E.E.O.C. v. Datapoint Corp.

• Decision Date: 07 April 1978
• Docket Number: No. 76-2862,76-2862
• Citation: 570 F.2d 1264
• Parties: 17 Fair Empl.Prac.Cas. 281, 16 Empl. Prac. Dec. P 8225 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION and Helen Sierra, Plaintiffs- Appellants, v. DATAPOINT CORPORATION (formerly doing business as Computer Terminal Corporation), Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1264

570 F.2d 1264

17 Fair Empl.Prac.Cas. 281, 16 Empl. Prac.

Dec. P 8225

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION and Helen Sierra Plaintiffs- Appellants, v. DATAPOINT CORPORATION (formerly doing business as Computer Terminal Corporation), Defendant-Appellee.

No. 76-2862.

United States Court of Appeals, Fifth Circuit.

April 7, 1978.

Rehearing and Rehearing En Banc Denied May 17, 1978.

Abner W. Sibal, Gen. Counsel, James P. Scanlan, Atty., Beatrice Rosenberg, Atty., Joseph T. Eddins, Assoc. Gen. Counsel, E. E. O. C., Washington, D. C., for plaintiff-appellant.

Luis M. Segura, Al Kauffman, Attys., M. A. L. D. E. F., San Antonio, Tex., for H. Sierra.

Douglas S. McDowell, Robert E. Williams, Avrum M. Goldberg, William R. Weissman, Washington, D. C., for amicus curiae, Equal Employment Advisory Council.

John McCamish, Jr., George P. Parker, Jr., Charles J. Fitzpatrick, San Antonio, Tex., for defendant-appellee.

Appeals from the United States District Court for the Western District of Texas.

Before GOLDBERG and MORGAN, Circuit Judges, and SCHWARTZ, ^* District Judge.

CHARLES SCHWARTZ, District Judge.

FACTS AND ISSUES

This appeal arises out of two consolidated lawsuits. One, filed by plaintiff Equal Employment Opportunity Commission (E.E.O.C.), charges that defendant Datapoint Corporation discriminated in the hiring of minorities into the job categories of officials and managers, professionals, technicians, office and clerical, and operatives, all in violation of Title VII of the Civil Rights Act of 1964 as amended, 42 U.S.C. § 2000e et seq. ¹ Said proceeding was consolidated The issues presented by this appeal are whether the trial court erred by: (1) Finding that the defendant's employment practices were non-discriminatory; (2) certifying the E.E.O.C. as the Rule 23 representative of all past and present employees of Datapoint, thus binding the class to the judgment in this case; (3) finding that plaintiff Sierra was lawfully discharged for misconduct; (4) awarding attorney's fees against both Sierra and the E.E.O.C.

for trial with a claim by a private plaintiff, Helen Sierra, a former employee of Datapoint, against her former employer charging discrimination in her firing because of her national origin (Mexican-American), in the paying of "Anglo" employees higher wages than Spanish surnamed employees for the same type of work, in promoting "Anglo" employees before promotions were granted to Spanish surnamed employees, and in hiring such employees only when Anglo-Americans were not available. In connection with the E.E.O.C. proceeding, the trial court made a finding that none of the defendant's employment practices in any way discriminated against minorities or females. It awarded attorney's fees and other costs against the Commission. The Court held that the Commission adequately represented all past and present black, Mexican-American and female employees and applicants for employment with defendant. It further held that all such persons had received the best notice practicable of this action and that such persons from the beginning of the trial (March 16, 1976) would be bound by the judgment with the exception of one person who filed notice with the court that she did not wish to be so bound. The trial judge further found that plaintiff Sierra was not in any way discriminated against, denied relief, and awarded attorney's fees and other costs to defendant.

The claim of appellants results from the circumstances surrounding defendant's discharge of plaintiff Sierra from employment on December 16, 1970. Defendant Datapoint Corporation (organized in 1968) is a manufacturer of computers and computer software. This industry operates in a highly competitive market dominated by IBM. The company despite its present success and growth was almost bankrupt in 1971, and operated at a loss until 1973. It employed the following number of persons on the dates hereinafter set out: June, 1970 241; April, 1971 310; April 27, 1974 929; May, 1975 1202. Sierra, a Mexican-American citizen of the United States, was originally employed by Datapoint on October 6, 1969. Prior to that time she spent five years working for Zenith Radio Corporation. During her employment, Sierra always received good job appraisals. On December 15, 1970, the defendant was conducting employee reviews. Each employee was to report to the supervisor's office to discuss the review and to be advised of the amount of any raise such employee was to receive. Each employee was to return to work after the interview while another party On the following day Sierra was notified of her discharge based upon the following grounds: (1) Interfering with production; (2) interfering with the production of others; (3) creating dissension among fellow employees; (4) stopping other employees from working. Prior to her discharge, Sierra had received no notice of dissatisfaction with her work or any warnings from defendant.

would report for an interview. There was in existence a company rule against employees discussing the amount of their wages with one another. Sierra had her interview at approximately 2:00 P.M. and thereafter voiced dissatisfaction with the amount of her raise to her fellow employee. Sierra admitted indicating displeasure with the result of her interview and raise, but alleged that she and another dissatisfied employee returned to their work and completed their work shift. Defendant Datapoint's version of the events following the interview was quite different. Defendant claimed that not only did plaintiff Sierra leave her production line but also that she went to other lines where she began complaining to other employees, distracting them from their work and bringing production to a complete halt in at least two different areas of the plant.

Sierra initiated her litigation against defendant on December 15, 1970. It was a class action on behalf of herself and all of Datapoint's past and present Mexican-American employees and future applicants for employment. After extensive discovery Datapoint moved on December 17, 1973 to dismiss the class action which motion was granted on March 4, 1974. No appeal was taken from this order. On April 24, 1974, with full knowledge of the foregoing, the E.E.O.C. filed its independent suit against Datapoint charging the across the board discrimination as previously noted. Thereafter, the E.E.O.C. engaged in extensive pre-trial discovery which was burdensome and expensive for defendant.

On May 28, 1975 the E.E.O.C. filed a "Motion to Define Nature and Scope of Commission Suit" which was granted in an order certifying the E.E.O.C. as a representative of all past and present blacks, Spanish surnamed and female employees, applicants for employment and dischargees of defendant. It further provided for notice in accordance with Federal Rule of Civil Procedure 23(c). At no time prior to trial did the E.E.O.C., by motion or otherwise, seek to be relieved of its obligation to represent all of the foregoing groups of individuals, nor did it maintain until the instant appeal, that such individuals would not be bound by the judgment. Notice of the suit was given to persons who might have derived individual monetary benefit from a judgment in favor of the E.E.O.C. The notice included the option not to be represented by the E.E.O.C., and one person elected to avail herself of the opportunity to opt out.

The court specifically found that the E.E.O.C. was an adequate representative of the class and that all affected parties were given the best notice practicable and the opportunity not to be represented by the E.E.O.C. Thus, at the time of trial, the E.E.O.C. seemed to be seeking back pay, and perhaps other monetary relief, for that very class of persons which it now claims are not bound by the judgment of the trial court.

The E.E.O.C. at the trial limited its proof of a prima facie case to employment statistics consisting of a comparison of Datapoint's work force composition by job category with the minority and female composition of Bexar (San Antonio) and Guadalupe County work forces during the years 1970, 1971 and 1973. ² The E.E.O.C. presented no Defendant introduced evidence which showed that it initiated an affirmative action program in 1973 which was approved by the Defense Supply Agency of the United States; that it made extensive minority recruitment efforts in the community, including expensive advertising programs; that it participated in community minority oriented programs sponsored by the Urban Coalition, EODC, and CEP; and that its minority employee percentage had been increasing approximately 3% Per year as the result of such efforts. ³

other testimony concerning discriminatory employment practices. Prior to commencement of the trial, Sierra gave notice that she would rely on the E.E.O.C.'s evidence on discrimination.

THE CLASS ACTION ISSUE

It is appropriate in the first instance to determine whether the class which plaintiff E.E.O.C. sought to represent is bound by the judgment rendered herein, the question being applicable only to the appeal of the E.E.O.C.

In Equal Employment Opportunity Commission v. D. H. Holmes, Ltd., 556 F.2d 787 (5th Cir. 1977) it was held that when the E.E.O.C. brings a suit in the nature of a class action, it may be required to comply with F.R.C.P. 23 and could be found to be an adequate representative of a class. While it is rather difficult, if not impossible, to conceive of a discrimination case seriously prosecuted by the E.E.O.C. in which it would not be found to be an adequate class representative, the fact is that in the instant case the trial judge specifically found the E.E.O.C. to be an adequate representative of the class and the E.E.O.C. went forward with the cause after being so designated. Now, on appeal, the E.E.O.C. takes the position that, although members of the defined class would have enjoyed the benefits of back pay and a permanent injunction against...