cantwell, Oakland, Cal., for defendants.
Appeal from the United States District Court for the Northern District of California.
Before KASHIWA, * ANDERSON, and FARRIS, Circuit Judges.
OVERVIEW
In January 1975 a group of black and Spanish-surnamed employees filed an individual and class-action discrimination suit against their employer, the Oakland Scavenger Company, and their union, Local 70 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America. After the first group of plaintiffs had settled their individual claims, the present group of one black and fourteen Spanish-surnamed employees intervened. The class of plaintiffs consisted of all black and Spanish-surnamed employees at the Company who were dues-paying members of the Union.
The complaint charged the Company with discriminating on the basis of race and national origin in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e et seq., 1 and the Civil Rights Act of 1866, 42 U.S.C. Sec. 1981. 2
The plaintiffs specifically charged the Company with (1) discriminating against black and Spanish-surnamed employees by restricting ownership of the Company's shares to "family members," all of whom were of Italian ancestry, and (2) discriminating among the nonshareholder-employees on the basis of race and national origin. The plaintiffs charged the Union with breaching its duty of fair representation by including the shareholder preference plan in the collective bargaining agreement and by not representing a former employee at a grievance hearing. 3 The plaintiffs sought appropriate relief and monetary damages.
The district court dismissed the action against the Company under Fed.R.Civ.P. 12(b)(6) on the ground that the plaintiffs had failed to state a claim upon which relief could be granted. Its order of dismissal did not mention the plaintiffs' complaint against the Union, nor did it discuss the charge of discrimination among nonshareholder-employees. 4 We reverse and remand.
The Oakland Scavenger Company began as a garbage collection company founded in 1909 by a number of independent garbage collectors and scavengers. The five original directors, the original shareholders, and all succeeding directors and shareholders have been of Italian ancestry. Until World War II created a labor shortage, all employees of the Company were shareholders. Since that time, it has hired as many "outsiders" as it needed to fill positions that it could not fill with other family members or close friends of Italian ancestry. The percentage of shareholder-employees decreased so that by 1978 only about one-quarter of the employees were shareholders. The number of shareholder-employees fell as well, from a peak of 208 in 1943 to approximately 135 by 1978. The number of shareholder-employees assigned to each garbage collection truck dropped from as many as four to at most one.
Since the Company is a "membership corporation," a person cannot buy shares in the Company without the approval of all the other shareholders. The shareholders' agreement, signed by every shareholder, provides that the share certificates remain in the custody and possession of the board of directors during the shareholder's life. When a shareholder dies, title to his shares passes to the board. The board then issues a new certificate to a suitable surviving child or relative, if one is available. Every shareholder owns an equal block of 100 shares. He or she is required to be a full-time permanent employee of the Company. The shares are not transferable without board permission, they are not publicly traded, and there are no outside investors in the Company. Every new shareholder-employee has either a relative or a close friend who is a shareholder-employee in the Company. Since May 1968 all new shareholder-employees have been children or, in one case, a son-in-law of shareholder-employees. The shareholder agreement is discussed more fully in Perata v. Oakland Scavenger Co., 111 Cal.App.2d 378, 244 P.2d 940 (1952).
There are basically three nonmanagerial types of jobs in the Company: head route drivers, single route drivers, and helpers. The head route drivers have some additional responsibilities, and they receive a wage premium of $5.00 more per day than helpers. Single route drivers receive $2.50 to $3.50 more per day than helpers. All drivers are guaranteed nine and one-half paid hours per day. Helpers generally receive no more than eight paid hours per day.
Under the shareholder preference plan, the board of directors has the right to assign the preferred driver positions to shareholder-employees. As a result, in 1978 there was only one shareholder-employee who was a helper. All other shareholder-employees were either drivers or members of management.
The nonshareholder-employees first joined Local 70 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers in February 1967. Since then, a series of three-year collective bargaining agreements between the Company and the Union has been in effect. Some time after the original organization, the nonmanagerial shareholder-employees joined the Union to protect their preferred driver jobs. The collective bargaining agreement incorporated and preserved the shareholder-employees' right of assignment, which permits the shareholder-employees to assign the preferred and higher paying driver jobs to themselves, regardless of the seniority of any nonshareholder-employee. The jobs not filled with shareholder-employees by the right of assignment went to the senior qualified bidder among the other employees.
The first count of the original plaintiffs' first amended complaint, which was incorporated into the intervening plaintiffs' subsequent complaint, alleged that the Company discriminated against minority nonshareholder-employees in terms of wages and job assignments. The district court did not specifically discuss this claim when it dismissed the plaintiffs' cause of action for failure to state a claim upon which relief could be granted.
The Company had filed, among other pleadings, a motion to dismiss under Fed.R.Civ.P. 12(b)(6) for failure to state a valid claim, along with a motion for summary judgment under Fed.R.Civ.P. 56(b). The district court considered evidence extraneous to the pleadings before granting the Rule 12(b)(6) motion to dismiss. As the Company concedes on appeal, this was error. We have held that a district court commits reversible error when it considers matters extraneous to the pleadings while treating the motion as one to dismiss, rather than as one for summary judgment. See Costen v. Pauline's Sportswear, Inc., 391 F.2d 81, 84-85 (9th Cir. 1968); see also Carter v. Stanton, 405 U.S. 669, 671, 92 S.Ct. 1232, 1234, 31 L.Ed.2d 569 (1972); Williams v. Pacific Maritime Ass'n, 384 F.2d 935, 936 (9th Cir. 1967), cert. denied, 390 U.S. 987, 88 S.Ct. 1181, 19 L.Ed.2d 1290 (1968); Fed.R.Civ.P. 12(b).
The allegation of discrimination against minority nonshareholder-employees states a valid basis for seeking relief under Title VII, Griggs v. Duke Power Co., 401 U.S. 424, 429-31, 91 S.Ct. 849, 852-853, 28 L.Ed.2d 158 (1971), and Section 1981, Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 459-60, 95 S.Ct. 1716, 1719-1720, 44 L.Ed.2d 295 (1975). See Gay v. Waiters' and Dairy Lunchmen's Union, Local No. 30, 694 F.2d 531 (9th Cir. 1982).
The plaintiffs are entitled to an opportunity to establish a prima facie case of disparate treatment between white and minority nonshareholder-employees. Disparate treatment arises when an
employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin. Proof of discriminatory motive is critical, although it can in some situations be inferred from the mere fact of differences in treatment....
On remand the plaintiffs should be given an opportunity to meet their initial burden of proving by a preponderance of the evidence a prima facie case of disparate treatment. See Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 252-53, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207 (1981). The plaintiffs' threshold burden is not onerous, id. at 253, 101 S.Ct. at 1093, and will be satisfied if they introduce evidence
showing actions taken by the employer from which one can infer, if such actions remain unexplained, that it is more likely than not that such actions were "based on a discriminatory criterion illegal under [Title VII]."
Furnco Construction Corp. v. Waters, 438 U.S. 567, 576, 98 S.Ct. 2943, 2949, 57 L.Ed.2d 957 (1978), quoting Teamsters, 431 U.S. at...
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