E.E.O.C. v. First Citizens Bank of Billings

• Decision Date: 16 April 1985
• Docket Number: Nos. 84-3529,84-3544,s. 84-3529
• Citation: 758 F.2d 397
• Parties: 45 Fair Empl.Prac.Cas. 1337, 36 Empl. Prac. Dec. P 35,156, 102 Lab.Cas. P 34,670 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, Cross-Appellee, v. FIRST CITIZENS BANK OF BILLINGS, Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 397

758 F.2d 397

45 Fair Empl.Prac.Cas. 1337,

36 Empl. Prac. Dec. P 35,156,

102 Lab.Cas. P 34,670

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Plaintiff-Appellant, Cross-Appellee, v. FIRST CITIZENS BANK OF BILLINGS, Defendant-Appellee, Cross-Appellant.

Nos. 84-3529, 84-3544.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 17, 1985.

Decided April 16, 1985.

Vincent Blackwood, Warren Bo Duplinsky, E.E.O.C., Washington, D.C., for plaintiff-appellant, cross-appellee.

Carey E. Matovich, Billings, Mont., for defendant-appellee, cross-appellant.

Appeal from the United States District Court for the District of Montana.

Before KILKENNY, GOODWIN, and SKOPIL, Circuit Judges.

SKOPIL, Circuit Judge:

The Equal Employment Opportunity Commission ("EEOC") brought this action against First Citizens Bank of Billings ("First Citizens") to redress employment discrimination violations. The district court found that First Citizens violated the Equal Pay Act, 29 U.S.C. Sec. 206(d), when it compensated men at higher wages than women working in the same positions. On appeal, the EEOC contests the district court's amended order reducing the original backpay award. First Citizens cross-appeals, challenging (1) the EEOC's jurisdictional authority; (2) the district court's determination that the bank violated the Equal Pay Act; and (3) the award of liquidated damages.

1. EEOC's Enforcement Power.

The Secretary of Labor was originally empowered to bring civil actions on behalf of employees who suffered employment discrimination in contravention of the Equal Pay Act. 29 U.S.C. Sec. 216(c). President Carter, by virtue of authority delegated to him under the Reorganization Act of 1977, 5 U.S.C. Sec. 901-12, transferred the Secretary of Labor's jurisdiction to the EEOC. Reorganization Plan No. 1 of 1978, 92 Stat. 3781, reprinted in 1978 U.S.Code Cong. & Ad.News 9795-9800.

The Reorganization Act of 1977, however, contained a one-house legislative veto provision, a provision which was later declared unconstitutional. INS v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 2768, 77 L.Ed.2d 317 (1983). First Citizens claims that any reorganization plan, including the plan which transferred authority to the EEOC, was therefore ineffective. First Citizens argues that only the Department of Labor is vested with authority to enforce Equal Pay Act violations.

This issue was rendered moot when Congress enacted Public Law 98-532, which ratified and affirmed as law each

                reorganization plan, including Plan No. 1 transferring authority to the EEOC.  Pub.L. 98-532, 98 Stat. 2705 (1984).  The EEOC not only has authority to bring future Equal Pay Act action, but has retroactive authority as well on any previous action it has brought.   EEOC v. CBS, 748 F.2d 124, 125 (2d Cir.1984);  Barrett v. Suffolk Transportation Services, 600 F.Supp. 81, 82 (E.D.N.Y.1984);  see also Swayne & Hoyt, Ltd. v. United States, 300 U.S. 297, 301-02, 57 S.Ct. 478, 479-80, 81 L.Ed. 659 (1937) (Congress may by enactment ratify acts which it might have authorized)
                

2. Violations of the Equal Pay Act.

The Equal Pay Act forbids wage discrimination based on sex. 29 U.S.C. Sec. 206(d)(1). Once the EEOC offers sufficient evidence showing substantial equality in jobs and a disparity in wages, the burden of persuasion shifts to the employer to show that the disparity is the result of one of the four statutory exceptions: (1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) a differential based on any factor other than sex. 29 U.S.C. Sec. 206(d)(1); EEOC v. Maricopa County Community College District, 736 F.2d 510, 513 (9th Cir.1984).

First Citizens conceded that a wage disparity existed between male and female tellers, proof operators, and installment loan officers. The burden thus shifted to First Citizens. First Citizens relies on the fourth exception, which allows for differentials based on factors other than sex. We review the district court's determination that First Citizens violated the Equal Pay Act under a clearly erroneous standard. Hein v. Oregon College of Education, 718 F.2d 910, 913 (9th Cir.1983).

A. Tellers

Joe Link was originally hired as a laborer on October 4, 1978 to help move the bank to a new location. Link, who had no previous banking experience or relevant education, began performing teller duties on December 1, 1978 at $650 per month. Evidence disclosed that women in the same job classification as Link with two to five years' experience earned $575 to $580 per month. The most experienced woman, Janet Helphingstine, who had worked nearly eight years, earned $600 per month, $50 less than Link.

First Citizens justifies this salary disparity on the basis that Link was a management trainee. The Equal Pay Act permits discrepancies in pay resulting from the existence of a bona fide training program. 29 C.F.R. Sec. 800.148 (1984); Schultz v. First Victoria National Bank, 420 F.2d 648, 653 (5th Cir.1969). But the program must be more than an afterthought and certain features common to training programs must exist. Elements indicative of a legitimate program include: (1) employees are hired with the knowledge that they are trainees; (2) a training manual exists; (3) rotation follows a schedule instead of depending upon personnel needs; (4) trainees receive formal instruction from the management; (5) the training program is open to both sexes; and (6) advancement to higher positions is constant and frequent. See Hodgson v. Behrens Drug Co., 475 F.2d 1041, 1045 (5th Cir.), cert. denied, 414 U.S. 822, 94 S.Ct. 121, 38 L.Ed.2d 55 (1973) (the Hodgson court found that, even though the training program contained these elements, the program was in violation of the Act because it was coterminus with a stereotyped province called man's work).

Joe Link was the first and only employee in First Citizens' "trainee program." No formal program or manual existed, nor had any management personnel conducted training sessions with Link. Furthermore, there was no vacancy awaiting Link on completion of the program. While Link was frequently rotated between various teller positions, other tellers also held numerous positions. There is little evidence to support First Citizens' claim that Link was a management trainee. The district court correctly ruled that the disparity in

wages between Link and the female tellers violated the Equal Pay Act.

B. Proof Operators

First Citizens claims that Ed Nelson received higher pay than the female proof operators because of his greater experience in proof work. Experience is a legitimate factor under the fourth exception. EEOC v. Aetna Insurance Co., 616 F.2d 719, 725 (4th Cir.1980). Testimony indicated, however, that experience was not the primary consideration in hiring a proof operator. The main qualities necessary for the job are speed and accuracy. The female operators who were paid less than Ed Nelson were both faster and more accurate than he was. This caused the district court to conclude that experience as a factor in hiring proof operators was not neutrally applied. The district court correctly ruled that Nelson's experience did not exempt First Citizens from paying proof operators equal wages.

C. Installment Loan Officers

Nick Krumenacher was hired in September 1976 as an installment loan lender at the salary of $850 per month. He was promoted to installment loan officer and given a raise to $900 per month in January 1977. This was his salary when he was fired in July 1977. Patricia Eik, after serving three years as an installment loan secretary, was promoted to installment loan officer in January 1979. Her salary was then $800 per month.

First Citizens claims that there was no salary difference between Krumenacher and Eik. In July 1979, First Citizens gave Eik a retroactive raise that matched Eik's salary to that of Krumenacher's. This occurred after the investigation of First Citizens' salary policy began. Clearly, the retroactive raise cannot conceal the disparity in starting salary between Krumenacher and Eik.

First Citizens alternatively claims that any difference in salary was the result of Krumenacher's education, a factor other than sex. But, Krumenacher's college degree is only marginally related to the job of installment loan officer. As the district court pointed out, "the defendant has failed to offer any evidence to explain why Krumenacher's four years of college education entitled him to a higher salary as an installment loan officer than Eik who had completed one and one-half years of college, together with three years' experience as secretary of the Installment Loan Department." The district court properly found a violation of the Equal Pay Act with regard to the installment loan officer position.

In each job category First Citizens failed to carry its burden in showing that the wage discrepancies fit within the catchall exception to the Equal Pay Act. The district court was not clearly erroneous in finding a violation of the Equal Pay Act.

3. Backpay Award.

The EEOC argues that the district court erred in amending its backpay award by reducing the recovery from $75,007.34 to $13,118.88. The district court restricted recovery under section 255(a) of the Equal Pay Act, 29 U.S.C. Sec. 255(a), to a period in which a male was actually hired. The interpretation of the statutory authorization of damages is a question of law that is freely reviewable on appeal. See United States for use of Morgan & Son v. Timberland Paving, 745 F.2d 595, 599 (9th Cir.1984).

Under the Equal Pay Act, a prevailing employee may recover actual damages if the case is brought within two years of the date the violation took place. 29 U.S.C. Sec. 255(a). If the court determines that the violation was willful, damages may be assessed three years back. Willful means the employer knew, or should have known, that there was an appreciable possibility that...