Smith v. U.S. Postal Service

• Decision Date: 10 July 1984
• Docket Number: No. 83-1446,83-1446
• Citation: 742 F.2d 257
• Parties: 35 Fair Empl.Prac.Cas. 1304, 35 Empl. Prac. Dec. P 34,638, 1 A.D. Cases 620 William Morrison SMITH, Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 257

742 F.2d 257

35 Fair Empl.Prac.Cas. 1304,

35 Empl. Prac. Dec. P 34,638, 1 A.D. Cases 620

William Morrison SMITH, Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee.

No. 83-1446.

United States Court of Appeals, Sixth Circuit.

July 10, 1984.

Decided Sept. 10, 1984.

Kathleen L. Bogas, Susan Fellman (argued), Detroit, Mich., for plaintiff-appellant.

Leonard R. Gilman, U.S. Atty., Ellen Christensen, Ellen Ritteman (argued), Asst. U.S. Attys., Detroit, Mich., for defendant-appellee.

Before MERRITT, JONES and WELLFORD, Circuit Judges.

MERRITT, Circuit Judge.

This appeal raises a question of first impression in handicap discrimination cases; namely, whether a plaintiff alleging a cause of action for employment discrimination against the Postal Service under the Rehabilitation Act of 1973, 29 U.S.C. Secs. 701-796i (1982), must exhaust administrative remedies before proceeding to federal court. We conclude that exhaustion is required.

I.

Plaintiff Smith, who suffers from cerebral palsy, was employed by the United States Postal Service from 1964 until he retired in 1979 on disability. At that time, plaintiff indicated that he was retiring because his condition had worsened.

Two and one-half years later, plaintiff brought a lawsuit against the Postal Service for wrongfully terminating him on the basis of his handicap. It is undisputed that plaintiff did not present this claim of handicap discrimination to the Postal Service or its Equal Employment Opportunity Division at any time during or following his employment there. Plaintiff's initial cause of action was brought in a Michigan state court under the Michigan Handicapper's Civil Rights Act, MICH.COMP.LAWS ANN. Secs. 37.1101-.1607 (West Supp.1984). The case was subsequently recast as an action under sections 501 and 504 of the Rehabilitation Act of 1973, 29 U.S.C. Secs. 791 & 794 (1982), and transferred to federal court in Michigan.

The Postal Service moved for dismissal on grounds that plaintiff had failed to exhaust administrative remedies as required by sections 501 and 505(a)(1) of the Rehabilitation Act. In response, plaintiff maintained that exhaustion is not required of suits brought under section 504 and 505(a)(2) of the Act. After a hearing, the District Court ruled that the exhaustion requirement applies to both section 501 and section 504, and entered an order of dismissal without prejudice. Plaintiff appeals from this determination.

II.

A. Statutory Framework

The Rehabilitation Act of 1973, 29 U.S.C. Secs. 701-796i (1982), is a program designed to assist and protect the rights of the handicapped. Through it, Congress wanted to "develop and implement, through research, training, services, and the guarantee of equal opportunity, comprehensive and coordinated programs of vocational rehabilitation and independent living" for disabled persons. See id. Sec. 701 (statement of purpose).

Title V of the Act prohibits federal agencies, federal contractors, and recipients of federal funds from discriminating against the handicapped. Specifically, section 501(b), 29 U.S.C. Sec. 791(b), requires all executive branch agencies and departments, including the Postal Service, to submit affirmative action plans for the hiring and advancement of handicapped persons. Section 503, 29 U.S.C. Sec. 793, stipulates that all federal contracts contain a provision requiring the contractor to "take affirmative action to employ and advance in employment qualified handicapped individuals." Finally, section 504 of the Act, found at 29 U.S.C. Sec. 794, declares Congress' intention that

[n]o otherwise qualified handicapped individual ... shall, solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance or under any program or activity conducted by any Executive agency or by the United States Postal Service.

The 1973 Act did not create an express private right of action on the part of handicapped employees against federal government employers. At that time, the language of section 501 merely required that federal agencies submit affirmative action plans. See Prewitt v. United States Postal Service, 662 F.2d 292, 302 & n. 12 (5th Cir.1981) (discussing private right of action). Nonetheless, in a confusing series of cases, courts interpreting the Act gradually recognized an implied private right of action under section 504 for handicapped persons subjected to employment discrimination by certain recipients of federal funds, see, e.g., Davis v. Southeastern Community College, 574 F.2d 1158 (4th Cir.1978), rev'd on other grounds, 442 U.S. 397, 99 S.Ct. 2361, 60 L.Ed.2d 980 (1979), but not in other employment discrimination cases where the employer was a federal agency or department such as the Postal Service. See, e.g., Coleman v. Darden, 595 F.2d 533 (10th Cir.), cert. denied, 444 U.S. 927, 100 S.Ct. 267, 62 L.Ed.2d 184 (1979). The courts split on the question whether a private right of action was available under section 503 for handicapped persons subjected to employment discrimination by federal contractors. Compare Rogers v. Frito-Lay, Inc., 611 F.2d 1074 (5th Cir.) (finding no private right of action), cert. denied, 449 U.S. 889, 101 S.Ct. 246, 66 L.Ed.2d 115 (1980), with Chaplin v. Consolidated Edison Co., 482 F.Supp. 1165, 1173 (S.D.N.Y.1980) (recognizing private right of action). Further, they disagreed as to whether exhaustion of administrative remedies was a prerequisite to a section 504 cause of action. Compare Doe v. New York University, 442 F.Supp. 522 (S.D.N.Y.1978) (exhaustion required), with Whitaker v. Board of Higher Education, 461 F.Supp. 99 (E.D.N.Y.1978) (exhaustion not required).

Partly in response to this confusion, Congress amended the Rehabilitation Act in 1978 to create an express private right of action under section 501 against federal agencies and departments, including the Postal Service. This was accomplished by the Senate's addition of section 505(a)(1), which provides that

[t]he remedies, procedures, and rights set forth in section 717 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-16) [Title VII], including the application of sections 706(f) through 706(k) (42 U.S.C. 2000e-5(f) through (k)), shall be available with respect to any complaint under [29 U.S.C.] section 791 [section 501] of this title....

29 U.S.C. Sec. 794a(a)(1) (1982). Section 505(a)(2) goes on to establish an express private right of action against recipients and providers of federal assistance by creating an analogous relationship between section 504 of the Act and Title VI of the Civil Rights Act of 1964:

The remedies, procedures, and rights set forth in Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) shall be available to any person aggrieved by any act or failure to act by any recipient of Federal assistance or Federal provider of such assistance under [29 U.S.C.] section 794 of this title [section 504 of the Act].

29 U.S.C. Sec. 794a(a)(2) (1982). In addition, section 504 was amended by the House to prohibit discrimination by federal agencies and the Postal Service as well as by recipients of federal aid. See Prewitt, 662 F.2d at 304-05 (discussing House and Senate versions of 1978 amendments).

B. Exhaustion Requirement

Defendant argues that section 501 of the Rehabilitation Act supplies the exclusive jurisdictional basis for claims of handicap discrimination in federal employment. Therefore, defendant contends, the "remedies, procedures, and rights" of Title VII, which are expressly incorporated into section 501 actions through section 505, control, including the requirement of exhaustion of administrative remedies. The District Judge did not address this argument directly in his decision from the bench, although he implied that Congress' intent to allow section 504 to be used as a jurisdictional basis for employment discrimination claims was uncertain.

This question has since been settled by the Supreme Court. In Consolidated Rail Corp. v. LeStrange, --- U.S. ----, 104 S.Ct. 1248, 79 L.Ed.2d 568 (1984), plaintiff filed an employment discrimination claim against Conrail, a recipient of federal funds. Apparently, the issue of exhaustion was not raised in LeStrange, but the defendant did argue initially that section 504 does not create a private right of action for employment discrimination. The Supreme Court rejected this argument with the comment that "it is unquestionable that the section was intended to reach employment discrimination." Id. at ----, 104 S.Ct. at 1254 (footnote omitted). Thus there is nothing to prevent plaintiff from basing his employment discrimination claim on section 504 save defendant's further contention that that provision, like section 501, must be construed to require exhaustion of remedies.

Plaintiff concedes that section 501 requires exhaustion, but argues that section 504 does not. Specifically, plaintiff contends that section 504 actions are to be governed not by Title VII but by the "remedies, procedures, and rights" set forth in Title VI of the Civil Rights Act of 1964, 42 U.S.C. Secs. 2000d--d-6 (1982).

Plaintiff's argument is based upon an imaginative reading of the Supreme Court's opinion in Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979), wherein the Court held that Title IX of the Education Amendments of 1972, 20 U.S.C. Sec. 1681 (1982), contains an implied private right of action. The Cannon Court found support for this conclusion in the fact that Title IX was patterned after Title VI, a statute which had consistently been held to contain such an implied right of action.

Plaintiff quotes at length from a footnote in Cannon in which the Court states that it has not required exhaustion in cases "where the statute explicitly confers a benefit on a class of persons and where it does not assure those...