Banas v. American Airlines

• Decision Date: 29 September 1992
• Docket Number: No. 91-1044,91-1044
• Parties: 59 Fair Empl.Prac.Cas. (BNA) 733, 59 Empl. Prac. Dec. P 41,646, 61 USLW 2086 Ruth V. BANAS, Diane L. Betts, Iris E. Feeley and Colette A. Zola, individually and as certified representatives of classes of persons similarly situated, Plaintiffs-Appellants, v. AMERICAN AIRLINES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 477

969 F.2d 477

59 Fair Empl.Prac.Cas. (BNA) 733,

59 Empl. Prac. Dec. P 41,646, 61 USLW 2086

Ruth V. BANAS, Diane L. Betts, Iris E. Feeley and Colette A.

Zola, individually and as certified

representatives of classes of persons

similarly situated, Plaintiffs-Appellants, v. AMERICAN AIRLINES, Defendant-Appellee.

No. 91-1044.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 13, 1991.

Decided July 29, 1992.

As Corrected, Sept. 1, 1992.

Rehearing and Rehearing En Banc

Denied Sept. 29, 1992.

Robert J. Peters (argued), LeAnn Pedersen Pope, Steven M. Bierig, and Glen L. Udell, Brown & Peters, Chicago, Ill., for plaintiffs-appellants.

Mary P. Chapin, Russell M. Pelton (argued), and John Y.E. Lee, Oppenheimer, Wolff & Donnelly, Chicago, Ill., for defendant-appellee.

Before CUMMINGS, WOOD, Jr., ^* and KANNE, Circuit Judges.

WALTER J. CUMMINGS, Circuit Judge.

Eight years after their complaint was filed, and in the middle of trial, plaintiffs' Title VII, Civil Rights Act of 1964, sex discrimination case was dismissed on the ground that the statute of limitations had run. The principal issue on appeal is whether the Supreme Court's decision in Lorance v. AT & T Technologies, Inc., 490 U.S. 900, 109 S.Ct. 2261, 104 L.Ed.2d 961, provides the rule for deciding the statute of limitations question in this case, or whether the statute of limitations rule in the Civil Rights Act of 1991 applies. The Civil Rights Act of 1991 was enacted after briefs were filed in this Court but before oral argument. ¹

I.

Plaintiffs are members of the Kiwi Club, an all-female philanthropic and social group consisting of former (and, since 1976, present) American Airlines flight attendants. ² In early 1970, American created the Kiwi Sales Program ("KSP"), in which interested Kiwi Club members engaged in various speaking and sales promotional activities on American's behalf, in consideration for wages and travel benefits. The named plaintiffs in this case were participants in the Chicago-area KSP when it began on September 1, 1970 and, except for Ruth Banas, continue to be participants in the program. In the mid-1970s, American changed the focus of the KSP from public speaking and public relations to more direct assistance to American's sales offices. KSP participants now help other American sales employees by answering phone calls from travel agents, assisting with promotional trips, and even taking full responsibility for some smaller accounts.

During most of the pre-trial proceedings, American maintained that KSP participants were not employees but rather were independent contractors. On the eve of trial, American conceded that the participants had some "indicia" of employment. Indeed, the KSP participants are placed on American's payroll, classified as "Management/Specialist Type 8." Federal and state taxes as well as FICA are deducted from the compensation paid to KSP participants. KSP participants receive an employee card that lists as their starting date of employment the date they start in the KSP program. We will therefore refer to KSP participants as employees in the remainder of this opinion.

American requires KSP employees to work a minimum of 288 hours a year, or 48 "credits" (each credit is a 6-hour block, and originally corresponded to one speaking engagement). By the time of trial, a maximum of 60 credits per year had been established, absent American's administrative approval. Numerous KSP employees have worked more than 60 credits per year. American pays wages to KSP employees based on the hours they work and grants travel passes to KSP employees as their only benefit. The only credit that KSP employees receive for seniority is an increase in the number of annual travel passes they receive. Unlike regular full-time and part-time employees, KSP employees do not receive unlimited travel privileges, vacation and sick pay, health benefits, or other benefits. In addition, KSP employees receive no credit for their length of service to American as KSP employees when transferring to other jobs in the company.

American regulations specify other categories of employees that receive little or no benefits. Temporary employees, provisional employees, associate employees and college campus sales reps all do not accrue company-wide seniority for their services. Campus sales reps, who are mostly male, apparently receive similar, limited benefits as do KSP employees.

Plaintiff Ruth Banas transferred from the KSP program to a full-time position as a ticket lift agent at O'Hare International Airport in Chicago in May 1979. She was given a seniority date of June 11, 1979, ³ not September 1, 1970, the date she first participated in the KSP program. Within several months after her transfer, Banas became aware that other employees who became ticket lift agents after she did were given higher seniority than she, because they were given credit for their previous full-time and part-time employment. American published a seniority list every quarter that was distributed to all employees so that the employees could knowledgeably bid for shifts or other positions. In September 1980, Banas received a letter stating that she would be laid off. Instead of being laid off, however, she was changed to part-time status. ⁴ If she had possessed a September 1, 1970, seniority date, Banas would not have been reduced to part-time status. Banas apparently has been reduced to part-time status on several occasions since 1980.

II.

On September 10, 1981, Banas filed a Charge of Discrimination against American with the Chicago District Office of the Equal Employment Opportunity Commission. After receiving notice of her right to sue American from the EEOC, Banas filed this Title VII class-action complaint on September 7, 1982. Plaintiff identified two primary classes in her complaint: 1) all females currently employed in KSP, and 2) all females formerly employed in KSP who are now employed in different positions by American. Plaintiff also listed as separate classes those females who would have qualified for one of the above classes but for the fact that their employment was terminated on or after 180 days prior to the filing of Banas' charge with the EEOC.

In April 1983, the district court denied American's motion to dismiss based on Banas' failure to file a timely charge of discrimination with the EEOC. American argued in its motion that Banas knew at least by May 23, 1979, the date of her transfer to a regular full-time position, that she was not receiving seniority credit for her time in the KSP program. This awareness triggered the running of the statute of limitations, according to American, and therefore Banas' filing in September 1981, more than 300 days after May 23, 1979, was untimely. The district court rejected this argument, relying on In re Consolidated Pretrial Proceedings in Airline Cases, 582 F.2d 1142 (7th Cir.1978) (later reversed on other grounds at 455 U.S. 385, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1982)), and Stewart v. CPC International, Inc., 679 F.2d 117 (7th Cir.1982). The court cited Airline Cases for the proposition that "when the complained-of policy is still in effect at the time a charge is brought and the policy is applicable to the plaintiff at that time, the violation is continuing and plaintiff's claim cannot be time-barred." R. 27 at 5.

The district court also held in its 1983 opinion that the statute of limitations did bar Banas from acting as class representative for current KSP employees because American's policies with regard to current KSP employees no longer affected her. In November 1983, a first amended complaint was filed which added several named plaintiffs who were current KSP employees to act as representatives for this class. No named plaintiff besides Banas, however, ever filed a charge of discrimination with the EEOC.

Plaintiffs' complaint survived two additional motions to dismiss before trial began. In April 1985, Judge Grady denied American's motion to dismiss plaintiffs' class action allegations. The gist of American's argument was that Banas had already been held to be an inappropriate representative for current KSP employees, and that the added plaintiffs who were current KSP employees had not exhausted their administrative remedies. The court agreed that Banas could not act as a representative for current KSP participants, noting that Banas' attack on American's seniority policy means she must prove discriminatory intent, but that the current participants may rely on a disparate impact theory. Nevertheless, Judge Grady concluded that the cases were sufficiently related to justify joinder under Fed.R.Civ.P. Rule 20(a). Judge Grady further held that the new plaintiffs could "piggyback" on Banas' EEOC charge of discrimination because it adequately raised these related claims.

In February 1988, the district court once again denied American's motions to dismiss the case. American had renewed its motion to dismiss in light of this Court's decision in Lorance v. AT & T Technologies, Inc., 827 F.2d 163 (1987) (later affirmed at 490 U.S. 900, 109 S.Ct. 2261, 104 L.Ed.2d 961 (1989)), which limited the viability of a continuing violation theory in an attack against a seniority system. The district court denied defendant's motion to dismiss (which the court converted to a summary judgment motion), reasoning that there was a genuine issue of material fact whether Banas was aware at the time of her transfer that the seniority policy was discriminatory, i.e., that it treated male part-time employees who transferred to her job differently than it treated her.

Trial began in September 1988. After the plaintiffs concluded their case, the judge decided that Banas was in fact aware of the allegedly discriminatory nature of American's policy by November 1979, thereby making her charge with the EEOC untimely under this Circuit's Lorance decision. The court therefore granted American's Fed.R.Civ.P. Rule 41 mo...