EEOC v. California Teachers Ass'n

• Decision Date: 21 January 1982
• Docket Number: No. C-80-4568 RFP.,C-80-4568 RFP.
• Citation: 534 F. Supp. 209
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiffs, v. CALIFORNIA TEACHERS ASSOCIATION, Defendant.
• Court: U.S. District Court — Northern District of California

534 F. Supp. 209

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiffs, v. CALIFORNIA TEACHERS ASSOCIATION, Defendant.

No. C-80-4568 RFP.

United States District Court, N. D. California.

January 21, 1982.

Chester F. Relyea, and John M. Rea, E.E. O.C., San Francisco, Cal., for plaintiffs.

Dennis H. Vaughn, and William S. Waldo, Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., for defendant.

MEMORANDUM AND ORDER

PECKHAM, Chief Judge.

This case presents the difficult question whether an organization which serves both as a union and as a voluntary professional association must comply with the Pregnancy Discrimination Act of Title VII when it offers its members temporary employment disability insurance through a purely voluntary purchase plan. The case comes before us on cross motions for summary judgment on the question of liability. The issue of relief has been bifurcated and is to be tried separately. Order of January 15, 1981.

The California Teachers Association ("CTA") was founded over 115 years ago as a voluntary membership association of teaching professionals for the purpose of promoting educational interests in the State of California. It still serves in that capacity. However, since 1975, when the California legislature, through the enactment of the Rodda Act, Cal.Govt.Code § 3540 et seq., gave California public school teachers the right to join labor organizations and to bargain collectively with public school employers, CTA has taken on a new capacity as a union. As of 1977-78, CTA had exclusive representation rights for 180,000 of the state's 200,000 public school teachers. Of the 180,000 teachers in CTA bargaining units, approximately 150,000 were CTA members; the remainder were free riders.

In order to be a member of CTA and to obtain and participate in its services, it is not necessary to be a member of a local CTA chapter which has a collective bargaining relationship with an education-related employer. CTA has many members employed by school districts and other education-related employers where CTA has no local chapter or has no collective bargaining relationship. Moreover, although many CTA members are, of course, teachers employed by the State of California, an individual need not be employed in order to be a member of CTA and to take advantage of CTA's services as a professional association. For example, certified professional educators on a limited leave of absence from work can be CTA members, as can retired teachers, individuals studying to be teachers, and any persons interested in advancing the cause of public education who do not fall within any other CTA membership classification.

CTA is the policyholder of a group insurance policy issued by Occidental Life Insurance Co. of California ("Occidental"). CTA actively markets this insurance to its members, and polices the insurer's treatment of the teachers who make claims against the insurer. Elected leaders of CTA chapters receive briefing on the insurance plan, and then sell the plan to CTA members. Information regarding each insured member is provided to Occidental by CTA. CTA has also constituted an Advisory Panel on Special and Economic Services, which decides on procedures, policies, and claims with regard to insurance offered through CTA. A teaching member dissatisfied with the insurer's refusal of a claim can enlist the assistance of CTA's Group Insurance Subpanel, which adjudicates insurer-claimant disputes.

In those school districts in which CTA has won exclusive bargaining rights, CTA attempts to negotiate for the school district to pay for the disability insurance plan. In each instance where the disability benefits of the group insurance policy are successfully negotiated, in whole or in part, as an employer-paid benefit, the disability income insurance policy specifically covers pregnancy, childbirth, and related medical conditions. Insurance issued in this manner is not the subject of the present suit.

In those instances where CTA has no collective bargaining agreement with an employer, or where a collective bargaining agreement exists but does not provide for employer-paid disability benefits, CTA members who are currently employed may voluntarily purchase the policy at their own expense. When the policy is thus voluntarily purchased, it excludes from coverage disabilities arising from pregnancy. It is this exclusion of pregnancy-related disabilities which the Equal Employment Opportunity Commission ("EEOC") contends is in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), as amended—specifically, § 701(k), added by the Pregnancy Discrimination Act of 1978 ("PDA"), 42 U.S.C. § 2000e(k).

Sandra Duckert was employed by the Lafayette School District, as an elementary school teacher. While CTA did have a collective bargaining agreement with the Lafayette School District, that agreement made no provision for employer-paid disability income protection insurance. Duckert voluntarily purchased the CTA group salary protection plan in question. Thereafter, she became temporarily disabled due to diabetes complicated by pregnancy and submitted a claim to Occidental under the policy. By letter from W. R. Crooke, dated November 28, 1979, Duckert was advised that, since her policy did not cover benefits for disability due to pregnancy or pregnancy-related conditions, and since her disability was pregnancy-related, no benefits would be released to her. She was then advised of her right to have the denial of benefits reviewed by the CTA Advisory Panel. She filed a request for review and was subsequently informed that the CTA Advisory Panel had upheld the denial of salary benefits.

On May 11, 1980, Duckert's attorney wrote to Ralph Flynn, Executive Director of CTA, demanding payment of Duckert's claim and asserting that the voluntary CTA insurance plan in question was unlawful under the PDA. In response, on May 19, 1980, Alan Cunningham, Assistant General Counsel for Occidental, agreed to pay the benefits demanded by Duckert on the grounds that supplemental medical information indicated that Duckert's disability was attributable to her diabetic condition rather than her pregnancy. Cunningham enclosed a check for $1,663.63, the total amount claimed by Duckert, including interest. Occidental also agreed to continue benefits throughout Duckert's disability period.

On May 21, 1980, Duckert filed Charge of Discrimination No. 0918011491 with the EEOC, alleging that all female members of CTA who had insurance coverage similar to her own were being discriminated against on the basis of sex in violation of the PDA. Following a fact-finding conference, the EEOC issued a determination that the CTA group salary protection plan did violate the PDA, and invited CTA to participate in settlement discussions. On September 19, 1980, a conciliation meeting was held. CTA's settlement offer was rejected by the EEOC at this time, as it did not provide relief to "deterees"—women deterred from purchasing the insurance policy in question because it failed to include pregnancy disability coverage. On that same date, the EEOC notified CTA that conciliation had failed. The EEOC initiated the present action against CTA on December 22, 1980.

I. DUTY TO CONCILIATE

We first address CTA's contention that the EEOC's failure to reach a settlement bars it from bringing the present action.

Under Title VII, the EEOC has a statutory duty to conciliate prior to bringing suit.¹ The courts have interpreted the provisions creating this duty as requiring that the EEOC make a good faith effort to achieve conciliation prior to bringing suit. See EEOC v. Sears, Roebuck & Co., 650 F.2d 14, 17-19 (2d Cir. 1981); EEOC v. Pet, Inc., 612 F.2d 1001 (5th Cir. 1980); EEOC v. Radiator Specialty Co., 610 F.2d 178, 182-83 (4th Cir. 1979); EEOC v. Zia Co., 582 F.2d 527, 533 (10th Cir. 1978). There is some disagreement as to the proper role of a district court in determining whether such a good faith effort has been made.

One view is that

a court should not examine the details of the offers and counteroffers between the parties, nor impose its notions of what the agreement should provide, any more than it would if dealing with labor contract negotiations under the Labor Management Relations Act.

Id. Under this view, instead of focusing on whether the EEOC should have accepted the offered terms of conciliation, the courts tend simply to inquire whether the EEOC provided an opportunity for the party charged with a violation to confront all the issues during the settlement conferences. See, e.g., EEOC v. Sears, Roebuck & Co., supra, 650 F.2d at 18-19; EEOC v. Pet, Inc., supra.

Under a second approach, the district court is required to determine whether the EEOC was reasonable in rejecting a particular settlement offer. This standard is articulated in EEOC v. Klingler Electric Corp., 636 F.2d 104 (5th Cir. 1981), as follows:

The specific language of Title VII says that the Commission, after its investigation has confirmed reasonable cause to believe that the charge is true, "shall endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion." 42 U.S.C. § 2000e-5(b). In evaluating whether the EEOC has adequately fulfilled this statutory requirement, the fundamental question is the reasonableness and responsiveness of the EEOC's conduct under all the circumstances. Marshall v. Sun Oil Company (Delaware), 605 F.2d 1331, 1335-36, 21 FEP Cases 257 (5th Cir. 1979). The EEOC has fulfilled its statutory duty to attempt conciliation if it outlines to the employer the reasonable cause for its belief that Title VII has been violated, offers an opportunity for voluntary compliance, and responds in a reasonable and flexible manner to the reasonable attitudes of the employer. Id. at 1335-39.

EEOC v. Klingler Electric Corp., supra, 636 F.2d at 107.

Although it is unclear which of these two views...