E.E.O.C. v. Hall's Motor Transit Co.

• Decision Date: 01 May 1986
• Docket Number: No. 85-3499,85-3499
• Citation: 789 F.2d 1011
• Parties: 40 Fair Empl.Prac.Cas. 1441, 40 Empl. Prac. Dec. P 36,104, 54 USLW 2626 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant, v. HALL'S MOTOR TRANSIT COMPANY and General Teamsters Chauffeurs, Warehousemen and Helpers Local Union 261.
• Court: U.S. Court of Appeals — Third Circuit

Page 1011

789 F.2d 1011

40 Fair Empl.Prac.Cas. 1441,

40 Empl. Prac. Dec. P 36,104, 54 USLW 2626

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant, v. HALL'S MOTOR TRANSIT COMPANY and General Teamsters Chauffeurs, Warehousemen and Helpers Local Union 261.

No. 85-3499.

United States Court of Appeals Third Circuit.

Argued April 17, 1986.

Decided May 1, 1986.

Johnny J. Butler, General Counsel (Acting), Gwendolyn Young Reams, Associate General Counsel (Acting), Vincent Blackwood, Asst. Gen. Counsel, Susan Elizabeth Rees (argued), Attorney, E.E.O.C., Washington, D.C., for appellant.

Francis M. Milone (argued), Steven R. Wall, (Morgan, Lewis & Bockius, of Counsel), Philadelphia, Pa., for appellee.

Before ADAMS, GIBBONS and MANSMANN, Circuit Judges.

OPINION OF THE COURT

ADAMS, Circuit Judge.

The issue in this case is whether an employer's decision not to reinstate a discharged employee in the course of a grievance procedure may be challenged as racially discriminatory under Title VII. The district court, 609 F.Supp. 862 (D.C.Pa.1985), held as a matter of law that a Title VII claim may not be based upon disparate results of a grievance procedure, but rather a plaintiff under that statute may challenge the denial of his grievance only on the ground that the grievance was handled in a different "manner" than were the grievances of other employees. Finding that appellant had alleged no such disparate handling of his grievance, the district court granted summary judgment for defendant. Because the employee presented sufficient evidence of racial bias in his employer's decision not to reinstate him to withstand a motion for summary judgment, and because the district court considered the evidence under an incorrect legal standard, we will vacate the grant of summary judgment and remand for further proceedings.

I.

Appellant Burke Smith, who is black, was a truck driver for defendant Hall's Motor Company until he was discharged in January 1982 for failing to report a minor accident. It is conceded that Smith's discharge was authorized by Article 47 of the National Master Freight Agreement and Teamsters Joint Council No. 40 Supplemental Agreement (NMFA).

Upon receiving notice of his discharge, Smith filed a grievance challenging the discharge. Under the grievance procedure established by the NMFA, a union representative first attempts to adjust the grievance informally by meeting with the disciplined employee and a representative of the company. If the grievance is not resolved informally to the employee's satisfaction, the union may file a grievance with the Western Pennsylvania Teamsters and Employers Joint Area Committee (JAC). The employer against whom the grievance was filed is not directly represented on the panel of the JAC that decides the grievance. If a majority of the JAC reaches a decision, that decision is final and binding on both parties. However, if the JAC deadlocks, the matter is referred to the Eastern Conference Joint Area Committee for settlement.

Smith's grievance followed the usual route. First, an attempt was made to resolve his grievance informally at a meeting between Lester Lenhart, the Hall's supervisor who had discharged Smith, two union representatives, and Smith. Lenhart, however, refused to reinstate Smith, and the union thereafter filed a grievance on Smith's behalf with the JAC. The JAC, in an opinion issued on February 10, 1982, declared that, "[b]ased on the facts presented, the company had just cause for discharge." It therefore denied the grievance.

Following the JAC decision, Smith filed charges against Hall's with the Equal Employment Opportunity Commission (EEOC), alleging that both Hall's and the union had engaged in racial discrimination. The EEOC determined that there was reasonable cause to believe that Hall's had discriminated against Smith because of his race both in discharging him and in refusing to reinstate him. It therefore filed this suit under Title VII, 42 U.S.C. Sec. 2000e et seq. (1982), in federal district court. Although the EEOC determined that the union had not engaged in racial discrimination against Smith, the union was nonetheless joined as an interested party under Fed.R.Civ.P. 19(a)(2).

After some discovery had taken place, Hall's moved for summary judgment. The district court granted the motion, concluding that no Title VII claim could be based upon the denial of Smith's grievance and that the EEOC had failed to produce sufficient evidence that Smith's discharge was tainted by racial discrimination. On this appeal, the EEOC has abandoned its claim that Smith's discharge was the result of racial discrimination. It also no longer contends, as it did in the district court, that Hall's can be held responsible under Title VII for any racial bias affecting the JAC's decision upholding Smith's discharge. Thus, the narrow issue presented here is whether the EEOC presented sufficient evidence to withstand a summary judgment on its claim that, in refusing to reinstate Smith at the informal-adjustment level of the grievance procedure, Hall's was motivated by racial discrimination.

II.

A.

As an initial matter, Hall's contends that this proceeding must be stayed because Hall's filed a petition in bankruptcy under Chapter 11 of the Bankruptcy Code on March 10, 1986. It argues that, pursuant to 11 U.S.C. Sec. 362(a) (1982 & West Supp.1986), the filing of the bankruptcy petition acts as an automatic stay of this suit under Title VII.

However, Sec. 362(b)(4) provides that "the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's policy or regulatory power" shall be exempt from the automatic stay provision. The Court of Appeals for the Eighth Circuit recently held in EEOC v. Rath Packing Co., 787 F.2d 318 (8th Cir.1986), that a Title VII action brought by the EEOC to enforce that agency's power to eradicate employment discrimination is exempt from the automatic stay provision under Sec. 362(b)(4). See also Ahrens Aircraft, Inc. v. NLRB, 703 F.2d 23, 24 (1st Cir.1983) (Sec. 362(a) does not preclude judicial enforcement of an NLRB backpay order); NLRB v. Evans Plumbing Co., 639 F.2d 291, 293 (5th Cir.1981) (per curiam) (a court-ordered reinstatement sought by the NLRB is not stayed by Sec. 362(a)); NLRB v. FDI, Inc., 611 F.2d 1248, 1250-51 (9th Cir.1979) (NLRB proceedings are not subject to an automatic stay). We agree with the Eighth Circuit that proceedings brought by the EEOC fall within the exception to the automatic stay defined by Sec. 362(b)(4). Accordingly, we must determine whether the district court erred in granting summary judgment for Hall's.

B.

The district court observed that the EEOC had not alleged that Hall's processed Smith's grievance in a different manner than the grievances of white employees. Rather, the district court stated, the discrimination claim was based solely on a difference between the outcome of Smith's grievance and the outcome of certain white employees' grievances. Specifically, the EEOC claimed that a number of white truck drivers discharged for failure to report accidents had been reinstated by Hall's at the informal-adjustment level of the grievance procedure, whereas no such reinstatement was granted to Smith. The district court concluded that allegations of differences in the results of grievance proceedings did not state a claim under Title VII. It based this conclusion largely on its reading of Delaware State College v. Ricks, 449 U.S. 250, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980).

In Ricks, the Supreme Court held that the Title VII limitations period began to run when a college professor was denied tenure rather than when his requests for reconsideration of that decision were denied or when his employment contract expired at the end of the following academic year. In so holding, the Court stated that in his complaint, Ricks had not alleged that discriminatory acts had occurred after he was denied tenure, either in the consideration of his grievance of the tenure denial decision or in his eventual discharge. The Court observed that the record indicated that all professors who were denied tenure were...