E.E.O.C. v. Liggett & Myers Inc.
| Decision Date | 28 September 1982 |
| Docket Number | Nos. 81-2186,81-2203,s. 81-2186 |
| Citation | 690 F.2d 1072 |
| Parties | 40 Fair Empl.Prac.Cas. 1285, 30 Empl. Prac. Dec. P 33,083, 95 Lab.Cas. P 34,263 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellee, v. LIGGETT & MYERS INCORPORATED, Appellant. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellant, v. LIGGETT & MYERS INCORPORATED, Appellee. |
| Court | U.S. Court of Appeals — Fourth Circuit |
W. Sherman Rogers, Washington, D. C. (Michael J. Connolly, Gen. Counsel, Philip B. Sklover, Associate Gen. Counsel, Vella M. Fink, Asst. Gen. Counsel, William Ng, Supervisory Atty., Washington, D. C., on brief), for E. E. O. C.
William W. Sturges, Charlotte, N. C. (Weinstein, Sturges, Odom, Groves, Bigger, Jonas & Campbell, P. A., Charlotte, N. C., on brief), for Liggett & Myers Inc.
Before WINTER, Chief Judge, and PHILLIPS and ERVIN, Circuit Judges.
Both the Equal Employment Opportunity Commission (EEOC) and Liggett & Myers, Inc. (the company) appeal from the judgment entered by the district court in a suit instituted by the government 1 against the company under the Equal Pay Act provisions of the Fair Labor Standards Act, as amended, (FLSA) 29 U.S.C. §§ 201-19. The district court found that the company had violated § 206(d) of the FLSA by paying twenty-two female employees in its Durham, North Carolina plant less than it paid male employees doing comparable work. Back pay with prejudgment interest was awarded to each of the injured employees.
The company challenges the finding that it violated the FLSA in relation to three of the twenty-two female employees, and also claims that the district court erred in setting the rate of prejudgment interest. In addition, EEOC and the company each challenge aspects of the method used by the district court to calculate the amounts of the back pay awards. We reject the company's challenges to the finding that it violated the FLSA and to the setting of the rate of prejudgment interest, but we conclude that the district court erred in calculating the amounts of the back pay awards. We affirm the adjudication of liability but vacate the awards and remand the case for recomputation of back pay.
We consider first the company's challenge to its liability to Mary Hilliard, Ruby Olive and Ruth Fowler.
Hilliard was employed as a production supervisor in the Durham plant's manufacturing department during the relevant time period. Like every other female production supervisor in the department, she was paid less in every relevant year than the lowest paid male production supervisor in the department, yet the district court found that every production supervisor in the department performed comparable work.
Olive was one of three production supervisors employed in the Durham plant's blending department during the relevant time period. She and a male production supervisor named W. E. Lucas were promoted to their positions at roughly the same time as a male production supervisor named H. P. Carpenter retired. Carpenter was paid considerably more than Olive or Lucas, who were paid the same amount. The district court found that Olive and Carpenter performed comparable work, but that Olive and Lucas did not.
Fowler was one of two production supervisors employed in the Durham plant's returned goods department during the relevant time period. She was promoted to the position at roughly the same time as a male production supervisor named James Phelps retired. Phelps was paid considerably more than Fowler, yet the district court found that Fowler and Phelps performed comparable work.
To summarize, the district court found that Hilliard, Olive and Fowler were paid less than male employees doing comparable work. The company does not dispute these findings, and it acknowledges that the burden was on it to show that the disparate treatment resulted from consideration by the company of legitimate factors. Despite the district court's contrary finding, the company argues that it met the burden, pointing to testimony by one of its managers that hourly employees who were promoted to supervisory positions-including Hilliard, Olive and Fowler-were always given a yearly salary equal to the yearly value of their hourly wages plus a supplement of several hundred dollars. This evidence does not prove disparate treatment from legitimate factors. It was not shown that the hourly wages these female employees received before their promotions were not sexually discriminatory and that it was not harder for women than for men to become supervisors without first being hourly employees. Thus we cannot say that the finding of liability to Hilliard, Olive and Fowler was clearly erroneous.
It was entirely proper for the district court in the exercise of sound discretion to award prejudgment interest to make the injured female employees whole. See Marshall v. Board of Education, 470 F.Supp. 517 (D.Md.1979), aff'd without opinion, 618 F.2d 101 (4 Cir. 1980). In determining the rate of prejudgment interest, the district court is not bound by state law. See, e.g., General Facilities, Inc. v. National Marine Service, Inc., 664 F.2d 672, 674 (8 Cir. 1981). That does not mean, however, that the district court may not in its discretion choose to apply the interest rate provided for by state law. In the present case, EEOC asked for prejudgment interest at the rate of eight percent, the legal rate currently provided for in § 24-1 of the North Carolina Code, and the company responded by citing North Carolina cases in which the court had awarded prejudgment interest at the rate of six percent, the legal rate provided for by § 24-1 prior to its most recent amendment. The district court apparently decided to resolve the dispute by referring to state law. It pointed out to the company that the cases it had cited had been decided prior to the amendment of § 24-1, and agreed with EEOC that prejudgment interest should be assessed at the rate of eight percent.
On appeal, the company argues that the portion of the interest accruing before July 1, 1980, the effective date of the amendment, should have been calculated at the rate of six percent. In light of the election apparently made by the district court, we think that the matter should now be decided by reference to state law, and we conclude that the district court applied North Carolina's law correctly. The bill which amended § 24-1 to change the legal rate from six to eight percent provided that "this act shall not apply to judgments entered prior to July 1, 1980." 1979 N.C.Sess.Laws, 2d Sess., chap. 1157, § 8 (emphasis added). The clear implication of this language is that the new rate of interest shall apply to all of the interest awarded in judgments entered on July 1, 1980, or thereafter, instead of just to that portion of the interest accruing after the amendment becomes effective. Accordingly, we reject the company's challenge to the setting of the rate of prejudgment interest.
The method used by the district court to calculate the amounts of the back pay awards was set forth in the district court's opinion filed in December 1979 and in an order filed in November 1980. In the former, the district court stated:
The Secretary (of Labor) also suggested at several points in his proposed findings of fact and conclusions of law that the female employees found by the Court to be owed additional wages should be reimbursed only for the difference between their actual wages and the average salary paid to comparable male workers. The Secretary cited no authority for this contention. There appears to the Court no reason to limit the compensation paid to female workers to the average male salary. A logical extension of the Secretary's position would be that an employer could achieve future compliance with the Act by paying all workers at the average male salary. Unless all males had been paid the same salary in the past, this course of action would directly contravene the prohibition in (§ 206(d) ) that bars employers from complying with the Act by reducing the wage of any employee. See 29 U.S.C. § 206(d)(1). A more logical outcome of the Court's finding that there was no legal justification for the pay differentials between male and female employees would seem to be that female workers are entitled under the Act to be paid the salary received by the highest paid comparable male worker for whom the defendant has failed to establish a legitimate reason for his wage differential.
In the November 1980 order the district court stated:
NOW THEREFORE, IT IS ORDERED, ADJUDGED AND DECREED AS FOLLOWS:
1. Withheld wages due females in comparable jobs to males shall be calculated up to the time the female salary equals the salary of the comparable male or up until such time as she quit, retired, was terminated or transferred to a non-comparable job, whichever occurred first.
2. If the comparable male quit, retired, was terminated or transferred to a non-comparable job, the female's withheld wages shall be calculated up to the time her salary equals the salary of the comparable male at the time he quit, retired, was terminated or transferred.
The company argues that, instead of comparing each female employee's salary with that of the highest paid male employee doing comparable work, the district court should have made individualized back pay awards based on each female employee's seniority and education or, where that was not feasible, should have compared each female employee's salary with the average salary paid to male employees doing comparable work. EEOC, on the other hand, argues that in instances where the male employee used for comparison left the company or was transferred prior to the end of the relevant time period, while the corresponding female employee continued to do the same job, the district court erred by basing the back pay award for the remainder of the relevant time period on the salary paid to the male...
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