Carole Tomka v. The Seiler Corporation, Daniel Lucey, David Polonsky and Timothy Conroy

PARKER, Circuit Judge,

dissenting:

Concurring in all but one aspect of our holding today, I write separately in dissent only as to the narrow issue of whether an employer’s agent may be held individually liable for discriminatory acts under Title VII. I believe that the express language of the statute permits individual liability under Title VII and that sound jurisprudence counsels giving that statutory language its full effect.

The majority opinion correctly notes that Carole Tomka cannot recover either punitive or compensatory damages under Title VII because the alleged discriminatory conduct in this case occurred prior to November 1991. Therefore, Tomka’s potential relief for the alleged Title VII violations is limited to the equitable remedies provided for under 42 U.S.C. § 2000e-5(g) prior to the 1991 amendments:

If the court finds that the respondent has intentionally engaged in or is intentionally engaging in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay (payable by the employer, employment agency, or labor organization, as the case may be, responsible for the unlawful employment practice), or any other equitable relief as the court deems appropriate.

42 U.S.C. § 2000e-5(g)(l) (1988) (emphasis added).

Title VII defines the term “respondent” to include “employers” as well as employment agencies, labor organizations and certain other supervisory bodies “controlling” specific federal employment and retraining programs. 42 U.S.C. § 2000e(n). Title VII specifically defines the term “employer” as

a person engaged in an industry affecting commerce who has fifteen or more employees ... and any agent of such a person ....

42 U.S.C. § 2000e(b) (emphasis added).

Based on a literal reading of the statutory language, I would hold that Title VII permits a successful plaintiff to receive all relief provided for under the statute — in this instance limited to equitable relief — against an employer “and any agent of such a person,” *1319 jointly and severally, as outlined below. For this reason I disagree with, and respectfully dissent from, the majority opinion holding that an employer’s agent cannot be individually liable under Title VII.

The majority, citing Miller v. Maxwell’s International Inc., 991 F.2d 583 (9th Cir.1993), ce rt. denied, - U.S.-, 114 S.Ct. 1049 , 127 L.Ed.2d 372 (1994), reads the “agent” clause to permit recovery available for Title VII violations only against the “employer/entity,” under the doctrine of respon-deat superior. I dispute this reading primarily because I believe it violates two independent canons of statutory construction.

First, the majority’s reading reduces the agent clause to surplusage. Absent this clause, Title VII would nevertheless permit respondeat superior liability against employers for the acts of their agents under common law liability principles. Indeed, respon-deat superior liability is so fundamental to the employment context that the term “employer” is commonly defined to include agents acting on the employer’s behalf. See Webster’s Third International Dictionary 743 (1961) (including “an agent acting for such an enterprise in employing persons”). It is well-established that, without some clear indication that Congress intended otherwise, courts must not construe the language of a statute in a manner which renders a provision of that statute mere surplusage. State of New York v. Shore Realty Corp., 759 F.2d 1032, 1044 (2d Cir.1985).

In addition, I believe the majority, and the cases upon which it relies, overreach our role as courts:

In a statutory construction case, the beginning point must be the language of the statute, and when a statute speaks with clarity to an issue judicial inquiry into the statute’s meaning, in all but the most extraordinary circumstance, is finished.

Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475 , 112 S.Ct. 2589, 2594 , 120 L.Ed.2d 379 (1992). This long-standing view of statutory construction is grounded upon a jurisprudential interest in the separation of federal powers under the Constitution.

It is urged, however, that if the literal meaning of the statute be [as defined], that meaning should be rejected as leading to absurd results, and a construction adopted in harmony with what is thought to be the spirit and purpose of the act in order to give effect to the -intent of Congress. [This] principle is to be applied to override the literal terms of a statute only under rare and exceptional circumstances. [Cases which have done so] demonstrate that to justify a departure from the letter of the law upon that ground, the absurdity must be so gross as to shock the general moral or common sense. And there must be something to make plain the intent of Congress that the letter of the statute is not to prevail.

Courts have sometimes exercised a high degree of ingenuity in the effort to find justification for wrenching from the words of a statute a meaning which literally they did not bear in order to escape consequences thought to be absurd or to entail great hardship. But an application of the principle so nearly approaches the boundary between the exercise of the judicial power and that of the legislative power as to call rather for great caution and circumspection in order to avoid usurpation of the latter ... [T]he remedy lies with the law making authority, and not with the courts.

Crooks v. Harrelson, 282 U.S. 55, 59-60 , 51 S.Ct. 49, 50 , 75 L.Ed. 156 (1930) (citations omitted) (accord Crandon v. United States, 494 U.S. 152, 168 , 110 S.Ct. 997, 1006 , 108 L.Ed.2d 132 (1990)).

Here, the statute speaks with such clarity that there is no need to look beyond-the statutory language in an attempt to divine Congressional intent. Absent a clear showing that a literal reading of Title VII is at war with itself, or an articulation of exceptional circumstances to justify further judicial inquiry, that inquiry should not proceed.

Courts which have held that there can be no individual liability under Title VII have uniformly failed to identify any rare and exceptional circumstances or other indicia making “plain the intent of Congress that the letter of the statute is not to prevail.” Instead, these courts proceed from a premise that a literal reading of the statute leads to *1320 manifestly illogical consequences. Upon this premise, they justify a new judicial gloss limiting liability under Title VII exclusively to respondeat superior liability and, as a consequence, insulating employers’ agents from liability for any discriminatory acts that they have perpetrated.

I find this reasoning wholly unpersuasive. A literal reading of Title VII reveals a remedial scheme which is neither objectionable nor absurd. Furthermore, so restrictive a reading of the statute contradicts Congress’ avowed desire that Title VII be construed consistent with its broad remedial purpose. See Sec. 209: Construction, H.R.Rep. No. 102-40(1), 102d Cong., 1st Sess. 113 (1991), reprinted in 1991 U.S.C.C.A.N. 549, 651 (1992); Sheehan v. Purolator Courier Corp., 676 F.2d 877, 885, 887 (2d Cir.1982); Guardians Assoc, of New York Police Dept., Inc. v. Civil Service Commission, 633 F.2d 232 , 254 (2d Cir.1980) (quoting Culpepper v. Reynolds Metals Co., 421 F.2d 888, 891 (5th Cir.1970) (“It is, therefore, the duty of the courts to make sure that the Act works, and the intent of Congress is not hampered by a combination of a strict construction of the statute and a battle with semantics.”)) Therefore, I see no basis, in the statute or elsewhere, for reading the agent clause to impose only re-spondeat superior liability, to the exclusion of joint and several liability, between an employer and his or her agent (thus, necessarily permitting some degree of individual liability on the part of the agent) under Title VII.

A Literal Reading of Title VII

All courts which have considered the matter agree that, by adding the agent clause to the statutory definition of “employer,” Congress sought to make discriminatory acts by both employers (in the traditional sense of the term) and their agents, actionable under Title VII. The question before us is whether Congress intended that agent clause to permit only respondeat superior liability upon the employer for the acts of his or her agent, or rather, to also permit holding employers and their agents jointly and severally liable for the discriminatory acts of the agent.

To aid in this inquiry, the Supreme Court instructs us that “Congress wanted courts to look to agency principles for guidance ...” Meritor Savings Bank, F.S.B. v. Vinson, 477 U.S. 57, 72 , 106 S.Ct. 2399, 2408 , 91 L.Ed.2d 49 (1986) (citing, generally, Restatement (Second) of Agency §§ 219-237 (1958)). Meritor itself outlines the contours of Title VII liability for sexual harassment consistent with traditional agency principles. While the issue of individual liability for an employer’s agent was not before the Court in Mentor, its focus upon traditional agency principles suggests that joint and several liability between an agent and his employer, thus individual liability for the agent, is logically consistent with the Court’s broader discussion of sexual harassment actionable under Title VII.

The Court’s direction that we look to traditional agency principles, and to the Restatement in particular, is instructive. Indeed, the Restatement itself prescribes joint and several liability, as opposed to mere respon-deat superior liability, for tortious conduct committed against a third party by either an agent alone, or an agent together with that agent’s principal. Restatement (Second) of Agency § 217B(1) (1958). If, as Meritor suggests, Congress intended to incorporate traditional agency principles in determining whether an agent’s acts implicate Title VII liability, there is no inconsistency in reading the agent clause as evidence that Congress further intended to incorporate these same traditional agency principles with regard to the scope of that liability. Accordingly, I believe Title VII permits employers and their agents to be held jointly and severally liable for “the tortious conduct of an agent or that of agent and principal.” Id.

As may be gathered by the foregoing, a literal reading of the agent clause in Title VII suggests Congress not only intended to make discriminatory acts by both employers and their agents actionable under Title VII, but also, that Congress intended to make those who discriminate, both employers and agents acting under the cloak of authority of their employers, answerable, jointly and severally, for those discriminatory acts. I would hold that the statute means what its words say: Both employers of 15 or more persons *1321 and their agents may be held liable for Title VII violations.

Miller and its Progeny

Nevertheless, today this Circuit joins several other circuits in holding that Congress intended to restrict Title VII liability to re-spondeat superior liability against an agent’s employer. This view of the statute, articulated most fully by the Ninth Circuit in Miller , is based upon several assumptions regarding Congressional intent, none of which survive closer scrutiny. As stated earlier, I believe that further inquiry into the intent of Congress is unwarranted in this case. Nonetheless, as the majority now adopts the Miller analysis, it is necessary to briefly address the substance of that analysis.

Miller offers three separate grounds for its holding. First, the Miller panel acknowledges that it was bound by prior circuit precedent, barring individual liability for backpay and reinstatement, announced in Padway v. Patches, 665 F.2d 965, 968 (9th Cir.1982), “which, in any event, announced the better rule.” Miller, 991 F.2d at 587 . Second, Miller cites the statutory definition of the term “employer,” which limits the term to those who employ fifteen or more employees, as evidence that Congress “did not intend to impose individual liability on employees.” Id. Finally, the court points to the liability caps adopted as part of the 1991 amendments to Title VII as support for its contention that Congress never envisioned individual liability for an employer’s agent. Id. at 587 n. 2. Careful consideration of these three arguments underscores the danger in replacing a legislative articulation of the statute with our own.

First, though not bound by Padway , the majority relies upon its holding for the proposition that “[cjlearly, backpay and reinstatement are equitable remedies which are most appropriately provided by employers, defined in the traditional sense of the word.” Pad-way indeed holds as much; however, the reasoning underlying its holding warrants that we exercise great caution in adopting its conclusion.

The full extent of Padway’s reasoning on this point consists of the statement that Title VII,

speaks of unlawful practices by the employer, and not of unlawful practices by officers or employees of the employer. Back pay awards are to be paid by the employer. The individual defendants cannot be held liable for back pay.

Padway, 665 F.2d at 968 (emphasis in original) (citations omitted). Padway’s unqualified emphasis upon the term “employer” raises the question whether the panel was aware of the broader definition of the term “employer” under Title VII. Moreover, by excluding the unlawful practices of “officers or employees of the employer” from the purview of Title VII, Padway appears to preclude an interpretation of the “employer” definition in Title VII as permitting even respondeat superior liability for discriminatory acts perpetrated by agents of an employer.

In addition to any shortcomings in the Padway decision itself, the majority’s contention that backpay can be provided only by an employer conflicts with rulings by a panel of this court as well as the Seventh Circuit, which have found no difficulty in holding that an employer and the employer’s agents may be held jointly and severally liable for back-pay awards.

Cornwell v. Robinson, 23 F.3d 694 (2d Cir.1994), affirmed, on other grounds, a back-pay award of $175,000 against an employer and four individual defendants, jointly and severally. Although the defendants apparently did not specifically challenge individual liability in their appeal, the holding suggests that joint and several liability for an award of backpay is not so patently absurd as to justify Padway’s categorical proscription. Indeed, as an equitable remedy paid in a monetary sum, an award of backpay is particularly amenable to joint and several liability for the payment of that sum in accordance with general agency principles as dictated by the circumstances of each case.

Similarly, in EEOC v. Vucitech, 842 F.2d 936 (7th Cir.1988), Judge Posner, writing for a unanimous panel, affirmed a judgment holding three individual defendants jointly *1322 and severally liable, citing the agent clause in the statutory definition of “employer” and stating that a “district court can order contribution among parties actually named as defendants in the Title VII suit.” Id. at 939, 942.

As for the availability of reinstatement relief against an employer’s agent, the majority acknowledges that there are circumstances where a supervisor will have the authority to rehire, promote, and correct employment records. However, the majority reasons that the mere existence of this authority in some cases should not embolden us to hold agents liable for the reinstatement of a successful plaintiff. On the contrary, it is the majority which boldly chooses to foreclose individual liability in all cases arising under Title VII, contending, categorically, that backpay and reinstatement “can only be provided by employers,” while admitting that there may be instances where individual defendants may have the authority to provide precisely the remedy sought by the plaintiff.

As 42 U.S.C. § 2000e-5(g)(l) places the scope of equitable relief within the discretion of the district courts, these courts should also consider the propriety of imposing a reinstatement order against an employer’s agent, in addition to or independent of that agent’s employer, where the plaintiff has chosen to seek such relief, based on the specific facts of the particular ease. It is simply not our place to foreclose remedies provided for under the statute based solely upon our own assessments of the likelihood that a given defendant will have reinstatement authority or that the fact-finding necessary to determine the scope of that authority may be too burdensome.

Finally, Tomka seeks broad injunctive relief, including a declaratory judgment identifying the alleged conduct as violating federal law. The majority offers no rationale to justify limiting liability to the employer where such relief is sought.

The second rationale offered by Miller relies upon the fact that the statutory definition of “employer” is limited to those who employ fifteen or more employees (and their agents). Miller, 991 F.2d at 587 . The Miller court suggests, without offering any support for its contention, that Congress “did not want to burden small entities with the costs associated with litigating discrimination claims.” Id. From this assumption the Miller court reasons that, “[i]f Congress decided to protect small entities with limited resources from liability, it is inconceivable that Congress intended to allow civil liability to run against individual employees.” Id.

There are two flaws to this argument. First, the floor debates concerning Title VII suggest that the minimum employee threshold was not created to protect small “entities” from potential liability, but rather, that it was deemed necessary to justify federal legislation in the employment context under the Commerce Clause. See, e.g., 110 Cong. Rec. 6566 (1964) (letter from minority membership of House Committee on the Judiciary); 110 Cong.Rec. 6548 (1964); 110 Cong. Rec. 7052, 7054 (1964) (remarks of Sen. Humphrey); 110 Cong.Rec. 7088 (1964) (remarks of Sen. Stennis); 110 Cong.Rec.S. 7207-12 (1964) (remarks of Sen. Clark).

Moreover, where Title VII’s impact upon small businesses was debated, those debates voiced a concern that federal legislation not intrude upon the intimate — often family — ties which often exist in businesses employing only a handful of people. 110 Cong.Rec. 13,086 (1964). See generally Janice R. Franke, Does Title VII Contemplate Personal Liability for Employee/Agent Defendants?, 12 Hofstra Lab.L.J. 39 (1994).

Second, the Miller court’s reference to Congress’ concern for small “entities” is misleading. Where Congress addressed the impact of potential liability, it concerned itself solely with the impact upon small business, as opposed to “entities.” 110 Cong.Rec. 13,-085-93 (1964) (debate on proposed Cotton Amendment). During those debates, its primary concern was the overall impact upon the economy should a large number of small businesses be forced to litigate discrimination claims. See, e.g., 137 Cong.Rec. 18,336, 18,-337-8 (1991) (remarks of Sen. Hatch); 137 Cong.Rec. 3857, 3874 (1991) (remarks of Rep. Moody). The debate concerning the economic viability of small businesses simply did not concern itself with the potential civil liability *1323 of an employee who discriminates against a co-worker or subordinate.

The proposition that Congress was concerned with the impact of civil liability upon small “entities” is further undermined by the fact that employers and agents of those employers face unlimited civil liability for similar discriminatory acts under 42 U.S.C. § 1981 , regardless of the number of persons they employ. See, e.g., Mitchell v. Keith, 752 F.2d 385, 388 (9th Cir.), cert. denied, 472 U.S. 1028 , 105 S.Ct. 3502 , 87 L.Ed.2d 633 (1985); Mahone v. Waddle, 564 F.2d 1018, 1029 (3d Cir.1977), cert. denied, 438 U.S. 904 , 98 S.Ct. 3122 , 57 L.Ed.2d 1147 (1978); Faraca v. Clements, 506 F.2d 956, 960 (5th Cir.), cert. denied, 422 U.S. 1006 , 95 S.Ct. 2627 , 45 L.Ed.2d 669 (1975). The liability scheme under § 1981 is of particular relevance to Title VII because proponents of the 1991 amendments to Title VII made “parity” between the damages available under § 1981 and those available under Title VII a stated goal of those amendments. H.R.Rep. No. 102-40(11), 102d Cong. 1st Sess. 24-30 (1991), reprinted in 1991 U.S.C.C.A.N. 694, 717-23 (1992).

The third basis for the Miller holding concerns the imposition of liability caps under the 1991 amendments to Title VII.

[In permitting compensatory and punitive damages], Congress specifically limited the damages available depending upon the size of the respondent employer.... [W]e think that if Congress had envisioned individual liability under Title VII for compensatory or punitive damages, it would have included individuals in this litany of limitations and would have discontinued the exemption for small employers ...

Miller, 991 F.2d at 587-88, n. 2 .

As discussed above, Congress may have had other reasons for hesitating to repeal the exemption for small employers. As for the liability caps created under the 1991 amendments, staggered according to the size of the employer, we can only speculate as their purpose. There is no mention of the liability caps in the official legislative history to the amendments. See H.R.Rep. No. 102-40(1), 102d Cong., 1st Sess. 142-3 (1991), reprinted in 1991 U.S.C.C.A.N. 549, 671-2 (1992). H.R.Rep. No. 102-40(11), 102d Cong., 1st Sess. 68-70 (1991), reprinted in 1991 U.S.C.C.A.N. 694, 754-56 (1992).

The floor debate itself reveals a pitched battle between proponents of compensatory and punitive damages and their opponents. As a result, the debate concerns whether or not to impose tort damages, rather than any rationale for creating staggered liability caps according to the size of the employer. It is noteworthy that the 1990 version of the amendments, passed by Congress but subsequently vetoed, limited punitive damages to the greater of either compensatory damages plus backpay, or $150,000, regardless of the number of employees employed. H.R.Rep. No. 101-856, 101st Cong., 2d Sess. 7 (1990); . 137 Cong.Rec. 3876, 3884 (1991) (remarks of Rep. Goodling). This again suggests that Congress was primarily concerned with the economic impact of tort liability upon businesses. Viewed in this context, it is not surprising that Congress, seeking a political compromise which would both permit tort-like liability under Title VII and limit its impact upon the economy, did not address the issue of individual liability within its compromise scheme. Certainly, the absence of any mention of individual liability in the 1991 amendments does not, in and of itself, justify a broader conclusion that Congress never contemplated such liability.

The Miller reasoning regarding liability caps ultimately rests upon the assumption that Congress could not have intended tort liability to he against employer’s agents because such liability would be too burdensome for individuals to bear. However, it is worth recalling that Title VII liability on the part of an employer’s agent must be premised upon a prior finding that the complained-of conduct may properly be imputed to the employer as well. Kotcher v. Rosa & Sullivan Appliance Center, Inc., 957 F.2d 59, 63 (2d Cir.1992) (citing Meritor, 477 U.S. at 70-71 , 106 S.Ct. at 2407 .) Consequently, under a literal reading of the statute, wherever Title VII liability is established, a remedy is available against the employer by respondeat superior, as well as against the employer and his agent together, jointly and severally. Therefore, the implication that an employer’s *1324 agent would be forced to bear the full brunt of Title VII liability, without the agent’s employer also bearing a portion of that liability, is illusory. Of course, any inequity which may have been created by the staggered liability caps is of Congress’ making and the remedy for it lies solely with that body.

Finally, as noted above, Congress imposed tort damages for Title VII violations, in part, to establish “parity” between the liability schemes under Title VII and 42 U.S.C. § 1981 . See also H.R.Rep. No. 92-288, 92d Cong., 2d Sess. 19 (1971); S.Rep. No. 92-415, 92d Cong., 2d Sess. 24 (1971). The possibility that an employer’s agent might be held liable for tort damages under § 1981 has existed since at least 1975. See Faraca, 506 F.2d 956 . If individual liability for discriminatory acts was truly beyond the contemplation of Congress, it had ample opportunity to correct those courts which have permitted such liability. Instead, the 1991 amendments broadened the damages available under Title VII and reaffirmed the breadth of liability under § 1981. The apparent political necessity of liability caps within that scheme should not shroud the clear desire on the part of Congress to bolster the broad remedial goals of Title VII. For these reasons, I find Miller , and its progeny, ultimately unpersuasive.

In conclusion, I remain convinced, as I was in Goodstein v. Bombardier, 889 F.Supp. 760 (D.Vt.1995), that Title VII permits an employer and that employer’s agent to be held jointly and severally liable for Title VII violations. The language of the statute permits it, canons of statutory interpretation require it, and the object and overriding policy goals of Title VII warrant it. I would reverse the district court on the issue of individual liability under Title VII for the reasons stated and remand for further proceedings.