Herrmann v. Cencom Cable Associates, Inc.

Decision Date09 July 1993
Docket NumberNo. 92-4152,92-4152
Citation999 F.2d 223
Parties62 Fair Empl.Prac.Cas. (BNA) 545, 62 Empl. Prac. Dec. P 42,452, 62 USLW 2070, 17 Employee Benefits Cas. 1330, Pens. Plan Guide P 23886U Tamera HERRMANN, Plaintiff-Appellant, v. CENCOM CABLE ASSOCIATES, INCORPORATED, Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

Lawrence O. Taliana (argued), Crowder & Taliana, Edwardsville, IL, for plaintiff-appellant.

Cawood Bebout (argued), Elaine V. Brzezinski, Gallop, Johnson & Neuman, St. Louis, MO, for defendant-appellee.

Gwendolyn Young Reams, Carolyn L. Wheeler, Donald R. Livingston, Susan Starr, E.E.O.C., Office of General Counsel, Washington, DC, for E.E.O.C., amicus curiae.

Before POSNER, COFFEY, and EASTERBROOK, Circuit Judges.

POSNER, Circuit Judge.

The district judge held that this suit brought under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., was barred by res judicata. The defendant had discharged the plaintiff on February 28, 1990. On August 14 she filed a charge of discrimination with the EEOC and its Illinois counterpart, claiming that she had been discharged because she was white and pregnant. In November she sued the defendant under the continuation of benefits provision (COBRA) of ERISA, 29 U.S.C. §§ 1161-68, which entitles an ex-employee to obtain continued medical coverage at favorable rates for up to a year after losing his or (in this case) her job. The district judge granted summary judgment for the defendant on the ground that the plaintiff had failed to tender her premium for the COBRA coverage within the statutory deadline, and we affirmed. 978 F.2d 978 (7th Cir.1992). While the appeal was pending, the plaintiff obtained her right to sue letter from the EEOC; and, shortly after our decision, she instituted the present suit, which the district judge held barred by res judicata because "both claims [the COBRA claim and the Title VII claim] arise from the same event, her termination, and should have been brought in one suit," the parties were the same in the two suits, and the COBRA suit had eventuated in a final judgment on the merits. So: same transaction, same parties, judgment on the merits--the three elements of res judicata. Aunyx Corp. v. Canon U.S.A., Inc., 978 F.2d 3, 6-8 (1st Cir.1992); Woods v. Dunlop Tire Corp., 972 F.2d 36, 38 (2d Cir.1992).

The Equal Employment Opportunity Commission has filed a brief as amicus curiae in support of the plaintiff in which it argues for a narrow construal of res judicata in Title VII cases on the ground that application of the doctrine disrupts the administrative procedures established by the statute. It does so, the Commission reasons, by impelling victims of discrimination to pretermit the administrative process (as the statute permits after 180 days, 42 U.S.C. § 2000e-5(f)(1)) by obtaining a right to sue letter in order to be able to join, in one suit, a Title VII claim with a claim under a different statute. If, as the district judge believed, every claim that can be said to arise out of the same employment action (such as a discharge) is part of the same transaction or occurrence, all such claims must be brought in the same suit, since, if they are not, a final judgment on the merits in one will bar all the others by operation of res judicata.

The Supreme Court rejected a parallel argument--that the statute of limitations applicable to employment discrimination suits brought under 42 U.S.C. § 1981 should be stayed pending exhaustion of Title VII administrative remedies--in Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 465-66, 95 S.Ct. 1716, 1723, 44 L.Ed.2d 295 (1975)--and we are not impressed by its second coming. Parties to Title VII actions enjoy no immunity from res judicata. Prochotsky v. Baker & McKenzie, 966 F.2d 333 (7th Cir.1992); Woods v. Dunlop Tire Corp., supra. Suppose a worker is fired, in violation (he claims) of his employment contract, two state statutes, and seven federal statutes, only one of which--Title VII--provides for any administrative remedy. That would be a clear case in which one transaction was alleged to violate a host of different laws, and it would not make much sense to say that the plaintiff must file all but the Title VII claim in one suit but may wait and bring a second suit charging violations of Title VII alone. For then a significant fraction of legally questionable discharges would give rise to two suits. This inefficient manner of litigation--inefficient and, we add, unduly burdensome to employers and hence indirectly to other workers and to consumers as well as to stockholders--can be avoided without crippling Title VII's administrative remedies. Cf. Nernberg v. United States, 463 F.Supp. 752 (W.D.Pa.), aff'd without opinion, 612 F.2d 574 (3d Cir.1979). Ordinarily (as here for example) the statutes of limitations governing the plaintiff's other claims will not be so short that he risks being barred from pursuing those claims by waiting to complete the Title VII administrative process. If he does face a looming deadline for suing on his other claims he can ask the EEOC or its state counterpart to accelerate the administrative process; he will have a good case for doing so. Moreover, an employer who sees an opportunity for settling the case informally with the aid of the EEOC may, in order to enable the administrative process to continue, agree with the employee not to plead the statute of limitations. The parties can also if they want agree to split a single claim into two or more suits. Keith v. Aldridge, 900 F.2d 736, 740 (4th Cir.1990); Restatement (Second) of Judgments § 26(1)(a) (1982). And finally the employee can sue on his other claims, ask the court--and again he would have a very strong case for doing so--to stay the proceedings until the Title VII administrative process is complete, and then if the process does not end in a way that satisfies him amend his complaint to add a Title VII count. These possibilities make the danger that applying res judicata in Title VII suits will interfere with the legislative design remote. Although it will mean additional delay in some cases, the plaintiff is protected, in part at least, against being harmed by delay by the fact that he will be accruing additional entitlements to back pay during this period and will receive prejudgment interest on his award when and if he does prevail. Loeffler v. Frank, 486 U.S. 549, 557, 108 S.Ct. 1965, 1970, 100 L.Ed.2d 549 (1988).

Although we do not think that the fact that this is a Title VII suit is important to the question whether the suit is barred by res judicata, we think the district judge went astray in concluding that it is barred. It is true that if the plaintiff had not been fired she would have neither a claim for COBRA benefits nor a claim that she had been fired as an act of racial and gender discrimination. Both the COBRA claim, the subject of the previous suit, and the Title VII claim, the subject of the present suit, thus arose out of her discharge in the sense that, but for the discharge, she would have had no complaint under either statute. A but-for test, however, is obviously no good (as has long been understood in tort, antitrust, and other cases). Restatement, supra, § 24, illustration 7, at p. 202. For suppose the plaintiff on her way out of her office after being fired had slipped on a banana peel carelessly dropped by another employee and it was clear that had she not been fired she would not have slipped because the banana peel would have been picked up by the time she left at the end of a normal work day. No one would argue in such a case that her claim for negligence was part of the...

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