E.E.O.C. v. Wooster Brush Co. Employees Relief Ass'n
| Decision Date | 08 February 1984 |
| Docket Number | 81-3644,Nos. 81-3638,s. 81-3638 |
| Citation | 727 F.2d 566 |
| Parties | 33 Fair Empl.Prac.Cas. 1823, 33 Empl. Prac. Dec. P 34,147, 5 Employee Benefits Ca 1483 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee, v. WOOSTER BRUSH COMPANY EMPLOYEES RELIEF ASSOCIATION (81-3638), The Wooster Brush Company, (81-3644), Defendants-Appellants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Evan Jay Cutting (argued), James D. Tomola, Baker & Hostetler, Washington, D.C., William J. Rosenthal (argued), Shewe & Rosenthal, Baltimore, Md., for defendants-appellants Wooster Brush Co. Employees Relief Ass'n.
Ronald E. Holtman, Daniel Plumly (argued), Wooster, Ohio, William J. Rosenthal (argued), Shewe & Rosenthal, Baltimore, Md., for defendant-appellant Wooster Brush Co.
Bruce B. Elfvin, EEOC, Cleveland, Ohio, Jeffrey Bannon (argued), Warren Bo Duplinsky, Raymond R. Baca, EEOC, Appellate Division, Washington, D.C., for E.E.O.C.
Before ENGEL and MARTIN, Circuit Judges, and BROWN, Senior Circuit Judge.
In this appeal we must decide whether Title VII of the Civil Rights Act, as amended by the Pregnancy Discrimination Act of 1978, codified at 42 U.S.C. Sec. 2000e(k) (Supp. II 1978), requires the inclusion of pregnancy benefits as part of the disability benefits provided by an independent and longstanding Employees Association. If it does, we must decide whether the failure to include those benefits gives rise to an action by the Equal Employment Opportunity Commission against the Association or against the Employer, which makes substantial contributions to the Association, or both. After a nonjury trial the district judge entered a judgment against both the Association and the Employer.
We hold that the Association itself was not an employer within the meaning of the Act. Since it is an independent legal entity, specifically found not to be a sham, it is not subject to liability under the Act, at least absent any showing that its inclusion for purposes of relief is essential in order not to frustrate the purposes of the Act. At the same time, we hold that the Employer, by making substantial contributions to a disability benefits plan which, if directly operated would violate the pregnancy amendments, has effectively discriminated against women on account of their sex in the "terms, privileges, and conditions" of their employment. The Employer is, therefore, subject to appropriate remedial relief. Thus we affirm in part and reverse in part the judgment of the district court and remand for the purpose of dismissing the action as to the Association but with instructions to modify certain aspects of the relief granted against the Employer.
We are assisted in this appeal by a thorough and carefully reasoned opinion of the district court, reported in EEOC v. Wooster Brush Co., 523 F.Supp. 1256 (N.D.Ohio 1981). The trial judge, in his discussion and conclusions of law, carefully considered nearly all of the judicial authority in this circuit and elsewhere which was available to him at the time.
In addition, the extensive facts found after a full trial on the merits are carefully and accurately chronicled in the district court opinion at 523 F.Supp. 1258-59. For convenience we repeat them here as they were found in the district court:
FACTS
The Company is a manufacturer of paint brushes, rollers, sprayers, and other associated items. It is a corporation operated by a board of directors and officers. The Company employs both male and female employees, who, as employees, are entitled to certain company benefits as explained to them upon joining the Company and as listed in the employee handbook. One of the benefits listed in the employee handbook is the opportunity for membership in the Association.
Defendant Association is an unincorporated association formed for the purpose of providing disability benefits to its members who are unable to work because of illness. It is operated by its board of directors and officers. The Association members elect the board of directors to carry on the day-to-day functions of the Association, although as a practical matter, one of the Company employees who is also an Association member processes routine claims pending final approval by the board.
The Association was formed in 1935 at the initiative of Company employees. Before that time, it had been customary to "pass the hat" to collect money for a fellow employee whenever an employee became ill and was therefore unable to work. Upon proposing the Association, the employees elected a founding board of directors that in turn investigated and drafted a constitution. The Association constitution was adopted by Association membership and to date, with amendments, the constitution remains in effect.
Under the constitution, the Association is run by a five-member board of directors, each member having an equal vote. Four of the directors are elected from and by Association membership, and the fifth director is the Company secretary/treasurer or his designee.
From 1949 through 1959 Woodrow G. Zook had been elected to the board. In 1959 the Association membership amended the constitution to provide for the Company's secretary/treasurer or his designee to sit on the board. Zook, the secretary/treasurer in 1959, has retained his appointed seat on the Association board although his positions with the Company now include treasurer, president, chief executive officer, and member of the Company board of directors.
Association membership is voluntary. To become an Association member, one must 1) be an employee of the Company, 2) submit a recent physical examination report, 3) be approved for membership by a majority of the Association board of directors, and 4) pay monthly dues into the Association fund.
Association membership is available only to employees at the Wooster, Ohio; Elyria, Ohio; and Reno, Nevada plants. Employees of the Acme Brush Corporation, the Company's wholly-owned subsidiary, are ineligible to join the Association.
At the end of approximately two (2) months of employment, new employees are informed in a meeting with the person in charge of the Company's hourly personnel that they will become eligible for Company insurance benefits at the end of three (3) months. Employees are also informed at the same meeting that they may apply for membership in the Association.
The requirement that the prospective Association member must submit a physical examination report may be satisfied by submitting the report of the Company's pre-employment physical. If the employee chooses not to submit the report of the Company's physical, the applicant must obtain a physical at his or her own expense.
Once the physical examination report has been submitted, it and the employee's application are presented to the Association's secretary/treasurer for the board of directors' consideration at the next board meeting. Applicants must meet minimum health requirements, and approval of one's health for purposes of working for the Company will not trigger automatic acceptance into the Association.
Finally, to maintain membership in the Association, the member must pay monthly dues, presently set at the amount of Two Dollars, Fifty Cents ($2.50). The dues of hourly and non-exempt salaried workers are deducted from their Company payroll checks. 1 Exempt salaried workers pay their dues in annual payments.
In addition to receiving dues from its members, the Association receives funds from the Company. The Company regularly contributes to a variety of charitable organizations. Charities listed on the Company's income tax returns include the Association, the United Way, the YMCA, the College of Wooster, and Goodwill Industries. About thirty-nine percent (39%) of the Company's total charitable contribution budget is donated to the Association. In addition to monetary contributions for which the Company takes charitable deductions, the Company makes monetary contributions for which it takes no charitable deductions. Other contributions are made, in kind, to what the Company believes are worthy organizations such as parent/teacher organizations, Boy Scouts, and churches that request company products for use in their respective cleaning and refurbishing projects.
When the Association was first formed, the Company contributed twenty-five percent (25%) of the Association's operating budget. Currently, the Company contributes dollar-for-dollar the amount of dues paid by Association members. When the Association fund reaches Fifty Thousand Dollars ($50,000.00), a moratorium is placed on dues payments and, consequently, no funds are received from the Company. No additional dues are collected until payment of disability benefits utilizes money in the fund, thereby reducing the fund and again necessitating the payment of more dues.
The Association pays One Hundred Dollars ($100.00) a week for up to thirty-nine (39) weeks in any one year or for any one disability to male and female members who are disabled due to injury or illness. The Association does not, however, pay benefits on claims related to disability arising from pregnancy.
The EEOC brings this action upon a determination that there was reasonable cause to believe that charges of unlawful employment practices by the Company and the Association in violation of Title VII were true and that conciliation attempts by the EEOC had failed. The basis of the complaint is an allegation that the Company, directly and by and/or through its agent, the Association, unlawfully discriminates against women because of their sex by providing disability benefits for temporary disabilities other than pregnancy but by failing to provide pregnancy-related disability benefits.
The Equal Employment Opportunity Commission in its complaint charged that the Wooster Brush Company Employees Relief Association and the Wooster Brush Company violat...
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