Artis v. Bernanke

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 14, 2010 Decided January 11, 2011

No. 09-5121

CYNTHIA ARTIS, ET AL.,

APPELLANTS

v.

BEN S. BERNANKE, CHAIRMAN OF THE BOARD OF GOVERNORS

OF THE FEDERAL RESERVE SYSTEM,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 1:01-cv-00400)

Walter T. Charlton argued the cause and filed the briefs

for appellants.

Kenneth M. Willner argued the cause for appellee. With

him on the brief were Richard M. Ashton and Katherine H.

Wheatley, Associate General Counsel, Board of Governors of

the Federal Reserve System, and John L. Kuray, Senior

2

Counsel. R. Craig Lawrence, Assistant U.S. Attorney,

entered an appearance.

Before: BROWN, GRIFFITH and KAVANAUGH, Circuit

Judges.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: Appellants are members of a

putative class of secretaries employed currently and formerly

by the Federal Reserve Board. They claim the Board

systematically discriminated against them on account of their

race in violation of Title VII of the Civil Rights Act of 1964, 42

U.S.C. § 2000e et seq. The district court dismissed the

complaint for failure to exhaust administrative remedies.

Because we conclude the secretaries completed informal

counseling in a manner sufficient to give the Board an

opportunity to investigate their claims, we vacate the district

court’s dismissal of their complaint.

I

Some of these secretaries appeared before us in 1998

when we affirmed the district court’s dismissal of their first

putative class action without prejudice, due to their failure to

exhaust administrative remedies. Artis v. Greenspan (Artis I),

158 F.3d 1301, 1306–08 (D.C. Cir. 1998). Board regulations

provide that “[a]ggrieved persons who believe they have been

discriminated against on the basis of race, color, religion, sex,

national origin, age or disability must consult a Counselor prior

to filing a complaint in order to try to informally resolve the

matter.” 12 C.F.R. § 268.104(a). In Artis I, we held the putative

class failed to complete counseling before bringing their

claims of agency-wide discrimination. The would-be class

agents, who were all employed in a single division of the

3

Board, had failed to “identify any agency-wide discriminatory

personnel practices” in counseling. 158 F.3d at 1308. Instead,

“[t]he four named complainants only addressed Board-wide

complaints by way of asking for data on other secretaries.” Id.

at 1307.

While the Board’s motion to dismiss was pending in Artis

I, the same putative class initiated a new round of

counseling—this time represented by secretaries employed

throughout the Board. 1 The Board’s Equal Employment

Opportunity (“EEO”) counselors held group counseling

sessions on January 15 and February 13, 1997, attended by

several of the secretaries and their counsel. No

contemporaneous record of the group counseling sessions

exists.

On January 17, 1997, in response to the Board’s request

for information at the January 15 group counseling session, the

secretaries submitted fourteen identical copies of a document

entitled “Resubmission of Class-Action Complaint.” In that

document, the secretaries alleged “a systematic and pervasive

pattern of discrimination against African-American . . .

secretaries” by the Board. In particular, the secretaries claimed

the Board paid them lower salaries than non-minority

secretaries, awarded them fewer and smaller bonuses, granted

them fewer promotions, deflated their performance appraisals,

denied them privileges and training that non-minority

secretaries enjoyed, unfairly enforced leave procedures against

them, and discriminated against them in the quantity and

quality of work assignments.

1

For example, Barbara Carter was employed in the Bank Operations

Division, Donna Dorey by the Research and Statistics Division, and

Donna Love-Blackwell by the Banking Supervision and Regulation

Division.

4

Between approximately January 24 and February 18,

1997, the Board’s counselors met individually with nine

secretaries, including six who are named plaintiffs in this case.

In the individual counseling sessions, the secretaries confirmed

the general allegations in the “Resubmission,” and some of

them alleged specific instances of discrimination from

personal experience. The EEO counselors prepared reports

based on the notes they took in these individual counseling

sessions.

The secretaries filed their administrative complaint with

the Board on March 3, 1997, and it wound its way through the

adjudicatory functions of the Board and the U.S. Equal

Employment Opportunity Commission (“EEOC”) without

success. 2

2

The Board dismissed the secretaries’ administrative complaint on

July 23, 1997. The EEOC affirmed the Board’s decision on

November 18, 1998. Although we had filed our decision in Artis I

almost a month earlier, the EEOC found “no indication in the record

that the United States Court of Appeals for the District of Columbia

Circuit has issued a decision on the matter,” and concluded that

dismissal was appropriate to avoid the risk of “inconsistent rulings

by the United States Court of Appeals and the Commission.” See 29

C.F.R. § 1614.107(a)(1), (3) (“[T]he agency shall dismiss an entire

complaint . . . [t]hat . . . states the same claim that is pending before

or has been decided by the agency . . . or that was the basis of a civil

action decided by a United States District Court in which the

complainant was a party . . . .”). For reasons that are not clear on the

record before us, an EEOC Administrative Law Judge dismissed the

administrative class complaint again on December 18, 2000—again

on the ground that it was the subject of the present civil action, then

pending in the district court. The Board “fully implement[ed]” that

decision on January 30, 2001.

5

After we issued our decision in Artis I, the secretaries filed

the underlying complaint in the district court. 3 As in Artis I,

the Board moved to dismiss for failure to exhaust

administrative remedies. The district court denied the motion

and ordered discovery on the issue of exhaustion—specifically

“whether plaintiffs have satisfied their obligation to engage in

counseling” and whether “the administrative counseling

process was a futile exercise.” Artis v. Greenspan, 223 F.

Supp. 2d 149, 155 (D.D.C. 2002).

Following five years of contentious discovery, the Board

renewed its motion to dismiss in 2005. The district court

granted the motion on January 31, 2007, holding the court

lacked subject matter jurisdiction over the secretaries’ claims

because, as in Artis I, the secretaries had failed to exhaust the

counseling requirement. Artis v. Greenspan, 474 F. Supp. 2d

16, 19 (D.D.C. 2007). 4

3

The operative complaint in this case was filed on February 22,

2001, after the Board’s “final action” on the administrative

complaint. See Dist. Ct. Docket No. 1. It was consolidated with a

virtually identical complaint filed on August 3, 1999. See Dist. Ct.

Docket No. 6.

4

We pause to note that failure to exhaust administrative remedies is

not jurisdictional under current precedents. The Supreme Court

recently clarified that “a threshold limitation on a statute’s scope

shall count as jurisdictional” only “[i]f the Legislature clearly states”

as much; otherwise “courts should treat the restriction as

nonjurisdictional.” Arbaugh v. Y&H Corp., 546 U.S. 500, 515–16

(2006). Because Title VII includes no such clear statement, we have

recently said Title VII’s exhaustion requirements are not

jurisdictional. See Menominee Indian Tribe of Wis. v. United States,

614 F.3d 519, 527 (D.C. Cir. 2010); see also Colbert v. Potter, 471

F.3d 158, 167 (D.C. Cir. 2006) (“The filing time limit imposed by

Title VII, 42 U.S.C. § 2000e-16(c), is not a jurisdictional

requirement but rather is similar to a statute of limitations.”

(quotation marks omitted)).

6

The secretaries filed a motion for reconsideration,

repeating their argument that they had successfully completed

counseling in the group and individual sessions, and proffering

for the first time the declaration of secretary Kim Hardy, who

recounted her ten-year-old recollection of the January 15, 1997

group counseling session. Dist. Ct. Docket No. 72. The district

court denied the motion, holding Hardy’s declaration was not

“new evidence” under the standard governing a Rule 59(e)

motion to alter or amend the judgment. Artis v. Bernanke, 256

F.R.D. 4, 6 (D.D.C. 2009). The secretaries appealed.

“A challenge to a dismissal for lack of administrative

exhaustion is a question of law, which this court reviews de

novo.” Brooks v. Dist. Hosp. Partners, L.P., 606 F.3d 800, 807

(D.C. Cir. 2010).

II

Title VII protects government employees, like private

employees, from personnel actions that discriminate on the

basis of “race, color, religion, sex, or national origin.” 42

U.S.C. § 2000e-16(a). To bring a civil action in federal court

under this section, an employee must first be “aggrieved by the

final disposition of his [administrative] complaint, or by the

failure to take final action on his complaint.” Id.

§ 2000e-16(c). Federal Reserve Board regulations modeled on

the EEOC’s regulations require Board employees to “consult a

Counselor . . . in order to try to informally resolve the matter”

before filing an administrative complaint. 12 C.F.R.

§ 268.104(a); see 29 C.F.R. § 1614.105(a). If the employee

intends to file a class action, she must satisfy the counseling

requirement on behalf of the class. See 12 C.F.R. § 268.204(b).

“If a complainant forces an agency to dismiss or cancel the

complaint by failing to provide sufficient information to enable

the agency to investigate the claim, [s]he may not file a judicial

7

suit.” Wilson v. Peña, 79 F.3d 154, 164 (D.C. Cir. 1996). The

district court concluded the secretaries failed to satisfy this

counseling requirement because they “declined to cooperate

with the Board by failing to provide any meaningful

information about specific instances of discrimination.” Artis,

474 F. Supp. 2d at 19. We disagree.

A

The purpose of EEO counseling is clear from the text of

the regulation: Counseling is designed to enable the agency

and its employee “to try to informally resolve the matter”

before an administrative charge is filed. 12 C.F.R.

§ 268.104(a), quoted in Artis I, 158 F.3d at 1306; see Wilson,

79 F.3d at 165 (“The purpose of the [administrative

exhaustion] doctrine is to afford the agency an opportunity to

resolve the matter internally and to avoid unnecessarily

burdening the courts.”); see also Blackmon-Malloy v. United

States Capitol Police Bd., 575 F.3d 699, 711–12 (D.C. Cir.

2009) (“[U]nlike agency exhaustion in other contexts, the

purposes of counseling and mediation are not to compile a

record for judicial review but instead simply to afford the

employee and the employing office an opportunity to explore

and possibly resolve the employee’s claims informally.”

(describing a similar counseling requirement in the

Congressional Accountability Act)).

Where counseling produces “sufficient information to

enable the agency to investigate the claim,” that purpose has

been served. Artis I, 158 F.3d at 1306 (quoting Wilson, 79 F.3d

at 164). Thus, we recognized that “where a complainant has

pleaded a nonpromotion claim to the agency, it is not her

responsibility to identify the positions for which she applied.”

Id. at 1308 (citing Mangiapane v. Adams, 661 F.2d 1388 (D.C.

Cir. 1981) (per curiam)). To hold otherwise would turn the

8

informal counseling requirement into a trap for unwary

counselees rather than a step toward remediation, and it would

violate the principle that “Title VII’s exhaustion requirement

should not be read to create useless procedural technicalities.”

President v. Vance, 627 F.2d 353, 362 (D.C. Cir. 1980).

An agency risks misusing the counseling requirement

when it demands excessively detailed support for a class-wide

complaint alleging a pattern and practice of subtle financial

and professional discrimination. Unlike an allegation of overt

harassment or a specific instance of retaliation against an

individual employee, class-wide claims of systemically

depressed salaries, performance ratings, advancement

opportunities, and the like can often be proven only by a

statistical comparison of the employer’s treatment of the class

to its treatment of non-minority employees. See generally

Segar v. Smith, 738 F.2d 1249, 1267 (D.C. Cir. 1984) (“A

plaintiff class seeking to show a pattern or practice of disparate

treatment must carry the initial burden of offering evidence

adequate to create an inference that employment decisions

were based on a discriminatory criterion illegal under [Title

VII]. This usually means providing evidence—often in

statistical form—of a disparity in the position of members of

the plaintiff class and comparably qualified whites.” (citation,

quotation marks, and emphasis omitted)). Usually, such an

analysis will be possible only after the employees obtain data

from their employer, whether informally or through discovery.

It would be perverse to dismiss a complaint for failure to

provide adequate detail in counseling when all of the relevant

data is in the employer’s exclusive control.

B

In light of the nature of the secretaries’ claims, the

information they provided collectively and in individual

9

counseling sessions satisfied the counseling requirement of 12

C.F.R. § 268.104(a). At the first group counseling session on

January 15, 1997, the EEO counselor and the Board’s lawyer

met with approximately fourteen secretaries and requested

more information about their claims. In response to the

Board’s request, the secretaries provided a list of “class

allegations” in a document entitled “Resubmission of

Class-Action Complaint.” Copies of that document were

signed individually by several of the putative class agents. The

“Resubmission” alleged on behalf of the “named

Complainants and the members of their putative class” that the

Board discriminated against them by

a. Failing to pay class members at the

comparable hourly rate or salary paid to

non-class members who were no more qualified

than were the class members.

b. Failure to pay the same amount of

money for cash awards, merit increases, lump

sum salary adjustments or other forms of

bonuses to class members as was paid to

comparable non-class members for similar

performance. . . .

c. Failing to award class members cash

awards, merit increases, special achievement

awards, lump sum salary adjustments or other

forms of bonuses as was done for comparable

or inferior non-class members.

d. Failing to adequately and properly

train class members as comparable non-class

members were trained.

e. Maintaining certain positions for

non-African-Americans and other positions for

African-Americans.

10

f. Maintaining certain facilities, within

[the Board’s] workplace, which are segregated

and inaccessible for African-Americans.

g. Failure to provide class members

with equal amount [sic] of personal time on the

phone as is afforded non-class members.

h. Failure to provide class members

with equal time away from the office for

personal reasons as is afforded non-class

members.

i. Failure to treat class members

equally with regard to utilization and

enforcement of leave procedures and records as

is afforded to non-class members.

j. Disparate treatment with regard to

distribution of work, both in regards to

workload and quality of assignment.

k. Failure to provide accurate

Performance Appraisals, such as PMPs

(Performance Management Programs) or its

predecessors, for class members and non-class

members, thereby creating a false discrepancy

in the abilities of class members when

compared to non-class members.

African-Americans’ PMPs are deflated and

non-African-Americans’ PMPs are inflated as a

systematic practice.

[l.] Failing and refusing, and continuing

to fail and refuse, to promote Complainants on

the basis of race.

11

All of these allegations were affirmed in individual counseling

sessions. Class agents corroborated most of them with relevant

examples of personal discrimination. 5

Barbara Carter specifically addressed allegations (a), (d),

(i), and (k). She told a counselor she was compensated less

than comparable white employees because she had been

“redlined since the early 70’s.” Carter also said her

performance appraisal was deflated in the years 1993–1996

and she was not permitted to take the classes she was told were

necessary to achieve an outstanding rating. Carter said her

supervisor, Joyce Zigler, failed to provide her with equal

personal leave when Carter was working in the Research and

Statistics Division.

Donna Dorey specifically addressed allegations (e), (i),

(k), and (l) in her individual counseling session. She alleged

that “Karen See, a white female, was preselected for a

position” and groomed for it even though she lacked a college

degree, which the job posting purported to require. According

to Dorey, the job posting’s degree requirement, which was

waived for preselected white candidates like Karen See,

discouraged Dorey from applying because she lacked a degree.

Dorey also alleged specific incidents of discrimination by her

supervisor, McKosh. She said McKosh denied her request to

change her work hours so she could attend college courses, but

5

The only general allegations that were not directly corroborated by

the specific allegations of class agents in counseling were (b), (f),

(g), and (j), relating to the amount of money awarded in bonuses to

class members, segregated facilities, discriminatory telephone usage

policies, and unfair distribution of work. This appeal does not

require us to decide whether these four claims are sufficiently related

to others for which the secretaries exhausted administrative remedies

such that they are proper subjects of the civil action. See Payne v.

Salazar, 619 F.3d 56, 65 (D.C. Cir. 2010).

12

allowed a white employee to change her hours to join a

vanpool. Dorey also claimed her leave requests are treated

differently from those of white employees. She said McKosh

once “humiliated her in front of the Board” by describing the

circumstances of one particular request for leave. Dorey says

her managers discussed her leave requests with human

resources and shared personal information with other

employees including Rena Carlton, an employee relations

specialist. Dorey also claimed that the Board’s EEO Director,

Sheila Clark, and EEO Counselor, Millie Wiggins,

discouraged her from filing a previous EEO complaint alleging

discrimination in her performance rating.

Donna Love-Blackwell specifically addressed allegations

(c), (e), and (l). She claimed she had never received a cash

award as white secretaries had, despite her excellent

performance ratings. Love-Blackwell also said she had applied

without success for other positions and that “this type of

movement is easier for nonminorities” who are “primped for

positions.”

Yvette Williams specifically addressed allegation (h). She

claimed she was permitted to work out only within a prescribed

lunch hour, while non-minorities were allowed to take their

lunch break at any time. 6

6

The secretaries also argue statements secretary Kim Hardy

allegedly made at the January 15, 1997 group counseling session

should have been included in a counseling report and would confirm

that she satisfied the counseling requirement. The district court did

not abuse its discretion in refusing to consider Hardy’s 2007

declaration. Her recollection was previously available to the

secretaries, so her declaration was not an appropriate basis for a

motion to alter or amend the judgment. See Messina v. Krakower,

439 F.3d 755, 758 (D.C. Cir. 2006).

13

Despite this evidence in the notes of the Board’s own

counselors, the district court found the secretaries “fail[ed] to

provide any meaningful information about specific instances

of discrimination.” 474 F. Supp. 2d at 19. To the contrary, the

secretaries argued consistently that they “counseled fully and

completely to the extent allowed by the Board.” Dist. Ct.

Docket No. 42, at 7. Their response to the Board’s motion to

dismiss incorporated by reference the previously filed

counselors’ reports. Id. at ii. In a motion for reconsideration,

the secretaries directed the district court’s attention to

individual counseling reports, including those of Carter,

Dorey, Love-Blackwell, and Williams, and quoted them at

length. Dist. Ct. Docket No. 72, at 2–3, 17–28. As the Board

admitted in response to that motion, “[t]hese reports . . . have

previously been filed with [the district court] by both plaintiffs

and defendant on numerous occasions and their contents have

been exhaustively discussed in the parties’ pleadings.” Dist.

Ct. Docket No. 73, at 2. The Board therefore conceded that the

evidence of successful counseling that is now before us was

properly before the district court.

Considered together, the secretaries’ written description

of their class allegations and their individual anecdotes of

disparate treatment were sufficient to give the Board an

opportunity to investigate and try to resolve their claims.

We affirmed the dismissal in Artis I because the four

named plaintiffs each belonged to a single division of the

Board and therefore could not establish commonality with the

Board-wide class or “identify any agency-wide discriminatory

personnel practices . . . despite the division-level decision

making.” Artis I, 158 F.3d at 1308. We noted that “[i]f

secretaries (perhaps even one secretary) outside of the Legal

Division had agreed to pursue counseling, the ALJ might have

had a basis on which to find specific facts that are common to

14

the class.” Id. (quotation marks omitted). That case is now

before us. The secretaries’ class status is relevant to counseling

only in that it allows a representative plaintiff to satisfy the

counseling requirement on behalf of similarly situated class

members. See 12 C.F.R. § 268.204(b) (“An employee or

applicant who wishes to file a class complaint must seek

counseling and be counseled in accordance with § 268.104.”).

Like any other plaintiff, a class representative must simply

provide “sufficient information to enable the agency to

investigate the claim.” Artis I, 158 F.3d at 1306 (quoting

Wilson, 79 F.3d at 164). Thus, the entire class exhausted

administrative remedies by virtue of the class agents’

successful completion of counseling.

C

On appeal, the Board argues that whatever counseling did

occur was untimely. Under the Board’s regulations, “[a]n

aggrieved person must initiate contact with a Counselor within

45 days of the date of the matter alleged to be discriminatory

or, in the case of a personnel action, within 45 days of the

effective date of the action,” unless she was unaware of the

time limits or unable to meet them. 12 C.F.R. § 268.104(a).

The Board now contends the secretaries’ complaint is based on

events that took place more than 45 days earlier or events for

which the secretaries failed to “provide any time period.”

Appellee’s Br. 27. Although we are skeptical of this defense

given the nature of the secretaries’ claims, we need not decide

the issue because the Board waived the time limitation by

failing to raise it in the district court. “A defense that has not

been raised in a pleading, by motion, or at trial normally will be

considered waived and cannot be heard for the first time on

appeal.” Nat’l Treasury Emps. Union v. IRS, 765 F.2d 1174,

1176 n.1 (D.C. Cir. 1985) (quotation marks and alteration

omitted). Contrary to the Board’s representation at oral

15

argument, Oral Arg. Recording 25:12–26, 25:47–53, the Board

did not raise the time bar in its opposition to the secretaries’

motion for reconsideration, see Dist. Ct. Docket No. 73. The

Board failed to raise this defense in spite of the secretaries’

explicit argument that individual secretaries, including Carter,

Dorey, Love-Blackwell, and Williams, provided sufficiently

specific information to satisfy the counseling requirement. See

Dist. Ct. Docket No. 72, at 2–3.

D

The Board suggests another basis for concluding the

secretaries failed to exhaust administrative remedies: their

alleged failure “to engage in counseling in good faith.”

Appellee’s Br. 10. The Board cites several instances of

obstruction of the counseling process by the secretaries and

their lawyer that it attributes to bad faith: Some if not all the

secretaries refused to discuss personal experiences of

discrimination in group counseling sessions. Some also

refused to give specific examples of discrimination in their

individual counseling sessions, despite the Board’s request for

details. Finally, the secretaries’ counsel refused to agree to an

extension of the 30-day counseling period so the Board could

consider his request for statistical data and “obtain the

information if appropriate.” Assuming the Board accurately

perceives a lack of good-faith cooperation in this conduct, the

secretaries nevertheless satisfied the administrative counseling

requirement.

The counselees’ alleged bad faith is relevant only to the

extent it “completely frustrat[ed] the agencies’ ability to

investigate complaints.” Blackmon-Malloy, 575 F.3d at

713–14; see Wilson, 79 F.3d at 165. As we have explained, the

Board was not so stymied. Despite their lawyer’s

counterproductive advice, the secretaries managed to convey

16

much more than “bare ‘notice’ of the basis of [their]

complaint.” Artis I, 158 F.3d at 1306. Doubtless other class

agents were not as forthcoming as Carter, Dorey,

Love-Blackwell, and Williams. But this is irrelevant to the

administrative exhaustion issue, since a single class agent may

satisfy the counseling requirement as to the entire class. See

Blackmon-Malloy, 575 F.3d at 704 (“Under the doctrine of

vicarious exhaustion, each individual plaintiff in a class action

need not exhaust his or her administrative remedies

individually so long as at least one member of the class has.”).

III

As the Board admits, the administrative counseling

requirement is “not a difficult burden to meet.” Appellee’s Br.

13. The secretaries fulfilled the purpose of 12 C.F.R.

§ 268.104(a) by advising the Board of the specific nature of

their claims and offering corresponding allegations of

discrimination against individual class agents. This was

enough to permit the Board to investigate and try to resolve

their claims. Therefore, we vacate the district court’s order

dismissing the secretaries’ complaint and remand for further

proceedings consistent with this opinion.

So ordered.