Council 31, American Federation of State, County and Mun. Employees, AFL-CIO v. Ward, AFL-CI
| Decision Date | 28 October 1992 |
| Docket Number | AFL-CI,Nos. 91-2980,D,91-3077,s. 91-2980 |
| Citation | 978 F.2d 373 |
| Parties | 60 Fair Empl.Prac.Cas. (BNA) 275, 60 Empl. Prac. Dec. P 41,839, 61 USLW 2331, 24 Fed.R.Serv.3d 316 COUNCIL 31, AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES,elores Barrett, Karen Bryson, et al., Plaintiffs-Appellants, v. Sally WARD, individually and as the former Director of the Illinois Department of Employment Security, Loleta Didrickson, as Director of the Illinois Department of Employment Security, Richard McClure, individually and as former Director of Central Management Services and Michael E. Tristano, as the present Director of the Illinois Department of Central Management Services, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Gilbert Feldman, Cornfield & Feldman, Solomon I. Hirsh (argued), Chicago, Ill., for plaintiffs-appellants.
Marita C. Sullivan, Office of the Atty. Gen., Chicago, Ill., for Sally A. Ward, Richard McClure, Michael E. Tristano.
Susan Frederick Rhodes, Asst. Atty. Gen. (argued), Marita C. Sullivan, Office of the Atty. Gen., Chicago, Ill., for Sally A. Ward.
Michael D. Mulvihill, Cooney & Associates, Kevin J. Conway (argued), Cooney & Conway, Terrence M. Johnson, Chicago, Ill., for Catherine Shine.
Catherine Masters Epstein (argued), Schiff, Hardin & Waite, Robert L. Martier, Baker & Martier, Chicago, Ill., M. Jayne Rizzo, Julian Solotorovsky, Carolyn Quinn (argued), John Dames, Kelley, Drye & Warren, Chicago, Ill., for Owens Illinois, Inc., Owens-Corning Fiberglas Corp.
Before CUDAHY and EASTERBROOK, Circuit Judges, and WOOD, Senior Circuit Judge.
This employment discrimination case presents two questions for review. First, does a plaintiff have to allege specific facts to state a cause of action for intentional racial discrimination? Second, must an "employment practice" be more than a single decision by an employer to be actionable under a disparate impact theory? The answer to both questions is no. We therefore reverse.
In the mid-1980s, unemployment in Illinois dropped to felicitously low levels. Federal spending on unemployment benefits dropped as well, forcing the Illinois Department of Employment Security (IDES or the Department) to cut its budget. In response, the (former) Director of IDES, Sally Ward, 1 decided to lay off large numbers of the Department's staff in several stages throughout 1985. She decided to concentrate the cuts in certain divisional offices of IDES that are mostly located in Chicago, and in the three regional field offices that serve the Chicago metropolitan area. Although a greater percentage of the staff of IDES statewide was black (43%) than was the population of Illinois, black employees are concentrated in the field and divisional offices affected by the cuts.
In January 1985, Gail Bradshaw, the Department's Affirmative Action/Equal Opportunity officer, prepared an adverse impact analysis on the first round of the proposed layoffs for submission to the Illinois Department of Human Rights (IDHR). Her report compared the layoff rate among white employees to the layoff rate among black employees and concluded that the planned layoff would have an adverse impact on black employees. Ward discussed this analysis with Bradshaw, who suggested that the analysis could compare retention rates rather than layoff rates. Ward agreed, and the resulting numbers looked much better. A March 7, 1986, analysis prepared by Bradshaw summarizes the difference between the two approaches. As a whole, the 1985 layoffs resulted in the layoff of 8.6 percent of the Department's black staff and only 3.0 percent of the Department's white staff. Conversely, 91.4 percent of the Department's black staff were retained as were 97.0 percent of its white staff.
Of course, this number-juggling had no substantive content, but it served a purpose. The Equal Employment Opportunity Commission (EEOC) generally regards any selection procedure that picks blacks and whites by rates that are different by one fifth or more to have an adverse impact. EEOC, Uniform Guidelines on Employee Selection Procedures (1978), 29 C.F.R. § 1607.4D (1991). Use of a layoff rate analysis triggered the "four-fifths" rule, since (again using the figures for all of 1985) the layoff rate among white employees was only 35 percent (3.0 percent/8.6 percent) of the black layoff rate. Use of a retention rate analysis, on the other hand, showed no adverse impact, as black employees were retained at 94 percent (91.4 percent/97.0 percent) of the white rate. Bradshaw eventually submitted retention rate analyses to the IDHR and to the Illinois Department of Central Management Services. Neither department disapproved the layoff plan.
The first round of layoff notices was sent on January 31, 1985--these layoffs are not directly at issue here. The layoffs challenged in this lawsuit took place between April 15 and August 5 of the same year. In the course of the challenged layoffs IDES laid off 217 employees; 130 were black.
All of the employees affected by the layoffs are members of Council 31 of the American Federation of State, County and Municipal Employees, AFL-CIO (Council 31 or the Union). In March 1985, the Union sued IDES in the Circuit Court of Cook County to enjoin the layoffs. Among other complaints, the Union argued that the layoffs were racially discriminatory. This suit was eventually dismissed for want of prosecution after the Union decided to proceed through the EEOC instead. Council 31 also filed various grievances under the collective bargaining agreement, which were eventually settled.
The present lawsuit was brought by Council 31 and by a separate class consisting solely of the black IDES employees affected by the 1985 layoffs. The complaint included claims of intentional discrimination brought under Title VII (42 U.S.C. §§ 2000e et seq. (1988)) and under 42 U.S.C. §§ 1981 & 1983 (1988). The complaint also presented a claim of disparate impact under Title VII.
The case was first assigned to Judge Leighton of the Northern District of Illinois. Judge Leighton dismissed the claims under sections 1981 and 1983 for failure to allege "well pleaded facts that would give rise to an inference that the layoff procedures were the result of intentional discrimination." Mem.Op. at 5, 1987 WL 4915 (April 27, 1987). The judge appears to have overlooked the fact that the plaintiffs also brought a claim of intentional discrimination under Title VII. Nonetheless, the parties have been assuming that the claim of intentional discrimination under Title VII was dismissed as well. 2
The plaintiffs amended their complaint, and the parties proceeded with the litigation on a disparate impact theory before Judge Plunkett, to whom the case was reassigned. After a certain amount of procedural skirmishing, Judge Plunkett granted the defendants' motion for summary judgment. The court reasoned that a disparate impact case requires the identification of a "specific employment practice." In such a case, an "employment practice" must be a "repeated, customary method of operation": a single layoff decision does not count. Mem.Op. and Order, 771 F.Supp. 247, 251. (July 30, 1991) (hereinafter Mem.Op.). Therefore the plaintiffs had failed to establish a prima facie case of disparate impact. Mem.Op. at 249, 251. The plaintiffs appealed, and the defendants cross-appealed. We reverse as to the direct appeal and affirm as to the cross-appeal.
We begin with the issues presented by the plaintiffs' appeal.
The Federal Rules of Civil Procedure establish a system of notice pleading. In addition to a jurisdictional statement and a demand for judgment, a complaint need present only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Well-pleaded facts are not required. American Nurses Ass'n v. Illinois, 783 F.2d 716, 723 (7th Cir.1986).
In their original complaint, the plaintiffs identified the layoffs at issue and then alleged that "Defendants knowingly, intentionally and maliciously discriminated against Negro employees when effectuating said layoffs...." Complaint p 12. This was "quite enough to state a claim." American Nurses, 783 F.2d at 724.
As the district court noted, there is "precious little" case law on the meaning of "employment practice" as that term is used in disparate impact cases. Mem.Op., 771 F.Supp. at 250. Parties may not have litigated the issue, however, because the meaning seems fairly clear. The relevant portion of the statute that authorizes disparate impact suits, section 703 of the Civil Rights Act of 1964, reads as follows:
(a) It shall be an unlawful employment practice for an employer--
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or
(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin.
42 U.S.C. § 2000e-2(a); see Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971).
As used in the statute, the term "employment practice" must refer to any of the enumerated acts, most of which could be characterized as single decisions of an employer. There is no question that single decisions are actionable under this same section when consciously motivated by race. See, e.g., Artis v. Hitachi Zosen Clearing, Inc., 967 F.2d 1132 (7th Cir.1992) (single recall decision). It is difficult to see why the result should be any different when...
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