Chavero v. Local 241, Div. of the Amalgamated Transit Union, 85-2362

• Decision Date: 20 February 1986
• Docket Number: No. 85-2362,85-2362
• Citation: 787 F.2d 1154
• Parties: 40 Fair Empl.Prac.Cas. 766, 39 Empl. Prac. Dec. P 36,023 Cristela CHAVERO, and all other members of the class similarly affected, Plaintiff-Appellant, v. LOCAL 241, a DIVISION OF THE AMALGAMATED TRANSIT UNION, an Unincorporated Association doing business in Washington, D.C. and the State of Illinois, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1154

787 F.2d 1154

40 Fair Empl.Prac.Cas. 766,

39 Empl. Prac. Dec. P 36,023

Cristela CHAVERO, and all other members of the class similarly affected, Plaintiff-Appellant, v. LOCAL 241, a DIVISION OF THE AMALGAMATED TRANSIT UNION, an Unincorporated Association doing business in Washington, D.C. and the State of Illinois, Defendant-Appellee.

No. 85-2362.

United States Court of Appeals Seventh Circuit.

Submitted Feb. 20, 1986 ^*.

Decided April 3, 1986.

Stuart H. Brody, Brody & Stein, Kathryn M. Cochran, Chicago, Ill., for defendant-appellee.

Before CUMMINGS, Chief Judge, WOOD and RIPPLE, Circuit Judges.

PER CURIAM.

Appellant Cristela Chavero brought an employment discrimination action against her former employer under Title VII of the Civil Rights Act of 1964, 42 U.S.C. Secs. 2000e et seq. The district court determined that it lacked subject matter jurisdiction and granted summary judgment for defendant, and Chavero appealed. We affirm.

Section 703(a) of Title VII, 42 U.S.C. Sec. 2000e-2(a), makes it an unlawful employment practice for an employer to engage in employment discrimination based on race, color, religion, sex or national origin. The Act further provides than an employer may be liable for its actions only if it is engaged in an industry affecting commerce and has 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding year. 42 U.S.C. Sec. 2000e(b). The district court determined that Chavero sued Local 241 of the Amalgamated Transit Union in its capacity as an employer, not a labor organization, ¹ and accordingly must establish that Local 241 had the requisite number of employees for Title VII coverage.

Local 241 represents employees of the Chicago Transit Authority for collective bargaining purposes. At the time of her discharge, Chavero was Local 241's secretary-typist. In addition, Local 241 employed a bookkeeper and a records clerk. Five officers elected by the membership of Local 241 manage the day-to-day affairs of the union. Local 241's president, financial secretary-treasurer, and recording secretary work full-time and are salaried; two vice-presidents also work full-time but are compensated on a per diem basis. All officers exclusively perform union duties; none currently work as employees of the Chicago Transit Authority. Additionally, a 25-member executive board supervises and directs the management of the union. The board meets twice a month and when necessary to take action on employee grievances, collective bargaining, union finances and other membership matters, normally three days each month. Each board member is an employee of the Chicago Transit Authority; all members perform regular duties as Chicago Transit Authority employees and are paid by the Chicago Transit Authority. For the days each month they conduct union business, Local 241 compensates the members at a per diem rate. On the basis of these facts, the district court saw the critical issue as whether the executive board members of Local 241 are "employees" for purposes of Title VII coverage; ² the court concluded that they were not and granted summary judgment in favor of Local 241.

Section 701(f) defines an "employee" simply as an individual employed by an employer. 42 U.S.C. Sec. 2000e(f). Chavero argues that under this definition all board members are employees of the union because they "do all the work for the union" and most members make a substantial amount of money in excess of the calculations based on the affidavit of Local 241's president. See supra note 2. While courts generally construe the term "employee" broadly under all provisions of Title VII, Armbruster v. Quinn, 711 F.2d 1332, 1340 (6th Cir.1983), members of boards of directors are not employees for purposes of Title VII coverage under any standards. 1 Larson, Employment Discrimination Sec. 5.25 at 2-22 (1985). See also York v. Tennessee Crushed Stone Association, 684 F.2d 360, 361 (6th Cir.1982) (defendant association, managed by a board of directors, never had more than two employees, an executive director and his secretary).

In a case arising under the Age Discrimination in Employment Act, 29 U.S.C. Secs. 621 et seq., this court refused to count as employees the wives of two of the company's major shareholders who were paid for their roles as directors but received no compensation and took no active role in their positions as corporate officers. Zimmerman v. North American Signal Co., 704 F.2d 347, 351-52 (7th Cir.1983). Drawing an analogy to the virtually identical definition of "employee" in 42 U.S.C. Sec. 2000e(f), ³ this court determined that the legislative history of Title VII "militates against distorting traditional concepts of employment relationships." Id. at 352. Congress did not intend "the term 'employee' to include persons who are no more than directors of a corporation or unpaid, inactive officers." Id. ⁴

Directors are traditionally employer rather than employee positions. See 1 Model Business Corporation Act Anno. Sec. 1.40(8) (3d ed. 1985). Although a director may accept duties that make him also an employee, cf. EEOC v. First Catholic Slovak Ladies Association, 694 F.2d 1068, 1070 (6th Cir.1982) (directors of nonprofit society who were also salaried officers and maintained records, prepared financial statements and managed office, employees for purposes of ADEA), cert. denied, 464 U.S. 819, 104 S.Ct. 80, 78 L.Ed.2d 90 (1983), a director is not an employee because he draws a salary. See Zimmerman v. North American Signal Co., 704 F.2d at 351-52. Rather, the primary consideration is whether an employer-employee relationship exists. Id. at 352 n. 4. The record here fails to establish that the board members perform traditional employee duties. The union officers manage the daily operations of Local 241 under the direction of the board. Although the board undertakes investigations of all grievances and disputes between union members and the company, it reports to no one other than itself. Cf. EEOC v. First Catholic Slovak Ladies Association, 694 F.2d at 1070. As such, the individual board members are not employees for Title VII coverage. See EEOC Dec. No. 80-23, 26 Fair Empl.Prac.Cas. (BNA) 1807 (August 27, 1980) (board of trustees and individual trustees who are granted exclusive authority to control and manage operation and administration of trust and its assets not employees within meaning of Title VII).

Since Local 241 did not have the requisite 15 or more employees, the summary judgment for defendant is

AFFIRMED.

* After preliminary examination of the briefs, the court notified the parties that it had tentatively concluded that oral argument would not be helpful to the court in this case. The notice provided that any party might file a "Statement as to Need of Oral Argument." See Rule 34(a), Fed.R.App.P.; Circuit Rule 14(f). No such statement...