Walker v. Abbott Laboratories

• Decision Date: 18 August 2003
• Docket Number: No. 02-1536.,02-1536.
• Parties: Dennis WALKER, Plaintiff-Appellant, v. ABBOTT LABORATORIES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

340 F.3d 471

Dennis WALKER, Plaintiff-Appellant, v. ABBOTT LABORATORIES, Defendant-Appellee.

No. 02-1536.

United States Court of Appeals, Seventh Circuit.

Argued May 20, 2003.

Decided August 18, 2003.

Patrick M. Ouimet (argued), Sarles & Ouimet, Woodstock, IL, for Plaintiff-Appellant.

Michele Odorizzi (argued), Mayer, Brown, Rowe & Maw, Chicago, IL, for Defendant-Appellee.

Before COFFEY, KANNE, and DIANE P. WOOD, Circuit Judges.

KANNE, Circuit Judge.

Dennis Walker appeals the district court's dismissal of his racial discrimination claim against his employer, Abbott Laboratories under 42 U.S.C. § 1981. Based on dicta in our decision in Gonzalez v. Ingersoll Milling Mach. Co., 133 F.3d 1025, 1035 (7th Cir.1998), the district court granted Abbott's motion to dismiss on the ground that at-will employees cannot maintain claims under § 1981. For the reasons stated below, we find that at-will employment relationships are sufficiently contractual to support claims of racial discrimination in promotion and pay under § 1981; therefore, we reverse and remand the district court's decision.

I. History

The somewhat lengthy procedural history of this lawsuit began in 1997, when Ronald Payne, a former employee of Abbott filed a lawsuit on behalf of himself and all similarly situated African-American employees at Abbott. Pertinent to this appeal, a four-count Second Amended Complaint, which added Dennis Walker and Marvin Fields as new class representatives, was filed on June 25, 1998. In Count I, Walker and Fields, but none of the other named plaintiffs, raised individual claims of intentional racial discrimination in promotion and pay (but not termination) in violation of 42 U.S.C. § 1981; in Count II, Payne alleged an individual claim of retaliation under § 1981; in Count III, plaintiffs alleged a class claim of intentional discrimination under § 1981; and in Count IV, plaintiffs alleged a class claim of disparate-impact discrimination under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq. No claims of disparate treatment under Title VII were raised.

On March 2, 1999, the district court granted Abbott's motion to dismiss the § 1981 claims on the ground that as at-will employees, plaintiffs had failed to plead a contractual basis for racial discrimination under § 1981. Further, the court struck the plaintiffs Title VII class allegations because the proposed class was overly broad and because plaintiffs failed to plead facts sufficient to describe the qualified population in the relevant labor market. The court, however, allowed plaintiffs to amend their complaint.

Plaintiffs' Third Amended Complaint was filed on May 21, 1999. This complaint pleaded and incorporated Counts I, II, and III—the § 1981 claims—of the Second Amended Complaint for the stated purpose of preserving those claims for appeal. Count IV alleged individual and class claims of discrimination in promotion and pay under a Title VII disparate-impact theory. Again, no allegations were made based on a Title VII disparate-treatment theory. Abbott moved for partial dismissal of the complaint, and the court dismissed the claims of all plaintiffs except those of Walker and Fields¹ and allowed the class claim to go forward.

Abbott filed its answer to Count IV, denying the allegations of discrimination, and the parties proceeded with class discovery. At the conclusion of class discovery, plaintiffs filed a motion for class certification, which was denied. Walker and Fields did not amend their complaint, but decided to pursue only their individual claims of disparate impact under Title VII. At the close of discovery, Fields was voluntarily dismissed from the suit, and Abbott moved for summary judgment on the only remaining claim before the district court— Walker's individual Title VII disparate-impact claim. Walker did not challenge the motion for summary judgment, and the district court granted the motion.

Walker is the only named plaintiff in this action who chose to appeal. And the only issue that Walker now raises is whether the district court erred in its March 2, 1999 decision to dismiss his individual § 1981 claim based on Walker's status as an at-will employee.

II. Analysis

A. Procedural Issues

Before addressing the issue of whether an at-will employee can state a claim for discrimination in promotion and pay under § 1981, Abbott raises two procedural issues that it claims make a ruling on the merits unnecessary. First, Abbott argues that Walker has waived his § 1981 disparate-treatment claim because he did not raise a Title VII disparate-treatment claim before pursuing this appeal. According to Abbott, when the district court ruled that at-will employees could not maintain a disparate-treatment cause of action under § 1981, Walker should have amended his complaint to raise a disparate-treatment claim under Title VII, which is governed by the same legal standards but does not require a contractual relationship. Thus, Abbott asserts, by not raising the Title VII disparate-treatment claim in the Third Amended Complaint, Walker has waived all intentional-discrimination theories—including his § 1981 claims. We find this argument wholly without merit.

Abbott cites no authority, nor could it, that a plaintiff waives his right to appeal the dismissal of a § 1981 claim because he failed to assert in the district court a Title VII disparate-treatment claim-an entirely different cause of action. The Civil Rights Statutes provide two separate methods to challenge an employer's intentional discrimination— § 1981 and Title VII. See Runyon v. McCrary, 427 U.S. 160, 174 n. 11, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976) (recounting that the legislative history of the Civil Right Act of 1964 reveals that Title VII and § 1981 were meant to provide alternative remedies to civil-rights violations). Even though they may have the same liability standards, see Bennett v. Roberts, 295 F.3d 687, 697-98 (7th Cir.2002) (citing Gonzalez, 133 F.3d at 1035), these two avenues of remedy are not identical. For instance, Title VII provides that absent a continuing violation, a plaintiff has only 300 days from the date of the discriminatory act in which to file a claim, see 42 U.S.C. § 2000e-5(e)(1) (2003); whereas § 1981 provides a two-year statute of limitations. Unlike Title VII, § 1981 does not require the filing of an EEOC charge before bringing an action in a federal court. Section 1981 claims are not subject to the same damage caps as Title VII claims. See 42 U.S.C. § 1981a (2003). Finally, Title VII is not available to employees who work in relatively small businesses. See 42 U.S.C. § 2000e(b). To say that failure to pursue one of these avenues results in a waiver of the other, entirely separate avenue, is simply incorrect. For whatever reason, Walker pressed a disparate-treatment theory only under § 1981. He pursued this claim in the district court, and he properly preserved it for appeal. He was entitled to wait for a final judgment and then appeal the district court's ruling on that claim to this court. He has done just that.

The second procedural argument that Abbott makes is that Walker waived his challenge to the district court's dismissal of his § 1981 claim because he failed to ask the district court to reconsider its ruling in light of new decisions from other circuits. The district court dismissed the § 1981 claim based on dicta in Gonzalez in which this Court speculated that an at-will employment relationship may not be sufficiently contractual to sustain a claim under § 1981. 133 F.3d at 1035. In its ruling, the district court acknowledged that two other circuits had ruled that at-will employees could state claims under § 1981, see Spriggs v. Diamond Auto Glass, 165 F.3d 1015, 1018-19 (4th Cir.1999); Fadeyi v. Planned Parenthood Ass'n of Lubbock, Inc., 160 F.3d 1048, 1049-50 (5th Cir.1998), but the district court stated that it felt compelled to follow Gonzalez rather than the cases from other circuits. After the district court's ruling, three more circuits decided that at-will employees could bring claims under § 1981. See Skinner v. Maritz, 253 F.3d 337, 342 (8th Cir.2001); Lauture v. Int'l Bus. Machs., 216 F.3d 258, 260 (2d Cir. 2000); Perry v. Woodward, 199 F.3d 1126, 1133 (10th Cir.1999). Abbott asserts that because Walker never sought to have the district court reconsider its earlier ruling in light of the contrary rulings by three additional circuits, we should hold that Walker has waived his right to challenge the district court's dismissal of the § 1981 claim. Again, we find this argument wholly without merit.

And again, Abbott cites absolutely no authority that creates an obligation to raise a motion to reconsider in order to preserve the argument for appeal.² There is simply no rule or case law that requires litigants to move for reconsideration of an interlocutory ruling in order to avoid waiving a challenge to that ruling on appeal of a final decision. Moreover, an analysis of the district court's ruling reveals that a motion to reconsider in light of new nonbinding authority likely would have been futile. The district court had already refused to follow two other circuits because it felt compelled to follow our dicta in Gonzalez. There is no reason to believe that the district court would have changed its decision when more nonbinding authority was brought to its attention.

We find that Walker did not waive his § 1981 claim by failing to raise a motion to reconsider or by failing to bring a Title VII disparate-treatment claim. Therefore, Walker has properly preserved his challenge to the district court's ruling for appeal, and we will now turn to the merits.

B. At-Will Employees and § 1981

Section 1981 provides that "[a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts ... as is enjoyed by white citizens." 42 U.S.C. §...