Stewart v. General Motors Corp.

• Decision Date: 22 February 1985
• Docket Number: No. 82-2778,82-2778
• Citation: 756 F.2d 1285
• Parties: 36 Empl. Prac. Dec. P 35,027 Joe STEWART, et al., Plaintiffs-Appellants, v. GENERAL MOTORS CORP., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1285

756 F.2d 1285

36 Empl. Prac. Dec. P 35,027

Joe STEWART, et al., Plaintiffs-Appellants, v. GENERAL MOTORS CORP., Defendant-Appellee.

No. 82-2778.

United States Court of Appeals Seventh Circuit.

Argued Oct. 31, 1983.

Decided Feb. 22, 1985.

Kenneth N. Flaxman, Chicago, Ill., for plaintiffs-appellants.

Patricia A. Brandin, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for defendant-appellee.

Before COFFEY, Circuit Judge, FLAUM, Circuit Judge, and CAMPBELL, Senior District Judge. ^*

WILLIAM J. CAMPBELL, Senior District Judge.

The major issue before this Court is whether the district court erred in vacating the permanent injunction in this cause. The injunction was ordered on December 15, 1975 when the district court determined, after a non-jury trial, that General Motors had violated Section 703 of Title VII [42 U.S.C. Sec. 2000e-2] in its promotional practices at its Broadview facility. The decree was designed to replace defendant's highly subjective and loosely structured promotion procedures with a system that provided notice of vacancies, objective evaluations, and advancement based on merit and seniority. The injunction remained in effect until August 31, 1982 when the district court, upon defendant's motion, vacated the decree. The plaintiff, Joe Stewart, ¹ appeals that decision contending that the district judge utilized an erroneous legal analysis and that the burden of proof was improperly placed on the plaintiff class to justify continuance of the injunction. Appellant also argues that the class did not receive adequate legal representation in opposing defendant's motion and that the district court erred in denying attorneys' fees to plaintiffs' counsel.

This action was filed in August of 1973 and alleged racial discrimination in two aspects of defendant's employment practices: the promotions to the position of hourly clerk and the promotions to salaried positions. The plaintiff class was certified as all black employees in hourly-rated positions at the General Motors Broadview parts facility as of or after December 21, 1973. Plaintiff's case was based on the disparate impact theory, that is, that the defendant's promotional practices were not overtly discriminatory but that they were discriminatory in operation, see Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971).

At trial the plaintiffs demonstrated statistically the extreme disparity between whites and blacks in the hourly clerk and salaried positions as opposed to the proportion in the general labor force. The defendant attempted to justify its procedures for making promotional decisions but was unable to persuade the district court that its methods were based on a business necessity. Notices of job vacancies and educational opportunities were not publicized in a uniform fashion. While the defendant claimed to utilize a bona fide seniority system in promoting employees to hourly clerks, the court found that seniority was often not a determining factor. The supervisors' evaluations of the employees were heavily relied upon in promotional decisions regarding salaried positions, but they were not based on any objective criteria.

The district court entered judgment for the plaintiffs and fashioned a detailed mandatory injunction. The decree was designed to provide notice to all employees of job vacancies and educational opportunities, to create a bona fide seniority system for the hourly clerks' promotions, and to implement an objective system for evaluation with respect to promotions to salaried positions. The injunction also created an Equal Employment Opportunity (EEO) Committee at the Broadview plant consisting of three representatives of management, three members of the plaintiff class and a neutral member. All disputes regarding compliance with the decree were to be presented initially to this committee for amicable resolution. If that was unsuccessful the issues could be presented to the district court.

This Court affirmed the trial court's order with one minor exception ² and remanded the cause for a determination of a back pay award, Stewart v. General Motors Corp., 542 F.2d 445 (7th Cir.1976) [hereafter Stewart I ]. Upon remand the plaintiffs filed a petition claiming that the defendant was guilty of numerous violations of the decree. The court ordered the plaintiffs to present the claims to the EEO Committee. The committee was unable to resolve the matters, and thereafter a full trial was held on the allegations. The district court found some violations but determined General Motors not to be guilty of a majority of the claims. The defendant was held in contempt, but the district judge denied plaintiffs' request for damages, finding that no prejudice had been demonstrated from the violations. Nonetheless, the defendant appealed and this Court affirmed in an unpublished order, see Table, 618 F.2d 113 (7th Cir.1980).

In April of 1980 the district court resolved the back pay issue by awarding the class $31,446. The plaintiffs had requested over $600,000. Soon after the award, the plaintiffs moved to discharge their counsel claiming "irreconciliable conflicts." The district court granted the motion and substitute counsel, Richard Cantor and Judith Halprin, were retained. The new attorneys then filed a Motion for New Trial on the back pay issue, but the motion was denied. The plaintiffs appealed the decision and this Court affirmed in an unpublished order, see Table, 657 F.2d 271 (7th Cir.1981).

While the back pay award was pending, plaintiffs filed another petition claiming violations of the decree by the defendant. General Motors denied any violations and moved to vacate the decree, contending that it was no longer necessary. The district court denied relief to both parties. He noted that the plaintiffs' allegations lacked the requisite specificity and that they had again failed to present their complaints to the EEO Committee. As to the defendant's Motion to Vacate the Decree, the court found the request to be premature since the appeal of the back pay award was still pending and the plaintiffs had submitted a second set of alleged violations.

The plaintiffs subsequently presented their complaints to the EEO Committee and the neutral member, Dr. Jordan Jay Hillman, issued a report finding no violations of the decree. Nonetheless, the plaintiffs pursued the issues before the trial court and evidentiary hearings were held on June 17, 21 and 22, 1982 concurrently with defendant's Motion to Vacate the Decree.

General Motors' Motion to Vacate Decree

On March 11, 1982, after Dr. Hillman submitted his report finding no violations of the decree, General Motors renewed its Motion to Vacate Decree. The district court received affidavits and exhibits in support of defendant's motion and held an evidentiary hearing on June 17, 21 and 22 (in conjunction with plaintiffs' allegations of violations of the injunction). Thereafter, the district judge entered an extensive memorandum embodying his decision. The findings of fact stated therein are not challenged by either party to this appeal.

The court found that since the decree had been implemented the situation of black employees at Broadview had changed significantly. The number of blacks in salaried positions had almost doubled and had also increased with respect to the hourly clerk positions. Furthermore, in July of 1979 the employees elected to become unionized, which resulted in the United Auto Workers being certified as their exclusive bargaining representative. A collective bargaining agreement was negotiated and became effective on October 11, 1979. One of the subjects of the negotiations involved the interaction of the decree and the CBA. The contracting parties agreed that the promotions to the hourly clerk's position would still be governed by the decree, while all other promotions and transfers would be subject to the union's contract. If the decree were vacated, however, the hourly clerk promotions would be governed by the CBA. The district court found that the provisions of the CBA relating to notices of vacancies, evaluations, and promotions were essentially similar to those in the decree. The contract required a uniform application procedure for job vacancies, reports to the employees from General Motors regarding their seniority status, and the implementation of a bona fide seniority system. The CBA also provided for a grievance and arbitration procedure for employee complaints as well as a Fair Employment Practices Committee especially for claims regarding discrimination.

In 1979 the management at Broadview adopted new procedures regarding the promotions of hourly employees to salaried positions. This Divisional Assessment Program was designed to create a pool of qualified candidates for salaried positions from the ranks of hourly employees. The district court noted that the program was utilized at numerous other General Motors plants and involved a comprehensive system of objective and work-related evaluations. Based on statistical evidence, the trial judge found that since its implementation at the Broadview plant the program had operated in a non-discriminatory manner.

The district court concluded that the decree had served its purpose of remedying the statistical disparity between the number of blacks in the labor force vis-a-vis the number of blacks promoted to the higher level positions. The district judge also determined that the other function of the injunction, the creation of objective and uniform promotional guidelines, was now redundant in view of the CBA and the Divisional Assessment Program. As to the potential harm involved in maintaining the decree, the court noted that the multiplicity of procedures could cause confusion among the workers. Furthermore, "the decree was never meant to retard the development of programs which will operate to benefit defendant's employees generally, without injuring any members...